According to a recent report, thousands of small stores have shut up shop in the capital of Honduras during the last 2 years as a result of extortion. Residents are fleeing the city in a clear example of the severe economic impact which the racket is having, not only on owners of businesses, but also the country;s economy.
30% of the capital’s corner stores have been closed because of extortion, with 600 being put out of business in the period between January and June this year alone. Half of the owners reported that they had closed because of bankruptcy and poor trade, while another 30% declared that they had moved and 20% gave no reason for their closure.
Typically, store owners are extorted by gang members for around 200 -600 lempiras each month, but in some cases the charges are substantially higher, with one owner admitted to relocating after demands for payments of 50,000 lempiras.
The vast scale of these closures represents nothing less than an emergency situation for Honduras, since every business that closes not only affects the owners themselves, but also multiple families. While this most recent report is solely focused on pulperias, the impact felt from this kind of extortion could well be a lot more widespread and should be addressed by security services in Honduras.
The majority of street gangs in Honduras see the control of their territory, primarily through extortion, as the foundation of their enterprise, and it is not only small scale businesses that are suffering. The yearly earnings for just one gang from extortion of the city’s transportation sector may be over $2.5 million.
Despite the security services in Honduras having performed several operations to combat extortion in 2016, the effect seems not to have been felt, since extortion is taking place in the city on a daily basis.