A hidden diamond
According to Greek mythology, the Phoenix is a bird that has the ability to regenerate itself from the ashes of its predecessor. Some believe that its death occurs after a show of flames and combustion, while others choose to believe in the decomposition of the bird before being born again. This is a metaphor widely used in everyday life when one wants to represent a new beginning, a before and an after.
In economics, cycles also have a before and after; one of the best-known cases worldwide is that of the Venezuelan economy, which has had its boom thanks to the large number of natural resources it possesses, more specifically, oil. The world was dependent on this oil, but this took an unexpected turn in the global economic context due to the sanctions imposed on the Latin country. The beginning of a decline that, today, is more real than ever. Is a rebirth likely?
Is a phoenix rising in Venezuela’s capital? Las Mercedes is a neighbourhood in Caracas, the Venezuelan capital. This area is mostly commercial and business, and recently, it has begun to revive. Are these the ashes we were talking about at the beginning? Although the general economic context of the country is not entirely favourable, a light at the end of the tunnel is beginning to appear. Las Mercedes is becoming fashionable in every sense; real estate constructions are intensifying, strolls along the downtown avenues are more recurrent, while at night, the big casinos take the scene, with those citizens who wish to try their luck in what could be called an oasis, forgetting all the bad things for a moment.
The dollar is a very important tool in an economy beginning to recover after years of downturns and stagnation; citizens who see an opportunity and have the ability to act, i.e. the money to invest, begin to plan their “new future.” Small signs in the new cultural, economic and financial center give indications that something is brewing; the appearance of luxury restaurants, and international brands that have not been seen for years, revive the hope of once again becoming a great city with thousands of tourists walking its streets and learning about Venezuelan customs and culture.
Capitalism and luxury are making their way at full speed in the capital of the Latin American country; in 2021, a Ferrari (BATS EU: RACE) dealership was opened in the Jalisco Tower, a privilege that only a few cities in the world can afford and, more recently in November 2022, the Avanti Gallery opened its doors to the public, with a 6-story building that offers products of all kinds, but luxury cannot be missing, the most recognized high fashion brands have a presence there. Versace by Capri Holdings (NYSE: CPRI) or Gucci by Kering SA (BATRS EU: KER) and even Dolce & Gabbana are just some of the options that can be found.
In the same city, two very different realities can be observed; although the economic reactivation is beginning to take shape in a certain sense, most Venezuelans are not able to enjoy these luxuries. A salary can be less than 30 dollars, and a piece of luxury clothing can easily exceed $500 dollars, but there are exceptions, of course, millionaires who, on summer nights, go out to tour this “oasis” with their exotic Ferraris (BATS EU: RACE).
Venezuela is a country of many controversies and controversies; it has gone through very complex situations in recent years, but this boom that has started in the capital, will it be able to expand throughout the rest of the territory? Only time will give the answer to this question. This would not only bring benefits for the residents, but by reestablishing the connection with the rest of the countries of the world, the exchange of raw materials and tourism would increase; I include myself in the latter since I hope at some point to visit this beautiful country and be able to relax on one of its paradisiacal beaches.
Originally published in Quantfury Daily Gazette on Feb 13, 2023.
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