The Security, Fire & Defence Market in Venezuela

1. TheSecurity, Fire & Defence Market in Venezuela UKTI-DSO INDUSTRY BRIEFING COURSE UK, 8-12November 2010 Luis Ernesto Sánchez, British Embassy Caracas - Venezuela

2. Venezuela

3. Geographical location of Venezuela

6. Basic information on Venezuela • Name: Bolivarian Republic of Venezuela • Population: 26,814,843 million (2009) • Capital: Caracas • Area: 912,050 sq. km • Language: Spanish • Currency: Bolívar Fuerte • Gross Domestic Product (Total): US $ 301.012 billion • Gross Domestic Product (Per capita): US $ $11,726 • Main exports: Petroleum, aluminum, steel, petrochemicals

7. UK in Venezuela • Fourth largest destination of UK exports in the region; • UK exports to Venezuela reached £ 270 million (2009); • UK imports from Venezuela £ 340 million; • UK presence in Venezuela include BT (telecomunication), GlaxoSmithKline (pharmaceuticals), Shell (oil & gas), Diageo (food & drinks), Vestey Group (food), BAT (consumer goods), AstraZeneca(pharmaceuticals); Anglo American Plc, (mining); • £ 2,8 bn approximate total of UK investment in Venezuela.

8. Criminality in Venezuela • 1.8 million criminal offences were reported in Venezuela between July 2008-July 2009 (including homicides, robbery, kidnapping, fraud, sexual assault, burglary, etc.). 1.480.349 out of the figure above were criminal offences against properties (robbery/thefts). • Criminal offences ratio in Venezuela between 2008-2009 was 8.400 per 100.000 habitants; • 19.133 homicides in Venezuela during 2009 (comparing to 16.047 homicides in 2008); • Homicides ratio per 100.000 habitants in Latin American countries: - Mexico: 8 - Colombia 32 - Venezuela 75

9. Cont. • Caracas has the second largest homicide rate of any large city in the world, with 92 homicides per 100,000 residents. Ciudad Juarez, México is considered N° 1 with 130 homicides per 100.000 residents; • A total of 7,676 people were killed in the Metropolitan Area of Caracas in 2009, that is, about one murder every hour and a half; • 54 polices officers were killed in the city of Caracas from January to June 2010; • Between July 2008 – July 2009 16.917 kidnapping cases were reported (including “express kidnapping” modality);

10. An average of 15-17 cars are stolen in Caracas on a daily basis; From January to June 2010, 2.112 motorcycles were stolen (22 motorcyclists were murdered in the process). In 2009, 2.640 motorcycles were stolen (including that of the British Embassy) and +90 motorcyclists were murdered in the process; According to experts, there are between 1,100.000 and 2,700.000 illegal guns in Venezuelan streets. Comparatively, all Venezuelan security forces including the National Guard have around 148,200 guns. Cont. 10

11. Gallup Poll on Security (2009)

12. Cont. • Less than half of adults in all 18 Latin American countries • say they feel safe, but their sense of security varies and is • lowest in Venezuela, at 23%. Venezuelans are among • the least likely in the world to say they feel safe, which • likely reflects the worsening crime situation in the last • decade. • Along with Venezuelans, South Africans are among the • least likely in the world to say they feel safe. How secure • residents across the sub-Saharan Africa region feel differs • dramatically, however -- ranging from a high of 84% in • Djibouti to a low of 20% in South Africa. South Africa is • known for its high incidence of violent crime, including • one of the highest murder rates in the world.

13. Characteristics of the local security market (commercial) • Insufficient/traditional approaches to counteract increasing and more imaginative/violent forms of crime; • Very little to none local manufacturing of security products; • Underdeveloped sector; • Mostly based on imported products from US, Germany, Israel, China, etc.; • Security equipment and services increasingly reflected in companies’ budgets; • Limited use of cutting-edge technology; • Lack of confidence in local authorities boost security-related expenses for both individuals and companies.

14. Size of the security market • Although it is difficult to assess the exact value of the market due to lack of accurate figures, it is estimated in US $ 1bn including procurement of services, goods and other protection-related expenses according to sector representatives. • New businessess have emerged in the security sector such as the car armouring industry (non-existing business 10 years ago). with 18 local companies working at full capacity to deliver increasing monthly orders (an estimated of 1800 -2000 orders per year).

15. Business opportunities sub-sectors • Businesses/Companies of different sizes; • Residential; • Governmental bodies/Embassies; • Supermarkets, Grocery Stores and Shops; • Shopping Malls and Department Stores; • Banking and financial institutions (including electronic frauds/ credit or debit card cloning); • Industrial and Manufacturing Sector; • Personal protection; • Car stealing/ car theft; • Kidnapping (including express kidnapping); • Public areas; • Motorways/roads; • Ports/airports.

16. The Venezuelan security market: The way forward Below you will find a list of areas that we consider offer a significant potential interest from the commercial angle: • Access control systems; • CCTV systems; • Intruder detection systems; • Electronic surveillance systems; • Security and protection consulting; • Video, voice and call recording systems; • All kinds of car anti-theft devices (wheel locks, gearshift locks, car starter circuit breaker devices etc.); • Industrial and home alarm systems;

17. Cont. • Fences (electrical, non-electrical); • Security, protection and risk management consulting; • GPS –like satellite tracking and monitoring system; • Evasive driving training; • Metal detectors; • High tech telecommunication devices; • Motion detection systems; • VIP protection training; • Burglar alarm; • Motion detectors; • Valuable transport;

18. Cont. • Scientific police equipment & training at all levels; • X-ray equipment (e.g. airport or port security); • Banking security (including e-crimes) • Car-armouring; • Counterfeit money detectors; • Additionally, specific training (e.g. protection, defensive driving, etc) training could also be added to the list.

19. Public Security

20. Organisation of the Venezuelan Public Security Forces • The Venezuelan Police force is organised at Central, State and Municipal levels. Additionally, the CICPC, a scientific police agency, is the primary criminal investigation body. Also, the National Guard, a branch of the Armed Force plays an important role in public order & security. Intelligence- and national security related matters are in charge of SEBIN (Spanish acronym for National Intelligence Bolivarian Service). • Central Level: The recently created National Police, The Scientific Police, National Guard (NG) and SEBIN. They depend directly from the Ministry of Interior. The NG depends on the Ministry of Defence; • State Level: Police forces of Venezuelan states under direct command of each governor of state; • Municipal Level: Police bodies of preventive nature directly dependent on each municipality´s mayor.

21. Strength of the Venezuelan Security Forces & Budget • The new National Police, created in 2009, has 2400 officers in July 2010 (with a further 1400 in training); • The National Guard has 33,000 officers; • The Scientific Police (CICPC) has 8000 officers; • State Police forces represent approximately 50,000 officers altogether; • Security budget for 2010 £ 232,007,114.18; • Security budget for 2011: £ 578,927,976.62 (including £ 173,764,339.07 for the National Police).

22. Experimental Security University • The Experimental Security University (Universidad Nacional de la Seguridad Experimental - UNES) is a state university in Venezuela founded in 2009. It specialises in providing training for Venezuelan police and security forces, in particular the new National Police. UNES is part of the "new model" of policing proposed by the 2006 report of the Comisión Nacional para la Reforma Policial – National Comission for Police Reform (CONAREPOL). CONAREPOL had proposed that the police should be specifically trained in human rights, and have a greater emphasis on crime prevention

23. Business Opportunities The public security sector offers a wide range of areas for the UK security industry. • Training/consultancy; • Technology at all levels; • Scientific equipment for criminal investigation (including forensic –related materiel); • Protective equipment such as ballsitic vests, helmets; • Riot control equipment.

25. Fire

26. Venezuelan Firefighting Venezuela´s firefighting units are organised according to two main criteria, jurisdiction (state/ municipality) and area of specialisation. The most important unit is the Bomberos Metropolitanos de Caracas (Caracas Metropolitan Firefighters) located in the capital city of the country Organisation by speciality: • Urban Firefighters; • Marine Firefighters; • Aeronautic Firefighters; • Forestry Fightfigthers; • Industrial firefighters; • PDVSA (National Oil Company) Firefighters; • University Firefighters; • Young Firefighting Brigades;

27. Characteristics of the Market • In comparison with countries like the Europe/US Venezuela shows a lower incidence of fire-related events (probably due to a significant reduction in the use of wood for construction purposes in residential areas); • The descentralised structure of local firefighting network is considered an advantage since procurement processess are less complicated/ beaurocratic; • As of 2001, Venezuelan president signed a law exclusively focused on the firefighting activity.

28. Business Opportunities • The local market offer posibilities in terms of procuring new equipment such as pumps, specialised vehicles, refurbishing, protection equipment (uniforms, masks, boots) etc. Training at different levels offers a possibility for UK organisations: • Being Venezuela a large oil producer, the country houses the largest reserves of heavy oil in the world Additionally, the country´s network of oil & gas infrastructure including current and future refineries make of Venezuela a very attactive market for oil & gas specialised firefighting equipment & training. Venezuela also has some of the largest gas reservoirs in the Western hemisphere. Major plans for offshore gs reservoirs are currently undergoing; • The recent passing of the LOPCYMAT (Occupational Health & Safety law) may create business opportunities for UK companies as far as far as industrial safety is concerned.

30. Defence

31. Current tendency of the market for military equipment in Venezuela • The arrival of Hugo Chávez at the Venezuelan Presidency at the end of 1998 introduced significant changes in the ideology and procurement of the Venezuelan military. Chávez, a self-proclaimed socialist, has characterised his administration with a very strong anti-American rhetoric. This has brought as consequence a radical change in the orientation and doctrine of the armed forces; • Venezuela’s traditional suppliers of military equipment have been the US and Europe. Nevertheless, since the political swift towards Cuba, Russia, China, Iran, etc., Venezuela is procuring military equipment from non-traditional sources. The U.S. has also prevented Venezuela to access US made equipment as well as foreign made equipment with some degree of American technology. • Venezuelan military expenditure in the last 3 years: + US $ 5.5 bn.

32. Recent military purchases by the Venezuelan military: • 100.000 AK (Automatic Kalashnikov) -103 & 104 assault rifles (Russia); • 24 Sukhoi 30 MKII Jet fighters (Russia); • 20 Mil Mi-17V-5 multipurpose helicopters(Russia); • 10 Mil Mi-35M2 “Hind” attack helicopters (Russia); • 3 Mil Mi-26T “Halo” heavy-lift helicopter (Russia); • JY 14 Tri-dimensional long range air defence radar (China); • 5000 Dragunov sniper rifles (Russia); • Advance jet trainers (China); • Patrol vessels (Spain); • Armoured vehicles –T72/T-90 Tanks (Russia).

33. Planned procurement • (+ 5) 636 kilo class/Amur 677 submarines (Russia); • (+12) TOR M1 medium-altitude, short-range surface-to-air missile (Russia); • S-300 surface-to-air missile (Russia); • Mil Mi-28 Havoc anti-tank helicopter; • Reconnaissance aircrafts; • Transport aircrafts.

36. Procurement of UK-made military equipment by the Venezuelan armed forces through history • Traditionally, British military equipment have enjoyed a reputation of quality and reliability among the Venezuelan military. This tradition started after the Second World War (1950s) when the Venezuelan Air Force purchased several fleets of English Electric Canberras, De Havilland Vampire and BAC Jet Provost; • Also during the 50's the Venezuelan Navy commisioned three heavy destroyers to Vickers Armstrong of Barrow in Furness shipyards, The three new units were ARV. "Nueva Esparta" (D-11), ARV. "Zulia" (D-21) and ARV. "Aragua" (D-31) which arrived in Venezuela between 1953 and 1954; • During the seventies, the Venezuelan Navy purchased a number of Vosper Thornicroft’s patrol vessels still in active service; • Last major deal involving British military equipment took place in the late 80´s when Venezuela bought around 90 “Scorpion” light tanks from Alvis (actually, BAE Systems Land and Armament).

38. Projected procurement deals involving UK suppliers • The Venezuelan army is currently considering the purchasing of some logistics equipment from a UK supplier; • UKTI Caracas is assessing business possibilities related to the upgrading of some elements of the Venezuelan army tank fleet (Scorpion, AMX 13); • In recent years, the Venezuelan navy has been testing some hovercraft models . According to different sources, the Venezuelan navy is interested in acquiring + 32 hovercraft of three different models to be assembled in Venezuela by DIANCA (National shipyard) with full assistance of the UK manufacturer.

39. Business opportunities Despite current Venezuelan arms procurement trends, there still exists possibilities as far as the UK military industry in the following subsectors: • Logistics/engineering equipment & materials; • Technology transfer / Joint ventures; • Telecommunications; • Marine technology /Shipyards; • Transport equipment; • Surveillance equipment; • Establishment of an aircraft/helicopter service & maintenance facility in country.

40. Approaching the local market If you are considering exploring the Venezuelan market, please bear in mind the following: • Collect as much information as possible about the market, its characteristics and distinctive features; • Explore if your product or service fits well in the local market; • Consider the possibility of appointing a local agent or representative who is experienced and knowledgeable about the security subject and the local business environment; • Contact UKTI (DSO /British Embassy Caracas) and discuss the best way to approach the Venezuelan market. UKTI offers a wide range of services especially tailored to meet your requirements and to help you succeed overseas.

41. Contact details For inquires on the local market, please contact the UKTI team at the British Embassy in Caracas, Venezuela: Haden Spicer, First Secretary Commercial Phone: +58 (212) 2638411 Ext. 4241 Haden.Spicer@fco.gov.uk Luis Ernesto Sánchez, Trade and Investment Officer Phone: +58 (212) 2638411 Ext. 4314 Luis.Sanchez@fco.gov.uk Luis Daniel Quirós, Trade and Investment Officer Phone: +58 (212) 2638411 Ext. 4285 Luis.Quiros@fco.gov.uk Andrea Fagundez, Trade and Investment Assistant Phone: +58 (212) 2638411 Ext. 4248 Andrea.Fagundez@fco.gov.uk

42. Thank you