As Venezuela’s woes worsen, Cúcuta looks elsewhere for trade

By Jim Glade December 23, 2018
Colombia Venezuela border. Thousands make the daily journey across Simon Bolivar Bridge in the hopes of finding a better life. Photo by Arjun Harindranath

Crossing the border from Colombia to Venezuela one afternoon in October, hundreds of people line up with one or two shopping bags in hand, a few carrying single tires on their heads. A Colombian man in line says that, just a couple of years ago, Venezuelans crossing back into their country would have been pushing carts overflowing with merchandise.

According to anthropologist Jorge Augusto Gamboa, the border city of Cúcuta has, since its inception, been “a place for commerce and a crossroads”. Situated in the warm valley of the Zuila river, the capital city of the Norte de Santander department had for thousands of years been a center of commerce for people from cold Andean climates as well as hot jungle lands.

More recently, Cúcuta’s economy has been strongly intertwined with Venezuela, and its neighbor’s perilous economic downturn has been forcing cucuteños to look elsewhere for trade.

“We had a very important [clay products] export corridor with Venezuela, but because of the crisis there, and the closing of the border, these days this is completely closed,” Cúcuta Mayor Cesar Rojas Ayala told The Bogotá Post in October.

Added the mayor, “We’re the city with the third highest rate of unemployment in the nation because it is a city that was dedicated to commerce between Venezuela and Colombia, but we didn’t grow industries for internal markets” or markets abroad.

Exports from Colombia to Venezuela were nearly halved from 2016 to 2017 and, according to a report in January from Colombia’s Ministry of Finance, they do not have recent figures for imports from Venezuela because they aren’t significant enough.

Rifts between the governments of both countries have recently resulted in numerous border closures and restrictions in the flow of goods and vehicles across it.  In a report for the Bank of the Republic of Colombia, Gamboa writes that Cucuta’s “economic and cultural destiny is strongly tied to its border situation. What happens in Venezuela has a wide impact on the city, which has seen times of crisis and bonanza in tune with what happens in the neighboring country.”

The contraband economy

A main driver of Cucuta’s economy with Venezuela has been the smuggling of contraband from one side of the border to the other. Before Venezuela’s economic collapse, many of the black market products such as meat and gasoline came across the border from Venezuela to Colombia and in 2015 TeleSur, a news outlet aligned with the Venezuelan government, claimed that 80% of the goods sold in Cúcuta originated in Venezuela.

The governments of Nicolás Maduro and his predecessor Hugo Chavez set price controls for goods that were designed to help the country’s poor. However, smuggling mafias made up of Venezuelans and Colombians took advantage of Colombia’s free market economy to sell the products at a markup just across the border.

Since the economy collapsed, however, the flow of goods across the border has reversed (save for areas such as petroleum and steel smuggling), with 30 to 40 thousand Venezuelans crossing daily according to Cúcuta’s mayor; many to buy staple goods that are not available in their home country.

When the crisis first began, Cúcuta’s merchants reaped the benefits. But as the Venezuelan economy worsened, Venezuelans have less and less money to spend on goods in Colombia.

For the Mayor’s part, he seems to be looking outward to Bogotá as well as countries abroad for the answers to his city’s economic woes:

“We need a grand push in organization nationally so that [small and medium sized businesses in Cucuta] can innovate and find and grow markets nationally and internationally,” said Rojas.  “It has to be an investment from international governments to help these small businesses have a technological evolution with new machines that are more practical.”