Business on the border between Colombia and Venezuela: from trade to social conflict

Los negocios en la frontera entre Colombia y Venezuela del intercambio comercial a un conflicto social


Os negócios na fronteira entre Colômbia e Venezuela: da troca comercial ao conflito social

Jhon Antuny Pabón Leon* 

Luz Stella Perez Arenas **

 Magda Zarela Sepulveda Angarita***



Research article


Date of reception: 14 sep 2014

Date of approval: 25 jun 2015




Border relations across "living borders" (borders that have communities of people living on both sides, often with cultural and historical bonds) have been the object of study due to the conditions under which border economies develop. Investigations carried out on the border between North Santander and Táchira State are analyzed, comparing them with the principles of the German (the nation-state) and French (the border area) Schools. Studies by the Cúcuta Chamber of Commerce are analyzed and discussed. It is concluded that the economy of North Santander is affected more by political and ideological positions than by international trade. Governments continue to ignore the reality of two peoples who share a border region, as it is described by the principles of the French School.


Keywords: border relations, living borders, business, nation-state, regional space.


JEL: E65, F16, R10





Las relaciones fronterizas en las “fronteras vivas” tienen interés de estudio dadas las condiciones bajo las cuales se desenvuelve la economía de fronteras. Se analizan investigaciones efectuadas sobre la frontera Norte de Santander y el estado Táchira cotejando con los postulados de las escuelas alemana (el Estado-nación) y la francesa (el espacio fronterizo), se analizan estudios de la Cámara de Comercio de Cúcuta. Se concluye que la economía del Norte de Santander está afectada más por posiciones políticas e ideológicas que por comercio internacional. Los gobiernos siguen desconociendo una realidad de dos pueblos que comparten una región fronteriza tal como lo exponen los postulados de la escuela francesa.


Palabras clave: relaciones fronterizas, fronteras vivas, negocios, estado-nación, espacio regional.





As relações de divisa “fronteiras vivas” tem interesse de estudo devido às condições sob as quais se desenvolve a economia de fronteiras. Analisam-se pesquisas efetuadas sobre a divisa entre Norte de Santander (Colômbia) e o estado Táchira (Venezuela) cotejando con os postulados das escolas alemãs (o estado-nação) e a francesa (o espaço de fronteira), se analisam estudos da Câmara de Comercio de Cúcuta. Conclui-se que a economia do Norte de Santander está afetada mais por posições políticas e ideológicas que por comercio internacional. Os governos seguem desconhecendo uma realidade de dois povos que compartilham uma região de fronteira tal como o expõe o postulado da escola francesa.


Palavras-chave: relações de divisa, fronteiras vivas, negócios, estado-nação, espaço regional.




When speaking of neighboring countries and regions, inevitably the issue of borders arises, an idea that according to Grimson (2005, p. 91) has become a key concept in the accounts and explanations of contemporary cultural processes. The author indicates that economic or symbolic analysis of so-called globalization refer, again and again, to the boundaries, the borders, the contact areas; however, he adds that the concept of a border remains unclear both in certain diplomatic rhetoric as well as in many of the social essays and cultural studies on the subject. Furthermore, he upholds that one of its features is in fact, duplicity: a border was and is simultaneously an object/concept and a concept/metaphor. On the one hand there seems to be physical, territorial boundaries; and on the other, cultural, symbolic boundaries.


Aligned with this reality, the concept of "living" borders emerges, which are nothing more than the group of people who inhabit the border areas of a country, constituting an important tool of exchange and integration with neighboring countries and acting as guards of the integrity of the territory. It is on these borders that, for Wilson and Donnan (cited by Grimson, 2000 a), the tension between legality and illegality is an integral part of everyday life. It's there where commercial transactions between populations are often considered to be "smuggling" by the states, whereas it is the most natural activity for the local people.


According to the report "Characterization of the Colombian-Venezuelan border," made by the Andean Community of Nations, of which Colombia is part, this area is "the border sector of greatest ​​interest and importance for bilateral relations" and for Andean integration, because it is here that one of the "most intense” integration processes” on the entire South American continent” takes place. Cúcuta (Colombia) and San Cristobal (Venezuela) together make up almost 3 million people; of which 85 percent are young people in an urban population with high geographical mobility.


The research sustains that the border regions between North Santander Department and Táchira State have historical ties, which are deeply rooted in its inhabitants. They have complementary economies; families are joined together, studying and living on one side or the other of the border. The area is made up of complex socio-cultural, historical, economic and political relationships, turning it in one of the most dynamic borders in Latin America and the one with the largest movement of people and goods between the two countries.


The study and analysis of the relations between the two countries is important as it has become one of the most controversial in recent years given the volume of trade, especially between North Santander Department in Colombia and the State of Táchira in Venezuela. This, combined with the historical, social and commercial relationships that are developed on the border, justifies identifying strategic positioning among the political and economic vagaries, as the economy of the region is influenced by the difficult binational diplomatic relations and economic movement in Venezuela, reflected in the variability of the exchange rate of the Venezuelan currency (Bolivar).


Various authors have spoken about the topic. Quoted are: Ardila (2012); Bustamante (2004); Jimenez (2008); Mejia (2009); Plata (2011); Ramirez (2003, 2005, 2008); Ramirez and Cárdenas (2006), Ramirez, Manzano, Zambrano & Nova (2013); Mayora (2012); Ramos (2012); Ramos & Otálvaro (2008); Rodríguez (2012); Sanchez (2011); Taylor (2010); Valero (2008), who have written about the relations between Colombia and Venezuela, which have passed cyclically from long periods of estrangement and conflict to moments of cooperation. They analyze the reality on the border and allow for the examination of the historical, social, economic and political studies of this sub region so as to understand the fundamental relationships and economic exchanges, the characteristics of mobility and the formation of the border culture.


One of the most affected cities has been Cúcuta. Therefore, a group of trade union representatives from North Santander, which included various sectors of industry and commerce, asked the government to declare an economic emergency in that region. They requested the implementation of measures to cover the overdue portfolios of local companies, using the resources of the nation, since they had not received money from their customers in Venezuela, due to the exchange control in that country and the policies implemented in the border area.


The study has a descriptive level, supported by documentary review, addressing three aspects: first the conceptualization of borders and border relations. Secondly, information is presented on Colombia-Venezuela relations in the historical, commercial and social context, with which it was intended to understand the positions of central governments and the most influential economic factors of the border dynamics from the point of view of a nation-state. And finally, the perception of relations between the department of North Santander in Colombia and the state of Táchira in Venezuela was investigated.


As a hypothesis, it is suggested that relations in this border region follow the postulates of the French school and should not affect the border region socio-economically. The objective of this study is to analyze business on the border, where the condition of proximity prevails, with all the implications that that brings, and its social impact, seeking to establish how the bonds that link them are influenced by the policies of the governments of Bogota and Caracas, the ideological positions of the two countries and the mistrust between the governments.


The social impact is analyzed in the level of employment, the level of informality, victimization and perception, while the economic impact is carried out with the volume of foreign trade, sales and economic perception.


The paper is organized into four parts including the introduction. In the second part the concept of borders is presented along with a synthesis of the research on the relations between Colombia and Venezuela and the border region of North Santander department (Colombia) and Táchira state (Venezuela). Thirdly, the analysis of the information and results is shown. In the fourth part, conclusions are presented and finally the supporting references used in the study are noted.





Van Gennep (1986) cited by Grimson (2000, p. 13-14) first considers territorial borders so to analyze metaphorical borders, taking the concept of boundaries as the core of his theory. He analyzes the rites of passage that the border crossing between the two countries involves, as well as the consecration rites that accompany the placement of any markers of political boundaries. When these limits are marked out, a particular group appropriates a determined land area, so that penetrating it, as a foreigner in that reserved space, is like committing sacrilege.


On this concept, Prieto (2011, p.1) says that there are two sides. First, the German School which states that the first concept of borders was the dividing line that delimited the local protection of the manor or the commune; later, with the emergence of cities, and then nations and states, that concept became the current one. Second, the French school, which regards man as a geopolitical factor that adapts to and accommodates the natural elements that surround him. For this school, the border is only an interim framework within which human life unfolds. It is the delimiting factor of a people, where the state's relationship with the land is developed; the territory is the basis of the state and the population is the living depositary and the very substance of the state. This school studies the border according to the groups that it separates, and their own interests.


This position and the principles of the French School constitute the conceptual framework that will guide this analysis.


In this context it is interesting to analyze the relations between the border cities. Donnan & Grimson (cited by Grimson 2000a) hold that there is no precise agreement between the state and nation since relations between power and identity on the borders and between borders and their respective States are problematic precisely because the state cannot always control the political structures established at its extremities. For these authors, as a result, the forces of politics and culture, possibly influenced by international forces of other States, give the borders specific political configurations that make for extremely conflictive relationships with their governments, and even more so when the case arises that the arrangement of cultural borders competes with that of state borders. First, attention is paid to the government's view on borders, highlighting the contradictory position between national policies and socio-spatial realities, and it is also noted that in neighboring territories the periphery can have an ignored relevance.



García (1998, p.7) reports that with the arrival of modernity, internationalization brought with it the opening up of geographical borders so as to incorporate goods and symbolic products from some nations in others. It is shown that with globalization, the process deepens and involves permanent functional interaction of diffuse economic and cultural activities, as well as of goods and services generated by a system with many centers, where the speed at which the goods or services can travel around the world is more important than the geographical position.



Borders and International Business


Borders and international business cannot be separated. About this, Daniels, Radebaugh and Sullivan (2004, p. 176-181) indicate that international business is understood as all commercial, private or governmental transactions, between two or more countries. Among these transactions are sales, investments and transport. These international operations of companies and governmental regulation of international business affect corporate profits, job security and wages, consumer prices and national security. They also indicate that private companies carry out such transactions for profit and that governments may or may not do the same in their transactions. On the trade of goods and services, the authors state that this kind of trade is an important means of linking countries economically, and that having more links improves global efficiency and add that governments routinely influence the flow of imports and exports.


Despite the benefits of free trade, all countries interfere with international trade to varying degrees; this government intervention can be classified as economic or non-economic. It is known that governments intervene in trade to achieve economic, social or political aims. However, it is important to note that governments pursue political arguments when trying to regulate trade. According to Daniels, government officials apply trade policies that, in their opinion, are more likely to benefit the country and its citizens and, in some cases, their personal political continuity. With reference to the above, they add that in this scenario it is observed that proposals for the reform of trade regulations often trigger fierce debates among the people and groups that believe they are affected, those that are affected more directly (called interest groups) tend to complain more.


In the Latin American case, there are several interesting cases for study. To that respect, Grimson (2000b, p.13-14) compiles a series of articles in which border relations between various Latin American countries and their cultural, social and economic implications are examined.



Relations between Colombia and Venezuela


In the Latin American context, when studying the relations between Colombia and Venezuela, Ramírez (2003, p.203) said that security problems have periodically disturbed relations between Colombia and Venezuela, which have passed cyclically from long periods of estrangement and conflict to moments of cooperation. In his study, he indicates that while the first have corresponded to tensions over border demarcation, the accumulation of unresolved issues and the paralysis of mechanisms for dialogue and negotiation, the latter have taken shape once the most critical situations on the border have been overcome, allowing a recovery of the other elements of the relationship. Ramirez also said that these moments are so short that it is not possible to consolidate a core set of permanent, proactive management agreements between their countries, even if there are problems or disagreements on the border and/or between the capitals, or if the government or governing party changes in either country.


Regarding that, Mejía (2009, p.7) notes that historically, the political relations between Colombia and Venezuela have ranged on the one hand between the tension generated by the definition and control of the borders, the overflow of the Colombian conflict, the ideological configuration of the governments and the perception of the integration processes; and the cooperation embodied in binational infrastructure projects, growing and constant flows of trade, and the dynamics of the border on the social and economic level.


In view of the conflicts that have arisen between the two countries, Plata (2011) stated that it certainly pleases everyone that two neighboring countries restore their diplomatic relations, but that it is an issue that must be looked at carefully; and he made a brief chronology of the significant events as regards the enmity between the Colombian and Venezuelan governments and why today we speak of improving relations. The facts are presented below:


Table 1. Chronology of events and conflicts between the governments of Colombia and Venezuela from 1999 to 2012





Shortly after assuming the presidency of Venezuela, Chavez puts in place a commercial safeguard that prevents the passage of Colombian trucks carrying export products


Chavez criticizes the government of Pastrana for Plan Colombia, because according to him that is an outpost of the empire to attack his XXI century socialist project.


The Venezuelan government imposes a high tariff of 29% on oils and fats from Colombia, with which it is impossible for Colombian exporters to compete.


Although the Venezuelan government systematically denies the presence of guerrillas in its territory, Chavez breaks trade relations with Colombia, because of the capture of the so called ‘chancellor’ of the FARC, Rodrigo Granda, in Venezuelan territory, the result of an incredible intelligence job.


-Chávez reduces imports of vehicles manufactured in Colombia.
-In November 2007, President Uribe removes the authorization given to Chavez in August to mediate together with Piedad Cordoba for the release of hostages, for which Chavez freezes bilateral relations.
-After the bombing by the Colombian Army of a FARC camp in Ecuadorian territory in which the second in command of the FARC, terrorist Raul Reyes, dies; Chavez mourns Raul's death, who is for him a true revolutionary brother; then closes the Venezuelan embassy in Bogota and orders the mobilization of battalions on the Colombian border.


March 9 at the Rio Summit in Dominican Republic, the presidents of Colombia, Ecuador and Venezuela agree to normalize relations between their countries.


July 28 Chavez again breaks relations with Colombia once an agreement is made known that allows the US military the use of seven military bases in Colombia, a similar  agreement to the one the Americans had had with Ecuador, which they later also signed with Brazil and which they have with countless countries in the world.


In July, President Uribe requests evidence from his ambassador before the OAS of the presence of fixed FARC camps in Venezuela, to which President Chavez once again breaks relations with Colombia.


A few days after the inauguration of President Santos, Chavez travels to Santa Marta to meet with President Santos, and in an expected and highly publicized summit, they both decide to advance the restoration of bilateral relations.


Following these meetings, on February 9, 2012 a bilateral trade agreement is negotiated between the presidents of both nations, which had been without a legal framework since the formal withdrawal of Venezuela from the Andean Community.

Source: based on data from secondary sources.



When he was asked about the economy and trade between the two countries, Mayora (2012) analyzed the "Effects of exchange controls on trade with Colombia. The consequences of the withdrawal of Venezuela from the Andean Community". He examined the causes that led to boosting bilateral trade. He states that these events are related to the rigors of the exchange control system in Venezuela, known as CADIVI, that affects the price of the products which are recorded daily in various transactions carried out by traders and retailers on the Colombian side and by the end of 2011 there was a recorded exchange of 2.193 million dollars.


It is noteworthy that the two countries had a trade of more than US $ 6 billion in 2008. This dynamic fell to US $ 4.05 billion in 2009 and then to US $ 1.423 billion in 2010 due to political disputes between the two nations. (Díaz (2012, p.1)). Despite the default problems that occurred, Colombia made exports to Venezuela of US $ 1.553 billion in 2011, showing a slight recovery compared to 2010. Venezuela became Colombia’s second largest trading partner, after the United States, but its withdrawal from the Andean Community and the subsequent rupture in relations between 2009 and 2010, during the second term of former Colombian President Álvaro Uribe (2002-2010), led to a collapse of trade between the two countries.


Border integration zones


Regarding bilateral relations, Ramírez (2005), in "The Crossroads of integration: the case of the Colombian-Venezuelan border," deals with the differentiation of the areas of the five Colombian land borders, not from the political-administrative divisions as is routinely done, but rather from the environmental, socio-cultural, educational, economic, political and security interactions that throughout its history have shaped various zones and have determined both its problems as well as its great opportunities for neighborliness. The most important area is that of North Santander-Táchira, which has been used as an example of a regional border economy. Economic integration on this border is such that it is reflected in all aspects of daily life. One example is that "when services are better in Venezuela, or the bolivar falls, the trade tide goes from Cúcuta towards Táchira; and when services improve in Colombia or the value of the peso declines, it is Táchira that moves to Cúcuta for the same commercial benefits and services."


For Ramírez (2008), in "Border Integration Zones of the Andean Community. A Comparison their Scope", unlike the boundary lines marked by landmarks and boundary stones, border areas involving the territories of two or more countries have always been subject to continuous, more or less spontaneous, reconfigurations. They have not been directly provoked or recognized by the states involved, as they arise because of local interactions. Since the beginning of the XXI century, a process of border area definition has been in progress, based on the policy of the Andean community on border development and integration, but the results have been contradictory. While such definitions contain conceptual advances, they seem disjointed from the debate on the meaning of border areas in the integration of neighbors so as to face globalization, and its application has not yet led to cross-border processes.


Meanwhile Ramos (2012) introduces existing common and differentiating elements between Colombia and Venezuela in order to contextualize the current dynamics that feed the binational relationship. He discusses the existence of some economic phenomena that distort the relationship and that are being exploited by new illegal groups in the border area and he shows how drug trafficking and lawlessness have damaged the security and institutions of the two countries. The phenomenon of the flow of Venezuelans who are immigrating to Colombia and its potential impact is analyzed.




The research was developed on a descriptive level, supported by documental review, addressing three aspects: the conceptualization of borders and border relations, Colombian-Venezuelan relations in the historical, commercial and social context - with this it was intended to understand the positions of the central governments and the most influential economic factors in the border dynamics with an nation-state  perspective - and finally it investigated the perception of the relations between the North Santander department in Colombia and the state of Táchira in Venezuela.  This point was supported by the surveys on perception and the economic situation published by the Chamber of Commerce of Cúcuta and by the statements of union representatives as well as the opinion of industrialists, politicians and academics. After reviewing the work and analyzing the border reality, this is collated with theoretical postulates on "borders" so as to deliver the findings of the research.





Border relations


In researching borders, region and binationalism, Bustamante (2004) notes that in the border zone of the state of Táchira (Venezuela) and the department of North Santander (Colombia) there have been demonstrations of sub-nationalism that could be considered as evidences or bases for constructing ideas of autonomy or "regionalism", even though the state has retained its power of cohesion and territorial integration. It raises the shared feelings of exclusion of the respective centers of power which have allowed the formation of regional power blocs that use the regional or border "particularity" for obtaining difficult to achieve political and economic objectives. While Jiménez (2008) addresses the problem of the perception of the Colombian-Venezuelan diplomatic tensions of 2005-2008 by commercial actors of the common border and their responses to them, he concludes that the media coverage of the diplomatic crisis of January 2005 and 2008 was exaggerated and noted that the reaction of the actors to changes in the environment has been strategic and operational. The perception of losses caused by the border closures and tensions has been more visible in the Venezuelan case than in the Colombian.


The investigation shows that Colombia-Venezuela relations have been marked more by the political and ideological positions of the central government than by economic and commercial positions. For the researcher, Núñez's position (2009) is valid today, who said that “Venezuelan nationalism, of anti-Colombian roots, and anti-imperialism are the two sources from which Hugo Chavez drinks ideologically.  Both inheritances inevitably lead him to confront the Colombia of Alvaro Uribe. Thanks to his Venezuelan nationalism, he always keeps a suspicious eye on his neighbor". Despite that these words were formulated in 2009, and the actors are now Juan Manuel Santos and Nicolas Maduro, new frictions between the two leaders have appeared, for which the background remains ideological.


It has been determined that the real effects of the rupture of relations between the two countries depend on the additional measures applied by the countries involved. Among them: the suspension of trade relations, the restriction and/or suspension of the movement of people, prohibition and/or restriction of imports. This has meant that the alienation between Venezuela and Colombia has been suffered most by the border populations who experience stronger repercussions, due to the strong ties that exist in these areas, taking into account that they do not make the decisions concerning the cessation of consular activities between Caracas and Bogota.


The analysis of the conflicts from 2005 to the present, confirms the clear ideological and political content in the history of encounters between the governments of the two countries and this is not seen to be in alignment with the theory of international business. According to Daniels, Radebaugh and Sullivan (2004, p. 176-181), among the arguments for government intervention in business are: to create domestic employment, fledgling industry, to promote industrialization and to encourage investment. While export restrictions could increase prices worldwide, it would lead to the need for more controls to prevent smuggling, to product substitution, to maintaining low domestic prices by increasing domestic production, and to displacing production and sales abroad; for its part, import restrictions could prevent the use of dumping to take domestic producers out of business, get other countries to remove restrictions and make foreign producers to lower their prices.


In the case of Colombia and Venezuela, none of these formulas have been sought, as the two economies are complementary and feed each other, and have common strategic areas such as energy and trade corridors to the Pacific. At the border area level, in the past and up to now, the relationship between Venezuelan and Colombian citizens has been left out of the diplomatic disagreements. In fact, it has been cordial and forged a binational culture.


Socio-economic indicators in the border region


In reviewing the document of Ramírez, Manzano, Zambrano and Nova (2013), where the economic and social structure of Norte de Santander is analyzed for the period of 2000 to 2010, the weakness of the economy of North Santander stands out due to the poor development of the industrial sector. Added to this, social record shows that the department made progress in educational coverage and poverty reduction, according to information from the National Administrative Department of Statistics (DANE being its acronym in Spanish), in 2011 30.43 % of people in North Santander are unable to meet basic needs and 11 % are in a situation of indigence. Although poverty levels are above the national average and in terms of the severity of extreme poverty, its capital is placed second among the seven major metropolitan areas of Colombia, as regards human development there has been progress, caused by improvements in educational achievement. The greatest achievement is found in the basic and mid-level secondary school cycle, which between 2002 and 2010 increased the registration of enrollments to 45.4 % for basic and 53.3 % for mid-level. However, when inequality and violence is discounted, the human development index deteriorates significantly.


According to the information consulted in the database of the Chamber of Commerce of Cúcuta, in the Metropolitan Area of ​​Cúcuta (MAC) in January 2014 an unemployment rate of 16.7 % was recorded, a figure that placed it as the city with the second highest unemployment in the country, while the national rate registered at 11.01 %.


The workforce of the MAC is mainly made up of 39 % in the trade, hotel and restaurant sector, 21 % is formed by community and social services and the services sector; and the manufacturing industry contributes 14 %. Labor informality in the MAC represents for the border a rate that has not improved and seems to be stuck in time. In the July-September trimester for 2014, it was 71.4 % and in the same period in 2013 the rate was 70.4 %.


Regarding foreign trade in September 2014, the accumulated value sold to foreign markets amounted to US$201.2 million. While in the same period for 2013, sales were US$ 319.9 million, representing a decrease of 37 %, which means US$ 119 million. Sales to Venezuela have declined by 63 % in relation to the period of 2013 - from US$100.5 million sold in September 2013 to US$37.3 million in 2014. Today Venezuela is not the first destination for exports; the former market leader. Now the positions are the US, China and then Venezuela.


In reviewing the results of inflation for 2013, the consumer price index for the border recorded 0.56 % (for the year). Cúcuta was one of the cheapest cities in the country, which favored local consumption. In 2014 the rate was at 3.01 %, which is to say 2.56 percentage points above the previous record, because the local consumption is demanding more local products, as a result of the tight control of subsidized goods from neighboring Venezuela.


There is also an exchange differential on the border that makes the marketing of products very attractive in the market of Cúcuta and its metropolitan area. It is estimated that 40 % of Venezuelan products vanish in the porous border and it is calculated that US$3.6 billion is smuggling annually into Colombia.


The economic models of the two countries tend to create these type of market asymmetries and lead to an imbalance in products and prices that they are taken advantage of by a natural market variable called smuggling. The measure itself is of a protectionist nature of the Venezuelan economy.


While in Venezuela, where a different economic model prevails, called socialist by some and communist by others, in 2013 the results were:


High inflation, rampant shortages, low international reserves, greater controls, the presence of four types of exchange (including three officials), huge debts with the productive sectors.


Inflation: Between April 2013 and February 2014, according to the latest data from the Central Bank of Venezuela (BCV by its acronym in Spanish), the accumulated inflation reached 43.5 %. Inflation last year closed at 56.2 %, the highest in Latin America and the highest recorded in Venezuela since 1996. The category of food is the one that has risen most, with an increase of 74.5 %, the highest in Latin America, according to FAO data.


Shortage: This index stood at 28 % in January 2014, a record figure registered by the BCV. Since July 2013, the indicator has risen steadily. Delays in the allocation of foreign currency and smuggling result in a permanent shortage of products, which affects one in four basic commodities.


The economy suffered a sharp slowdown, going from 5.6% growth in 2012 to a modest 1.6% in 2013, well below the 6 % expected by the government.


Foreign exchange reserves fell 29 % during 2013, from US$29.750 million to US$21.251 million.


Oil and its derivatives, the marketing of which is a state monopoly, in 2013 contributed 94 % of the Venezuelan currency and generated 64.693 million dollars that are managed and administered by the State thanks to exchange controls operating since 2003.


Subsidies for petrol and basic food, along with the exchange difference of 10 to one between the official market rate for food imports and the parallel market, feed a huge smuggling market to neighboring countries, mostly Colombia.


In the state of Táchira, according to the National Statistics Institute of Venezuela (INE by its acronym in Spanish), the unemployment rate was 3.6 % in 2009, 3.2 % in 2010, in 2011 it was 2.7 % and in 2012 it was 3.6 %. However, in the study it was found that there is no consensus about the veracity of these figures in Venezuela since the INE measures the occupation rate but not the employment rate. This differs from the methodology used in Colombia and means that unemployment figures are not comparable.


In the figures for informality, it was found in the INE reports that in 2009 they reached 55.0 %; in 2010 it was 52.9 %; for 2011 51.2 %; in 2012 49.5 % and in 2013 49.4 %. Regarding production figures and added value, no detailed information for Táchira state was found.


The comparison of these results demonstrates the economic and social distortions that occur in the border region. Regarding border policies, the Venezuelan government took the strategy of temporary closures of the Simón Bolívar and Francisco de Paula Santander international bridges. The action stemmed from the shortage generated by the removal of consumer goods and fuel towards the border and the difficulty of domestic production, including the importation of raw material for the production of basic consumer goods.


To this reality, the Colombian response has been to give an economic and commercial overtone that impacts the region socially in its indicators, making an appeal to the government to declare an economic emergency.


While on the Venezuelan side, the response has been purely political. They have affirmed the existence of an "economic war" against the system and proposed the repression and criminalization of commercial activity in the border region as solutions, militarizing the border and "building walls", ignoring calls made by several Venezuelan sectors to rectify the situation, especially the economic and commercial sectors of the state of Táchira, which have been quite affected; and the general population has been more affected by the limited supply of the components of the basic food basket, as have economic and financial organizations abroad which have been prevented from carrying out their activities.


In the research, statements were found in the Venezuelan press made by the spokesmen of the regional Chamber of Commerce of San Antonio and Fedecamaras, Tachira, who reiterated calls to be taken into account in addressing the problems of the border region.


It is outlined in the article "Unemployment has also contributed to smuggling " published in the Diario de Los Andes on September 1 (2014), that, given the poor supply of jobs in Táchira, in recent years, people have taken on the practice of illegal activities such as smuggling in its various forms (food, medicine, technological equipment, fuel, etc.), as a means to survive. According to public inquiry, in recent years, due to the economic recession and the closure of businesses in the state, the unemployment figures have soared, leading citizens to engage immediately in any activity, whether it is legal or not, as this has proved to be lucrative and to overcome their basic needs.


Likewise, the situation has been classified by the president of the Chamber of Commerce of Ureña, Isidoro Teres, as very serious, a total mess. He explained that the border axis faces three different fronts. On the Venezuelan side, protests against the national government; while on the Colombian side, people engaged in smuggling express their dissatisfaction with the established controls; and also there is the National Guard.


This has resulted in an increase in the usual shortages in the area, which are already reaching levels of shortage and the population in general is alarmed. Teres explained that the biggest concern is the lack of pharmaceuticals. "In these times of protest and confrontation it is worrying that we do not even have sutures to help those who might be injured.” See "Municipalities of Táchira state lack food, fuel and medicine", an article in Journal de Los Andes, February 26, 2014.


In this respect a difference of opinion about those involved in smuggling is observed. By delving into the issue evidence was found that supports the idea that actors from both countries are involved in the smuggling, and even points to the existence of binational mafias.


Victimization and perception in the border area


The levels of victimization and perception in North Santander were investigated to try to observe any relationship between the socio-economic impact and the levels of victimization. It is clarified that no statistical analysis of correlation between variables was performed, only an observation of the figures was made in the database of the DANE in the Survey of Citizen Security (ECSC in Spanish) of the years 2013 and 2014, (it is highlighted that the data is consolidated in the capital city of the department). See Figure 1



Figure 1. Victimization Rate and perception of insecurity rate for 2013

Source: Dane ECSC (2013)


In 2013 the city of Cúcuta, showed a victimization rate of 11.7 %, below the national average that was 18.5%; while the perception of insecurity in that year was 25.3 % compared with 54 8 % nationally. Figure 2 shows the result of 2014.


Figure 2. Victimization Rate and perception of insecurity rate for 2013

Source: Dane ECSC (2014)


It was verified that in 2014 in Cúcuta the level of victimization was 13.8 %, against 18.2 % nationally and it was found that the perception of insecurity was 22 % versus 25.3 % nationally.


Compared to the previous year it was verified that there was an increase in the level of victimization in Cúcuta, going from 11.7 % to 13.8 %, while nationally it decreased from 18.5 % to 18.2 %. Regarding the level of perceived insecurity in Cúcuta, it decreased from 25.3 % to 22 % while the national rate decreased significantly from 54.8 % to 25.3 %.


The results could show that there is some indication of a relationship between increasing levels of victimization and the deterioration in social indicators of unemployment and informality in the North Santander Department, but this is not sure as it was not subject to statistical analysis.


Morffe (2014) was encountered, who presented statistics on the crimes that occurred in state of Táchira (Venezuela) and North Santander department. See Table 2


Table 2. Crimes in Táchira-North Santander border






































































Fuel smuggling

196 cases
314.852 liters

193 cases.
480.214 liters

215 cases.
496.782 liters

285 cases.
529.763 liters

292 cases.
724.288 liters

43 cases

77 cases

106 cases

101 cases

100 cases

Drug smuggling

9.852 Kg seized

13.453 Kg seized

9.725 Kg


5.527 Kg seized

1.0325 Kg seized

10.896 Kg seized

11.943 Kg seized

7.589 Kg seized

12.561 Kg seized

6.879 Kg seized


Source: Morffe (2014)


As regards the murders in Táchira and North Santander in 2009 it is revealed that 528 murders occurred in North Santander, a figure that rose to 618 deaths for this offense in 2012. In the case of Táchira, 410 murders occurred in 2009 and the figure for this offense declined to 362 deaths for this offense in 2012.


It is determined that on the Venezuelan side, the crimes of fuel smuggling and drug smuggling are the one that increased most between 2008 and 2012. The result confirms previous statements about the shifting of activity towards smuggling as a way out of the unemployment crisis.


Economic perception in the border region


Based on the aforementioned, the surveys on economic perception for the years 2009, 2011, 2012 and February 2013 published by the Chamber of Commerce of Cúcuta were analyzed; the study covered the sectors of trade, industry, tourism and services. The economic perception study was conducted by implementation of 500 surveys distributed in different parts of the city. The sample of selected companies was established through the records obtained from the Chamber of Commerce of Cúcuta. The design of the survey contained a questionnaire prepared by the Economic Observatory of the Chamber of Commerce of Cúcuta. Three of the questions presented which relate to border problems were studied, these were: sales performance, identifying variables that affected businesses and the impact of the border crisis on companies. The analysis of the surveys showed that, in the period studied, sales fell in all sectors, as shown in Figure 3.



Figure 3.  Performance of sales North Santander Department.

Source: Based on data from the Chamber of Commerce of Cúcuta (2013).


On average, 78.5 % indicated that sales declined, 14.75 % that they were sustained; and 6.75 % that they rose. It was found that 67 % of the tourism sector respondents indicated that sales had declined; in the service sector, 83 % of respondents replied that there was a decrease in sales; for the industrial sector the decrease was 80 % and for the trade sector it was 84 %. The drop in sales was reflected in rising unemployment and falling participation of North Santander Department in the Gross Domestic Product (GDP) as evidenced in Figure 4 corresponding to the unemployment rate in the North Santander Department and the country.




North Santander recorded an unemployment rate of 12.4 % during 2012, higher than in 2010 and 2011 by 0.6 percentage points and 0.2 percentage points respectively. See Figure 4:



Figure 4. Unemployment rate North Santander Department Colombia

Source: DANE Great Integrated Household Survey


It is observed that the rate of unemployment in North Santander is above the national average and that percentage has been increasing since 2008. It is considered to be a consequence of the economic crisis due to the conflicts between the central governments of both countries, which have affected the border region.





GDP behavior is shown in Figure 5


Figure 5. North Santander and Colombia GDP.

Source: DANE National Accounts


Gross domestic product (GDP) measures the level of productive activity as well as its behavior, evolution and economic structure. During the period 2007 - 2011 GDP performance in North Santander showed positive rates. In 2011 it demonstrated a growth rate of 2.6 %; the lowest growth rate was in 2010 (0.8 %), while the highest in the period was recorded in 2008 (7.2 %). In North Santander, fluctuations were more pronounced with peaks in 2006 (11.0%) and 2008 (7.2 %), and low growth in 2005 (0.4 %) and 2010 (0.8 %). The trend of production growth in North Santander tends to be contrary to the national rate.


Variables that influenced the management of companies according to assigned importance


The opinion of respondents on the variables that influenced businesses was also analyzed, see Figure 6:



Figure 6. Variables that influenced business in the period 2009-February 2013

Source: Based on data from the Chamber of Commerce of Cúcuta (2013).



It was determined that the price of the Bolivar was the most important variable, averaging 1.4 on the scale where 1 is assigned to the most important and 4 the least important; in second place, Venezuelan buyers with an average of 2.1; third, the Colombian economy with 2.9 and finally, Venezuelan politics with 3.6.


These results show how the dependent variables of the border relationship affect the performance and management of companies in North Santander, which shows the complex interplay that occurs in the area of ​​border integration.



The impact of the border crisis on companies and businesses


Figure 7 shows the results of the query on the impact of the border crisis on companies and businesses.



Figure 7. Impact on companies and businesses due to the border crisis, period 2009-February 2013.

Source: Based on data from the Chamber of Commerce of Cúcuta (2013).



It was evident that all sectors indicated that the border crisis did affect business, 77.08% of respondents said that they were affected and 22.92 % said they were not. The trade sector and the services sector showed the highest percentage of affirmative responses, about 81 % said yes, while the tourism sector and the commercial sector responded with 70% and 76% respectively.





Relations between Colombia and Venezuela have been marked by periods of "love and hate", as has been expressed by several writers and researchers when studying the border considered to be "the most alive border" in Latin America. Throughout history it has passed between agreements and crises over which the political and ideological theories have prevailed over the postulates of international trade, where the different strategic visions of the governments of each country have dominated the scene; and trade relations have been affected regardless of a reality that exists at the border junction of the two states.


The analysis of the socio-economic indicators shows the impact that occurred in North Santander, with rising unemployment, increasing informality, the fall in foreign trade, and falling sales as a result of political conflicts between the two countries, and it has increased with the policies of the Venezuelan government, the growth in smuggling because of the existing exchange rate differential.


While on the Venezuelan side, according to the information obtained, the crisis is demonstrated by increased shortages in basic commodities, high inflation that reduces purchasing power, combined with the repression and criminalization of business activity. Add to that, the shortage of foreign currency due to the exchange control that is affecting firms in San Antonio and Ureña and that has led to the closure of a large number of them.


In analyzing the surveys of economic perception conducted by the Chamber of Commerce of Cúcuta, it was noted that due to the conflicts and crises between the central governments, sales fell in all sectors of the economy. In identifying variables that affected companies, it was determined that the price of the Bolivar and the presence of Venezuelan buyers were the most influential variables, while the Colombian economy and Venezuelan politics were not deemed to be the most critical factors. It is perceived that the decisions of the nation state do not affect the border region as much as the transit of people on the border and the value of the currency at the border.


Respondents perceived little interest on the part of national governments as regards the realities on the border and added that there is a disconnection with border issues. It is considered that there exists a centralist development model that ignores local issues and only gives a macroeconomic approach to a reality that affects the supply sector of the population of both countries.


This was corroborated by the statements of representatives of the productive sectors, who have asked the central government for a declaration of economic emergency in North Santander to mitigate the impact of the border crisis since the supposed benefits of the Free Trade Agreements (FTAs) and even signing bridge trade agreements such as the last signed with Venezuela did not reflect nor have reflected an improvement in the economic conditions in North Santander.


It is important to highlight here the conclusions of Jiménez (2008, p. 271-272) which remain valid at the moment of this research, among other things he states: that the binational problems acquire the connotation of an international border crisis due to the exaggerating effect of information provided by the national and local media. In this context, border actors, amid diplomatic tensions, are affected by a climate of uncertainty and fear of the uncertain contingencies of border trade. Given the climate of impositions and restrictions, delays and arrival points closures of the binational border trade, entrepreneurs and traders accumulate knowledge and experience and adapt to an uncertain and changing business environment. Thus, trade actors and institutions develop contingency plans and business strategies to suit the changing environment. Despite the perception people have of a restricted commercial stage, local initiatives at a political and institutional level to reconfigure the current conditions are not visible and concrete, with the exception of some Venezuelan initiatives that have failed in a scenario with a high level of restriction and control. Interviewed actors do not relate turning points of the diplomatic crisis with commercial crises; instead, they identify other critical points in the economic cycle, or have a vague perception of the impact of the diplomatic tensions, despite predominantly acknowledging, in the Venezuelan case, a climate of restrictions and gaps in the existing business regulations, legal uncertainty, indifference, lack of knowledge and a lack of local autonomy from the central state.


The application of integration zones, as a support for the living borders between the two countries, find many barriers since the support of the central government to local and regional active forces is not guaranteed by the traditional conceptions of border that they have; on the one hand, the management and control of border areas by the state, aimed at defending the territory and national sovereignty and on the other hand, promoting the development and improvement of the quality of life of residents in border communities.


In the border area there is a growing conflict which is manifested by repeated demonstrations on the border bridges to protest the measures taken, which affect the population that is engaged in commercial activity on the border either legally or illegally. The trade boom of San Antonio and Ureña and the industrial potential have disappeared. Trade shows very low levels of activity while industries based in Ureña are only memories.


It is concluded that the proposed hypothesis "relations in the border region follow the postulates of the French school and should not socio-economically affect the border region between North Santander (Colombia) and the state of Táchira, Venezuela", it is not met and instead there prevails the notion of state-region. The clash of the two schools and approaches to border studies are evidenced in this region. On the one hand the state-region where central governments, especially the one in Venezuela, have emphasized the theory of boundary lines, ignoring the cultural, historical and social reality existing in this area of ​​development and integration, just as it is stated in the theory of border area.





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*Business Administrator, Master’ s degree in Business Management. Full time professor at the Universidad Francisco de Paula Santander.

** Business Administrator, Master’s degree in Business Management. Full time professor at the Universidad Francisco de Paula Santander.

*** Business Administrator, Master’s degree in Business Management. Full time professor at the Universidad Francisco de Paula Santander.