THE United States Agency for International Development (USAID) says Jamaica’s high crime rate has been affecting small businesses, and cautioned that it could impact negatively on investments.

According to Karen Hilliard, USAID’s mission director to Jamaica, data from a World Bank report – Firm Victimisation Survey – indicated that small companies in Jamaica expended an average 17 per cent of their annual revenue in security costs.

However, she told Tuesday’s meeting of Jamaica Chamber of Commerce (JCC) in Downtown Kingston that the percentage of revenue spent on security costs was too high for the Caribbean country.

“It is inching towards doing business in Iraq,” she said. “This is alarmingly comparable to an approximate 23 per cent spent by small firms in war-torn Iraq”, Hilliard said.

The USAID mission director told the business executives that they could not continue to divert critical resources to crime prevention measures.

“This discourages investments, halts business expansion and subsequently impedes the creation of well-needed jobs,” she said.

She added that the World Bank study indicated that the costs of crime totalled five per cent of Jamaica’s GDP and highlighted the exorbitant costs of acquiring physical security, early business closure and the costs of extortion and protection.

She said, too, that the World Bank’s Doing Business Report 2009 gave Jamaica a ranking of 63 out of 181 economies assessed, showing a minimal decline from 62 in the 2008 report. The report covered several key areas, including registering property, accessing credit, dealing with construction permits and paying taxes.

“In accessing credit Jamaica fell from 79 to 84 and struggles with tax compliance.In terms of registering property Jamaica was given a ranking of 109,” Hilliard told the businessmen.

“A large portion of [local] property is not formally registered and those that do get registered often regress to the informal sector due to high costs and excessive processes to transfer and formalise titles,” she said.

However, Hilliard told the JCC members that the Legs and Regs development approval project had catapulted Jamaica to one of the 18 top reformers out of 181 countries, based on the implementation of reforms dealing with construction permits.

The legislative and regulations (Legs and Regs) committee is a JCC-led initiative that lobbies government on construction matters.

“Despite trying times there are things happening that bodes well for the future,” the USAID mission director said.

“By introducing the statutory time limit on the issuance of building permits, the waiting time has decreased from 236 to 156 days,” she said, adding that the one-stop shop to help reduce bureaucratic red tape has been endorsed by the prime minister.