They often say to chase your dreams.
The grind is tough in the US, don’t you know?
Working those 9-5 days…
Commute is 1 hour both ways…
Your wife won’t stop nagging your ass…
All the around you taking care of kids that you suspect ain’t even yours but don’t know for sure…
Drowning in debt….
With your expensive ass truck and more…
And you just can’t seem to get ahead!
However, there is a light at the end of the tunnel…
You read on Twitter by some anon account that you can have it all!
Just quit your job because who wants to be a “wagecuck”
A “wagie” you know?
So sell your house..
And you move to some random ass part of Latin America to achieve the dream!
To some small little beach community popular with tourists…
And you invest in a burger & beer joint in some part of Mexico or Colombia or the DR….
As if Cancun needs another burger & beer joint…
But yours will be different!
And once you get set up, you will be rolling in dough with big ass Latina bitches sucking yo dick every day on the beach!
Fuckin awesome
But then you wake up one day…
And maybe you get a call some random person claiming to have your son kidnapped and they will cut his fuckin guts out if you pay 20,000 USD.
Regardless if they have him or not…
Or maybe they just threaten you directly.
“Give me a percentage of your business profits or I’ll fuck you up.”
All of a sudden the dream don’t look good no more.
Well, fuck off – those anon kids living in shared apartments or with their parents didn’t tell me this would happen!
Just quit my job and move abroad, they said!
You’ll be doing great, they said!
Fuck the 9-5 and your nagging wife Karen!
Now…
That’s not an unusual story…
Though the details mentioned here are not part of everyone’s story obviously…
But the idea is the same.
The gringo who thinks he will start some burger joint down here or whatever the fuck the business idea is.
And hits a brick wall known as reality..
With all of the shit you have to deal with down here.
Be it inefficiency, corruption, bureaucracy, etc…
And…
Perhaps extortion also.
Now, to be fair, there are gringos who come down here and kick ass in business.
Do fucking great and make all the dough.
But there’s plenty of gringos also who don’t quite realize the extent to which they will have problems of running a business in a “developing country.”
A country with higher rates of those same problems -- inefficiency, corruption, bureaucracy and crime.
With minimal to no ability to address some of the problems appropriately.
One of those problems is extortion.
What we will be discussing in this article here.
This will be just the first article I will be bringing up to address some of the issues that businesses have operating down here.
In the future, I will be interviewing actual business owners as well to give their personal experience with these issues – including extortion.
Because among those interested in living in Latin America, I’m sure starting a business is of interest to some.
So just so nobody walks blind into doing this down here…
And like I said, some do pull it off well.
This article – among others in the future – will be to just highlight some of the issues that you may or may not encounter.
So let’s briefly look into the issue of extortion in various Latin countries.
Starting with the country I currently live in…
Mexico
In Mexico City – where I live right now – extortion has often been reported in the media to be an issue down here.
According to this article here, extortion increased by 127% in the first three months of 2019 compared to the same time period the year before.
Many of the extortions are done by local criminal groups such as the Unión de Tepito.
Which, by the way, if you want a story I did relevant to them, then just read this article here I wrote.
Anyway, the issue of extortion got so bad in Mexico City that a small business owner named Raymundo Pérez López formed an association of hundreds of small business owners to put pressure on the local police to do something about the extortion issue.
And writing a letter stating that a self-defense group among the business owners might be necessary if the police don’t do anything.
He ended up getting shot and killed.
A more recent example of extortion can be found in this article here.
Where supposedly there is risk in Mexico of criminals calling businesses that want to reopen during the Covid Recession that we are experiencing…
And these say criminals will basically demand money over the phone pretending to be civil servants that can give them permission to reopen or not.
So if they don’t pay, they will get threats basically.
Now, I do remember reading one article a few months ago where actual civil servants tried extorting a business in Mexico City – I believe in Roma Norte – by demanding that the owner pay money or they will close his business.
The owner had to close his business and then spend money on legal fees to take the civil servants to court.
If I could find the article, I would post it here. If you want to find it, you will have to look it up in Spanish. I tried but Google results isn’t showing me what I read.
Anyway, it’s similar to the extortion by phone by the fake civil servants above.
And also shows that extortion can not only be done by legit criminals but also by people in positions of authority.
A more common example of that is when police try to get bribes from folks – such as when they demanded I pay a bribe in Mexico City a few years ago or be at risk of being put in jail.
As you can read here.
And I’m sure that happens to businesses also.
At any rate, there are larger statistics that go into the issue of crime that businesses have to deal with in Mexico.
According to this article here, about a third of all businesses surveyed reported in 2017 of being victims of crime – robbery, extortion and more.
However, small, medium and large businesses had different rates of victimization. Small firms reported 59.3%, medium firms reported 61.5% and large firms reported 51.4%.
And the issue of extortion is such a large issue in Mexico that it also hinders a lot of growth in the country as you would expect.
According to this article here, a lot of small businesses prefer to operate informally (employing 57% of the labor force in Mexico) given the risk of not flying under the radar.
Because of crime related issues such as extortion, many of the same businesses are fearful to expand their operations.
Now, moving beyond Mexico…
Colombia
In 2012, about 125,000 Colombians reported being victims of extortion or paying protection money as you can read here.
Now while that is about 8 years ago, I imagine the issue isn’t much better today.
And as that article reports, the business of extortion in Colombia was worth about a billion dollars back then.
And half of the victims reported there were business owners.
Now when it comes to how the extortion was done…
About 50% of the extortion attempts were done by phone, 24% in person and 19% being a mixture of both cases.
Which isn’t surprising – in my time in Mexico, extortion by phone seems to be more common from what I have seen personally.
I remember a friend of mine named Angie telling me how someone tried extorting her for money a few years ago by phone by saying that they had some friend or family member kidnapped.
When it was bullshit.
Thankfully, she didn’t fall for it but still…
Anyway, in Colombia, apparently the cities with the most extortion were in Medellin, Bogota and then Cali.
And while that does make sense since there would be more wealth and businesses to extort in those areas…
It does make me wonder also if there is underreporting in lesser known cities of Colombia.
Like in Mexico, the frequency at which crimes are reported will vary by area – significantly at times.
But either way….
Brazil
The issue of extortion also seems to be on the rise in Brazil.
According to this article here, more than 40 people were arrested in 2019 due to working for a gang that extorted companies that worked for a Brazilian state-run oil company named Petrobras.
This apparently is an increasingly common issue in Brazil where militias are being formed by former police and that go after companies offering distribution of utilities and goods.
Here’s another really great article on corruption and extortion in Brazil. It has a similar theme in that there is a lot of extortion against companies working for Petrobras by militias run by former police and security officials.
Though the article goes into detail also on how these same militias force vendors into selling a specific type of cigarette brand as you can read here.
And apparently it is not just former police doing the extortion as you would imagine logically…
But also current police officials as well – again, no shock as you can read this other article here.
Where 22 current police officials – including the third-in-command of the military police of Rio de Janeiro was arrested under charges of bribery and extortion.
Surprising they didn’t get the #1 in command…
I’m guessing he is innocent….
Right…..?
Right?!?
Argentina
Interesting enough, the capital of Argentina (Buenos Aires) and its surrounding areas apparently have an issue with Chinese mafia groups.
According to this article here, the issue has been becoming more common in recent years with a mini market employee of Quilmes being shot at by members of a group.
Apparently the owner of the store had received an extortion threat for 50,000 USD in exchange for protection a few days prior and other business owners had received similar messages.
Funny enough, they wrote the message in Mandarin. I guess they thought the business owners would use Google Translate?
Perhaps it shows that many of the criminals down here are not necessarily very smart either...
But that’s another topic for another day.
Though, to be fair, these Chinese mafia groups seem to be targeting the Chinese community in Buenos Aires and surrounding areas so I guess it’s not entirely illogical to write in Mandarin.
Anyway, that’s the most I could find on extortion in Argentina on a brief Google search but I’m sure there is more that happens down there.
Costa Rica
In Costa Rica, a brief search online seems to suggest that loan sharking is an issue in the country.
As you can read more about here.
In Spanish, the phrase is “gota a gota.”
New to me anyway since I don’t go around loan sharking people down here!
But it seems a bunch of flyers are put up everywhere offering easy credit to folks on the street.
To which someone can call the number on the flyer and get someone to stop by to offer as much as 15,000 USD or more.
Anyway, criminal investigations into these practices seem to suggest that there are criminal networks that operate this practice in places like Escazú.
And if you couldn’t pay the money and the interest then you would obviously be at risk of physical violence.
Peru
Based on a quick Google search, it seems extortion is quite common in the construction industry in Peru for whatever reason.
According to this article here, extortion accounts for 1.5% of construction value in Peru.
The money spent is to avoid work stoppages and violence.
With 90% of any construction project being worth over 60,000 USD being infiltrated by criminal organizations.
And so while not only do these construction companies have to issue direct payments…
But they also have to hire the services of phantom companies run by these criminal groups and have workers pay “union dues.”
But obviously this problem goes beyond just the construction industry…
In 2014, about 500 businesses in Peru reported having to pay extortion fees that ended up being over 18 million dollars in total.
And there are apparently over 100 extortion groups in Lima, Peru overall.
Not counting, of course, the extortion groups in the rest of the country that exist probably….
And these extortion groups target a wide variety of businesses asking for payments between 3,500 to 355,000 USD.
It has also apparently caused 30% of the businesses extorted to move or close.
Dominican Republic
Based on a few articles I came across online…
Apparently a British company named Biwater International had abandoned operations in the DR due to issues regarding extortion despite winning millions in contract work as you can read about here.
Here’s another article also on the possible influence of Russian and Italian mafia on crime and extortion in the country.
Guatemala
As you can read in this article here…
There has been issue in Guatemala with extortion from large criminal groups such as MS-13 and 18th Street.
Where in Guatemala City, around 550 garbage trucks drive around the city three times a week and collecting duties.
With about 300 truck owners approved by officials to operate their business in the city.
Anyway, these businessmen are grouped under an association that represents their interests…
And, according to the article, a criminal group reached out by phone to the board of directors of this association threatening death against the truck drivers if they did not pay 100 quetzales or 13.5 USD for every truck.
And apparently the fee has doubled as another criminal group tried extorting them for the roughly the same fee.
Anyway, they ended up paying as they started shooting at the trucks and ended up killing the son of a colleague.
For more details, read the article here.
The Point
Obviously, this article is meant to highlight, as I said, the real issue of extortion and crime on any business you might ever plan on running in Latin America.
Though, to be fair, not all of Latin America is the same as I often say on this website.
I picked just a bunch of random countries to look at online for this article and I could have picked any of them.
I did look up Chile and Paraguay, for example, but a brief Google search into extortion issues in Chile and Paraguay didn’t bring me any relevant results.
But I’m sure the issue probably exists there as it does in any country.
And that brings up a valuable point – which is that the issue of extortion is going to vary quite a bit by what country you are in and also obviously what part of that country you are in.
For example, some parts of Mexico or Colombia are safer than other parts.
Chile and Paraguay are arguably safer than Mexico or Colombia perhaps.
And in a country like Chile, I’d imagine there is probably more concern regarding extortion in a place like Santiago than Punta Arenas.
But that’s just a guess.
So just keep that in mind as I don’t want to paint all of Latin America as this place of endless extortion everywhere.
Simply bring the issue to light for those thinking of setting up a business down here.
As I said, this is just one of the articles I plan on writing about folks running businesses down here.
The first one actually.
Anyway, if you got any relevant questions or comments…
Drop them below in the comment section.
And follow my Twitter here.
Thanks.
Best regards,
Matt