WILLEMSTAD - The long-awaited reopening of Curaçao’s border with Venezuela raised hopes that the island’s steep fruit and vegetable prices would finally see some relief. For years, Curaçao was cut off from its traditional source of fresh produce due to the border closure, forcing it to rely on more distant markets like Colombia, Panama, the U.S., and the Dominican Republic. These distant suppliers drove up transportation costs, which were passed on to consumers.
However, months after the border was reopened, the expected drop in prices has not materialized, leaving many Curaçaoans questioning why their grocery bills remain high.
Venezuela’s Economic Troubles
A key reason behind the stubbornly high prices lies in the severe economic downturn in Venezuela. The Venezuela of today is vastly different from when the border was initially closed. Years of hyperinflation, economic mismanagement, and deteriorating infrastructure have crippled the country, driving up the costs of agricultural production and transportation.
Increased Production and Transportation Costs
In the past, Curaçao benefitted from low-cost Venezuelan produce, supported by Venezuela’s heavily subsidized economy. Fuel was almost free, and government subsidies kept production costs low. Those days are over. Currently, gasoline in Venezuela costs around $0.50 per liter, and diesel, essential for agriculture and transport, is even pricier at approximately $0.80 per liter. These steep costs, compounded by chronic fuel shortages due to the failing state of Venezuela’s refineries, have significantly increased the expenses associated with getting goods to market.
Taxation and Inflation Woes
Heavy taxation is another burden on Venezuelan businesses. It’s reported that 50% to 60% of a company’s revenue in Venezuela goes towards taxes. Coupled with ongoing inflation, this heavy tax load makes it nearly impossible for Venezuelan producers to offer lower prices to Curaçao. Despite official reports of declining inflation in Venezuela, prices remain stubbornly high due to these underlying issues.
Fuel Monopoly Complications
Adding to the problem is the Venezuelan government’s monopoly on fuel imports, leading to inefficiencies and artificial scarcity. Despite pressure from the private sector to allow businesses to import diesel independently to reduce costs, the government’s tight control has kept prices high and availability low. This monopoly not only inflates fuel prices but also limits the diesel needed for farming and transporting goods, exacerbating the high costs faced by consumers in Curaçao.
Unfulfilled Promises of Cheaper Produce
Curaçao’s government had assured citizens that reopening the border with Venezuela would bring down prices, but this promise remains unfulfilled. The complex economic challenges in Venezuela—including high fuel costs, heavy taxation, and inefficient monopolies—have kept the prices of fruits and vegetables elevated, despite the reopening of the trade route.
This raises serious questions about the advice received by Curaçao’s government from its economic experts. Shouldn’t the Ministry of Economic Development have anticipated that the Venezuelan situation would make it impossible to lower prices as promised?
For Curaçao, the reality is that unless significant reforms occur within Venezuela’s economy, the high cost of produce is unlikely to change. Consumers will continue to face high prices, underscoring that reopening borders doesn’t always deliver the expected economic relief.
