Showing posts with label brazil. Show all posts
Showing posts with label brazil. Show all posts
Saturday, April 14, 2007
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A Summary of the Crime, and How to Avoid it.

Kidnapping in Latin America, or express kidnapping, remains a prominent and serious problem in many countries from Mexico to Argentina. The popularity of the crime among criminals first gained popularity in Colombia and was used in conjuction with operations of drug lords, and other extortion and terrorist groups. With the widespread use among professional drug and crime families, the practice of kidnapping began to spread to ordinary street criminals in the hopes of obtaining the same large rewards, at a relatively low cost. The trade then made its way from Colombia to countries like Venezuela, Brazil, Argentina and Mexico. While the crime has been on the decrease in Colombia, other countries such as Venezuela, Brazil and Mexico have recently experienced a sizeable increase in cases. Argentina reports of kidnappings have remained relatively stable, primarily in and around Buenos Aires. Peru has also struggled to eliminate the crime. To date, kidnapping remains a serious threat to Latin America's residents, business persons and foreign tourists.

What is kidnapping or express kidnapping? Generally speaking, individuals of wealth are targeted for abduction and quick release upon payment. In one scenario, a victim may be taken from his or her home in an affluent neighborhood and kept for months until a large ransom can be paid for the victim's release. In some cases, body parts, especially ears, may be mailed to the abductee's family to terrorize those to make payment. Although safe release is the bargain made to those who pay ransom, only about 65% are actually released unharmed. Some victims are even murdered, regardless of the ransom. In an express kidnapping, a tourist or business person may be approached on the street, forced into a vehicle and taken to an ATM machine, where he or she is told to withdrawal money. These "express" kidnappings usually see the victim released without serious injury upon the withdrawal.

As the crime has propagated, the fear itself may be used alone. In recent years, victims have received a call that a family member has been abducted. The victim may even hear the family member crying out for help. He or she is then instructed to deposit money to an account for the loved one's safe release. The situation can be real but at other times, the "kidnapper" is only using the phone to conduct the crime, and the claimed abductee is never actually abducted or in harm's way. Hence, the fear alone of kidnapping in Latin America has become a widespread and serious problem.

How to avoid this horrible crime? Avoid taking unregistered taxis, and taxis off the street at night in cities like Mexico City, Bogota, Caracas, Sao Paul, Rio and Buenos Aires. Use safe "sitio" taxis or take taxis from restuarants and hotels, whenever possible. Avoid the green beatle taxis in Mexico City at night. Avoid wondering the streets of Caracas, Sao Paulo, Rio de Janeiro and Mexico City at night. Dress down, and understand the risks of flaunting wealth in the form of cars, clothing and jewelry in Latin America. By doing so, you increase your chances of becoming a victim. If you receive a call that a loved one has been abducted, and the caller requests a ransom, first, cooperate and inform the caller you are going to get the money and make the deposit. Second, hang up the phone and contact that loved one to confirm that he or she has indeed been kidnapped. Lastly, if someone other than a police officer approaches you on the street and attempts to force you into a vehicle, or force you to walk in any direction, fight like hell to escape and yell for assistance.

If on business or soon to be traveling in Latin America and wish to obtain additional information, contact Cinnamond Global, an international consulting firm specializing in Latin America, or Wymoo International for confidential background checks, and Kroll, also for advisory and background checks in any of these countries. For more reading, visit ERRI's page on the subject.

The future of the kidnapping trade depends largely on Latin America's ability to fight widespread corruption among police ranks, and to overhaul its corrupt and inefficient legal systems. Fixing those problems from Mexico to Argentina, however, is no easy solution. While these economies remain in the developing stage, crime and poverty - and kidnapping - will remain a real threat. Until the future arrives, exercise extra caution.

Be safe,

A. Hathaway
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Thursday, April 12, 2007
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Investment Opportunities - How to Enter the Game

Since the arrival of Colombus, Cortes and the subsequent invasion of the conquistadors, Latin America has suffered a difficult past and struggled to establish an open and fair democracy with modern economic policies. Cortes and his men in 1518 led the destruction of Mexico's Aztec Empire, followed by Pizarro's brutal annihilation of the Incan Empire in modern day Peru. A similar course of events in Brazil, and other Latin America countries completed the change in history. Unfortunately, nearly 500 years later, corruption and inequality are widespread, arguably as a direct result from the conquest, its poor leadership from the Spanish, the slow healing wounds from the conquest, and the reluctance of the European blood to share the wealth.

In 2007, Latin America shows some promising signs of change, both in economics and government reforms. With this slow social change, comes a rather rapid economic and market change with potential opportunity for foreign investors. First, let's sort out the good from the bad in terms of economic and investment - based mainly on leadership and the division within Latin America of left and right, or closed and open economies. Major countries with less prospects include Ecuador, Venuezuela, and Paraguay. While those countries in Latin America with a wide margin for growth are Brazil, Argentina, Chile, Peru, Colombia and Mexico.

How to enter this market, diversify your investment, and take part in the growth? Without expanding your business into Latin America, international investors have the opportunity to purchase these shares directly via an ETF (exchange traded fund). We recommend the iShares MSCI Brazil Fund (EWZ) which has a 3 year annualized return of 46.25%. Or, for Mexico, the iShares MSCI Mexico Fund (EWW) with a 3 year annnualized return of 40.15%. Clear signs that indeed the Latin American markets are emerging, and moving at a good pace. For a more diversified and simple approach to enter these markets, iShares offers the Latin America 40 Fund covering several countries and sectors.

Interested in a more direct investment, or expanding your operations into Latin America? We offer some general advice. Make every effort to establish relationships or offices in one or more of Latin America's major cities: Mexico City, Bogota, Sao Paulo, Buenos Aires or Santiago. It's safe to say that nearly all of the action is here. Learn the language, hire someone who knows the culture and the language, or hire an outside consultant such as Cinnamond Global to screen opportunity and liason with the foreign business. Be skeptical and approach offers with caution in this market with slack regulation. Understand the risk-reward relationship. Lastly, when dealing with a small or medium-sized firm in Latin America, and especially when dealing primarily with an individual, get a professional background check from a firm like Wymoo who can validate the company and contacts.

Buena suerte,

A. Hathaway
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