There has been considerable economic trauma in Venezuela. The result has caused border closings, and deportations.
Hundreds of miles to the southwest, trouble is also brewing and it has similar roots. The oil rout pushed Colombia's peso to a record low last month, it's down 35 % against the dollar in the past year. That makes the country's goods cheaper for anyone with dollars to spend, like Ecuadorians.
This effect has a negative impact on Ecuador's economy. Due to increased buying power Ecuadorians are flocking to Columbia to shop. The bad thing is that commerce is being sucked across the border, turning the Ecuadorian side into a ghost town. Meanwhile in the town of Ipiales, two miles inside Colombia, business is booming.This is having a very negative effect on store owners in Quito, not to mention, killing owners closer to the border.
Once upon a time, it was the other way round. Colombia's peso surged during the oil boom that began in 2009, gaining 10 percent against the dollar that year and peaking in 2011. The peso, which gained 1.6 percent on Wednesday, is still down 34 percent in the past 12 months.
Ecuador's Government has tried to crack down on cross-border shopping sprees, by limiting the amount Ecuadorians can bring home and slapping tariffs of as much as 45 percent on goods arriving by land from Colombia.
This brings to mind a few questions;
1. Have any Expats profited from this situation?
2. Does anyone see a potential problem on the horizon?
3. What can or should be done to limit its impact on Expats?