In Colombia, the topic of entrepreneurship has found its way into the national conversation as a key policy tool to accelerate economic integration among the incoming migrant labour pool. As this migration flow is set to become the largest in the world in 2020, it is important for international organisations and industry leaders to promote the implementation of reactionary supply chains to better prepare these delicate communities for challenges that are set to amplify across the region during the next few years. Increasing the entrepreneurial network of Colombia can address two major challenges being felt nationwide: the growing sense of ‘aporophobia’ and the integration of the incoming labour force.
Aporophobia has become a widely used term in the Venezuelan-Colombian context since the beginning of the most recent migration wave in 2016-2017. While xenophobia has been well documented for years, aporophobia differs in that it is the social rejection or fear of “poorer people” in particular. In Colombia it is difficult to attribute any social tension to ethnic or racial differences given the cultural and demographic similarities between both countries. The source of new social tension is therefore being attributed to the resentment caused by the economic and social status of the migration population.
Colombia is currently dealing with the presence of over 1,8M Venezuelans, almost 1M of whom have arrived in the last twelve months alone, while 50% are estimated to be of irregular or undocumented status. It has been very difficult for Colombian authorities to compile concise data on the immigration population, not only because of the scale of undocumented crossings, but also due to the transient nature of border communities. As Arturo Rodriguez, local administrator for the United Nations Development Program (UNDP), describes it, “we estimate that around 25,000 Venezuelans cross the border every day using the two official border bridges and the more than 300 illegal crossings (known as ¨trochas”) we know of; of that amount we estimate around 20% are ‘caminante’ migrants starting their journey to other South American countries, 40% are ‘pendular’ migrants who engage in temporary commerce and return to Venezuela, and the remaining 40% are looking to stay in Colombia permanently.” This segmentation suggests that approximately 80% of all Venezuelan migrants entering Colombian territory are statistical candidates to receive subsidised or free health and education, humanitarian aid, and labour integration services in the short-medium term. In a report by the Organization for Economic co-operation and Development (OECD) in 2019, the World Bank estimates that the fiscal impact of this migration wave is currently 0.4% per year and could grow to 0.4-0.6% in the short run.
Yet, in that same report the World Bank also estimates that long term this migration injection could represent a 0.2% boost to GDP with a stimulation in aggregate consumption demand of 0.3% and an investment increase of 1.2%. If properly communicated and implemented, this potential economic boost can be the antidote to facilitate social cohesion and minimise the aforementioned migration frictions, such as aporophobia. Juan Sebastian Aljure, Director of the new local think tank ProCucuta, explains that “as more public policies and incentives are launched to accelerate the integration of the migrants into the productive economy, the faster social cohesion will be between the two communities.” The logic is that as Colombians begin to see the economic benefits of a productive migration force, they will divert their attention away from the negative noise currently circulating around fiscal crunching and employment crowding out effects. It would be an effective solution to bridge the local and migrant community and reduce the presence of aporophobia.
So, what are some of the initiatives that are currently being seen in Colombia to promote entrepreneurship? Here are three that merit recognition:
Frontera de Oportunidades (Border of Opportunities): An initiative between the United Nations Development Program (UNDP) together with local foundation Fundacion Hablemos in the North Santander region of Villa del Rosario. The goal of this initiative is to support local entrepreneurs who are employing Venezuelan and Colombian-Venezuelan migrants. The strategy of the program is to re-direct formerly approved humanitarian aid funds towards small businesses and to establish a training curriculum. As Dalia Delgado, Regional Director of UNDP, explains: “When we started working with these micro-businesses, we realised that the best strategy was not to offer grants but rather strengthen their business fundamentals to promote their productive capacity and generate more employment.” The pilot program, launched in Q1 2019, identified over 200 micro-enterprises in the Villa del Rosario and Cucuta communities, and filtered the selection to twelve entities responsible for approximately 130 jobs. The selected small businesses received approximately $600 USD and participated in an eight-month curriculum program with marketing, accounting, sales, and networking modules.
ProCucuta: One of the fundamental challenges this border region has always faced, since before migration wave surged in 2016, is the lack of reliable data on the local labour pool and migration flows. Cucuta has always been a de facto terminal for border commerce, and because the geography makes it very difficult and economically impractical to build more robust border infrastructure, the migration fluidity between Venezuela and Colombia has always been difficult to measure. In this context, it has always been near-impossible for local authorities to manage up to date statistics and census data, which by default creates an impenetrable asymmetric information challenge for national and local authorities when designing policies of labour integration, fiscal enforcement, and welfare. One could almost identify these challenges as being structural market failures of border communities which merit their own analysis and contextualization. ProCucuta is a local think tank that is focused on controlling for these informality variables and creating a network of collaboration between the private, public, and institutional sectors to improve regional data-collection methods. With 2019 being a year of projection and preparation, ProCucuta is officially launching in January 2020 in partnership with Fundacion Hablemos, the UNDP, and Open Society Foundations.
Migracion Productiva: The migration wave from Venezuela does not stop in the border regions, and often represents only the first step for hundreds of thousands which begin their journey to other corners of Colombia and beyond. As soon as they cross the border, their local designation becomes ‘caminantes,’ or walkers, which is the name given to this pool of people seen across hundreds of national highways and roads. Within Colombia the majority of these caminantes head towards Bogota, where the Bogota Chamber of Commerce (BCC) launched a program to train 60x micro-entrepreneurs with Venezuelan or Colombo-Venezuelan nationalities. The training program includes an initial productivity diagnostic session, a mentor assignment from corporate partners, and a six month intensive training curriculum. The initial pilot program yielded positive results, with a net-increase in sales of 27% and with 19% of the cohort ramping up employment after the program. The head coordinator of the pilot program, Roberta Chirumbolo, is hoping to “expand the program in 2020 by partnering with other Chambers of Commerce around the country, with initial interest already being expressed by the cities of Bucaramanga, Cucuta, Medellin, and Cartagena, and a goal of training up to 750 migrant entrepreneurs in 2020.”
REFERENCES:
OECD. (2019). OECD Policy Note on the Venezuelan migration shock in Colombia and its fiscal implications. https://www.oecd.org/economy/surveys/Colombia-migration-shock-note-english-2019.pdf
Corugedo, Emilio Fernandes & Guajardo, Jaime. (11/19) For Venezuela´s Neighbors, Mass Migration brings Economics Costs and Benefits. IMFBlog: Insights & Analysis on Economics & Finance. https://blogs.imf.org/2019/11/21/for-venezuelas-neighbors-mass-migration-brings-economic-costs-and-benefits/
Franco, Alexandra Castro. (04/09) Venezuela Migra: Aspectos Sensibles del Exodo hacia Colombia. [Translation, Venezuela migrates: Sensitive aspects of the exodus towards Colombia].
IMF. (04/19). IMF Country Report No. 19/106, Colombia, International Monetary Fund, D.C, file:///Users/enriquejosegarcia/Downloads/1COLEA2019001.pdf
