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In Caracas, Armored Cars Are All the Rage


Venezuela, now the murder capital of South America, is a rich market

Luis Fuenmayor, a Caracas-based airline pilot, says he never considered armoring his Chevrolet Tahoe because of the $28,000 price tag. He changed his mind when two armed motorcyclists robbed him of his watch in traffic. "It seemed expensive at first, but then I realized that, more than an investment, it's a necessary cost," he says.

Since President Hugo Ch?vez took power in 1999, Venezuela has overtaken Colombia as South America's murder capital. That spells brisk business for security firms, which are adding the middle class to the traditional corporate client base, says Ingrid Suarez, manager at armored-car company Blindcorp. The number of businesses in Caracas that prepare vehicles against attack has risen to 47 from 12 five years ago, she says. It takes about a month to outfit a car with armor, since the automobile needs to be stripped down and reassembled.

The rise in violent crime reflects a broader breakdown in the rule of law, as criminals, many involved in the drug trade, operate with "complete impunity," says Roberto Brice?o, who heads the Venezuelan Violence Observatory, a Caracas-based group that tracks crime. Last year, 17,600 people were murdered, a rate of 57 victims for every 100,000. In 1999, 5,968 were murdered, according to the Observatory. In the U.S., the murder rate was 5 per 100,000 in 2009.

The Chavez government says the murder rate in 2010 was lower, at 48 per 100,000. Elias Jaua, Venezuela's vice-president, said in a May 30 broadcast that the number of kidnappings fell 39 percent, to 174, in the first quarter of this year: "We are on the right path to reduce crime." That's hard to verify, since the government has not published crime statistics since 2005.

Among the companies profiting from the crime spree is Li?ge (Belgium)-based Carat Security Group, the world's largest commercial armored vehicle provider, according to its website. Carat's Centigon Venezuela unit bulletproofs about 20 privately owned vehicles each month, says Eduardo Ibarra, the unit's managing director. That's more sales than Carat does in Brazil, where the population is more than six times Venezuela's 29 million. Venezuela has now surpassed guerrilla-plagued Colombia as the company's most profitable market in Latin America.

The fear of becoming a victim of violence runs deep. The Country Club, a golf club in Caracas, held a Father's Day raffle on June 19 whose prize was an armoring service. Tickets cost 250 bolivars, or $58 at the official exchange rate.

Companies such as Alquiblind also hire armored vehicles out. The Caracas-based company does a brisk business driving teenagers to parties, says owner Luis Esclusa. "We transport the father to drop off and pick up his child," Esclusa, 39, says. "And we keep a security guard at the site to protect against kidnappings." The price of the service is about 2,700 bolivars.

German Garcia-Velutini, head of the Caracas-based Vencred brokerage, didn't invest in personal security until after he was kidnapped in January 2009 and held for ransom for 11 months. Now, he's armored all of his family's vehicles and hired bodyguards. "Before, I was worried about my children crashing their cars," Velutini says. "Now the risk is that they'll be robbed or kidnapped."

The bottom line: Venezuela's middle class is opting for extra protection??uch as armored cars??s crime spreads throughout society.

Rodriguez Pons is a reporter for Bloomberg News. Orozco is a reporter for Bloomberg News.

Steve Ballmer, Power Forward
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