Colombian Ambassador Camilo Ospina said his country would take legal actions in the event that Venezuela moves to nationalize Colombian corporations (Photo: AP)

EL UNIVERSAL

Colombia is set to file legal actions with international courts against Venezuela, in the event that President Hugo Chávez accomplishes his threats to nationalize Colombian companies operating in Venezuela, warned the Bogota Ambassador to the Organization of American States (OAS) Camilo Ospina.

"This is yet another move in a set of actions Venezuela has taken over the last few months. They are using every possible mechanism available to threat," Ospina told Reuters. "The way Colombia is going to take is that of resorting to judges," he added.

Last Wednesday, Chávez warned that a diplomatic crisis between Ecuador and Colombia -in which his government is playing a role- was likely to hit Colombia-Venezuela trade. Further, he threatened to nationalize Colombian enterprises.

"Let us outline a blueprint of the Colombian corporations operating in Venezuela. We may nationalize some of them, and we will have to sell our companies over there," Chávez stressed.

In this connection, Ospina explained that his country would resort to the justice "to request the relevant compensations and seek respect for the Colombians' economic rights." He added that such complaint could be similar to that US oil major Exxon Mobil filed against Venezuela following nationalization of assets in heavy-crude oil Orinoco belt.

Meanwhile, in a news conference, Chávez announced the purchases the Venezuelan State made in Colombia would now be made in Ecuador. "This move is intended to protect Venezuela from likely destabilizing actions."

The ruler added that Venezuelan imports from Colombia would decline because the neighboring country was not a reliable supplier, because the head of the Colombian government is "a compulsive liar who is at the service of the empire's interests."

Juan González, a former chair of the Colombia-Venezuela Trade Chamber (Cavecol), noticed that Colombian investments in Venezuela generate over 300,000 direct jobs and 1,000,000 indirect jobs. Over 200 Colombian corporations are currently operating in Venezuela, including manufacturers and distributors.

For González, "it is not easy to replace this market with another," as this involves a complex process that may take years.

The chair of the Venezuelan Confederation of Trade and Industry Chambers (Fedecámaras), José Manuel González, showed concerned about the "rashness" of the Venezuelan government spokespersons who underestimate Venezuelan imports from Colombia, which meet 30 percent of the Venezuelan market demand.

Purchases from other countries involve additional steps, longer time and long-term vision, he added.

Colombian corporations operating in Venezuela include Alimentos Alpina, Avianca, Boots and Bags, BDF Beiersdorf and Muebles Carvajal.

Drought
The threats against the Colombian capitals come at a time when Venezuela is recording a dramatic decline in foreign investment -a vital mechanism to boost economic growth.

The investment in machinery, facilities, and equipment to increase the production of goods and services helps diversify the economy. Additionally, this results in companies hiring new workers, thus leading to increased labor demand and higher salaries in all sectors.

Based on the balance of payments disclosed by the Central Bank of Venezuela (BCV), foreign investment in the country was USD 646 million in 2007.

While the figure represents an increase compared to disinvestment in Venezuela at USD 590 million in 2006, it also translates into a 75 percent drop in comparison to USD 2 billion foreign investment in 2005.

The BCV explained that the Venezuelan State move to purchase the country's major phone company Cantv and power utility La Electricidad de Caracas played a role in the decline. However, it is apparent that Venezuela is becoming less attractive.

Last year, foreign investment in Colombia amounted to some USD 6.7 billion, with foreign investment in Peru at USD 4.5 billion; in the Dominican Republic at USD 1.5 billion, and in Chile at USD 15.3 billion.

Hydrocarbons businesses at stake
The likely materialization of Chávez's threat to drop the Venezuelan ventures in Colombia is expected to hit Monómeros Colombo-Venezolanos, a petrochemical corporation whose majority stake was purchased by Venezuelan state-run Pequiven from the Colombian government.

Pequiven and Monómeros trade raw materials and finished products. Their operations are not very large, yet dynamic.

Another joint project between Colombia and Venezuela in the energy sector is the Trans-Caribbean Gas Pipeline, which started operations last October. Minister of Energy and Petroleum Rafael Ramírez said the gas flow remained unchanged, but he stressed that "the valve is on the other side."

When asked about the implications of a likely suspension in gas supply, he reminded that the electric powerhouses that are fueled with 50 million cubic feet of gas / day Chevron drills from the Colombian Guajira could operate on diesel.

Based on reports by Eduardo Cámel, Mariela León, Víctor Salmerón and Marianna Párraga

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