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United States of America

Murders in emerging markets: Now you can travel again, where's safer?

  • As travel and tourism budgets begin to loosen we are again occasionally asked, 'is it safe for me to travel there?'

  • High homicide rates: US in DM; Brazil, Colombia, Nigeria, Sth Africa in EM; Jamaica, Phils, Thailand in Tourism spots

  • Post-2000, US alone deteriorated vs DM peers while most EMs improved (except Chile, Egypt, Iraq, Jamaica, Mexico, Peru)

Murders in emerging markets: Now you can travel again, where's safer?
Hasnain Malik
Hasnain Malik

Strategy & Head of Equity Research

Tellimer Research
1 October 2022
Published byTellimer Research

As travel and tourism budgets begin to loosen we are again occasionally asked, 'is it safe for me to travel there?' One way to grade security risk is to compare homicide rates.

This data suggests that questions over safety should be asked more often in advance of visits to countries such as Colombia, Brazil, Mexico, Nigeria and South Africa, than countries such as Kazakhstan, Pakistan, or almost all of the investable countries in the Middle East (ex-Iraq).

Murders in developed and emerging markets

Insecurity has been sufficient to put investors off certain emerging market countries in the past. Examples in the past decade might include Nigeria and Pakistan and, from the preceding decades, the likes of Colombia, Egypt, South Africa and Sri Lanka.

The resolution of insecurity risk creates opportunity for tourism, all other factors equal, and obviously creates opportunity for investors. All of these countries have seen that, albeit with a lag, when they have passed the peak of insecurity.

Below, we chart how the homicide rate has changed over the past 20 years (where the data allows). Emerging market countries where these rates have increased over this time period appear to represent the exception, not the rule – that should be considered a bullish factor for investment in EM.

Change over the last generation in murder rates

Insecurity and autocracy

Insecurity can also lead a population to tolerate more autocratic rule in return for some resolution of that insecurity. Of course, a long-standing autocratic regime, that stamps out all dissent under the agenda of addressing insecurity, can make it difficult to gauge what a population really thinks.

In this regard, Russia presents an interesting example.

  • Outside of Russia, few regard President Vladimir Putin as anything other than a dictator and few regard the last president of the USSR, Mikhail Gorbachev, as anything but an enlightened reformer and peacemaker.

  • However, domestically, the Russian population still has an 83% approval rating for Putin according to the Levada-Center – much nearer to prior peaks in the high-80s seen in 2003, 2008 and 2015 than the troughs near 60 seen in 2013 and 2020-21.

  • To the degree that this survey is an accurate impression of popular sentiment, it is likely that much improved day-to-day security is at least a partial explanatory factor. The murder rate has dropped very sharply since 2000:

    • 1991 – when the USSR disbanded, the homicide rate in Russia was c15 per 100,000.

    • 2000 – by the time Putin took over from Yeltsin at the end of 1999, it had climbed to 28.

    • 2020 – after 20 years under Putin's leadership, it had dropped to 7.

Russia's murder rate dropped sharply in President Putin's era

In many instances elsewhere, there arguably is a trade-off between liberty and security implicit in the social contract underpinning the institutions and personalities in government:

  • Relatively autocratic governments – eg China, Saudi Arabia and the other GCC countries, and Vietnam.

  • The privileged role of the military in hybrid-regimes can be grounded in their role as ultimate guarantors of domestic security – eg Egypt, Pakistan and Thailand.

  • The electoral appeal of politicians in democracies can be based on security assurances, even if made more to their own ethnic community than others, eg:

    • Rajapaksa in Sri Lanka (at least for the Sinhalese-Buddhist majority in the civil war era election of 2005 and the 2010 one that followed its conclusion);

    • Modi in India since 2014 (at least for the Hindu ethnic majority);

    • Buhari in Nigeria (prior to the 2015 election);

    • Duterte in the Philippines (prior to the 2016 election); and

    • Bolsonaro in Brazil (prior to the 2018 election).

This link between security assurances and autocracy is a tricky one for emerging market investors who claim to adhere to high ethical standards; an issue I explored more in this report, published after the Russian invasion of Ukraine: When countries behave badly: The tortuous morality of ESG investing (March 2022).