CARACAS: The closure of the border has revealed the role played by smuggled Venezuelan goods in generating informal employment in Colombia’s economy.
Colombian President Juan Manuel Santos announced that he will issue an “economic emergency” in the border regions affected by Venezuela’s decision to close parts of its border with Colombia.
The economies of cities in Colombia located along the border with Venezuela are largely dominated by employment in the informal sector, which is facilitated through the smuggling of subsidized goods from Venezuela.
In Cucuta, the Colombian city most affected by the recent border closure, the level of informal employment – practically all related to the resale of smuggled Venezuelan goods – reached 71 percent in January. The border closure has devastated the economy of the city, leading Santos to say that this was a chance to “convert this crisis into an opportunity.”
Cucuta is also facing a resource crunch as thousands of Colombians voluntarily returned from Venezuela. In addition to those who left Venezuela on their own volition, roughly 1,000 undocumented Colombians were deported from Venezuela.
The closure of the border has revealed the prominent role played by smuggled goods in generating informal employment in Colombia’s economy, as well as the negative effects the smuggling of goods has on the Venezuelan economy.
Jose Vielma Mora, governor of the border state of Tachira, said that as a result of the border closure Venezuela was saving 1 million liters a day of smuggled fuel.
The Colombian national tax and customs bureau, DIAN, estimates that US$6 billion in goods entered the country illegally in 2012, comprising approximately 10 percent of total imports, valued at US$58 billion that year.
Venezuelan officials have alleged that organized crime groups are largely in control of smuggling operations, with proceeds going to fund further criminal activity.
The economic situation in cities on the Colombia side of the border may worsen, with the Venezuelan government considering additional closures in the border states of Apure and Zulia.
Venezuelan National Assembly President Diosdado Cabello reiterated his government’s call for the Colombian government to do its part to stem smuggling, criticizing the small security presence on the Colombian side of the border.
Venezuelan President Nicolas Maduro ordered the border with Colombia closed after paramilitaries attacked Venezuelan soldiers who were patrolling the border. Maduro also declared a state of exception in a handful of municipalities on the border in order to address the presence of paramilitaries within Venezuela’s borders.
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