Venezuela, Mexico & Brazil: Rising Levels of Violence in Latin America

Dear Clients,

Many of you know my long-standing interest and experience in Latin America, going back to when I began my CIA career in Santiago, Chile in the 1970s. I had the good fortune of heading the Latin America Division at CIA and working in many countries in Latin America, including Venezuela. It is with that history in mind that I watch the political-economic crisis unfolding in Venezuela and the current struggle between the Venezuelan opposition leader, Juan Guaidó, and the authoritarian government of Nicolás Maduro. The struggle is familiar, but it is also an example of the rising levels of political violence and crime throughout Latin America that are affecting many of our clients as they seek to do business in the region.

Chaos & Collapse in Venezuela
A combination of poor economic policies, corruption, and a wholesale degradation of democratic institutions has led to the crisis in Venezuela. Venezuela has been in a death spiral of violent political protests and economic collapse over the last few years, as Venezuelans have taken to the streets against Nicolás Maduro and 3 million have fled for the borders to Colombia and Brazil. While the Venezuelan government has been unable and unwilling to rescue the country from devastation, ordinary Venezuelans suffer from soaring crime rates, rampant corruption, and endless lines to procure basic goods and services which are in short supply.

It is unclear whether Juan Guaidó has the capacity to lead Venezuela out of crisis and usher in a transition back to democratic rule with new elections, but it is clear Venezuela will not emerge from the violent chaos and turmoil until there is a change in government.

Political Violence & Crime in Mexico & Brazil
Mexico and Brazil are not Venezuela, but these countries also suffer from increasing levels of political violence and criminality. Mexico’s homicide rate was the highest on record in 2018, as political violence increased sharply ahead of the July 1, 2018 election, which saw leftist nationalist Andrés Manuel López Obrador win the presidency with 53 percent of the vote. Indeed, López Obrador’s win could be attributed to the growing insecurity and violence in the nation, and a growing weariness of the population to tolerate it.

As in Mexico, it is the organized criminal groups, gangs, and drug trade that fuel the violent crime in Brazil too. Increasing levels of violence and insecurity also played a role in Brazil’s 2018 presidential election, and right-wing Jair Bolsanaro won 55 percent of the vote after campaigning on an authoritarian agenda against crime and corruption. Their leaders may be ideologically opposed, but both countries will have to address the issues of impunity and corruption while also going after the gangs, organized criminal groups, and drug cartels behind the violence.

Safeguarding your Business in Latin America
Despite the high levels of political violence and crime in Latin America, businesses can and do manage the risks that come with the operating environment. Corporate entities operating and investing in Latin America require ongoing risk management. Successful companies in the region invest in appropriate systems and protocols so they can mitigate the risks and seize the opportunities. They also turn to specialized firms, like The Arkin Group, that can help them navigate the security concerns and prepare for possible downside impacts as a result of the security situation – including anything from violent political protests disrupting supply chains to CEO and top management being targeted for kidnapping and extortion to criminal groups penetrating the organization for illegal gain. Political solutions and policy changes will not happen overnight, so businesses need to manage the risks while also taking advantage of the economic opportunities that Latin America presents.

To give a more detailed explanation for the rising levels of political violence and crime in Latin America and how to safeguard your business in the region, I have co-authored a chapter with Amanda Mattingly in The Guide to Corporate Crisis Management entitled, “Dealing with the Challenges of Political Violence and Crime in Latin America.” Published in January 2019 by Latin Lawyer, The Guide is designed to assist key corporate decision makers and their advisers in effectively planning for and managing corporate crises in the region.

I hope you will find the chapter useful and share with your colleagues. If you or your firm would like an individualized consultation or information, please contact me at The Arkin Group.

Sincerely,

Jack Devine

“Cold War Games in Venezuela?” Jack Devine on BizNews Radio UK, February 2019

TAG President Jack Devine recently discussed the complicated situation in Venezuela, the struggle between the Venezuelan opposition leader Juan Guaidó and the Venezuelan government of Nicolás Maduro, and how the struggle has split the international community. Jack noted that Venezuela could be seen as another proxy war between the United States and Russia, commenting, “When I look at Venezuela today with my background having spent so many years in the struggle with the Russians and the Cubans, I mean, this is a very familiar pattern …” BizNews Radio in London picked up Jack’s comments originally recorded for Bloomberg Radio.

Cold War Games in Venezuela?

“In the Long Game, Maduro Goes,” Jack Devine on Bloomberg Radio, February 2019

Jack Devine, former chief of CIA’s worldwide operations and founding partner and President of The Arkin Group, discussed Venezuela and the state of the CIA on Bloomberg Radio. He commented on the current crisis facing Venezuela and the struggle between Venezuelan opposition leader Juan Guaidó and the Venezuelan government of Nicolás Maduro, noting that “We tend to underestimate how far a country has to fall before there’s an eruption or a regime change … over the long play, Maduro goes.”

In the Long Game, Maduro Goes

“Should Mexican Troops Keep Fighting Cartels?” Amanda Mattingly, Latin America Advisor, December 2018

As the new Mexican President, Andrés Manuel López Obrador, took office December 1, questions about his security plan started to emerge with questions about the continued role of the Mexican military in the fight against the drug cartels and organized crime. In response to a Q&A in the Latin America Advisor, TAG Senior Director Amanda Mattingly noted that “involving the military in domestic law enforcement is a tricky thing and was always supposed to be temporary…”

“Should Mexican Troops Keep Fighting Cartels?”

“Джек Девайн, ветеран ЦРУ,” Jack Devine in Ukraine, December 2018

While in Ukraine, TAG President Jack Devine sat for an interview on Ukrainian national television to discuss important issues about national security threats and global challenges facing both the United States and Europe.

Джек Девайн, ветеран ЦРУ

“‘Thanks for independence’: Ukraine’s schismatic Patriarch bestows highest award on ex-CIA ops chief,” Jack Devine in Kiev, Ukraine, December 2018

As part of TAG President Jack Devine’s trip to Kiev, Ukraine, he was bestowed with the Order of St. Andrew by Patriarch Filaret of the Ukrainian Orthodox Church. The cleric thanked Jack for the U.S. support for Ukraine’s independence and a unified Ukrainian Orthodox Church.

The following is a translation of an article about the event published on December 14:

Patriarch Filaret awarded the deputy director of the CIA Devine for the support of Ukraine’s independence and the creation of the Local Ukrainian Orthodox Church

His Holiness Patriarch of Kyiv and All Russia-Ukraine Filaret met with former deputy director of the CIA Jack Devine. During the meeting, Jack Devine expressed his sincere enthusiasm for the level of support among Ukrainians for the idea of getting Tomas for autocephaly of the Ukrainian Orthodox Church.

He also emphasized the prominent role of the Patriarch of Kyiv Filaret in his almost thirty-year historical struggle for the creation of an independent Local Ukrainian Orthodox Church from Russia and thanked for protecting the rights of Christians to atheistic Soviet authorities.

In his turn, Patriarch Filaret thanked Jack Devine for helping Ukraine on the part of the United States in support of Ukraine’s independence and the creation of a Single Local Ukrainian Orthodox Church.
At the suggestion of Bogdan Gubsky, Chairman of the Board of the Ukraine-XXI Century Foundation and Paul Yaroshenko, a member of the Foundation Council, the Primate of the Kyiv Patriarchate awarded Jack Devine with the Order of St. Andrew Pervozvannyi.

‘Thanks for independence’

Jack Devine’s Fall 2018 Intelligence Report

TAG President Jack Devine’s Fall 2018 Intelligence Report includes his current assessment of the U.S. midterms, Saudi Arabia, China & NAFTA, Russia, Mexico, and Venezuela.

Marching toward the Midterms

Much has happened in this past quarter which will have long term domestic and international implications – a strong economy at home, a Trade War with China, the end of the Iran nuclear deal, an on again off again diplomatic dance with North Korea, a revamped NAFTA, and the further debilitation of ISIS. We now face one of the more fraught congressional midterms in recent memory. What perhaps has most gripped and energized the American electorate as we head to the polls on November 6 is the traumatic congressional hearings relating to the appointment of Supreme Court Justice Kavanaugh, which will cut two ways in the voting booth. Although the prevailing view is that Republicans will hold the Senate and Democrats will take the House, the winds of change likely will alter again in the days ahead. The Khashoggi fiasco, the immigration caravan’s march toward the Rio Grande and this week’s spate of mail bombs are just some of the issues which will unfold in the next eleven days. The outcome will depend on the unpredictable turnout on Election Day. No matter what happens on the 6th, expect the next two years to resemble the drama of the past two years of the Trump era.

Saudi Arabia: The Strategic Impact of the Khashoggi Affair

The most significant development abroad has been the fallout from the disappearance and killing of Saudi journalist Jamal Khashoggi in the Saudi consulate in Istanbul. Crown Prince Mohammed bin Salman (MBS) has taken a hard line in both his “corruption crackdown” that consolidated power domestically, and his stance abroad in Yemen, Qatar and even with Canada. With the full backing of his father King Salman, MBS has not yet been held accountable for his excesses and missteps. However, the Khashoggi affair could be a game-changer. As a result of the steady drip of Turkish President Erdogan’s intelligence disclosures, the Saudis have had to admit that their intelligence operatives killed Khashoggi in an apparent premeditated murder. To stem the growing criticism, MBS may well have to step aside, or at the very least soften his unflinching domestic and international posture, despite his inclinations to the contrary. But, all bets are off since only the King can make this happen, and so far he has not shown an inclination to do so.

The Trump Administration and Congress have their own diplomatic challenge as they try to address congressional, media and public concern without undermining foreign policy priorities in the Middle East or causing oil prices to skyrocket. Erdogan’s deft handling of the situation has strengthened his position domestically and regionally where he is in stiff competition with MBS. Iran might be the biggest short-term beneficiary if the strong ties are frayed between the U.S. and Saudi Arabia. In the short-term, this situation may allow Europe leeway to continue to prop up the Iran nuclear agreement. Expect the Administration’s attention to shift toward Tehran again soon. Read Jack Devine’s article in The Hill, The Saudis’ Dangerous Game of Truth or Dare.

China and NAFTA: Economic Games

China continues to maintain a resolute face in the trade war with the Trump Administration. However, cracks are emerging and it’s unclear how long the Chinese government can withstand the standoff. Hopefully, both sides will find an off-ramp that allows a win for both Trump and Chinese President Xi Jinping. Should that happen, it will be another example of Trump bending the international order to his will on economic issues, which he seems to have accomplished with NATO countries, Japan, Mexico and Canada.

Financial markets, the business community, and proponents of free trade can breathe a sigh of relief with the recent completion of NAFTA 2.0. The revised trilateral deal, rebranded as the “U.S. Mexico Canada Agreement” or USMCA, includes updates related to the digital economy, automobiles, agriculture, and labor unions. While the negotiations at times were acrimonious, the successful outcome is a win for all parties.

Russia: Midterm Meddling and the INF Treaty

Clearly unchastened by 2016 election meddling blowback, Russia appears to be at it again in the midterms, albeit on a seemingly scaled back level. Criminal charges have been filed against Elena A. Khusyaynova, the alleged accountant for “Project Latka,” for once again using thousands of phony social media accounts to plant divisive messages and sow political and social discord ahead of the November mid-terms. This time it is on Trump’s watch. Look for this issue to become more pointed when Trump and Putin meet in Paris next month.

They also will no doubt address the imperiled INF treaty, long a target of NSC Director and Chief Negotiator John Bolton who has grievances about Russian compliance. Trump has taken a very strong stance in threatening to abandon the treaty, possibly a bargaining strategy. It is in both sides’ interest to have a viable INF treaty and is likely to be renegotiated eventually, but not without a lot of push and pull.

Mexico and Venezuela

President-elect Andrés Manuel López Obrador, popularly known as AMLO will take office December 1, five months after being elected with 53% of the vote. With NAFTA negotiations out of the way, AMLO can focus on two of his biggest domestic challenges, security and the economy. Homicide figures set records at above 22,000 in the first eight months of 2018. Improving that number is a heavy lift which requires a broad attack on multiple fronts, but the success of his early presidency will depend on quick progress. Internationally his biggest challenge will be to establish a good relationship with the Trump Administration. He understands the importance of this and will likely move smartly in that direction. That said, no one should underestimate the drag of his leftist coalition.

The Venezuela crisis continues to deepen as average Venezuelans have given up their marches in favor of daily survival. Venezuelan oil production is half what it was just two years ago, and hyperinflation is pushing more and more Venezuelans to the borders seeking refuge in Brazil and Colombia. An estimated 2.6 million Venezuelans have left already. Grocery stores are empty, medicines are scarce, and lines are long for basic supplies. Still, Venezuelan President Nicolás Maduro continues to deny the humanitarian crisis. Despite his reported fears about a possible U.S. military intervention, this outcome is highly unlikely, nor should we expect Maduro to crack under international pressure and step aside any time soon. More likely, Venezuela will continue to crater, while Maduro cozies up to Russia and China for aid and protection.

Fall 2018 Intelligence Report

“The Saudis’ Dangerous Game of Truth or Dare,” Jack Devine, The Hill, October 2018

The Trump administration should insist on the truth in the Khashoggi murder, argues TAG President Jack Devine in an opinion piece published in The Hill on October 24, 2018. According to Jack, “The current flap with Saudi Arabia is one of the most complicated diplomatic crises in many years. The murder of Saudi journalist Jamal Khashoggi within the Saudi consulate in Istanbul has hit a nerve in the international zeitgeist that neither Riyadh nor Washington can afford to ignore.” Commenting on the US-Saudi relationship, Jack writes, “No matter how one slices it, the way forward starts with the truth.”

The Saudis’ Dangerous Game of Truth or Dare

“Saudis Will Need To Find Someone To Take A Fall,” Jack Devine on Bloomberg Radio, October 2018

Jack Devine, former chief of CIA’s worldwide operations, and founding partner and President of The Arkin Group, discusses the escalating crisis in Saudi Arabia.

Saudis Will Need To Find Someone To Take A Fall

“‘A fighting war with the main enemy’: How the CIA helped land a mortal blow to the Soviets in Afghanistan 32 years ago,” Business Insider, October 2018

CIA veteran and TAG President Jack Devine is quoted in Christopher Woody’s article published in Business Insider on the CIA’s successful effort to drive the Soviets out of Afghanistan in the 1980s. Jack said, “The Stinger changed the course of the war.” Within two years of that first successful Stinger strike, Russian forces began to pull out of Afghanistan, completing their withdrawal in February 1989, almost 10 years after invading.

‘A fighting war with the main enemy’: How the CIA helped land a mortal blow to the Soviets in Afghanistan 32 years ago