What is the Cost to Colombia of the Venezuelan Migratory Crisis?

The Venezuelan migratory crisis is presenting a very high cost to Colombia, whose political leadership is ignoring the gravity of the situation.

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The Venezuelan mass exodus is posing a serious challenge to Colombia’s already precarious finances, as it battles to stay out of debt (EC).

The problem of the massive migration of Venezuelans to our country is becoming increasingly evident for Colombia’s finances. However, the government seems to have not understood that the problems of Venezuela are also our own.

The Colombian government can not continue to ignore reality or maintain the discourse of rejection of a US military intervention in Venezuela. President Ivan Duque may try to appear moderate and follow the lead of the Lima Group, but if he is really thinking of Colombia, the least he can do is publicly accept that Venezuelans need military intervention to be freed.

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Culturally, the Venezuelans are very similar to the Colombians. In other economic conditions the Venezuelan migration would be a population boom very easy to take advantage of. Everything would be different if Colombia resembled Argentina in the late nineteenth and early twentieth centuries, when it took advantage of the extraordinary wave of European migration because it had virtually no labor laws, so there was a completely free market with respect to hiring and firing employees. Additionally, there was no welfare state, so the migrants did not pose a burden to the Argentine government.

However, this is not the current situation in our country and we are very far from a time when that level of liberalism enjoyed an important degree of acceptance from politicians and society in general. So for every Venezuelan who arrives, given the ridiculous amount of regulation that exists in the Colombian labor market, it becomes very difficult to be hired by a company.

But, in addition, there is a welfare state in Colombia that plays a large role in society and, as always, does things wrong and displaces private initiative. In Cúcuta, for example, the authorities have closed houses that voluntarily dedicate themselves to welcoming migrants. In Argentina the opposite happened: the state did not forbid charity, nor take millions from Argentines to give to foreigners. It was the migrants themselves who organized the aid for their compatriots.

The money of Colombian taxpayers that will be used to assist Venezuelan migrants

Last week in Washington DC, the Colombian Minister of Finance, Alberto Carrasquilla, received USD $31.5 million that World Bank partners donated to assist with the Venezuelan migratory crisis. The economist was clear, and said that this is practically crumbs compared to what the Colombian state needs to face the migratory problem. He calculates that USD $1.5 billion is what we need!

Carrasquilla was realistic in his analysis: the rest of the money will have to come out of the taxes paid for by the Colombian people. That is to say that more than 0.5% of GDP must be destined to assist the migrants.

The situation is so complicated that at the end of March even more debt was approved to deal with the migratory phenomenon. After a meeting of the Consultative Committee on Fiscal Rules, they decided to adjust the fiscal rules, “in order to assume the impact generated by the Venezuelan migratory crisis.”

In 2011, a bill that established “fiscal rules” in the country was passed by the Colombian Congress. This means that, by law, there is a mandate in Colombia whereby a committee of experts imposes a limit on the fiscal deficit of the government, trying to assure that the state does not spend more than it collects.

However, before the migratory crisis, the committee in charge of establishing the fiscal rules decided that the debt margin for 2019 will increase by 0.3% of GDP, going from 2.4% to 2.7%; and that for 2020 the change will be 2.2% to 2.3% of GDP.

“At this moment there are more or less 1.2 million citizens of that country [Venezuela]. This is having fiscal effects that have been quantified by several studies at approximately 0.5% of GDP, which represent approximately 5 billion pesos per year, however, this is a temporary shock,” the minister said at the time.

But if he’s wrong, and the government continues with this line of thinking, Colombia could end up very badly. How does the minister know that it is temporary situation? Cuba has been enduring socialism for more than 50 years. If Maduro does not leave power, Venezuelan immigration to Colombia will increase drastically.

According to Colombian Foreign Minister Carlos Hollmes Trujillo, by 2021, if Maduro does not leave power, 4 million Venezuelans could arrive Colombia (in addition to the current figures). The cost of meeting the social demands of that population, according to government estimates, could exceed USD $8.6 billion.

The impudence of a large part of the Colombian political class

Juan Manuel Santos, the worst president in the history of this country, and a figure who still has a lot of influence in Colombian politics, has given La Vanguardia a repulsive interview in which he shows not only his sympathy with Chavez, but also, the effrontery of a political class that does not care about the suffering of either the Venezuelan people or the Colombians.

“It is necessary to dialogue with Maduro. Diplomacy is based on dialogue and there is no dialogue with a tweet,” said the former president, who once again rejected the idea of ​​a military intervention. Santos wants the dialogues to return with Maduro and the tyrant to remain in power for years. Without any shame, he insists on what any rational person knows is impossible: Maduro will not leave power through dialogue.

The position of Santos is extreme. Iván Duque, and a good portion of Colombian politicians, reject any negotiation with the tyrant and they understand that he has to be removed. However, at the end of the day (surely unwittingly) and like Santos, they end up being enablers of tyranny, and negatively impacting all Colombians.

Rejecting a US military intervention in Venezuela does not mean only preventing the only thing that can free the Venezuelan people, but also plunging Colombia into an economic crisis.

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