Country Risks Influence Security Levels

Aon Interactive Country Risk Map_2014


Being exposed to different countries with varying risk levels, I’ developed a keen sense of the proper security layers that should be implemented. The most often asked question by company executives is as follows: Why are more resources invested in essentially identical business operations in different geographical locations?

The short answer is this, a country’s risk level is a fundamental external catalyst which added to the risk analysis enables decision making on the proper security layers to implement in the protection of people, assets and the well-being of all stakeholders. A number of different strategies are intertwined forming an effective protective fabric.  For instance, depending on your business activities (considering the difference between transporting valuables and commodities which require different mitigation strategies) in terms of duty of care for a broader geographical spectrum, few resources are allocated to staff protection in Alberta, Canada where the country risk level for violent criminal activities is relatively low, as opposed to Cairo, Egypt where political instability may trigger violent criminal acts (also considering the absence of or overreaction by state authorities), thus requiring more resources to assure the integrity of staff for on-going business operations. Even more resources would need to be invested if the risk levels reach a climax forcing business operations to be either temporarily or permanently interrupted.

Think of it as the layers and various fabrics that should be worn to protect yourself against the climatic elements. For instance, you’d be ill advised to don a heavy wool sweater or goose down jacket to the hot desert climate of Cairo for a business trip; just the same as you would not be fitted in a fashionable light linen shirt for a similar trip to Alberta at the height of the winter season. If traveling back and forth between these regions, care would be taken to wear the right clothing based on the prevailing climate. Equal permutations should be considered when tailoring the proper security strategies for these regions respectably and as mentioned before, based on your particular business operation.


Country Security Profile: Brazil

By Francisco Mateo

As the sun once again shines brightly over Brasília and its brand in the concert of nations continues to grow, Security Beyond Borders turns its focus on Brazil, on the eve of a presidential election runoff, which would determine how its course is charted for an undoubted prominent future.  Despite its eminence (economic ascendance) as one of the BRIC (fastest growing emerging markets comprised of Brazil, Russia, India and China) countries, Brazil has deeply rooted security issues driven my social-economic disintegration, which it must confront before the spot light of international events is shown upon it.

Brazil’s population hovers at just under 200 million people. Approximately 88% of the population is concentrated in its urban centers, which in itself explains the dynamics that drive inequality and crime problems. Although this phenomenon is a fixture of all overcrowded cities, it appears to have magnified and galvanized over time.

Economic Overview

To better understand Brazil’s meteoric rise onto the world stage we must look at the key elements that characterize its economy. First off, a large and well-developed agricultural, mining, manufacturing, and service sectors set them apart in the region. Brazil’s economy outweighs that of all other South American countries and it’s expanding its presence in world markets. Since 2003, Brazil has steadily improved macroeconomic stability, building up foreign reserves, reducing its debt profile by shifting its debt burden toward real denominated and domestically held instruments. It has adhered to an inflation target, and committing to fiscal responsibility. To illustrate its economic prowess, Brazil was one of the first emerging markets to begin a recovery. By exploiting vast natural resources and a large labor pool, it has become South America’s leading economic power and a regional leader.

Brazil has in part enjoyed stellar economic growth over last ten years due to its adherence to continuity of economic policy despite political transition from right leaning to clearly leftist political leadership. President Lula Da Silva’s enormous popularity derives from his pragmatic approach to economic policy.

But all the notoriety has far reaching consequences. Its newly minted economic reputation and its maturing role as a regional powerhouse have landed Brazil in thorny world issues recently. Most notable of all have been its mediation of the Honduran political crisis in 2009 and its willingness to establish diplomatic ties with unpopular regimes like Cuba, Iran, and Venezuela, as well as to pursue economic exchange with China and Russia. It is clear that Brazil has aimed at charting an independent path and becoming a geopolitical counterforce in the region and beyond.

Geopolitical Overview

A review of Brazil’s security profile would not be complete without drilling down on the country’s most notable transnational crime problem, which is for the most part concentrated in the unruly region at convergence of Argentina-Brazil-Paraguay borders. This area is a locus of money laundering, smuggling, arms and illegal narcotics trafficking, as well as fundraising for extremist organizations. Other border areas including the States of Amazonas, Acre, Rondônia and Mato Grosso, are high risk due to drug trafficking. Its sheer size (bordering 10 countries) and deep forest areas provide natural defense, but also serve as incubator for the worst of the global illicit economic activities. It would explain why despite government drug control efforts, it remains the second-largest consumer of cocaine in the world. It is also an important transshipment country for Bolivian, Colombian, and Peruvian cocaine headed for Europe.

The International Maritime Bureau reports that the territorial and offshore waters in the Atlantic Ocean present a significant risk for piracy and armed robbery against ships; numerous commercial vessels have been attacked and hijacked both at anchor and while underway; crews have been robbed and stores or cargoes stolen.  Similar socioeconomic factors driving piracy in the Gulf of Aden are at play for the most part in Brazil’s Atlantic coastal waters.

Crime Overview

Serious crime, often involving violence, is high in a number of urban centers, including Rio de Janeiro, São Paulo, Recife, and Salvador. The recent reports of armed drug gang members setting up roadblocks and robbing drivers en masse in the Rio de Janeiro area, prompting the firing of 19 police battalion, is certainly a notable reminder of what lurks just beneath the pristine surface. As the country sets out to host the World Cup in 2014 and the 2016 Olympics it should ponder the right strategy to avoid the Mexicanization of its crime problem.

Crimes and violence in São Paulo can be attributed to street gangs and organized crime groups.  São Paulo is notorious for the brazenness of certain high profile crimes and violent crimes such as murder, rape, and kidnappings.  The most concerning crimes in São Paulo are express kidnappings, carjackings, virtual kidnappings and home invasions.

Crime while on the road remains a problem for both visitors and local residents alike, especially during evening travel and traffic jams. Violent crimes committed in heavily congested roadways is the motivating factor for companies like Truffi or Master Blindagens to produce over 25 bulletproof cars a month, and they’re just 2 of 45 companies in São Paulo by far the biggest market, with Rio de Janeiro a close second.  Brazilians would “much rather trim their appetites for appliances and electronics in the recession, but bulletproofing is one expense they are not giving up easily”. This is an outgrowth of the overall sense of insecurity felt by everyday people.  The general consensus is that if the government can’t keep them safe than they will use their recently acquired prosperity to buy their own security.  As a nation it can certainly do much better than that and there are obvious compelling reasons for doing so.

Other Risk Pressure Points

Natural disasters, mainly flashfloods, remain a considerable risk of social disturbance.  That is because the large communities still living in favelas are most susceptible to these unpredictable events.  Last year’s deadly floods are but an example of the infrastructural fragility of overpopulated cities to deal with large magnitude emergency incidents.

Flooding over several recent years has continued to plague São Paulo State and many other parts of the country. Severe rainstorms in 2006, 2007, 2008 and 2009 resulted in some of the worst flooding in years for São Paulo. Bridges and highways were closed due to flooding and some major roads and highways were submerged underwater. In December 2008, floods in São Paulo left 20,000 residents without potable water, numerous motorists were stranded, and 70 flights were canceled at Congonhas Airport (one of three airports in greater São Paulo). In November 2008, flooding in the southern state of Santa Catarina left nearly 100,000 homeless and claimed over 100 lives. The disaster was one of the worst in the country’s history. In December 2009, the eastside of greater São Paulo was under water due to severe rain storms.  Flooding brought traffic in São Paulo to a standstill, resulting in deaths, destruction of infrastructure and millions of dollars in financial losses for businesses. During a one day period the city received more rain than it would normally see during the entire month.

In closing, it is clear that Brazil is poised to confront its internal security risks head-on.  Its success in creating continuity of economic policy to spur growth should be emulated by the new political leadership, during their transition into power, to bring cohesive socioeconomic growth that would undermine its security shortcomings and continue to drive a downward trend to its most vexing crime problems. It must remain steadfast in this direction as focus on everything Brazil will only spike during the World Cup in 2014 and the 2016 Olympics. They have a short window of time if it aims to capitalize on its successes in eradicating the security weaknesses highlighted herewith.