Facebook Twitter

Venezuelan smugglers defy crackdown drawn by huge profits

SHARE Venezuelan smugglers defy crackdown drawn by huge profits

SAN CRISTOBAL, Venezuela — In a warehouse at the edge of this city near Venezuela's western border, the load of valuable contraband sits in boxes ready to be shuttled the few miles (kilometers) into Colombia where it will fetch an impressive profit.

This impending shipment is a household staple: rice. The next one could be tomato sauce, toothpaste, flour or shaving blades — whatever the band of smugglers is able to buy cheaply at Venezuela's controlled prices and then ship out for resale.

"Moving a shipment of milk is more profitable than cocaine," according to the smuggler, a man in his 30s who said he is a top leader in a network of some 150 people. He declined to be named out of fear of arrest.

While Venezuela struggles to right its listing economy and urban shoppers form long lines around stores in search of basic goods, the smuggling business is booming. A kilogram of rice sold in Caracas at the Fair Price Regulator's mandated price of 26 bolivars, the equivalent of 10 U.S. cents at the widely-used black market rate, can garner 15 times that amount in Colombia. Toothpaste goes for 27 times as much. A gallon of gasoline costs less than a penny in Venezuela compared to as much as $3 across the border.

The government complains the smuggling of between 50,000 and 100,000 barrels per day of gasoline alone represents losses of more than $3 billion a year, or about 1.5 percent of GDP if taken into account what the same volume costs at international prices.

"It's the problem we have for living in the cheapest country in the world," Jose Gregorio Vielma Mora, the pro-government governor of Tachira state, told The Associated Press. "At least 30 percent of the food Venezuela produces leaves the country illegally."

Venezuela established price controls a decade ago under the socialist administration of President Hugo Chavez in order to help the poor. But the country's oil-dependent economy has been battered by mismanagement and the crash in global crude prices, creating a cash shortage that has made it difficult to buy imported goods.

With the value of the Bolivar tanking, hard currency itself has become the country's most sought-after commodity and the profits to be found in smuggling are proving irresistible.

President Nicolas Maduro has condemned smuggling as a weapon used in an "economic war" waged by the United States and political opponents intent on unseating him.

The government has intensified its fight against the flow of contraband, creating a special taskforce to bring control to the porous 1,400-mile (2,200 kilometers) border with Colombia. Steps include closing the border at night, deploying more troops and ramping up jail sentences for anyone caught smuggling. The government also has begun rolling out some 20,000 finger-print scanners to ration the amount of any single product shoppers can buy.

In the last six months, authorities have seized some 12,000 tons of smuggled products ranging from fertilizer to animal feed and mayonnaise, according to Gen. Efrain Velasco, Venezuela's top army officer along the border.

"It's enough to feed the 1.7 million people of Tachira for 15 days," he said.

But the trade continues at a brisk pace, in part due to systemic corruption among Venezuela's poorly-paid security forces.

Under emergency rules put in place last year, transporting food, especially to cities along the border, is akin to moving precious cargo. Smugglers easily avoid detection by falsifying shipping documents, understating the true size of their haul or concealing its origin.

The smuggler in San Cristobal describes how an advance car known as "La Mosca," or the fly, travels a few minutes ahead of the cargo, doling out bribes at each of 20 military checkpoints along the highway linking the capital to San Cristobal. He records the payments in a simple spiral notebook. On the 400-mile (650-kilometer) journey, he pays a total of about 80,000 bolivars, or around $300: 2,000 bolivars to National Guard troops on each side of Barinas, the hometown of late President Chavez; another 7,000 in Capitanejo; and 10,000 entering Tachira state.

The bulk of what's left is handed over in San Antonio, the border town where the stakes are higher. The area is one of the most-dangerous in Latin America, a haven for drug traffickers, leftist rebels and criminal gangs that have arisen during Colombia's half-century civil conflict.

Unlike busier border crossings, where authorities long have tolerated poor residents hiding goods on the back of motorcycles, this no-man's land is said to be controlled by paramilitary gangs and thus unsafe for small-time smugglers.

A few blocks before the customs house, a bumpy, dirt trail heads off the road into a green scrubland. From time to time, a sputtering motor of a clandestine vehicle breaks an otherwise complete silence.

From this point, it's a 15-minute drive across the shallow Tachira River into Colombia and a dusty barrio known as La Parada where, in a scene resembling something of a Middle Eastern bazaar, dozens of merchants from all over Colombia pore over all sorts of smuggled goods laid out in the streets and on plastic tables. Despite Venezuela's insistent demand that Colombia do more to control the smuggling, no state presence is detectable.

Colombian consumers in the nearby city of Cucuta, the country's sixth largest, are the ultimate beneficiaries, paying sometimes a quarter of what they would for the same goods at a supermarket.

Vielma Mora, the Tachira governor who as a junior officer in 1992 helped Chavez lead a military uprising, complained that authorities on the Venezuela-Colombia border once seized more drugs than anywhere else in South America.

"Now we don't find anything," he said. "Why? Because the smugglers have all moved into food."

Gen. Velasco, the military commander, said he regrets that smuggling has become a way of life in San Cristobal, causing residents to all but lose the notion of an honest job.

The smugglers scoff at such comments. They've never been working harder, they say, and any further obstacles will only make the payoffs grow larger.

At the warehouse, the smuggler, his belly bulging from an orange track suit, looked nervously at his cell phone as a cascade of text messages confirmed another shipment was on its way from Caracas.

Follow Jacobo Garcia on Twitter: https://twitter.com/jacobogg