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
Abstract
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
Resumen
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.
Resumo
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.
INTRODUCTION
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.
BORDERS
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 et.al, 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
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.
Method
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.
ANALYSIS OF INFORMATION AND RESULTS
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
|
CRIMES |
TÁCHIRA |
NORTH
SANTANDER |
||||||||
|
2008 |
2009 |
2010 |
2011 |
2012 |
2008 |
2009 |
2010 |
2011 |
2012 |
|
|
Homicides |
459 |
410 |
323 |
358 |
362 |
627 |
528 |
489 |
469 |
618 |
|
Kidnapping |
17 |
45 |
12 |
11 |
18 |
37 |
10 |
12 |
13 |
20 |
|
Robbery |
226 |
486 |
325 |
405 |
396 |
145 |
135 |
155 |
168 |
162 |
|
Theft |
1.009 |
1.025 |
800 |
960 |
938 |
163 |
99 |
100 |
125 |
128 |
|
Extortion |
26 |
30 |
25 |
47 |
48 |
12 |
7 |
10 |
7 |
16 |
|
Fuel smuggling |
196 cases |
193 cases. |
215 cases. |
285 cases. |
292 cases. |
43 cases |
77 cases |
106 cases |
101 cases |
100 cases |
|
Drug smuggling |
9.852 Kg seized |
13.453 Kg seized |
9.725 Kg seized |
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.
Unemployment
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
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.
CONCLUSIONS
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. jhonantuny@ufps.edu.com.
** Business Administrator, Master’s degree in
Business Management. Full time
professor at the Universidad Francisco de Paula Santander. luzstellaap@ufps.edu.co
*** Business
Administrator, Master’s degree in Business Management. Full time professor at the Universidad Francisco
de Paula Santander. magdazarelasa@ufps.edu.co