Crime is cutting into business profits and GDP growth. Instead of running away from the problem, entrepreneurs around the region are coming up with creative ways of tackling it.
The tractor-trailer pulled up beside a warehouse in Mexico City in the early-morning darkness. Fourteen men armed with machine guns stepped out and burst through the warehouse doors, surprising a staff of 20 construction workers who were nearing the end of a months-long job building a movie theater complex nearby. The raiders forced the workers to load the truck with about $1 million worth of audio and visual equipment and even machines used for candy concessions. They were gone within minutes.
The incident happened a few years ago, but prominent Mexican contractor and real estate developer Marcos Fastlicht still marvels at the split-second professional choreography of the heist. In fact, he has become a kind of connoisseur of the grim art of business crime in Latin America. Fastlicht, owner of the warehouse, has seen his facilities assaulted and robbed more than a dozen times over the past decade. And as far as he is concerned, things aren’t getting better.
I remember about 10 years ago I was on a trip with two or three couples in the south of France, and we met a couple from Colombia who told us about the kidnappings and the insecurity there,” Fastlicht recalls. “We all said, the day that happens in Mexico I will leave the next weekend…it got worse.”
Fastlicht didn’t leave. And he is paying a steep price for staying. The 26th-floor suite of offices that serve as the headquarters for Fastlicht’s company, Grupo K, is enclosed behind a wall of glass and remote-control doors that he installed five years ago. Fastlicht himself rides around Mexico City in a bullet-proof car that cost him more than $35,000. And a hefty chunk of his budget goes to pay for security guards and theft insurance.
Fastlicht isn’t alone. Across Latin America, steep security budgets are now part of the cost of doing business. Estimates provided by private security advisors in Mexico alone range from 3 to 6 percent of a company’s total spending. But specific figures are rarely available. Computer-maker Hewlett-Packard, whose 10,000 Latin American workers are scattered around plants and stores in Brazil, Argentina, Chile, Venezuela, Costa Rica, Mexico, and Puerto Rico, now integrates security “into our business planning and decision-making,” concedes Haroldo Level, Vice President and Managing Director in Latin America. But in a written response to questions, he adds, “Due to company policies we do not disclose investments of this kind.”...