By Jeremy Morgan
Latin American Herald Tribune staff

CARACAS – Concern mounted among business leaders in Táchira state, which borders on Colombia, after Venezuela President Hugo Chávez ordered steps to be taken in preparation for an outright “rupture of relations” with the neighboring country. Speaking on Tuesday evening – hours before the Organization of American States (OAS) assembly, where both countries were to raise their differences the following day – Chavez spoke of an “eventual” break of relations.

“This is going to happen, we will be preparing for it because this Colombian bourgeoisie hates us,” he declared during a meeting at Miraflores where he bid farewell to the departing Cuban ambassador.

As to Colombian President Alvaro Uribe’s agreement to allow the United States military to use military bases in his country – a move Chávez sees as posing a direct threat to the region in general and Venezuela in particular – the Venezuelan leader was as uncompromising as ever.

“Never more will we permit it that our soldiers bend the knee before the anti-patriot and the yanqui empire,” he declared. “They can put 7,000 yanqui bases around Venezuela and they’re not going to be able to stop the Bolivarian Revolution.”

In the wake of this, the Táchira branch of Venezuela’s biggest business organization, the Federation of Chambers of Commerce and Industry (Fedecámaras), warned that shunning Colombia would severely affect cross-border trade.

Fedecámaras Táchira President José Rozo said that 70% of trade activity in the state depended on imports from Colombia, and he wondered out loud about the wider implications.

Warning that Venezuela’s image in international public opinion was “very bad,” Rozo claimed that “nobody wants to sell to Venezuela if payment isn’t made in advance.” The only country that had been willing to export on credit had been Colombia, he added.

The dispute was damaging the economy, which was “the motor that drives social development in the country,” he continued, and Chávez’s decision could spell problems in the next few months. He pointed the president towards Article 87 of the Constitution, which obliges the state to promote development, employment and new sources of jobs.

The Venezuelan-Colombian Chamber of Commerce reiterated an earlier estimate that breaking with Colombia could affect half a million jobs. While cross-border trade was continuing, it added, this had fallen by 17%.

Reports from the region indicated that the decline in economic activity was accelerating as border guards and customs officials responded to the presidential order by tightening up controls at key crossing points such as the Simón Bolívar bridge.

The number of people passing though the border appears to have fallen steadily as Chávez upped the stakes. “The Colombians are abstaining from coming to make their daily shopping here,” said Isabel Castillo, president of the chamber of commerce in the border town of San Antonio.

The reason for this was ever longer queues resulting from controls enforced by the National Guard, she said. “The people from Colombia are frightened to come here, they lose a lot of time in queues even if the exchange rate is advantageous to them,” an anonymous storekeeper added.

For their part, Venezuelans were said to be making fewer trips across the border. In Cucutá, a border town in Colombia, shopkeeper Pablo Rubio was quoted as having said that “without the Venezuelans,” the town had “no life” and his sales had dropped 80% since the latest spat between the two countries erupted. Venezuelan officials say there’s active smuggling into Colombia of contraband foodstuffs purchased in Venezuela at low prices set under government controls. The officials say this is all the more reason to tighten up the border.

In Caracas, Agricultural and Land Deputy Minister Richard Canan said that an investigation had shown that 200,000 quintals of coffee had been smuggled across the border to Colombia during the first half of this year.

This, he claimed, had been the cause of shortages in Venezuela. The coffee industry claims the shortages are a result of official price controls, while the government accuses companies of deliberately hoarding stocks in an attempt to force the authorities into relaxing or ending the controls, or to sow public discontent.

The government has “intervened” plants owned by the two largest coffee companies in Venezuela, Fama de América and Café Madrid. Chávez and Commerce Minister Eduardo Samán have both spoken of making the “temporary” takeovers permanent.

The government ordered the troops into the plants after the companies said foreign exchange controls meant they only had sufficient raw material to continue producing for five days. Canan said 535,000 kilos of coffee had been produced since the plants were taken over.

However, indicating that government price restrictions had indeed killed Venezuelan coffee production, earlier this month the Chavez government signed a deal with Brazil for the immediate importation of 1,500 tons of coffee.


Chávez’s statement came just three days before an extraordinary summit meeting of the South American Union (Unasur) to be held at Bariloche in southern Argentina. The purpose of the summit is to debate Uribe’s military agreement with Washington.