Bilateral Compression and Macrofinancial Vulnerability: Macroeconomic Impact, Critical Infrastructure Collapse, and Post-Earthquake Financing Gap in Caracas and the Central Coast

This paper introduces the analytical framework of «bilateral compression» to assess the macroeconomic impact, critical infrastructure degradation, and fiscal response capacity following a severe exogenous shock—specifically, two major earthquakes—in the Metropolitan Area of Caracas and the Central Coast. Unlike linear approaches to physical damage quantification, the analysis demonstrates how the convergence of endogenous degradation (fiscal erosion, institutional fragmentation, and the exhaustion of the rentier model) and external constraints (financial blockades and litigation over strategic assets) destroys the formal resilience of the State. Econometric findings indicate that while the «trench economy» (informal dollarization and remittances) endows agents with subsistence-level microeconomic resilience, it remains incapable of financing the replacement of heavy fixed capital. The analysis estimates potential reconstruction needs of up to approximately USD 50 billion under a resilient reconstruction scenario (Build Back Better), distinguishing these from direct physical damages estimated at approximately USD 19.6 billion by the World Bank. An independent UNDRR estimation previously placed direct physical damages at approximately USD 37 billion using a distinct methodology. These magnitudes do not represent the extremes of a single damage interval. The results suggest that reconstruction cannot be financed exclusively through current fiscal flows, thus requiring institutional reengineering and multilateral financial cooperation mechanisms. Key Figures & Estimates: Direct Physical Damages (World Bank): ~USD 19.6 Billion Direct Physical Damages (UNDRR): ~USD 37.0 Billion Resilient Reconstruction Needs (Build Back Better): ~USD 50.0 Billion