20080303 venezuelan army 18
Members of the Venezuelan army stand in formation at a barrack in Maracay, 100 km away from Caracas on March 2, 2008. Venezuelan President Hugo Chavez ordered the withdrawal of personnel in his country's embassy in Colombia, following Bogota's cross-border raid into Ecuador that killed a top Colombian insurgent. - 


TESS VIGELAND: A daring cross-border raid, the leader of a terrorist organization is taken out. Sound like the Middle East? Try South America. Over the weekend, Colombia sent troops into neighboring Ecuador and killed a top leader of the FARC, a rebel group. Ecuador and its ally, Venezuela, responded by sending troops to the border with Colombia. What's preventing these South American nations from going to war?

Here's Marketplace's Dan Grech.

DAN GRECH: In Venezuela, the suggestion of a war with neighboring Colombia has come as a shock.

ROBERT BOTTOME: It's about as inconceivable that we go to war with Colombia as the United States going to war with Canada.

That's Venezuela's Robert Bottome, publisher of Veneconomia, a leading financial journal. He says the economies of Venezuela and Colombia are too intertwined for the countries to go to war.

BOTTOME: Colombia is our second largest trading partner. Well, I guess the way to put it is, would it hurt us? Yes, it would hurt us.

Venezuela faces food shortages right now because of government imposed price controls. That's made it more dependent on Colombian meat, milk and produce. Last year, Colombian exports to Venezuela increased 87 percent, to $4.5 billion. Riordan Roett is with Johns Hopkins University.

RIORDAN ROETT: We have a new Chavez bourgeoisie that spends and consumes, and Colombian goods are of high quality and are in demand in Venezuela.

Michael Shifter is with the Inter-American Dialogue. He says despite Venezuela's oil wealth, Chavez can't afford to go to war.

MICHAEL SHIFTER: Chavez above all wants to keep his power, wants to increase his power, and this would tend to undermine him because he would lose the tremendous trading relationship that he has with Colombia.

Chavez ally Ecuador also has troops at Colombia's border. Outsiders are trying to broker a peace between the three nations.

I'm Dan Grech for Marketplace.