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Venezuela seals its border with Colombia to fight smuggling

The illicit trade is a problem for the Colombian government too since smugglers sell goods at prices impossible for local businesses to match.

Venezuela border smuggling aug. 11 2014Enlarge
Members of the Binational Center for the Coordination of Operations Against Smuggling meet in San Cristobal, Venezuela, on Aug. 11, 2014. (FEDERICO PARRA/AFP/Getty Images)

Venezuela closed its border with Colombia Monday night to fight the smuggling of cut-rate gasoline and other products that has caused huge losses for the government and exacerbated severe shortages.

Oil-rich Venezuela has the world's cheapest gas, as well as price controls that keep goods like rice and toilet paper up to 10 times cheaper than in Colombia.

But Venezuela has also been hit by crippling shortages of basic supplies and rampant inflation, even as the outward flood of local products has become a defining feature of the regional economy.

To combat the problem, the Venezuelan government has deployed 17,000 troops to seal the 1,400-mile border off every night from 10:00 p.m. to 5:00 a.m.

Venezuela, which announced the closures Saturday, says it is doing so under a joint accord with Colombia.

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The illicit trade is a problem for the Colombian government, too, since smugglers sell goods at prices impossible for local businesses to match.

Officials said they would enforce the measure for a 30-day trial period, then evaluate the results.

Gas cheaper than water

As the first night of closures got under way, 20 paratroops moved to close off the Simon Bolivar bridge between San Antonio on the Venezuelan side and Cucuta in Colombia.

"You have six minutes. If you want to return to Colombia, you have to do it now," a rifle-toting soldier told a woman making her way home.

Some commuters voiced exasperation.

"What good is this nonsense?" asked Susana, who works in a store on the Colombian side and just managed to get back into Venezuela.

The lure for smugglers is acute: Gasoline is so cheap in Venezuela it costs less to fill up your tank than it does to buy a bottle of water.

Gas sells for $0.02 a liter ($0.08 a gallon) there, more than 60 times cheaper than in Colombia.

A kilo of rice costs $0.10, a tenth of the price in Colombia.

Even Venezuelan President Nicolas Maduro — the political heir to late socialist leader Hugo Chavez — admitted a few months ago that selling a liter of milk at the border brings in more money than selling cocaine.

The flood of contraband across the border has become easily visible, in broad daylight as well as at night.

The Venezuelan government estimates that 40 percent of the country's basic commodities are smuggled into Colombia, plus 100,000 barrels of oil, equivalent to annual losses of $3.7 billion.

The general in charge of the operation, Vladimiro Padrino Lopez said that so far this year some 40 million liters of gasoline and 21,000 tons of food have been seized while being smuggled across the border.

'Too good a business' 

The first victims of the new measures are truck drivers, for whom the restrictions are even more severe — they are blocked from crossing the border after 6:00 p.m.

The president of the national truckers union, Ricardo Virviescas, said the losses will be huge, at an estimated $500 per day per truck.

And while smuggling may be reduced by this measure, the only real way to tackle it is by ending price controls in Venezuela, said Luis Vicente Leon of the think tank Datanalisis.

Because of the enormous difference in prices between the two countries "it is very unlikely there will be no one willing to take the risk because the profits are high," said Mercedes de Freitas of activist group Transparencia Venezuela.

"And some of those charged with enforcing the law are involved, or don't have enough power to stop it and look the other way," she added.

Joan, a resident of the Venezuelan border town of San Cristobal, shared her skepticism.

"Maybe the closures will cut down on contraband because a lot of them did it at night. But there will still be smuggling. The problem is that the economic policies of this country push them to do it. It's too good a business," she said.

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http://www.globalpost.com/dispatch/news/regions/americas/venezuela/140812/venezuela-seals-its-border-colombia-fight-smuggling