More than 3 weeks after the inauguration of Gustavo Petro, the promised total opening of the border between the brotherly countries has not yet materialized. The official communiqués are vague and inconclusive. Why?
Hello friends of leofinance I hope you are very well. today I want to talk to you about a topic much closer to home, the supposed economic opening that would occur between Venezuela and Colombia, and how the failure to materialize is indicative of how free trade and circulation is a problem for authoritarian governments like the one in my country.
The context.
On the 7th of the current month, Gustavo petro, a former guerrilla fighter and the first leftist president of the Colombian nation, was sworn in as president of Colombia, a total paradigm shift in the country's politics that presaged huge transformations in both the domestic and foreign policy of the brother country. Gustavo Petro was a long time supporter of the policies of the late Hugo Chavez, and an apologist for his successor, Nicolas Maduro. And very important in his foreign policy strategy was the reopening of the border between Colombia and Venezuela. Both for the movement of people and to formally reactivate the very important commercial relationship between both countries that has existed since their very origin.
But today it has been 21 days since Petro has been in government, and the border is still closed. So it is valid to ask, what is going on?
Although until a couple of weeks ago, after the appointment of the ambassadors and the affirmation by the Colombian government that the border would be opened in a short term, a situation that filled with excitement the merchants on both sides of the border, in cucuta many businesses were preparing to increase their inventories, waiting for the Venezuelan buyers who gathered all the liquidity they could in anticipation, it ended up happening that the Colombian government said that first all the security conditions must be guaranteed to open the border. While the Venezuelan government said that they should think things over, since the cheaper Colombian products could put in check the weak Venezuelan industry. This is undoubtedly a bucket of cold water for all of us who were waiting for the FORMAL economic reactivation of the border, and I say FORMAL because the border has always been a focus of trade, only controlled by mafias and corrupt entities of all kinds.
To give you some context, Colombia's exports to Venezuela alone in 2008 before the outbreak of the economic crisis amounted to 6.1 BILLION dollars a year. It may not seem like a lot compared to the economies of the north, but we are talking about two countries that together do not exceed 90 million inhabitants. Last year, due to the border closure and Venezuela's failing economy, Colombia's exports to Venezuela were only $331 million last year. Business groups claimed that if the border was opened between months, the trade explosion would bring exports to $1.2 billion by the end of the year. This would mean more jobs, more trade opportunities, and an improvement in the standard of living of Venezuelans by having access to cheaper Colombian products.
The opening of the border is tremendously beneficial economically for both countries. Something that would change the economic outlook of the region in these difficult times. However, in spite of this, and in spite of both presidents being left wing comrades. This has not happened yet.
The reasons alleged by the governments.
On the Colombian side the concern about guarantees can be considered very legitimate, the border is plagued by guerrilla groups engaged in extortion, mafias from both countries, and drug trafficking organizations, changing the status quo in the region could create a wave of violence that the Colombian government is not yet able to contain, and that would make petro look very bad in front of the Latin American left. Technically, though, Petro's closeness to the rebel left would help pacify the region, and a new partnership with the Venezuelan government would allow the security forces of both countries to cooperate in fighting criminal groups on both sides of the border.
While on the Venezuelan side, the concern about the future of the country's industry in the face of the wave of Colombian imports is a product of the systematic weakening of the Venezuelan economy, Venezuelan products compared in price in the same currency are at least 50% more expensive than Colombian products, this is because producing in Venezuela, with government regulations, taxes, the difficulty to import machinery and raw materials, and the general shortage of energy is much more expensive. Technically, Colombian imports would affect the sales of some companies, but these companies could well import cheaper Colombian raw materials and machinery and adapt their prices to the new market reality, normalizing the economic dynamics.
But this is a superficial appreciation of the issue, the situation is much more complicated.
The reasons that governments do not mention.
It is perhaps the government of Nicolas Maduro that is actively blocking the negotiations, because for an authoritarian government, which depends on isolationism for its stability, and uses its iron-fisted and corrupt control over the economy to maintain its power, OPENNESS is a dreaded word, as is the case with all authoritarian governments.
To elaborate on this, I will list the reasons why the opening of the border is problematic for Maduro.
Businesses, of the oligarchs. The leftist narrative usually has little regard for businessmen, often accusing them of the world's problems, yet Maduro is sensitive to Venezuelan industry, after destroying and expropriating it for years, perhaps because the model of industry in Venezuela is poor and inefficient, a model owned in large part by those who in my country we call Enchufados, and that in the context of the Russian-Ukrainian war are now called Oligarchs, basically they are 'businessmen' friends of the regime who have the permission of the regime to import and export and the preference in exchange controls and relaxation of regulations by the regime. They may be private businessmen who have close and corrupt relationships with regime officials or front men for the regime's powerful political figures.
More information about these Enchufados here.
Therefore, an opening of trade between Colombia and Venezuela would jeopardize everything that the corrupt and the oligarchs have worked for years to build. The Maduro government depends as much on these enchufados to maintain a semblance of economic functionality in the country, as they depend on him to continue making money.
The corrupt armed forces.
The border closure created a system of roads used by some people to trade goods between the two countries, this black market is technically illegal.
Now, the Venezuelan government relies heavily on its armed forces to continue ruling, whether it is to persecute the opposition, brutally repress protests, intimidate the population and even assassinate the most troublesome dissidents. But due to the country's failing economy, the military's salary is practically nothing. So the government needs a way to keep them comfortable and happy to keep doing the dirty work.
And the answer is corruption, many Venezuelan military, from soldiers to generals, live and even prosper thanks to the money they charge to anyone who wants to cross the border. On the other hand, some military use front men to trade themselves with goods imported from Colombia. Corruption not only serves to keep the military under control, but serves as a tool to punish anyone who rebels, when everyone has dirty hands, to punish someone you only have to have a court try them for their crimes.
If the border trade is normalized, the Venezuelan government would lose a way to control its arms, and therefore lose control of the country.
Maduro is a prisoner of other commitments.
During the years of sanctions, anti-imperialist rhetoric and failed economic policy, Maduro's government has resorted to making trade agreements to import food and raw materials from countries far away but more akin to his authoritarian ways. Such as Iran, Turkey, Russia and China.
Today, with the possibility of seeing the Venezuelan market flooded again with Colombian raw materials, machinery and finished products, such trade agreements would take a back seat in the Venezuelan market since products from regions such as Iran or Turkey are usually much more expensive for obvious reasons, and would have to compete in a free market against the Colombian alternative, more suitable to Venezuelan tastes and cheaper. And if there is one thing authoritarian governments don't like is to compete fairly, so it is easy to assume that the Maduro government must be under a lot of pressure from its trading partners to avoid free competition in the country, one that they would lose.
Social control.
A new era of trade and therefore prosperity on the border could precipitate the emergence of new economic and social forces that the Maduro government cannot control, and if the situation in at least part of the country improves, it would mean the return of hundreds of thousands or even millions of Venezuelans who were forced to emigrate in search of a better future. Thousands of Venezuelans who hate Maduro's government very much, something possibly detrimental to the survival of this...
Conclusion.
Although I eagerly hope I am wrong, perhaps the maduro government is actively delaying the opening of the border for the reasons I mentioned above, and will only open the border as long as the Venezuelan government has tight control over what comes in and what goes out.
Meanwhile, the relationship between comrades Petro and Maduro seems to be cooling, as recently, Gustavo Petro refused to return the persecuted political prisoners of the Maduro regime who are in Colombia... and several diplomatic meetings to address the border issue have failed.
Perhaps the clash of relations is intentional, as there are illegal groups in Colombia that are also interested in the status quo. Even so, I hope I am wrong. I hope I am wrong.
Thanks for reading me. And happy evening.
Recommended Bibliographic Reference
[1] ECONOMIA -GOBIERNO DE VENEZUELA PREPARA PLAN SOLIDO Y HABLA CON SECTORES PARA LA REARPERTURA