Posters of the stout, stern president Hugo Chávez and his favourite slogans dot Caracas, with the stirring “Motherland! Socialism or death”, a particular favourite of his. A key part of the drive to implement 21st-century socialism entails overhauling the economy, focusing on building communal rather than capitalist enterprises.
In December, 2006, Mr Chávez consolidated power and announced he is working on a new constitution. In these circumstances, all bets are off and risk has become impossible for companies and banks to price. For individual banks, building a long-term, sustainable business is all but impossible. Short-term profitability comes down to one key question. How much are you prepared to deal with the government? Those that cultivate cosy relations find rich pickings. Those that do not see business stagnate.
