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Venezuela: Political and Economical Introduction

The country is located on the northern part of South America. Its continental territory limits are the Caribbean Sea to the North; the Atlantic Ocean and the Republic of Guyana to the East; the Republic of Brazil to the South and the Republic of Colombia to the West. Venezuela has a total area of 917.450 square km, which, according to the United States Department of State, is approximately 2.5 times the State of California (Travel Guide, par. 1).

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According to the same source mentioned above, Venezuela has an estimated population of 21 million. Caracas is the capital city. It alone has a population of 2.8 million inhabitants, but there are some unofficial estimates that make it go up to a total of 7 million. Other major cities are Maracaibo, which has 1.4 million inhabitants, Valencia with around 1 million inhabitants, Maracay approximately 800,000 inhabitants and, lastly, Barquisimeto with around 800,000 inhabitants (Travel Guide, par. 1).

For time purposes we must say that Venezuela is part of the -4 Time Zone (GMT). It must be noted that this country has a variety of climates ranging from tropical to temperate. There are only two seasons: winter and summer. No middle season like in Britain. The rainy season runs normally from May to mid-November. For example, the average temperature in Caracas is 22º C and in Maracaibo 20º C – 40º C year round (Travel Guide, par. 1).

If you need to make an international call to Venezuela, you have to dial first the Venezuelan international code number, which is 58. For a more specified call in Caracas, for example, you have to dial the city code which is 2, that of Maracaibo 61, Puerto Ordaz 86 and Valencia 41. Fax and telex service is available at most major hotels. Most international couriers serve Venezuela. These include DHL, Federal Express, Jet International, P.O. Box Air International and Domesa (Travel Guide, par. 2).

Normal business hours are from 8 a.m. to 12 noon and from 2 p.m. to 6 p.m. Stores are usually open from 9 a.m. to 1 p.m. and from 3 p.m. to 7 p.m. Banks are open to public from 8:30 a.m. to 3:30 p.m (EarthTrends, 1).

Political and economical introduction

Venezuela is a very rich country in oil and minerals. It also has a beautiful coastline which is perfect for tourism. Combined with the open policy for foreign investments that the country has had the second half of the twentieth century it made it very attractive for foreign businesses to invest in the country. In fact, up until the election of the present President in power, Hugo Chavez, Venezuela was a preferred country for foreign businesses to invest their capital. The election of Hugo Chavez in 1999 and his governmental policies afterwards have affected negatively this heavy investing attitude of foreign business companies. Economic policy and the business environment have become even less friendly to investors since Hugo Chavez was re-elected in December 2006 (EarthTrends, 2).

The Republic of Venezuela is a representative democracy with division of powers as follows: Executive Branch (referred to as the “National Executive”) headed by the President and 22 Cabinet Ministers; Legislative Branch, comprised of two Chambers, Senate and Deputies elected every five years; and a Judicial Branch, headed by the Supreme Court of Justice. The National Territory is divided into 22 states, 1Federal District and 72 islands. Caracas, the capital of the Republic and the Federal District, is the permanent site of the headquarters of the National Executive(EarthTrends, 4).

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Due to the financial crisis of 1994, a significant part of the financial institutions are owned by the State. However, the Venezuelan Government is taking the necessary steps to sell these institutions to national or foreign private investors. The financial intermediation in Venezuela is governed by the General Law of Banks and Financial Institutions, enacted in November 1993. This law is a permissive law that states the activities prohibited for banks and other financial institutions and allows those institutions to engage in any activity not expressly forbidden. In addition, the Law introduced important changes regarding banking matters, among these, the following:

  1. a. The extension of the definition of financial intermediation to include the habitual fund taking to carry out investments. Under the former law, the definition of financial intermediation was limited to deposit taking and lending.
  2. b. The introduction of the unlimited foreign investments in the financial intermediation. Before this law, the foreign investment in the banking sector was limited to the 20% of the capital of the bank (IMF, 2).
  3. c. The universal banking. All Financial institutions are under the control, supervision and regulation of the Superintendence of Banks and Other Financial Institutions. Securities transactions are governed by the Capital Markets Law of 1975 and the supervising authority is the National Securities Commission (IMF, 4).

Safety and travel security

Violent crime in Venezuela is pervasive, both in the capital, Caracas, and in the interior. The country’s overall per capita murder rate is cited as one of the highest in the world. Kidnapping is another serious concern. The Venezuelan National Counter Kidnapping Commission was created in 2006, and since then, official statistics have shown an alarming 78 percent increase in the number of reported kidnappings. Surveys show that the overwhelming majority of kidnappings are not reported to the police. Armed robberies take place in broad daylight throughout the city, including areas generally presumed safe and frequented by tourists. Well-armed criminal gangs operate with impunity, often setting up fake police checkpoints. Investigation of all crime is haphazard and ineffective. Only a very small percentage of crimes result in trials and convictions (Travel Guide, par. 6).

Travel to and from Maiquetía Airport, the international airport serving Caracas, can be dangerous, and corruption at the airport itself is rampant. Travelers at the airport have been victims of personal property theft, as well as mugging and “express kidnapping” in which individuals are taken to make purchases or to withdraw as much money as possible from ATMs, often at gunpoint. Multiple, credible reports have been received that individuals with official uniforms or other credentials are involved in facilitating or perpetrating these crimes. For this reason, American citizen travelers should be wary of all strangers, even those in official uniform or carrying official identification. There are also known drug trafficking groups working from the airport. Travelers should not accept packages from anyone and should keep their luggage with them at all times (Travel Guide, par. 8).

The road between Maiquetía Airport and Caracas is known to be particularly dangerous. Visitors traveling this route at night have been kidnapped and held captive for ransom in roadside huts that line the autopista. Because of the frequency of robberies at gunpoint, travelers are encouraged to arrive and depart only during daylight hours. If not, travelers should use extra care both within and outside the airport. We strongly advise that all British staff make advance plans for transportation from the airport to their place of lodging. If possible, travelers should arrange to be picked up at the airport by someone who is known to them or at least try to caravan in known groups en route to Caracas. Travelers should be aware of chokepoints inside tunnels and avoid obstacles in the road. Frequent reports of armed robberies in taxicabs going to and from the airport at Maiquetía have been made these past years (CIA, par. 2). There is no foolproof method of knowing whether a taxi driver at the airport is reliable. The fact that a taxi driver presents a credential or drives an automobile with official taxi license plates marked “libre” is no longer an indication of reliability. Incidents of taxi drivers in Caracas overcharging, robbing, and injuring passengers are common. Travelers should take care to use radio-dispatched taxis or those from reputable hotels. Travelers should call a 24-hour radio-dispatched taxi service from a public phone lobby or ask hotel, restaurant, or airline representatives to contact a licensed cab company for them.

In the present situation, all the British staff to travel and locate there should bear in mind the above mentioned problems. It is advisable to use the appropriate mentioned taxis for moving around and get to know some of the local culture. For example, for Venezuelans to make comments on beautiful women while walking is considered a normal cultural value. The British staff of the company should be aware of this and not react promptly because this would provoke reaction from the other part. Also, it is best to frequent those areas mentioned above and the pubs and bars located there for leisure purposes. Another problem to be met with is the kidnapping of foreigners.

According to the United States Department of State, Venezuela is a source, transit, and destination country for men, women, and children trafficked for the purposes of commercial sexual exploitation and forced labor; Venezuelan women and girls are trafficked within the country for sexual exploitation, lured from the nation’s interior to urban and tourist areas; child prostitution in urban areas and child sex tourism in resort destinations appear to be growing; Venezuelan women and girls are trafficked for commercial sexual exploitation to Western Europe, Mexico, and Caribbean destinations (“CIA”, par. 6).

Security Management

To make sure the work of Caspian Construction in Venezuela after its bid is accepted is of high quality, it is necessary to have a high level of security for both the facilities, equipment to be used and staff. The traditional form of achieving security, especially for facilities and equipment, is the hiring of companies that provide static guarding services. These static guards with guard the equipment and facilities and they can also guard staff while working also. Certainly it is a good form of security but the problem with this type of security is that it has limited capability especially for staff which are dynamic, mobile, in their work and not static. As we have mentioned above there are certain roads that are considered to be of high risk for foreigners in Venezuela.

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So, there is a need of a broader security policy, one that includes both physical security but also alarm management. Not only the need is to secure people and stuff but even react properly in a security threat, or security breach, situation. It is the need of having a manager that is imaginative, capable of identifying the situations properly and reacting to them adequately and effectiveness, efficiency and cost of an integrated risk management and security solution. This is why I recommend that the head of security management be an expatriate security manager. His Deputy also should be an expatriate which is preferred to be a Consultant for security issues. Among his responsibilities will be the managing and implementation of the security review recommendations and the managing of the guard force and third party supplier contracts.

It is advisable that this Security Management team should be located alongside the Caspian Construction HSE Manager within the Head Office in the compound that will be established for the company. This is a necessitty to facilitate the easy passing of information which is inevitable.

Using various networking methods, it is recommended that local national staff be recruited to fulfil the roles of facility security guards, static guards and drivers. They will come under the command of local security advisors, who are typically ex-Forces and familiar with the deployment of large numbers of guards and the nuances of doing so.

Journey Management

The fleet of 70 vehicles is the biggest part of the expenses to be made. It is a significant cost for the company. Of these vehicles many are anticipated to be of a rugged, 4×4 capability for transporting employees and clients in and around a construction site. It would be more appropriate that local nationals be employed as drivers. This option eliminates the need to train employees, to get Venezuelan driving permits and mitigates against them being involved in any traffic accidents with legal implications. It is an option that also cuts costs significantly. Local staff are better acquainted with the roads and driving conditions. It can also be expected to work on a shift pattern basis and longer hours. It is however advised that a Defensive Driver Training package be given to check people’s ability and also train in off-road driving skills, recovery of vehicles using winches, vehicles preparation, vehicle kit lists, the communications equipment and route information. Only during the visits to remote locations will vehicles be required to drive in convoy and then a minimum of 2 vehicles is required.

Where possible, additional security should be sought from both the Police and the Military in Caracas. This adds an element of jurisdiction to the security detail and also means weapons can be carried around the site. Vehicle escorts may also be permissible into Caracas and more remote geographical regions, and armed military convoys are less susceptible to attack.

Office Security

Around the buildings and offices where Caspian Construction will reside there must be established fences. In order to have improved safety and security, the distance must be adequate to prevent trespassers accessing, also preventing theft and damage to property of the company. A fence also denominates a boundary, which indicates to people that this facility is not for open public entrance. The access to the facility will be from a fixed position with an alternate, emergency exit located at an opposite side. This entry position will be divided in two lanes where the vehicles can enter the site and be checked for security reasons. They will also leave via a checkpoint simultaneously to aid in the smooth movement of vehicles. Since the duration of the contract is expected to be of four years then it is recommended that either T-wall concrete sections or ‘Hesco Bastion’ barriers must be used to create the fence (Security Management, par. 5). Within this boundary, sections will be divided using chain link with razor wire tops to secure individual buildings and to segregate the Yard areas with the Office areas. This is done in consideration of a security threat. By dividing the two areas you give them additional security. If the yard area is breached, for example, the office area would have an additional barrier.

Accommodation security

Especially for the British staff, accommodation security is essential. As mentioned above the risk of kidnapping is high in Venezuela nowadays. But this accommodation security must also include preventive measures for accidents like fire prevention for example.

A key-entrance system device which can be monitored by CCTV and controlled by an Operations Centre is advised to be the proper mode of entrance for the staff in the residence area. This will assure that only staff would enter this area. Since the risk of hijacking and theft is greater during night hours then the perimeter of the site should be lighted during those hours and an appropriate Illumination matrix should be created and floodlights be set up. A particular attention should be made toward power requirements of these light providing matrixes. There should be staff appointed in re-supply the fuel to each generator to prevent it stopping and creating a security warning.

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As mentioned before it is better to use local national force for guardianship. A tender could be made for contracting the best local company possible to provide these services for the entire duration of the contract. The main reason for using this local security guardianship companies is that this way you cut of costs of training and education. Also they are more familiar with the ambient and particular situation in the country. This way they would be able to react more promptly, adequately and faster to threatening situations than foreign security companies would do.

Security Planning

This is the part when a serious security break has happened. The major security threats would be kidnapping, theft or damage of property of the company. First, let us assess the reaction to a kidnapping of staff, especially foreign staff.

First thing to do from the company’s management team is to explore all alternative explanations including confirmation that the individual is not late, lost, or has not been involved in an accident of any sort. In order that this is done correctly a few preventive measures should be taken prior to having a kidnapping situation. The company’s management team should consider attaching a recording device to telephones to ensure that all instructions and information are received correctly and evidence is gathered. In a case of kidnapping the team should ensure that the person receiving or conducting any calls from the kidnappers should make written notes as soon as possible. Original tapes and letters sent by the kidnappers may also become important evidence. Letters and envelopes should only be touched at the extreme corners and placed in plastic envelopes before photocopying and storing securely for eventual handover to the police as criminal evidence. Where possible, recording should also be copied immediately and the originals stored. Transcripts and translations should be made ad delivered to local authorities. It is appropriate to have a separate telephone line to be used for negotiations with the kidnappers; recording equipment should be fitted to this telephone.

Now we turn to the human factor of preventive measures. Foreign staff should be given pre-arrival information about the situation and a training awareness after arrival in the country. Topics covered would include situational awareness training, defensive driving techniques and trauma first-aid training. Experience shows that the most common cases of incident of this sort occur whilst working in small numbers in remote locations with some distance from immediate support. Employees should be able to drive safely off-road, know how to recover a vehicle from obstacles and preserve life at the scene of an accident.

It is a fact that most kidnappers rely on routine to track down and then look for a time when individuals are most vulnerable to an attack (Security Management, par. 13). It is the case to have a well designed and well managed plan. This will provide a number of routes that are considered to be safe by the Security Management team. There should also be a schedule of departure and arrival on destination to further prevent accidents.

Another important factor is the awareness of staff. It should be noted and specified to the staff that kidnappers don’t always snatch their victims off the streets. They can sometimes begin the attack in their home. To prevent kidnapping in the accommodation facility it is important to follow all the procedures of security described above. The more secure people are inside, the more difficult an attempted abduction will become.

Staff must not think that when everything seems calm nothing an happened and they are de facto more secure. They should always be aware of the risk.

Another important preventive measure would be to carry personal alarms. By Venezuelan law it is not permitted to employees to carry personal weapons in Caracas or around the country, but nothing can stop them by carrying personal alarms. There are two types available: a silent trigger which will remotely alert security protection teams to an ensuing incident or, an audible alarm which is designed to stun any attacker, alert other people nearby to an incident and to deter further action.

Security Application

In order to have a proper implementation of all the above mentioned strategies a high technology IT equipment and communication devices should be used. This is known as the concept of I.T security. This form of security offering is a highly specialized area. This is why it requires a highly specialized consultant and staff to deal with it. However it is always useful to know the basic concepts of I.T security and how to go about implementing a clear and concise policy (“IT security for business”, par. 2).

Since excellent IT security is essential for the success and safety of the business, access will be given only on a “Need to Know” basis. This should apply to all staff, both local and foreign. It shall also apply to agents and contractors. In a certain sense this form of security is the obligation of every person because it is not sufficient to have just a couple of highly trained staff for supervision of the technology. Everyone should do his, or her, part in order not to have a system breach (IT security for business, par. 5).

The following measures and rules should be applied:

All staff is going to be users of the system and so they must understand and implement all the required procedures adequately. Staff can make no changes to software or hardware without given authority. All the data and software programs owned by the company should not be used on personally owned PCs and vice versa.

Disks, printouts and other storage media should be stocked and disposed of properly when their usage is no longer required. An important factor is that it should be noted in the contracts of employment that infringements of security policy may result in disciplinary action. This way they will be more aware of the risks and be more careful in their attitudes. Portables must be locked up when not in use and, of course, should have passwords and virus checking software installed. The reason is that a virus form or a bug can be used to steal information from these devices (IT security for business, par. 6).

Data held on portables should be transferred to the networks as soon as possible and the portable drives cleared of the data. If any member of staff requires the usage of any computer disk, CD-ROM or DVD-ROM, they must be first checked on a continually updated Company stand-alone system for viruses. If a virus is found on that device to be used then IT security team and the proper line manager should be informed immediately of the situation.

The same should be done if any hacking, or any other IT infringement, must be reported to the IT. The drives of any desktop or laptop computer should be securely and professionally wiped of any sensitive data. The same should be done for any sort of classified data.

Access to the server room must be limited to IT security team only. This would diminish significantly the IT system breach from outside. If any member of staff and personnel has any sort query on IT security, they should contact IT. The changing of all passwords every month is advisable. Also staff should not re-use passwords they have previously used.

Employees should be careful not run non-company software or data on company PCs, including portables, and vice-versa. This is because this software could be used maliciously to enter the company’s servers (IT security for business, par. 9).

Personal laptop computers must be locked away when not in use. Prior to taking charge of or using a company portable PC, all staff must sign the “Conditions of Issue and Use” certificate, acknowledging that they understand the instructions.

The usage of floppy disks should be prohibited unless absolutely necessary, and then only with the authority of your line manager.

Staff can use company’s devices and technology but also those received from legitimate business partners. Anyway, all such devices must be checked for viruses on the above mentioned virus checker system of the company prior to using them and must be clearly annotated accordingly.

If any staff member needs to transfer data to company network, this should be done fast and as soon as possible and the device with which he, or she, transferred the data within the company network system should be destroyed securely. It is adequate to give it to IT security personnel.

And finally, the use of e-mails should also be monitored. All staff should be aware that their e-mail messages will become a permanent record at the company’s storage devices. Also, it is necessary that classified documents must be encrypted before transmission. If a telephone can be used to finish the job then do not use the email. Do not print documents or e-mail unless absolutely essential and then keep copies to a minimum.

All personnel should be trained to know who has access their own mailbox database and know how to change this. they must also check who is in a group before sending a message to that group – some groups list a lot of people.

All this is done because information from inappropriate emails could be used from hijackers or other persons wanting to breach the company’s facilities or damage its staff and property.

Frequently, e-mail users do not consider their comments carefully prior to composing mail and therefore, it tends to be conversational and instantaneous. This can sometimes result in comments that may be regarded by some as offensive. Be aware of this fact at all times when sending / receiving e-mail.


“The world fact book: Venezuela”. Central Intelligence Agency Official Website. 2009. Web.

“Venezuela”. The International Monetary Fund Website. 2009. Web.

“Population, Health, and Human Well-Being – Venezuela”. EarthTrends Country Profiles. World Resources Institute. 2003. Web.

“Doing Business In Venezuela”. Kwintessential Website. 2009. Web.

“Business, Trade and Investment: Venezuela”. The Internationalist Online Magazine. 2009. Web.

“Crisis Negotiation”. Security management website. November 2004. Web.

“Travel Guide: Venezuela”. United States Department of State Travel Guide. 2009. Web.

“IT security for business”. Information Technology Security Website. 2009. Web.

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