Criminal Gangs Hinder Business Operations in Several LATAM Countries: Report

Venezuela, Honduras and Guatemala are the most dangerous countries to run a business in Latin America, with companies spending a significant portion of their resources on protecting their assets, according to a report published by FTI Consulting. Costa Rica, Chile and Uruguay are the safest countries, with governments there doing everything they can to crack down on criminal syndicates.

While the activities of drug cartels are the major source of public insecurity in parts of Central America and Mexico, social and political unrest has become a factor for some of Latin America’s more troubled economies, such as Venezuela.

“Despite significant investment that has led to marked improvements in some countries such as Colombia and Brazil, they have seen a resurgence of crime that has been difficult to control,” the report noted.

But government efforts to crack down on crime is yielding good results in several countries. Guerrillas have become a “spent force” in Colombia, the homicide rate has been reduced significantly in Haiti, and Nicaragua appears to have overcome its problems with drug-related crime.

“Social mobility and inclusion has not eliminated the scourge of public insecurity. It remains, together with organized crime, money laundering, corruption and drug trafficking, paramount on regional government agendas,” said FTI, whose report was based on data collected from public safety secretariats, local police, governments, multilateral organizations, nongovernmental organizations (NGOs) and research institutes on crime.

The consulting firm’s analysis of the security situation in major Latin American countries follows:

Mexico: After some initial success in lowering homicide rates, the overall security situation in Mexico shows little sign of further improvement. The growth of militias to fight the drug cartels, infighting among the cartels themselves and continued government action has shown a similar level of public insecurity, kidnappings and violence as prior years, with increases in some areas such as theft of merchandise in transit.

The spectacular capture of Joaquin “El Chapo” Guzman, head of what is arguably the largest drug cartel in the world, has emphasized Mexico’s efforts to crack down on criminal gangs.

Venezuela: The Maduro administration has inherited a politically divided country, a collapsed economy, record inflation, and the highest rates of public insecurity in the region. Corruption, organized crime and violent political clashes have worsened an already critical situation. Investments have been made to reinforce law enforcement agencies and to deploy them more heavily throughout the country, but it remains to be seen what effect this will have.

Honduras: With high homicide and violent crime rates, Honduras is one of the most insecure countries in the region. Violence here is mostly blamed on the “maras” (gang) activity.  President Hernández is attacking the problem directly with more resources and multilateral cooperation. It is too early to tell what results he will obtain.

Nicaragua: The country continues to maintain the lowest rate of insecurity in the “Triangle of Central America;” however, violent robberies are increasingly frequent. In the first month of this year, the number of violent crimes increased by 15% in comparison to the same month last year. As it fights organized crime, the government continues to implement social order policies in order to achieve greater inclusion in sectors considered at risk.

Brazil: The country continues to see high amounts of crime in major cities in the northeast, with a continued resurgence of crime in São Paulo as well. Rio has stabilized after showing material improvement in recent years. The penitentiary system is still in urgent need of reform.

Significant resources have been deployed in the face of the upcoming World Cup and later Olympics, but overall public insecurity rates remain. One of the biggest new issues of concern is the rivalry between the two largest criminal groups in the country (CV and PCC), and their potential impact during this period.

Colombia: As mentioned in 2013, the peace negotiations between the government and the guerrillas continue. An agreement does not appear to be imminent; however, the guerrillas are weaker than they have been in the past. An additional concern is those members that do not enter into the process may organize as criminal gangs. The Santos administration has made improvements in border control between neighboring countries. However, some of the major cities in the country have seen worsening crime statistics.

Argentina: The country is going through a difficult economic crisis with high inflation and increasing social protest. Activities  of drug cartels in the country have become apparent and have been associated with violent crime. The areas of Greater Rosario and Greater Buenos Aires are the most affected.

Panama: The country continues to invest heavily in security and combating drug trafficking. The year 2013 ended with slightly improved crime rates from 2012.

Costa Rica: The government continues with its plan to professionalize the security forces and its investment in public safety prevention programs. The country continues to maintain lower crime rates than other neighboring countries, although it has not been completely isolated from their problems.

Peru: The country continues to maintain low levels of crime in relation to other neighboring countries, but drug trafficking remains a major problem. Several studies highlight an increase in overall crime year-on-year. Despite investments and changes made to control crime and combat violence, well over half of the population perceives the country as insecure.

Haiti: The country has seen a drop in its homicide rate, mostly attributable to the presence of the United Nations Stabilization Mission in Haiti, also known as MINUSTAH, as well as reforms to the Haitian National Police. Other types of violent crime remain high, as does criminality in general.

Paraguay: The Cartes administration has inherited persistently high juvenile crime rates and the porous tri-border area with Brazil and Argentina continues to represent a hive of drug activity, organized crime and money laundering. The guerrilla group “Paraguayan People’s Army” is increasingly active as well.