Geopolitics

A Half-Million And Counting: Venezuelans Pour Into Colombia

Decades ago, thousands of war-weary Colombian made their way to Venezuela in search of better opportunities. Nowadays, the flow of migrants runs in the opposite direction.

Venezuelans crossing into Colombia
Venezuelans crossing into Colombia
Norbey Quevedo Hernández.

-Analysis-

BOGOTA — As the new year gets underway, Colombia is struggling as never before to cope with the rush of Venezuelans who have entered the country in recent years to escape dismal economic conditions at home.

In late January, authorities removed 600 undocumented migrants from a makeshift camp set up in a gymnasium in the city of Cúcuta, near the Venezuelan frontier. In nearby Bucaramanga, people are up in arms over reports that a Venezuelan stabbed a Colombian resident who was distributing food. In Bogota, the capital, three Venezuelans were arrested as suspects in an assault on the Transmilenio bus system. And in the southern town of Ipiales, authorities have counted 32,754 Venezuelans wanting to cross into Ecuador.

These are just some of the consequences of the arrival, in recent years, of more than half-a-million Venezuelans. More than 370,000 of those newcomers, according to government figures, are undocumented. Others put the figures far higher, with some organization saying there may be more than 2 million Venezuelans in Colombia.

Reversal of fortune

Four decades ago, paradoxically, the opposite scenario occurred, as thousands of Colombians entered Venezuela to seek a better life in the oil-rich neighbor country. At the time, Venezuela issued Decree 31 of 1977, part of its Fifth National Plan, ordering equal treatment and fitting social and work conditions for Colombians. Many of those Colombians are now coming back.

Martha Barón is one of them. Born into a large family, she was just 14 when she went to Venezuela in 1977. There she did all types of work before landing a job as a civil servant. Later she became a municipal councilwoman in Chacao, a district of Greater Caracas. "I was embarrassed to say I was Colombian because so many Colombian women were prostitutes. But I had the option of doing other things," she says.

Barón helped create a foundation called Fundación Venezolanos por Decisión (Venezuelans by Choice), which worked to improve conditions for Colombians in Venezuela. Working through the same Foundation, she's now trying to assist Venezuelans in Colombia.

Barón supports the government's Special Stay Permit, or PEP, a recently introduced regulatory measure, but says Colombia should expect critical conditions in Venezuela to continue for some time. Colombian authorities ought, therefore, to declare a humanitarian crisis and seek international aid, she argues.

Together with a number colleagues, the Colombian-born woman recently intervened on behalf of a group of roughly 600 Venezuelans camping in the Bogota bus terminal. And she managed to get 500 Venezuelans employed on coffee estates outside the capital. But they still have a long way to go, she says of the recent arrivals, before they're properly integrated in the job market or the banking system.

Among those making their way across the border are thousands of Colombians returning from Venezuela, and who now feel like strangers in their own land. Migración Colombia, the migration authority, believes 22,000 at least have returned since August 2015. The government has set up seven more posts on its 2,200-kilometer border with Venezuela to receive them.

Beside PEPs, Colombian also issues what's known as a Frontier Mobility Card, or TMF, which allows Venezuelans to circulate in Colombia for up to two years. Complicating matters is that many use Colombia only as a transit stop on their way to places like Peru, Ecuador, Argentina or Chile. For some routes, transit migration has increased 10-fold in the last five years.

Most lack proper papers

It's not just people who are leaving Venezuela. Money is flying out of the country as well, says María Clara Robayo, an international affairs expert. In 2005, when the government of then president Hugo Chávez (1999-2013) dismissed 18,000 employees of PDVSA, the state oil company, prosperous Venezuelans including potential investors began relocating in Colombia. In 2010-11 many more left to protect their assets, which Robayo says was a response to the socialist regime's confiscation policies and to rising inflation and the devaluation of Venezuela's currency, the bolivar. The exodus regained force in 2014, during protests against President Nicolás Maduro.

The Venezuelans coming into Colombian cities nowadays are mostly just trying to survive. They need all the help they can get, in other words. But more than anything, they need legal residency papers. In August 2017, the government issued its PEPs, allowing Venezuelans meeting its conditions to work, study and engage in legal activities. The visas are valid for 90-day periods but are renewable. Individual ministries have issued their own instructions to integrate Venezuelans into schools and the healthcare system, though so far the impact has been limited, according to government records.

All of this promises to have a political impact as well, as both countries are scheduled to hold presidential elections this year.

At any rate, fewer than 180,000 of the Venezuelan in Colombia are currently registered. Another 150,000, approximately, overstayed their permits, and 225,000, at least, never registered in the first place, official numbers suggest. Together, that puts the number of undocumented Venezuelans at approximately 375,000, with more crossing into the country every day.

The government began taking countermeasures in 2016, with expulsions and fines. Authorities have reportedly turned away about 2,500 Venezuelans, but that's just a drop in the bucket compared to the countless people who can been seen camping in parks and bus stations, or working in bars, shops and nightclubs.

The head of the Colombia-Venezuela Trade Chamber, Darío Umaña, says Venezuelans are becoming "the cheap, exploited workforce in Colombia." That includes informal sectors like sex, with one union observing a notorious rise in Venezuelans working as prostitutes.

All of this promises to have a political impact as well, as both countries are scheduled to hold presidential elections this year. The Foreign Affair's Ministry and immigration authority maintain that people are welcome in Colombia. But the immigration chief, Christian Kruger, recently warned that while "all foreigners are welcome in our country, they must meet the country's norms, as we do abroad. So I would call on them to regularize their situation."

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Economy

Air Next: How A Crypto Scam Collapsed On A Single Spelling Mistake

It is today a proven fraud, nailed by the French stock market watchdog: Air Next resorted to a full range of dubious practices to raise money for a blockchain-powered e-commerce app. But the simplest of errors exposed the scam and limited the damage to investors. A cautionary tale for the crypto economy.

Sky is the crypto limit

Laurence Boisseau

PARIS — Air Next promised to use blockchain technology to revolutionize passenger transport. Should we have read something into its name? In fact, the company was talking a lot of hot air from the start. Air Next turned out to be a scam, with a fake website, false identities, fake criminal records, counterfeited bank certificates, aggressive marketing … real crooks. Thirty-five employees recruited over the summer ranked among its victims, not to mention the few investors who put money in the business.

Maud (not her real name) had always dreamed of working in a start-up. In July, she spotted an ad on Linkedin and was interviewed by videoconference — hardly unusual in the era of COVID and teleworking. She was hired very quickly and signed a permanent work contract. She resigned from her old job, happy to get started on a new adventure.


Others like Maud fell for the bait. At least ten senior managers, coming from major airlines, airports, large French and American corporations, a former police officer … all firmly believed in this project. Some quit their jobs to join; some French expats even made their way back to France.

Share capital of one billion 

The story began last February, when Air Next registered with the Paris Commercial Court. The new company stated it was developing an application that would allow the purchase of airline tickets by using cryptocurrency, at unbeatable prices and with an automatic guarantee in case of cancellation or delay, via a "smart contract" system (a computer protocol that facilitates, verifies and oversees the handling of a contract).

The firm declared a share capital of one billion euros, with offices under construction at 50, Avenue des Champs Elysées, and a president, Philippe Vincent ... which was probably a usurped identity.

Last summer, Air Next started recruiting. The company also wanted to raise money to have the assets on hand to allow passenger compensation. It organized a fundraiser using an ICO, or "Initial Coin Offering", via the issuance of digital tokens, transacted in cryptocurrencies through the blockchain.

While nothing obliged him to do so, the company owner went as far as setting up a file with the AMF, France's stock market regulator which oversees this type of transaction. Seeking the market regulator stamp is optional, but when issued, it gives guarantees to those buying tokens.

screenshot of the typo that revealed the Air Next scam

The infamous typo that brought the Air Next scam down

compta online

Raising Initial Coin Offering 

Then, on Sept. 30, the AMF issued an alert, by way of a press release, on the risks of fraud associated with the ICO, as it suspected some documents to be forgeries. A few hours before that, Air Next had just brought forward by several days the date of its tokens pre-sale.

For employees of the new company, it was a brutal wake-up call. They quickly understood that they had been duped, that they'd bet on the proverbial house of cards. On the investor side, the CEO didn't get beyond an initial fundraising of 150,000 euros. He was hoping to raise millions, but despite his failure, he didn't lose confidence. Challenged by one of his employees on Telegram, he admitted that "many documents provided were false", that "an error cost the life of this project."

What was the "error" he was referring to? A typo in the name of the would-be bank backing the startup. A very small one, at the bottom of the page of the false bank certificate, where the name "Edmond de Rothschild" is misspelled "Edemond".

Finding culprits 

Before the AMF's public alert, websites specializing in crypto-assets had already noted certain inconsistencies. The company had declared a share capital of 1 billion euros, which is an enormous amount. Air Next's CEO also boasted about having discovered bitcoin at a time when only a few geeks knew about cryptocurrency.

Employees and investors filed a complaint. Failing to find the general manager, Julien Leclerc — which might also be a fake name — they started looking for other culprits. They believe that if the Paris Commercial Court hadn't registered the company, no one would have been defrauded.

Beyond the handful of victims, this case is a plea for the implementation of more secure procedures, in an increasingly digital world, particularly following the pandemic. The much touted ICO market is itself a victim, and may find it hard to recover.

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