AI-Jane Political, And Economic Forums

Full Version: Investing in Former Soviet Union?
You're currently viewing a stripped down version of our content. View the full version with proper formatting.
I was trying to think of where to put this little tidbit, and in fact it opens a whole new issue: investment in the former Soviet Union. Whether or not it will eventually pay out is really questionable. And here is one clear example: Investor Alert: Red Flags in Kazakhstan.

Now that energy sources are being discovered all over the globe, is it really worth it to throw good money away, with just the possibility of reaping later rewards?
High risk, high gain. Everyone makes his own judgement. That's it, really.

(I may tell one day just where I invested most of my $... not now.)
There is a big difference between investing in oil or in anything else in former USSR.

Oil investments depends on global markets and is garanteed by the fact that local governement get a shared interrest directly.
Any other investment is lost money and not even worth talking about it. Russian, Kazahk and "Cebtral Asian" funds are 60% in oil, 20% in banks, 2% in something else and 18% in cash (USD). You can buy a global oil fund as well, you will get the same result. The fact that's it's Russia or in its region doesn't make it special.

The Kazahk problem in this article is a typical mismanagement and corruption. So, yes, a good project can fail because it was mismanaged.
The oil companies have underestimated the costs. It often happens in former USSR because these companies think that you can hire a qualified worker for $300 a month. It's true, just that he wiil not be qualified at all.

I have some experience with working with very poor poeple in Lithuania, and you always get what you pay for.
To get good workers you need to pay at least twice the statistical wage.

In places like Kazahkstan, there is also poor infrastructure, remote location, climate etc ...and corruption of course which is uncalculable.