Colombia and Venezuela plan to resume diplomatic relations shortly after the inauguration of Gustavo Petro, the new Colombian president, which takes place this Sunday (7). The rapprochement, which had already been promised during the campaign by the elected representative, was agreed upon by both governments when the new Colombian chancellor appointed by Petro, Álvaro Leyva, visited the border state of Táchira, on the 28th, to meet with the minister of Venezuelan Foreign Affairs, Carlos Faria.
The expectation is that both countries appoint new ambassadors next week and start reactivating commercial activities at the borders.
In addition to symbolizing a decrease in tension between Colombia and Venezuela, the normalization of relations between the countries should be economically advantageous for both, reactivating the Colombian export sector and boosting economic recovery in a Venezuela that is taking its first steps out of the crisis.
Second projections of the Venezuelan-Colombian Chamber of Economic Integration (Cavecol), after the reestablishment of relations and the reactivation of borders, the commercial exchange between the two nations – which takes into account exports and imports – could reach US$ 1.2 billion (R$ 6.2 billion) by the end of 2022.
The increase in indices is also foreseen by the Colombo-Venezuelan Chamber of Commerce (CCV). According to the entity, the more moderate growth scenario would allow trade between countries to reach US$ 800 million (R$ 4.1 billion) by the end of the year, which would double the activity recorded in 2021.
Last year, the commercial exchange between Colombia and Venezuela stood at $406 million. If the most optimistic projection of business entities is reached and the index reaches US$ 1.2 billion, the growth would be almost 200%.
In an interview with Brazil de facto, Ronal Rodríguez, a professor at the Universidad de Rosario in Colombia and a member of the institution’s Venezuela Observatory, said that the normalization of commercial operations between countries would represent a disincentive to informal trade and smuggling, which gained strength after the closing of borders. The movement, therefore, should increase tax collection, mainly from Venezuela, since the trade balance between the countries is historically a surplus for Colombia.
“Trade between the two countries was subordinated to smuggling. When someone goes to [estado de] Norte de Santander can see how people pass goods with wheelbarrows, carrying boxes on their shoulders, carrying suitcases with products, which should not be the nature of a commercial relationship between two countries that have so many interests in common”, he said.
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In addition, the professor argues that an expansion of the bilateral trade flow would allow Venezuela to resort to Colombian manufactured products of basic necessity to supply its domestic market, which would make the country reduce import costs, no longer buying from more distant suppliers and more expensive.
“I think Venezuela wins because it recovers its natural supplier. Recovering the Colombian market means recovering an agent that can place these products on its territory quickly, easily and safely. Obviously this means a profit for Venezuela, especially since the country no longer has the financial and economic muscle it had in the late 2000s,” said Rodríguez.
Chávez, Uribe, Duque and Maduro: history of relations
Since former President Hugo Chávez took over the Venezuelan presidency in 1999, relations between Colombia and Venezuela have gone up and down, with several diplomatic incidents marked by Bogotá’s alignment with Washington’s positions and hostility to Caracas. In 2010, for example, countries reached break off relationships for a few months after then-Colombian President Álvaro Uribe accused Chávez of “harboring” guerrillas from the former FARC armed group.
In 2015, during the government of current president Nicolás Maduro, Caracas even ordered the closure of some points on the border after Venezuelan soldiers fighting smuggling operations were killed in an ambush in the Táchira border area. Although the country has summoned its ambassador to Colombia – a diplomatic measure of redress -, relations have not been broken.
Despite the political turmoil, trade between nations has never been as affected as it has been in the last five years. The best levels of commercial exchange were even recorded when Chávez and Uribe held the presidencies of their countries, between 2002 and 2010. The record was reached in 2008, when trade between Venezuela and Colombia exceeded US$ 7.2 billion ( BRL 37.2 billion).
The indices, however, began to worsen after 2016, when the impacts of the Venezuelan economic crisis began to be felt more strongly. Inter-country trade activity that year was $803 million, down 40% from 2015 levels and nearly 89% from record 2008 levels.
The arrival of Iván Duque to the presidency of Colombia only worsened trade relations. In 2018, shortly after the rightist’s victory in the elections, the then Venezuelan ambassador to the country, Iván Rincón Urdaneta, resigned from his post after claiming that his diplomatic representation would no longer be safe in Colombian territory in view of the threats and attacks that Uriba forces – right-wing political current linked to ex-president Uribe – waged against Venezuela. Since then, Caracas has not had a representative in Colombia.
Enrique Acosta, a researcher at the Venezuelan Border Research and Studies Center (Cief), says that the deterioration of relations between the countries was “a tragedy” for both populations and criticizes the Colombian president’s alignment with the US strategy.
“Duque’s strategy was not his strategy, it was the adoption of a global power plan from the United States to South America. Colombia’s role in this strategy, in economic and military terms, was fundamental and is not something new. For years, Colombia has been part of the attempt to stop an integration project proposed by Venezuela,” he told the Brazil de facto.
Tension levels reached their peak in 2019, when Duque decided to recognize then-deputy Juan Guaidó as Venezuela’s “interim president” and provide political and material support for the so-called “interim” of the opposition. In February of that year, the Colombian government supported an attempted invasion of Venezuelan territory on the pretext of delivering alleged “humanitarian aid” to the country, leading Maduro to completely sever relations with the neighboring country.
Commercial activity between Venezuela and Colombia, in turn, was not immune to the political conflict and recorded the worst annual drop in the last 20 years, from US$ 490 million in 2018 to US$ 240 million in 2019, a 51% reduction. In 2020, countries achieved the lowest trade rates in the last two decades.
In 2021, despite the trade volume between countries having increased, reaching US$ 400 million, the levels were still far from the most active periods. If the optimistic projections of the chambers of commerce come true and the flow in binational trade reaches the mark of US$ 1.2 billion, this would be the best number in the last seven years.
Opportunities on the table
Among the topics considered fundamental in the discussion with Venezuela, Petro has already guaranteed that the commercial reactivation of the borders and the recovery of Monomeros, a Venezuelan company that is based in Colombia and that since 2019 has been controlled by opponents linked to Guaidó.
A subsidiary of Venezuela’s state-owned Pequiven, Monomeros is a strong producer of fertilizers, has 1,400 jobs and was once responsible for manufacturing around 50% of the products used in Colombian crops. With the recovery of the factory, the Petro government hopes to lower the costs of inputs for national productions and reduce the price of food.
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The expectation is that the company will return to the hands of the Venezuelan State. “Petro’s commitment is to return Monomers to Venezuela,” says Acosta. The researcher believes that “the Colombian president has all the legal tools to make Monomeros once again a prosperous company that represents brotherhood between countries”.
Since it passed into the hands of Guaidó, the company has been the center of several cases of mismanagement and internal disputes by the opposition over control of its income, which began to finance the activities of the “interim government”. In September 2021, the Superintendence of Societies, a body linked to the Colombian Ministry of Commerce, placed the company under its control, claiming the need to “remedie the critical legal, accounting, economic and administrative situation”.
Professor Ronal Rodríguez, however, warns that over the last few years in which he was under opposition control, the company has lost suppliers and customers to competitors and that, therefore, there is a risk that it will be returned to Venezuela “a empty shell”. “In addition, the 2015 National Assembly reports [formada paralelamente pela oposição aliada a Guaidó] about cases of corruption in the company are not satisfactory, we still don’t know for sure what was done in these years”, he said.
In addition to the return and reactivation of Monomeros, Venezuelan state-owned companies could also benefit from the sale of natural gas to the neighboring country. According to the agency BloombergPDVSA is said to be planning the reactivation of a 224-kilometer gas pipeline that runs between the Venezuelan state of Zulia and the Colombian city of Ríohacha, which had been opened in 2007. The plans involve the establishment of a natural gas trade between the countries , in line with Petro’s intentions to invest in energy transition projects and combat climate change.
Opportunities for economic growth could also translate into job creation, particularly on the Venezuelan side, which could attract the millions of migrants who have left the country in recent years to escape the crisis. In an interview with Brazil de factoMartha Grajales, a researcher at the Venezuelan human rights NGO Surgentes, says that this would be a positive point, but that it will be determined by the types of agreements that will be defined between governments with the intention of protecting workers on both sides of the border.
“Economic growth does not necessarily mean a democratization of well-being for the entire population. The way in which the conditions of commercial exchange will be established on both sides of the border can help to ensure that this economic reactivation does not simply become a source of wealth for traditional economic powers and results in an improvement in the basic living conditions of the population.” , said.
Editing: Arturo Hartmann
