Maduro Worse Than Xi? The Case For Colombia-Venezuela Trade
Troubled as Venezuela may be, it is a major, and needy, market right next door to Colombia. Double standards should not apply, especially when there are national interests at stake.
BOGOTÁ — Had they any sense of economic development — or patriotism — Colombian business leaders would be doing everything to help restore our trade relations with Venezuela.
Let's face it: business interests now effectively run the country, and President Iván Duque is their friend and loyal servant. At the same time, Venezuelan President Nicolás Maduro is offering Colombian businesses a major opportunity by opening his country's oil industry to foreign capital. U.S. President Donald Trump, meanwhile, is starting to consider a transitional government in Venezuela even as U.S. sanctions prove beneficial to the dictatorial regime that shares the self-perpetuating aspirations of its peers in Russia, China, Cuba and North Korea. The Lima Group, charged with finding a peaceful and democratic solution for Venezuela, is also hovering around on apparent stand-by.
Renewing trade with Venezuela would not reverse the internal liberalization model implemented in Colombia since 1991, which has dealt its fledgling industries a fatal blow but would alleviate the critical state of its trade balance, caused by increased imports and drastically reduced exports. Venezuela was, for decades, our leading trade destination. Now, with its productive apparatus in ruins, it is an open market for Colombia — and it could also explore our market in return. We are tied to our neighbor by history, culture, people, 2,000 kilometers of borders, a natural exchange of merchandise and 1.5 million migrants, half of them Colombians, who have made our economy dynamic.
Relations between countries must follow state interests, not a government's tantrums.
Our model currently substitutes industry and farming with foreign products. It replaces the employment of Colombians with that of people in other countries. It is the non-developmental paradigm that condemns us to exporting primary products like oil, coffee, bananas and flowers, and prevents our leap to producing high-tech goods and manufactures with good wages.
It all began with the sudden drop in tariffs under César Gaviria. Before opening our market, tariffs stood at 30%, in contrast with 5% today. According to the analyst Mauricio Cabrera Galvis, between 1991 and 2018 imports rose in value from 8% to 15.5% of the Gross Domestic Product (GDP). Last year they grew by 9.2%, which is more than double the growth rate of domestic demand and almost three times the GDP growth. This means we are buying more foreign products than our own. Textile and apparel sales have increased by 146% since 2001, yet the national production of clothes has barely increased by 24%, and textile production has fallen 42%.
Maduro greets other leaders at his inauguration in Jan. 2019 — Photo: Office of El Salvador presidency
The Venezuelan market offers an opportunity to increase and diversify exports which, it must be said, would help us resume the path of industrial development. Venezuela could join us on this path, especially if it is a part of efforts to reinvigorate the Andean Group trading bloc as a formula for regional development, reciprocity and integration.
Circumstances change fast, and there is no reason why our relations with Venezuela could not be suddenly reversed. Even Trump is lowering his guard against Maduro after his recent offer to privatize the state oil firm PDVSA. Multinationals could become the majority stakeholders of this emblematic firm, though this investment rests on the condition of ending U.S. sanctions.
The president of the Inter-American Development Bank has invited Colombian businessmen to leave their comfort zone. Will they be so hypocritical as to refuse to deal with Maduro's regime when they strive to gain entry into China? China was awarded the construction of the Bogotá metro. Is Xi Jinping less of a dictator than Maduro? Are Caracas' privatization proposals not just a bid to establish the Chinese model next-door — a mix of market economy and authoritarian government? Relations between countries must follow state interests, not a government's tantrums.