Tuesday, 1 January 2013

The many faces of Curacao

Over the years I have visited Curacao and I have observed the changes in the buildings, both style and state. At first there were several areas heading towards Punda where the buildings appeared to have been abandoned and the effects of unuse showed in grass/bush growing in the lots and roofs needing repairs. Not knowing the history of the country, over time I watched, to see if new areas under construction would be completed, with full occupation or would there be an increase in unused buildings.  Happily with my last visit in 2012,  there were several apartment buildings facing the sea which appear to be fully occupied and well kept with most of the other buildings which were constructed over the last eight years continuing to be well maintained with signs of occupation.  Without knowing all of the facts on the economy or having a full view of the country, I would be happy as a visitor with those factors as this  indicates several things:
  1. There is recurrent expenditure taking place on an ongoing basis. This means that persons are contributing to the economy and seeing the maintenance of the buildings as important. This could imply that there is a fair portion of the expenditure taking place in the provision of services which are not financial in nature. These services are not directed towards tourism which  tends to be seasonal in nature but are  year round in nature. Also with the increase in rain in Curacao, there could be other changes in the services which are demanded as there will be an increase in grass as well as the other effects of moisture. 
  2. The occupation of the buildings shows a possible change in the status of persons. Either there has been a change  in the ages of the population with a larger 'young work force" existing which can be financially sustainable or there has been a change which I am not familiar with, not being proficient in the languages.
  3. From an accounting point of view,  the returns on investment with respect to buildings arise either from the rental income or the appreciation in value. Having a good cash flow contributes to taxes, and financing of repairs, while appreciation in value materialises only when the property is sold.  In some places if the building is sold within a year, the profit is subject to capital gains tax. Thus a building could be a cash cow or a drain as an investment. Also when returns on the stock market are good, the return on rental income is calculated to be much lower making an investment in a building a much less attractive option. There is also the outflow of funds to construct the building in the first place which creates  demands on the cash flow and which may not be recoverable over a period of time.
Just a few thoughts on a few things.
Copyright Jennifer Bailey

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