Extortion and threats by criminal gangs led to the shutdown of an estimated 17,500 small businesses in Honduras over the past year, indicating the level to which street gangs continue to suffocate the country’s economy.
According to La Prensa, some 25,000 Hondurans are affected either directly or indirectly by the closure of these businesses, which include stores, restaurants, transportation companies, and street vendors. The newspaper estimates gangs are making approximately $62.6 million in profits per year from extortion. Threats are made by telephone, mostly from the country’s jails, with the caller demanding cash, cellular phone credit or bank deposits, the report said.
In 16 markets in the capital city Tegucigalpa, gang members are estimated to collect about $15 each week from the 14,000 vendors leasing space, making around $10 million per year. The transportation system is also a principal target, with over $16 million collected per year throughout the country and $12.5 million in Tegucigalpa alone.
Few of these crimes are ever reported due to distrust in the authorities, the newspaper notes.
InSight Crime Analysis
La Prensa’s report is just the latest example of the widespread economic impact of gang extortion in Honduras. In July 2012, 30 percent of Tegucigalpa’s small businesses were reportedly shut down because of extortion; over 90 percent surveyed said they had received security threats, which often included demands for money.
Local street gangs and larger criminal organizations such as the Mara Salvatrucha (MS-13) and Barrio 18 rely heavily on extortion for funding, and have also been known to fight over the profits. Smaller gangs are also known to impersonate the maras in order to collect the neighborhood “tax” themselves.
La Prensa’s assessment that extortion is widely under-reported due to mistrust in the authorities is unsurprising. There have been reports of police participating in extortion rackets in various Tegucigalpa neighborhoods. And the process of purging the police of corrupt members has been slow and plagued with political problems.