LOOK skywards in posh districts of Caracas, the capital of South America’s most economically troubled country, and you will see something surprising: construction cranes at work on rising office towers. Dozens are nearing completion during Venezuela’s most severe recession ever. In the trendy Las Mercedes area, the din of pneumatic drills starts shortly after 7am every weekday.
About 400,000 square metres (4.3m square feet) of office and commercial space are under construction in the city. “That is a significant amount,” says Carlos Alberto González Contreras, president of Venezuela’s Real Estate Chamber. This is not a sign of optimism that Venezuela’s authoritarian government is anywhere close to solving the colossal economic problems it has created. On the contrary, it is a desperate stratagem for coping with them.
Companies based in Caracas have bank accounts full of fast-devaluing bolívares and few good options for spending them. Under Venezuela’s convoluted system of currency controls, featuring two official exchange rates, it is nearly impossible to convert bolívares into dollars at an acceptable rate. Just using…Continue reading