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Venezuela in isolation

By Veneconomy

24.03.05 | One of the peculiarities of the Hugo Chávez administration has been its rejection of the principles of trade integration and opening up of the economy.

One of the first decisions taken by Hugo Chávez after he became President was to order the partial closing of the frontier with Colombia, violating all existing bi-national agreements. On that occasion, he forbid Colombian truckers to travel inside Venezuela, forcing them to transship their loads at the border, with the attendant increase in costs.

The Chávez administration has also kept its distance when it comes to regional negotiations, such as those on the Free Trade Area of the Americas (FTAA) and the negotiations aimed at bi-national treaties with the United States. This is a decision that will cost the country dear in the long term because of its implications and the poverty that it will generate, and also because it will be more difficult to join these negotiations in the future. Moreover, the government is developing its own integration campaign, essentially political integration, which is turning out to be negative for the country’s trade. It has used oil right and left as a strategic and political lever for buying loyalties throughout Latin America and the Caribbean. It has fostered barter transactions that are far from transparent, exchanging oil for heifers with Argentina and for medical services and trainers with Cuba, for example.

Barter is the oldest form of trade known to man, but it is also the most imperfect, as it does not permit an objective valuation of the goods being traded.

Now, this eagerness on the part of the government to consolidate its “political integration” has culminated in the excess of creating a new Ministry of State for Integration and Foreign Trade, which will be in charge of monitoring the agreements signed with foreign countries and whose goal will be to expand and consolidate those agreements in order to adapt them, in the words of the Minister for Integration and Foreign Trade, Andrés Izarra, to the government’s “very full, dynamic international agenda.”

With this measure, the country’s isolation from the rest of the region is further consolidated, while Chávez continues insisting on promoting the idea of multipolarity in international relations, where his own particular social agenda, which finds no echo in the rest of the world, will prevail.

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