THE VENEZUELAN EFFECT

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?

If an expat leaves and comes back to Ecuador the same day, does that count as a day out of country?  Does the expat have his passport stamped coming and going?

mugtech,

Good question,

Having not tried this, I have no idea. It sounds like you should have to have your PP stamped both ways, but one never knows?

I imagine cccmedia will roger up, soon and provide the correct answer. If he has not done it, I am sure he will know someone who has.

GMC(SW) wrote:

I imagine cccmedia will roger up, soon and provide the correct answer. If he has not done it, I am sure he will know someone who has.


I did do it, about ten years ago, crossing at Tulcan in northern Ecuador, to Ipiales, Colombia, and back after spending about three hours shopping and sightseeing in Ipiales.  My purpose was to get more time in Ecuador, and after both sides stamped my passport, I had it -- 90 days, as I recall.  (I do not have the expired previous passport to prove it.)

Nonetheless, the answer to mugtech's question about how the day is counted would depend on who is making that judgment call and toward what purpose the decision is necessary.

cccmedia in Quito

cccmedia,
So now, do you think it would be required to have a persons Pass Port stamped, if they went into Columbia for 1 day for shopping? Have you heard of anyone who has dealt with this lately?

I guess it would make sense, you are leaving one country and entering another. Unless there is a time element involved, say for short trips 24 hours or less type of thing.

Now that people are crossing the border to shop or play the money change game, I would think the crime element would be onto this as well. Making the border area a potentially dangerous place to be.

One issue that comes to my mind is the fact that these events could possibly push Ecuador into a recession. I have read that the Government (El Jefe), is not happy about the current use of the dollar.

It seems Ecuador is more or less stuck, as there is no viable currency at this point, that could replace the dollar.

mugtech wrote:

If an expat leaves and comes back to Ecuador the same day, does that count as a day out of country?  Does the expat have his passport stamped coming and going?


Actually, the MERCOSUR/MERCOSUL nations permit free movement between countries using only one's Cédula de Identidade. This applies to naturals and to legal permanent residents, so for permanent residents a passport is not necessary in order to travel between MERCOSUL nations.

Cheers,
James

GMC(SW) wrote:

cccmedia,
So now, do you think it would be required to have a person's Pass Port stamped, if they went into Columbia for 1 day for shopping? Have you heard of anyone who has dealt with this lately?


We heard from a U.S. Expat last week who not only encountered no problems, he saw car lines backed up for hours seeking to enter Colombia from Ecuador -- apparently taking advantage of the shopping opportunities.

Historically, Colombia has routinely stamped passports when presented.  If there is a reason to avoid having a passport stamped, it's not clear to me what that reason is. 

I defer to James on the only-cédula-needed MERCOSUL rule.

cccmedia in Quito

GMC(SW) wrote:

Now that people are crossing the border to shop or play the money change game, I would think the crime element would be onto this as well. Making the border area a potentially dangerous place to be.


Ecuador's northern border areas became known hang-outs for the remnants of Colombia's Escobar Era after the drug kingpin was taken out in the 90s and the trafficker-gangs were largely flushed out of COL cities by police.

The U.S. State Department, cautioning on the U.S. Embassy/Quito safety page, says there is drug trafficking and other criminal activity throughout northern Ecuador's border areas.  State Department personnel are forbidden to visit the border areas on their personal time and may only go there with case-specific permission when on duty.

cccmedia in Quito

James wrote:

MERCOSUR/MERCOSUL nations permit free movement between countries using only one's Cédula de Identidade.


For those keeping score at home, the following are the current countries in the MERCOSUR free-trade federation:

Full members... Argentina, Brazil, Paraguay, Uruguay and Venezuela.

Associate members... Bolivia, Chile, Colombia, Ecuador and Peru.

source... Wikipedia

Thanks for clearing that up.  :top:

I think about the only instance I would ever go near that border would be as a last resort.

This currency situation makes it very favorable for US expats to have a nice vacation in Colombia on the cheap. Whatever products I have seen in Ecu that were made in Colombia- I really liked their quality, and it is not only me. Ecuadorian friends tell me that Colombian products are of good quality accross the board.
I personally would not be interested to take advantage of buying clothing or household goods there if I was to travel, but a friend of ours just retuned from Colombia with a laptop, a printer, a camera and clothing. That is a large amount of money that was left on the Colombian side and I feel bad for the Ecuador's business owners struggling with slow traffic of buyers.

Recent News.

The Trans-Pacific trade agreement signed last week between the United States and 11 other Pacific Rim countries will be another nail in the coffin of the populist governments of Brazil, Argentina, Venezuela and other countries that will be left even more isolated from the global economy — and poorer — than before.

All of this will lead to a formal partition of Latin America. There will be a Pacific bloc led by TPP member countries that will be linked to the world's biggest trading bloc, and an Atlantic bloc led by Brazil, Argentina and Venezuela that will be linked to an economically troubled China. The division, which has already existed de facto, will now become official.

Read more here: http://www.miamiherald.com/news/local/n … rylink=cpy

This will also have an effect on Ecuador, Hopefully the new regime will take a more realistic approach to trade.

GMC(SW) wrote:

Recent News.

The Trans-Pacific trade agreement signed last week between the United States and 11 other Pacific Rim countries will be another nail in the coffin of the populist governments of Brazil, Argentina, Venezuela and other countries that will be left even more isolated from the global economy — and poorer — than before.

All of this will lead to a formal partition of Latin America. There will be a Pacific bloc led by TPP member countries that will be linked to the world's biggest trading bloc, and an Atlantic bloc led by Brazil, Argentina and Venezuela that will be linked to an economically troubled China. The division, which has already existed de facto, will now become official.

Read more here: http://www.miamiherald.com/news/local/n … rylink=cpy

This will also have an effect on Ecuador, Hopefully the new regime will take a more realistic approach to trade.


Not being in TPP will certainly stunt future growth, give the advantage to Peru and Chile,  make Ecuador's prices less competitive.

I can only hope, and assume people in the Correa administration are seeing this and will take the proper actions.

Then again, you know what they say about "Assumptions".

The TPP has only been signed by agreement of committees.

It now has to go to the legislative bodies of the signatory countries for ratification and approval.

It ain't over till it's over. That's a ways down the pike still.

gardener1 wrote:

The TPP has only been signed by agreement of committees.

It now has to go to the legislative bodies of the signatory countries for ratification and approval.

It ain't over till it's over. That's a ways down the pike still.


It has or would have had enough votes to pass, but there is a bunch of backlash againt this agreement now in the U.S. from it's citizens. Was almost a certainty, now maybe 60-70 percent chance to pass? Personally think people are in for a surprise, and it won't pass.

My take on it FWIW, is that New Zealand is not totally on board. Local outcry there could gum it up.

Canada has serious reservations. The Canadian people might have the collective power to bring about real discussion and debate, which would bring all of the ugly details to light.

But never fear, after that there are two other global trade agreements in the works, far more damaging then the TPP.

TTIP and TiSA.

The global corprocrats are going to steal everything anybody's got, one way or another.

I tried to depart from Guayaquil to Peru! The reason of my travel was to apply for a new Dutch passport at the Embassy in Lima. Because my passport had expired, I was told that I could travel with my Cédula .
To my horror the lady at the checkin counter of Avianca stated that I could NOT!
The reason is that if you look at your Cédula, it states: "Identidad*EXT". The "EXT" letters behing the Identidad indicate that you can not travel. Now this is according to that person at Avianca, at which time I indicated that I have no choice but to travel, and She was kind enough to take me to Immigration where She explained the situation to a senior officer, who indicated that I was permitted to go. Good thing I noted the officers name, since at the immigration counter past security, they had an issue also, although indicating that I spoke to Mr. Officer, all was good and went on my way.
So it seems there are conflicting stories about the travel permission on your Cédula.

Seasoned travelers avoid trouble by observing these facts of life about passports ...

1.  Many countries now require that either three or six months of validity be remaining on a visitor's passport.

2.  Renew before expiration if you want to keep travelling without incident.

cccmedia in Quito

So what is the " Identidad EXT", thing all about?

As a rule I try to keep tabs on expiration dates etc. Looking now, at my Cedula I am ashamed to say I never really noticed or payed attention to what it actually said !!!  :dumbom::offtopic:

So what other valuable information go overlooked on a Cedula?

DutchCanMen wrote:

I tried to depart from Guayaquil to Peru! The reason of my travel was to apply for a new Dutch passport at the Embassy in Lima.


The VisaHQ website has maps showing the location of the Netherlands' consulates in Guayaquil and Quito.

So why was it considered necessary to fly from Ecuador to Peru when seeking a passport renewal?

cccmedia in Quito

New News

NEW YORK (Reuters) - Venezuela, whose economy has been decimated by low oil prices, this month will unveil a bold new strategy to revive them, taking a page from OPEC's history books with a proposed price band to build an automatic floor for prices at $70 a barrel.

In an exclusive interview with Reuters, Venezuela's long-time oil minister and current United Nations ambassador Rafael Ramirez said the proposal – to be presented to a meeting of OPEC technical advisors on Oct. 21 – would reapply the old mechanism of progressive production cuts to control prices, with a "first floor" of $70 per barrel and a later target of $100 per barrel.

"We will try to progressively recover the price," he said, while acknowledging that the Latin American nation could face an uphill battle in convincing other major oil producers to go along with the proposal.

Ramirez's comments provide the first detailed public insight into Venezuela's months-long global effort to drum up support for measures to revive oil prices.

President Nicolas Maduro, whose party could struggle to maintain control of Congress in a coming election, has hinted at a need to address the lowest prices in six years at a series of meetings with counterparts from Russia, Qatar, Mexico and others.

Venezuela, which is heavily dependent on oil exports, is facing a surging triple-digit inflation rate and scarcity of goods such as food and medicines due to a lack of dollars to pay for imports.

In addition, its budget, like those of other OPEC producers from Nigeria to Ecuador, has been ravaged by the downturn that has contributed to economic instability.


Do they really think these other countries are concerned with Venezuela's irresponsibility? I don't think Kuwait and others are going to make changes simply because of Venezuela's tanking economy.  For many of these countries high petrol prices provided gravy years of excess and boasting of sound economic controls.

It is clear now, that these same countries are in deep "shite" as they can no longer through around oil money. Whether they know it or not they are selling out their countries to China, Russia etc. In an attempt to keep their economy afloat.

It seems to me that with the various economies tanking, the lure of Ecuador having the U.S. dollar will stimulate  massive immigration. I can't see Ecuador responding to this event very well. There may be rough times ahead for all.

It appears OPEC is not jumping at the invitation to rescue Venezuela. Maduro's new plan is to go into the electronics business, building laptops, note books etc. The problem is he will need 330+ factories and processors from Japan to make that happen.

With such loose control on the economy even in good times I find his control of 300+ factories would be a futile gesture. It sounds more like a ploy to make the people think he is turning things around. Many probably realize that things are to far gone for that, at this point.

I think, best case scenario would be his taking his winnings and leaving, before things reach critical mass.

GMC(SW) wrote:

It appears OPEC is not jumping at the invitation to rescue Venezuela. Maduro's new plan is to go into the electronics business, building laptops, note books etc. The problem is he will need 330+ factories and processors from Japan to make that happen.

With such loose control on the economy even in good times I find his control of 300+ factories would be a futile gesture. It sounds more like a ploy to make the people think he is turning things around. Many probably realize that things are to far gone for that, at this point.

I think, best case scenario would be his taking his winnings and leaving, before things reach critical mass.


Well at least Maduros intent to try and reason with OPEC to raise the prices to 70 bucks was more reasonable then his initial plan of meeting with OPEC leaders, and demanding they raise the prices to 100 bucks. That of course was when oil initially tanked about a year ago.

Is a very unfortunate situation in Venezuela where there will be no winners. Only losers. Violence is out of control. Political protesters are arrested, tortured, and sometimes worse. Actually isn't an unfortunate situation, is a horrific situation.

you are so right.  My aunt and uncle left Spain during Franco & moved to Caracas.  Now they are older and have to leave every thing behind to leave for Spain.  The situation they thought could not get worse.  They were wrong.  They say is hell.  There are no winners.

Things are definately not going well, I hope it does not evolve into a situation that will affect us here in Ec.

Latest news about the new government in Argentina does not bode well for Venezuela. According to Andres D'Alessandro and Chris Kraus in a special to Tribune Newspapers,  the Macri government is ending protectionism and unquestioned support for Venezuela. Macri takes office on December 10, he has indicated he will propose that Mercosur suspend Venezuela for its "undemocratic " actions against opposition politicians. Unknown is how many more will flee Venezuela and how many will head to Ecuador.