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. ...
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. ...
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. ...
The resulting distortions are most visible in street markets in Cúcuta. Here, one kilogram of Primor brand rice bought in Venezuela at the regulated price of nine bolívares—about 13 cents at the black-market exchange rate—is sold for 1,700 Colombian pesos, or 89 cents, merchants say. The popular Venezuelan brand of corn flour Harina P.A.N., used to make the ubiquitous corn cakes known as arepas, fetches similar profit. Stacks of its iconic yellow packaging can be found all over roadside markets here. ...
"Everything you see on this street is Venezuelan," Alejandro Valbuena, a 32-year-old merchant, said on a recent day as a steady stream of loading trucks hauled in crates of dishwashing detergent and diapers behind him. "Looking around here, you can tell why socialism doesn't work."
