Ripple Effect: How the Venezuelan Crisis is Impacting Colombia’s Economy and Foreign Relations

Ripple Effect: How the Venezuelan Crisis is Impacting Colombia’s Economy and Foreign Relations

Border Crossing Welcoming Venezuelan Immigrants into Colombia. Source: Wikimedia Commons.

 

In the past two decades, under both President Hugo Chávez and President Nicolás Maduro of the United Socialist Party, Venezuela has experienced mounting political and economic trouble. Price and foreign currency controls, first instituted by Chávez, have fueled an illegal market and led to hyperinflation. Inflation rates passed 1.3 million percent in 2018 and show little sign of slowing, making money virtually useless and necessary goods virtually impossible to afford. Amidst these economic challenges, the political tensions between Maduro and Juan Guaidó, who declared himself acting president last year, have further worsened the situation in Venezuela.

By Kelly Shen and Joshua Yang / Huntsman Program





In order to signal U.S. opposition to Maduro’s rule, President Trump imposed sanctions prohibiting commerce with the Venezuelan government and any business tied to the government. These measures have exacerbated the economic crisis, and this crisis has spurred around four million Venezuelans to flee the country.

The Venezuelan refugee crisis has quickly become one of the worst in history. However, it is important to recognize that beyond triggering state failure within Venezuela, this crisis has larger repercussions at the international level. Specifically, an exodus of refugees on this scale places enormous burdens upon host countries, which can often be overlooked by the international community [8]. While key international actors—the United States, United Nations High Commissioner for Refugees (UNHCR), and International Organization for Migration (IOM)—have sent humanitarian aid to the area, it is the neighboring Latin American countries that take in the fleeing migrants. Colombia, one of Venezuela’s three neighboring countries, has received over 1.4 million Venezuelan migrants, a large proportion of the fleeing refugees . Although political turmoil and economic instability in Venezuela may be the most apparent consequences of the current crisis, the refugee crisis also has broader implications with regards to Colombia’s economy, U.S. economic policy, and global power dynamics.

To continue reading click here.