By: Frank Holder 

NOTE: All rankings are from 1 to 5 by FTI Consulting Ibero America, 1 representing a safe country and 5 representing a very dangerous country.

High/Higher: High or trend to be higher.

 Stable/Possible Ch: Stable with possible changes.

 Stable/No Ch: Stable with no changes.

The ratings are based on official numbers from Public Security Secretariats, Local Police, Governments,

Non-governmental Organizations (NGO) and Institutes of Crime Investigations.

METHODOLOGY AND SOURCES

This index takes into account how each country in the region is doing related to public insecurity, with special focus on the business community. This allows longer-term trends to be seen in terms of improvement or worsening of the situation. FTI Consulting obtains government statistics at the federal, state or province and municipal levels in areas such as homicides, serious crime, cargo theft, home invasions, kidnapping, political and labor unrest, riots and violent demonstrations and drug trafficking, as well as the efficacy of government programs put into place to combat these problems. FTI weighs the governmental data based on its reliability, and it also utilizes NGO and multilateral institution studies and statistics and information in all these areas as a part of its ranking. FTI conducts scans of all major regional media outlets in order to obtain more specific facts around certain phenomena as well as academic research on the issue. Finally, FTI polls its business contacts in the region related to issues affecting their security.

Story from Latin Business Chronicle

 Brazil Safer, Venezuela Worse

BY LBC STAFF

 Brazil and Panama have become safer for foreign multinationals and executives, while Venezuela has worsened further, according to the fifth annual Latin Security Index developed by FTI Consulting Ibero America for Latin Business Chronicle. Overall, however, Latin America remains unchanged from a year ago.

 The Latin Security Index takes into account how each country in the region is doing related to public insecurity, with a special focus on the business community. Apart from polling its business contacts in the region related to issues affecting their security, FTI analizes government statistics at the federal, state or province and municipal levels in areas such as homicides, serious crime, cargo theft, home invasions, kidnapping, political and labor unrest, riots and violent demonstrations and drug trafficking, as well as the efficacy of government programs put into place to combat these problems. FTI weighs the governmental data based on its reliability, and it also utilizes NGO and multilateral institution studies and statistics and information in all these areas as a part of its ranking. FTI conducts scans of all major regional media outlets in order to obtain more specific facts around certain phenomena as well as academic research on the issue.

VENEZUELA

Venezuela has seen an increase in drug trafficking, kidnapping and organized crime, says Frank L. Holder, Senior Managing Director at FTI. “Natural disasters, continued corruption and juridical instability, rampant inflation and problems with the food supply continue to drive a surge in overall crime, “ he says.

Official data shows kidnappings jumping to 673 in 2009 from 415 in 2008. However, the real figure is likely much higher and could be as much as 8,000 a year, experts say. That compares with 2,600 in Colombia when it was considered the kidnapping capital of the world, points out Luis Cedeño, who runs the Paz Activa, a non-governmental organization that tracks crime statistics.  The majority of these kidnappings are “express” – spontanous kidnappings by small groups that are not well-organized, he says. And unlike, the kidnappings in Colombia, which mostly were isolated to rural areas, kidnappings in Venezuela are concentrated in the big cities like Caracas, Maracaibo and Valencia.

“Traditionally the kidnapping victims in Venezuela were ranchers in rural areas near the Colombia border,” Cedeño says. “Today they are business executives, maids, children, a foreigner, diplomatic personnel, businessmen form multinationals. Everybody can be kidnapping victims.”  

He expects the trend to continue due to a lack of government attention to the problem. Crime in general is not a big priority for the government and there are few dedicated police fighting kidnappings, Cedeño points out.  

Meanwhile, Colombian kidnappers who have been pressured by the successful security policies of former president Alvaro Uribe in Colombia, are now focusing on victims in Venezuela, he says. Colombian narco-terrorist group FARC, for example, specializes in kidnappings and appears to be operating with impunity in Venezuela, according to Cedeño.  Venezuela also suffers from a high rate of murders. Venezuelan interior minister Tarek al Aissami told the nacional assembly last month that the rate was 48 per 100,000 inhabitants. That would make it the highest rate in South America.  

The murder rate in Venezuela has doubled since 1999, when Hugo Chavez became president. That year it was 25, according to Paz Activa.

However, Caracas has an even worse rate. According to Paz Activa, the murder rate in the Venezuelan capital was 122 per 100,000 inhabitants in 2009, compared with 94 in 1999.  

Unlike kidnappings, though, most of the victims of murders are young men – many whom belong to criminal gangs -- in poor areas of the cities, Cedeño says.  

A major problem in Venezuela is that the government has stopped releasing detailed crime statistics. Last year it didn’t publish a yearly report on crime that had been published annually since 2006.  “This deliberate hiding [of data], which is unconstitutional and illegal, is the clearest proof that the numbers have not been reduced, but rather have increased,” local NGO Provea said in its 2010 report on public security in Venezuela.

MEXICO  

Despite the frequent news about drug violence in Mexico, the country is not among the worst in Latin America. In fact, the latest index shows that Mexico went from ranking as the fifth-worst to the sixth-most dangerous country. That change was partly due security worsening in Guatemala, which became the fifth-most dangerous country.

 “Mexico is recovering well from its economic crisis and continues to battle its organized drug trafficking cartels, and has made a massive effort to contain the problem, both in terms of resources and in terms of changes in legislation and structures, but the results are still uncertain,” says Holder. “The north of the country is more affected than the south, with Ciudad Juarez having the highest homicide rate of any city in Latin America and Monterrey, at one time one of the safest cities in Latin America, having suffered 60 homicides in the first three weeks of 2011 alone.”

 According to data quoted by the American Chamber of Commerce in Mexico, 90 percent of the victims of Mexico’s drug violence since 2006 have been members of criminal gangs. Another seven percent were police or soldiers and only three percent were innocent victims. Meanwhile, most of the violence is concentrated in areas at the border to the United States rather than capital Mexico City or business hub Monterrey, the chamber says.

 “The perceptions of Mexico as a place to live, work and do business are very often at odds with the reality,” the chamber said in a detailed report, Foreign Direct Investment in Mexico: Is your Investment Safe? “The risk of being a victim of random drug-related shooting is minimal.”

BRAZIL

Security in Brazil is improving, but remains a serious problem. “Brazil has shown some improvement in its fight against public insecurity, but there has been slippage in other areas such as cargo theft, drug related violence and overall crime in urban areas that have led us to leave the trend the same as 2010,” Holder says.  

Brazil needs to make progress as the country prepares to welcome millions of visitors for the 2014 World Cup in soccer and 2016 Olympics. The sporting events have produced a strong commitment in the national administration to controlling and eradicating complex problems such as the drug gangs, organized crime and juvenile delinquency, he adds. “Brazil continues using its military to fight against the narcotics gangs in the main favelas of Rio de Janeiro, engendering some positive results so far,” he says.

 Last fall, police started gradually taking control of the top favelas of Rio de Janeiro. The action came after a drug gang in August took 30 hostages at the Inter-Continental Hotel in Rio de Janeiro, one of the city’s top hotels and the location for this year’s World Economic Forum Latin America next month.

 Although all hostages were released unharmed, the incident shocked foreign business travelers.

 "We are improving, and I think by the World Cup there will be no problem at all," Tourism Minister Pedro Novais told the German news agency DPA last week. 

COLOMBIA

Colombia has made material advances in combating the FARC and the drug cartels, although there is still significant activity on the border with Venezuela, Holder says. “Even though the [paramilitary group] AUC has been disbanded, there are still small paramilitary/organized crime groups acting in rural areas where government coverage is spotty,” he says.

The homicide rate remains high in cities like Bogota and Medellin, Holder points out. Meanwhile, there has been an increase in kidnappings and extortions in the petroleum and mining industries, but they have been dealt with severely by the government. “The Santos administration has continued the

previous administration’s commitment to fighting public insecurity in general,” he says.

HAITI: WORST OF THE WORST

 Haiti remains the most dangerous country in Latin America for multinational executives. Although its murder rate is lower than many Central American countries, its overall safety situation is worse.

 “The situation in Haiti continues to be dramatic, with health crisis following the earthquake and subsequent hurricane, as well as an institutional crisis related to the presidential elections,” Holder says.

 Organized gangs also interfere with aid reaching those who most need it, and government institutions are severely limited in their ability to maintain a secure environment for the populations. The UN police and the Haitian security forces have made a significant effort to curb the insecurity, but there were still over two murders and two rapes per day reported in Haiti last year, over 2,000 escaped prisoners during the earthquake still at large and almost 10 percent of the police force has been suspended or is under investigation.

DANGEROUS CENTRAL AMERICA

 Apart from Venezuela and Haiti, three Central American countries are among the five most dangerous countries in Latin America on the index.

 Honduras tops the list in Central America. “Honduras homicide rate continues to climb and is now possibly the highest in the world, above that of Venezuela and El Salvador,” Holder says.

 In El Salvador, the “maras” continue to be a major driver of public insecurity and the government so far as been unable to effectively curtail their operations, he adds. Meanwhile, Guatemala joins Honduras and El Salvador as the most insecure countries in Central America, sharing many of the same characteristics.

 Guatemala has replaced Mexico as the fifth-most dangerous country in Latin America.  Meanwhile, Nicaragua is also getting worse. The country has long marketed itself as a safe alternative in Central America.

 “Nicaragua has better indices than the aforementioned three, but has various security issues at its borders and is in an electoral year, which both in this year and next means more political violence,” Holder says.

Historically there has been a double digit jump in reported crimes in electoral years and the year following the election.  

THE SAFEST

 Costa Rica again ranks as the safest country, closely followed by Chile and Uruguay. The three are the only ones that receive a danger level of 2 (with 1 being best).

 “Costa Rica is still the safest country in Latin America overall, but has recently seen an increase in its homicide rate as well as its general crime rates,” Holder says.

 President Laura Chinchilla has put in place a new long-term citizen security policy called Polsepaz and has added policemen to the force and increased training, but it is too soon to see the results of these efforts, he says.

 One major bright spot in Latin America is Panama, which already ranked as the fourth-safest country in the region. “Panama has seen material improvement in its overall crime rate in 2010, reversing the trend up to 2009,” Holder says.

 The progress is mostly due to the introduction of “Pele Police”, which are handheld verification devices at street checkpoints that resulted in the arrest of more than 8,000 people on outstanding warrants.

LONG-TERM INSECURITY

 Latin America kept its average danger level score of 3.42 – the very same it had last year.

 “As we have stated in years past, 2011 is not an exception in that public insecurity continues to be one of the main concerns of the population of the region, a stumbling block to more rapid growth and a detriment to quality of life,” Holder says. “Whilst there are several countries which are considered safe (Uruguay, Chile and Costa Rica), and another which improved its overall public insecurity problem over the past year (Panama), most have remained at the same level or have seen a worsening in their situation.”

Latin America in general has a homicide rate that is somewhere between two and three times the world average and over 27 times the average in the European Union. It is a top five leading cause of death in

the region, whilst in the EU it is in 44th place.

“Natural disasters, endemic corruption and a lack of government resources have conspired to leave the region as a whole bogged down in a cycle of long-term insecurity,” Holder says.