The WSJ reports,"CÚCUTA, Colombia—Venezuelan President Nicolás Maduro's sliding popularity amid persistent street protests can be partly blamed on the humming smuggling market on this border, which shows how Colombia's unbridled free-market capitalism is eclipsing Venezuela's socialism and hurting ordinary Venezuelans.
Many Colombian consumers benefit from a massive smuggling trade involving subsidized and price-controlled goods from oil-rich Venezuela—including near-free gasoline, car parts, corn flour and deodorant, all bought cheap in Venezuela and marked up before being sold here.
Many Colombian consumers benefit from a massive smuggling trade involving subsidized and price-controlled goods from oil-rich Venezuela—including near-free gasoline, car parts, corn flour and deodorant, all bought cheap in Venezuela and marked up before being sold here.
With its heavy intervention in the economy, Venezuela now imports three-quarters of what it consumes but loses a third of its goods to illegal cross-border trade, its government estimates. Some economists say Caracas exaggerates the smuggling problem to mask its own inability to keep supermarkets stocked.
The scarcity has eroded Mr. Maduro's popularity to a low of 37%, as recent polls show food shortages surpass rampant crime as citizens' top concern. And in Colombia, there is so much anxiety among businessmen about the incoming, cheap products that the National Poultry Federation on Sunday started a public-awareness campaign to discourage the purchase of contraband chicken.
"We're not so much living here as much as surviving," said Isabel Castillo, president of the Chamber of Commerce in San Antonio, a struggling town by Venezuela's side of the Táchira River that divides the countries.
Stifled by inefficient state-owned factories and price controls, domestic production in Venezuela has plummeted. Moreover, the massive weakening of Venezuela's currency makes its goods cheaper in Colombia. These factors lead to frequent shortages that make life especially trying for Venezuelans along the border, where smugglers leave little behind on store shelves.
That is partly why the protest movement that kicked off in February against Mr. Maduro's administration took root here before spreading nationwide. Scattered demonstrations and rallies still take place, including one on Sunday in which members of the Popular Will party spoke out against the government's arrest of their leader, Leopoldo Lopez, who is accused of instigating violent demonstrations.
Venezuela's government says it is working with its neighbor to try to crack down on trafficking with an increased military presence on the border. That led smugglers, who see their work as legitimate, to block traffic last week on the bridge connecting the two countries here.
"The problem is that on the Venezuelan side what these smugglers do is illegal but just one kilometer down the road in Colombia, no one thinks they're doing anything wrong," said Carlos Chacon, a San Antonio city councilman, referring to Colombian customers.
To make ends meet, many residents turn to running bags of groceries from Venezuela to Cúcuta—an errand that can yield more than a typical workman's salary. Here they have become known as "bachaqueros," a reference to South American leaf-cutter ants that can deplete a terrain of resources when working together.
In this year's first three months, Venezuela's border patrol in Táchira state confiscated more than 14,000 tons of food and meat—enough to feed about 400,000 people for a month—compared with 20,000 tons of food seized in all of 2013, Venezuela military commander Vladimir Padrino said on state television.
Fueling the illicit trade is Venezuela's bolívar currency, which has shed more than 60% of its value against the dollar over the past year on the black market, enabling buyers with stable U.S. dollars and Colombian pesos.
As a major clash point between the two countries' economic models, many Venezuelans look to Cúcuta to find out how much their bolívares are worth. For years, the exchange rate determined by currency houses in Cúcuta has been posted on underground websites to be used as a reference for dollars on the black market in Venezuela, where strict currency controls make dollars difficult to obtain".
