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Tensions with Venezuela have profound implications on the trajectory of Colombia – a country with an unpopular president, a stalling economy, and a protracted armed conflict.

The economy

Venezuela is one of Colombia’s largest trade partners. Exports to Venezuela amounted to $2 billion in 2014, making Venezuela one of the largest buyers of Colombian goods.

Amid Venezuela’s collapsing economy, those numbers have fallen dramatically. From January to June of this year, Colombia only exported $631,730,000 USD to Venezuela, down from $1,011,602 in the same period of 2014, a drop of 38%.

Trade to Venezuela has already been dropping since 2012. But current tensions between the two countries could make matters worse.

Those are just the formal numbers. The economy of the Norte de Santander province depends largely on the trade relations with the neighboring country, including the illegal smuggling of goods from Venezuela to Colombia where everything, from clothes to gasoline, is sold at a much higher price.

While Venezuela’s formal economy has worsened, the black market economy has increased.

This can now be seen in the drastic long lines at gas stations in Cucuta. It seems that the formal economy had not been meeting the demand for gas in that region – it had been satisfied by cheaper contraband gas from Venezuela. This line has now been cut off.

The influx of deportees and refugees is putting an enormous pressure on Norte de Santander, which is already struggling to improve its 40% poverty rate. With thousands of newly displaced, the local authorities will be strained to provide support to those in need.

The Colombian government has come in and offered assistance to those who were displaced by the crisis. The government has guaranteed 2,300 jobs for deportees, through SENA, the Ministry of Labor and Housing, and the Department of Social Prosperity. The government will also offer an $80 monthly stipend per family to help them find housing.

Santos visits Cucuta days after Venezuela deports hundreds of Colombians

However, for a region dependent on trade between the brother nations, whether formal or informal, the longer the border remains closed, the worse the economy will get and the more lucrative contraband and drug trafficking will become.

Negotiations with FARC

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Peace talks

A strained relationship with Venezuela has the potential to impact Santos’ ongoing peace talks with FARC guerrillas, who ideologically are aligned with the Venezuelan government.

In an agreement between the FARC and Colombia, Venezuela was named a sponsor of the peace talks, the others being Norway, Cuba, and Chile.

The socialist government of Venezuela, along with Cuba, is able to create a level of trust in the process for the leftist guerrillas. If that situation is compromised it could add yet another stumbling block for the already protracted peace process.

Such a development could be disastrous for Santos, who has bet all his political capital in search of a peace deal. In a recently published poll, 69% of Colombians are already pessimistic about the ability of the government to reach a peace deal with the FARC, and 36% calling for an immediate end to the negotiations.

FARC truce fails to curb Colombia’s pessimism over peace talks

Santos’ dwindling popularity

The border crisis with Venezuela could also spell bad news for Santos popularity, who is facing local elections in October. The success of a peace process with the FARC will depend largely on the participation of mayors and governors.

The conservative opposition, led by former President Alvaro Uribe, can count on popular aversion against both the FARC and Venezuela’s President, Nicolas Maduro.

According to pollster Ipsos, Santos carries only a 29% favorability rating, and 70% saying they are dissatisfied with the job he is doing as president. In the same poll, Uribe showed a favorability rating of 57%.

Santos’ more cooperative, diplomatic approach may be testing the patience of Colombian voters.

While he was working through diplomatic channels to seek a resolution to the border crisis, his predecessor and frequent critic took advantage of the situation to score important political points.

Uribe was in Cucuta with a megaphone rallying crowds and calling for a more confrontational response – taking Maduro and his government to the Inter-American Commission on Human Rights.

Santos’ fall in popularity and recent troubles could hurt his political allies in the upcoming elections and weaken the national government’s attempts to impose policies on a local level.

Colombia will hold elections for Governor of each of the 32 provinces, representatives to the National Assembly and Mayor of each of the 1099 municipalities on October 25.

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