October 4, 2014: The government is accused of cooperating with Venezuela in suppressing growing popular unrest there in order to keep Venezuela from trying to sabotage the peace negotiations with FARC. It’s no secret that for 15 years the leftist government of Venezuela has supported FARC, mainly by providing sanctuary for FARC bases just inside Venezuela. The FARC connection led to Colombian drug having an easier time contacting and bribing Venezuelan officials to allow Venezuela to be used as part of the smuggling operation taking Colombian cocaine to North America and Europe. Meanwhile the Venezuelan border bases made FARC forces in the northeast safe from attack by the increasingly capable Colombian security forces. But support like that was not enough and FARC has been getting battered to death over the last decade and is now on the verge of signing a peace deal that would end their five decades of violence (that have killed over 220,000 so far). Venezuela could continue supporting die hard FARC factions willing to fight on. At the very least such support would delay a FARC peace deal, but it might also trigger a war with Colombia and their much more capable armed forces. So it is widely believed there is an unwritten agreement to cooperate. Colombia arrests and returns to Venezuela people Venezuela considers “enemies of the state.” These include two college protest leaders who were recently sent back. Colombia has also returned drug gang leaders who had powerful friends (the best money could buy) in Venezuela. Whatever the reality of an “understanding” Venezuela has stayed out of the FARC peace negotiations and Colombia continues to do the Venezuelan government unexplained “favors.”

The FARC peace deal is very important to most Colombians in part because of more and more evidence showing the economic and social benefits. Over the last decade the government offensive has driven FARC out of large parts of rural Colombia. Those liberated areas have then undergone an economic boom and the people involved know that it’s all because the FARC are gone and the area is again connected with the national and global economy. This phenomena has given Colombia the fastest growing economy in South America. By clearing FARC gunmen out of their remaining strongholds (especially along the Venezuelan, Panamanian and Ecuadoran borders) the local and national economy would grow even faster. All this evidence of post-FARC prosperity has made the government willing to spend a lot of money to help former FARC members get jobs or start businesses. This is persuading a lot of FARC members to go along with any peace deal.

FARC is adamant about there not being a peace deal unless there is more amnesty for FARC leaders and veteran fighters. This is a growing problem because most Colombians, especially the many victims of FARC, insist that FARC members answer for their crimes. A lot of the FARC members could be subject to prosecution and are not about to surrender and disarm to face that. FARC also wants the government to cease operations against them while the peace talks are going on. That is not happening because in the past such ceasefire agreements enabled FARC to rebuild and then abandon the peace talks. This impasse could cause nearly two years of negotiations to be abandoned. Many rebels are willing to end the decades of violence and disarm, but not if they are subject to prosecution for the crimes (murder, rape, kidnapping and sundry acts of violence and theft) they have committed. This problem is compounded by the fact that many of these criminal acts were committed or ordered by FARC and ELN members who are publically known. There are often still witnesses out there willing to testify. Many Colombians are willing to let the war (which the leftist rebels have been losing for the past decade) go on rather than let so many of the rebels “get away with murder.” Every month FARC and ELN get weaker from casualties, desertions and the fact that they have lost much of the public support they once had. The government says it can get some amnesty, but not as much as the rebels want. Until this issue is revolved the peace talks are, in effect, stalled. All other issues have been settled. FARC is quietly trying to get an agreement that takes advantage of a 2012 amendment to the constitution that allows the government to prosecute and convict FARC and then suspend the sentences. Doing that discreetly would not eliminate the possibility of a public uproar and political crises. There is no easy way out of this mess.

Meanwhile FARC continues to fight hard in the southwest, northwest and northeast to earn cash to keep their armed members operational. FARC continues to derive most of its income from the drug trade as well as less lucrative crimes like extortion and theft. FARC and ELN attacks on oil fields and pipelines in the northeast have been heavier (over 60 so far) this year, resulting in oil production to fall nearly three percent versus last year. The leftists are seeking to extort “protection money” from the oil companies. That is illegal and more strictly enforced so a lot of the military clashes with leftist rebels are in the northeast and involve protecting oil facilities. The government can afford to deal with the decline in oil production because over all the economy grew six percent in 2013 and the growth is continuing.  The government campaign against FARC continues and is particularly intense in the southwest and along the Venezuelan border. Venezuela has become a sanctuary for drug gangs and leftist rebels who can afford to pay what corrupt officials demand.

The Venezuelan economy continues to collapse and the government is responding with desperate gestures that most Venezuelans know are mainly theater and will not help. Over a decade of far left economic policies have ruined the economy and the government fears backing down will be admitting responsibility for the mess and that could mean a violent revolution. So the leadership decided that doing more of what caused the problems will somehow make it all better. The government has to do something because of the growing threat of widespread organized violence by a population that gets angrier each day because of the shortages, inflation and unemployment. President Maduro has seen his approval ratings go from 60 percent in late 2013 to under 35 percent now. A growing number of angry Venezuelans are joining anti-government political parties and a large coalition of these parties are hoping to peacefully replace the leftist government in the 2015 elections. This has happened before in South America and many Venezuelan believe it is worth a try. If the government tries to rig these elections, then it’s revolution time. Aware of that possibility the government is taking good care of the security forces. They get paid more, and on time, and have access to special stores that never run out of essentials. Most of the new housing built goes to the military and police families. The government is importing 20,000 cars from China to be given to soldiers and policemen who have performed well. Retired officers are given administrative jobs in the government.  So amidst the growing poverty and shortages, a job in the security forces is available for those who will be loyal, and brutal when ordered to crack down on anti-government forces. This has created a “them versus us” atmosphere which creates even more popular anger.

Venezuelan inflation is running at over 60 percent and while unemployment is under ten percent many people have low-paying government jobs that leave many with enough to eat (from government subsidized and rationed food) but not much else. The mismanagement of the economy has left the government unable to import enough food for everyone. The shortage of cash now threatens to ruin the Venezuelan credit rating as well. It looks like the government won’t be able to make international debt payments due in October. That would trigger a default and cut off additional loans. With the government budget running at a deficit for years, no more foreign loans means a sharp increase in shortages for people are already squeezed. Allies like Russia and China are unlikely to provide emergency loans, especially since both these countries are fully aware of the falling Venezuelan credit rating. It’s also no secret that the government stopped publishing economic data early in 2014, apparently because the news was all bad. It is known that oil sales have declined over 40 percent in the last few years because of corruption and mismanagement in the state owned oil industry. To make matters worse, the price of oil has fallen sharply as well and is now under $90 a barrel.

The government claims that most of the economic problems are the result of smuggling. It is believed that over 40 percent of goods (especially the heavily subsidized petroleum products and staple foods) are illegally smuggled to neighboring countries (mainly Colombia) where they can be sold at a much higher price. This has made many Venezuelans rich and makes it possible for many poor Venezuelans to get by. There is a growing black market where goods are available, but at market rate prices most Venezuelans cannot afford. Until recently the government was deadlocked with pragmatists urging loosening of market controls to enable businesses to revive, survive and eliminate many of the shortages. But hardliners blocked reforms and insisted that only enforcing communist style economic controls could cure the problem.  This year the socialist government has been criticized by its own far-left zealots who have long been core supporters. The far-left faction won this debate and now the government will seek more control over the economy and how people live in order to avoid a rebellion.

Meanwhile Venezuela has the highest crime rate in the region. The basic problem is that Venezuela imports 70 percent of its goods and years of price controls and rationing have corrupted the economy and driven many legitimate businesses into bankruptcy. Spending money you don’t have catches up with you eventually. Smuggling is a major problem and the government sent over 30,000 soldiers and police to the Colombian border and tightened up border crossing security. At most this means the smugglers have to pay more in bribes to get cheap oil out and all manner of consumer goods in or out. Many Venezuelans believe that most of the smuggling is controlled by military and police commanders who share in the profits. All this sustains a black market that most Venezuelans, dependent on low-paid (in local currency) jobs cannot afford. These Venezuelans depend on the government subsidized food provided under a rationing system. That has been corrupted as well and the government is trying to implement a system of finger printing all those with ration cards in order to prevent fraud and theft.  Nevertheless the latest crackdown on smuggling has reduced the amount of goods getting across the border. The government knows that growing popular anger at shortages of basic goods is more of a danger than some army and police commanders upset because of reduced bribe income.

The Venezuelan extreme left could never accept any suggestion that the socialist policies of the government had caused the economic collapse and urged the imposition of even more centralized control of the economy. This is what many senior Venezuelan officials are coming to realize is what has caused the economic collapse. But the far left is composed of true-believers to whom economic issues are a matter of faith, not reality. The leftists have another problem in that they are depending on Cuban economic advisors. Cuba has been an economic basket case for decades and has been forced to allow more and more market economy activity to survive. Changes like this could help, but not cure Venezuela’s economic problems. A “Cuban solution” would require a degree of state economic control similar to what Cuba has. This would do further damage to the Venezuelan economy. The Cuban economic advisors are also calling for less waste and corruption. That is difficult to do without a lot of violence. China, which is a major customer Venezuelan oil and the main source of foreign loans urges a Chinese type economy (free market with a communist dictatorship.) But the Chinese model works mainly because the Chinese entrepreneurs have been far more productive than those in Venezuela have ever been. In large part that’s because of oil exports, which account for half the Venezuelan GDP and none of the Chinese GDP have over decades removed a major economic incentive for many Venezuelans. The oil allows the government to buy its way out of a lot of wasteful policies and makes a lot of corrupt officials rich. Neither Cuba nor China have this oil bonanza and that makes a big difference. 

There is one far-left criticism that is accurate; there is a growing problem with corruption. Those who are in control are not willing to reduce the corruption because too many of the corrupt officials see that the socialist policies are not and cannot work and the money they are stealing will be a way out of this mess for themselves and their families. Unfortunately many of their less affluent followers are figuring this out as well and are becoming unruly about it. This is particularly troublesome when it happens with some of the armed militias the government has formed to provide protection against a popular uprising. Losing the support of the armed militias means the ruling socialists are another corrupt dictatorship ripe for overthrow followed by a civil war. Unless there are some fundamental (and not very socialist, thus very unlikely) economic reforms the inflation, unemployment and shortages (especially of essentials) will get worse and when the popular discontent turns to violence. This will be a problem for all of Venezuela’s neighbors, but particularly Colombia which will see lots more refugees and more years of Venezuela serving as a sanctuary for gangsters and Colombian rebels. President Nicolas Maduro may be ignoring economic competition, but he has proof that in the political competition for popularity he has lost big time this year.

October 1, 2014: In Venezuela a pro-government member of parliament and his girlfriend were found shot to death in their apartment in the capital. The government blamed anti-government groups. But with one of the highest murder rates in the world, not to mention constant infighting among corrupt government officials, most Venezuelans can easily imagine many other suspects for the murder.  The government effort to blame political opponents for the murder is also seen as an effort to play down the high (and rising) murder rate. That did not work either.

September 29, 2014:  ELN apologized for killing two oil company workers on September 14^th. The two victims had been sent to repair damage an ELN bomb had done to a pipeline. ELN is mostly interested in extorting “protection” money from the oil companies and usually avoids injuring oil company employees. Such violence only makes the oil companies more willing to obey the law and not make extortion payments.

September 16, 2014: In the north (Córdoba) FARC ambushed a police patrol and killed seven policemen using a roadside bomb and long-range gunfire. This attack was apparently in support of a drug gang the local FARC were working for.

September 13, 2014: In central Colombia (Meta) the air force bombed a rural FARC camp where a meeting of local FARC commanders was taking place. The bombs killed at least six FARC men including four of the leaders. Many others got away before ground troops arrived to gather evidence. Government intelligence efforts continue to reveal information about FARC leadership that makes attacks like this possible. This is yet another reason so many FARC leaders back the peace negotiations. For many of them it is a matter of life and death.

September 11, 2014: Venezuela extended for the three months the policy of closing crossings on the 2,200 kilometer Colombian border at night. This was started a month ago and Colombia calls it counterproductive and illegal. Venezuela claims that the smuggling is costing the government over $300 million a month. The night closings are said to be responsible for the arrest of 512 smugglers in the last month.

In Peru the government declared a 60 day state of emergency in areas along the Colombian and Brazilian borders where cocaine production has sharply increased in the last year. Most of this is the result of Colombian drug gangs finding it too difficult to continue operations inside Colombia. Despite bribes and threats of violence, the Peruvian government is not cooperating with the gangs.

September 7, 2014: In the northwest (Antioquia) a policeman died during an encounter with FARC. The leftist rebels are becoming more active in these border areas as the security forces are increasingly active in trying to find and destroy drug gang and rebels hideouts.