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3 Dangerous Countries That Investors Might Be Willing To Bet On

02/02/2016 8:36 AM IST | Updated 15/07/2016 8:25 AM IST
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During the late 1980s at the height of apartheid in South Africa, no major investor was willing to go in to set up shop. After all you'd have to be insane to risk investing your money in a country whose masses were relatively poor, and which saddled with international sanctions, acute social disorder and a sustained pattern of civil unrest. So in 1987, when Portuguese-born audio engineer Fernando Duarte took his fellow countryman and entrepreneur Robert Brozin to take over a local restaurant in one of the (then) most dangerous countries in the world, many experienced observers felt that this was a disaster waiting to happen.

But Duarte relied on the theory that apartheid was dying and that thereafter his investment would gain national momentum. As it happened, his investment began to blossom much sooner than he had thought. Within less than a year in Johannesburg, Fernando Duarte found the business profitable enough to open another branch of his restaurant chain in Rosettenville, South Africa.

Nando's success story illustrates that sometimes it is worthwhile to make certain categories of investments even in dangerous places, and still yield positive returns.

Today, Nando's, the restaurant that he had founded in 1987, now (albeit under a new owner) has over 1000 outlets in at least 35 countries.

There's no doubt that many investments of a similar nature at the time, even in relatively stable economies, failed to take off. But Nando's success story illustrates that sometimes it is worthwhile to make certain categories of investments even in dangerous places, and still yield positive returns.

So if you are an insanely positive investor like Duarte and Brozin, then here are three "dangerous" countries, where you can invest as little as $20,000, and perhaps, just perhaps, become a success overnight.

Liberia


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Liberia has been in the news for all the wrong reasons, including two Ebola outbreaks and bloody civil wars in the past.

Yet, in all of West Africa, Liberia probably has the greatest investment opportunities for anyone wanting to make a modest investment for relatively high returns.

I have travelled extensively in Liberia and was able to garner a fairly good understanding of its business climate, investment prospects, its people, its skill sets, and economic readiness.

Fruitful money-generating investments here are centred around private education and technical training, mobile computing supplies, property development, micro financing, remote electricity supply, remote entertainment facilities, middle-class casual dining restaurants, fast food franchising (popular names only), beverage bottling and packaging, healthcare in all areas, accounting, and professional business counselling.

I have travelled extensively in Liberia and was able to garner a fairly good understanding of its business climate, investment prospects, its people, its skill sets, and economic readiness.

The only major downsides to doing business in Liberia are the fear of Ebola resurgence, a culture of corruption, the isolation of certain conveniences, tribal conflict issues, and a strong feeling of disorganisation.

But you will be surprised at the high speed quality of its mobile internet service, reliable international communication facilities, and the haste with which you can have all of your investment paperwork in order.

So if a hassle-free investment experience matters a lot to you, alongside a slew of opportunities, then you should certainly take a shot at Liberia.

Disadvantages

While Liberia may have some genuine investment opportunities, you must be mindful of its violent past, and potential for coups and other deadly uprisings which can occur at any time.

And even though the UN continues to maintain peacekeepers in Monrovia, this in itself does not provide any guarantees or insurance against damage to property, civil disturbances, or violence against your person.

Ebola outbreaks and high corruption can also run your investment into trouble there.

Somaliland


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Here's one fact that may put some people off: Somaliland, officially, does not exist.

Sitting in the northwestern region of Somalia on the Coast of the Gulf of Aden, the Republic of Somaliland was founded in 1991 after breaking away from mainland Somalia during the Somali Civil War.

And even though it has a stable central government, its own currency, an active business community, a police unit, an army, an official passport, an elected President, and a fully functioning Parliament, the country is actually not recognised by any government.

But when Mohammed Yusef, CE0 of the UK based equity firm Invicta decided to invest a $40 million here, it generated some international interest in this breakaway region in the Horn of Africa.

With direct flights rolling into its Hargeisa International Airport from Dubai, Djibouti, Ethiopia and a host of surrounding countries daily, even the most inexperienced investor can tell that this country is bursting with investment opportunities.

Investors with as little as $20,000 are now taking up profitable opportunities in housing, construction, private education, tourism management, building signage and computer graphic art, and micro-financing among others.

If you, like many others, are convinced that Somaliland is the emerging "Dubai of Africa", then it might certainly be worthwhile to dip in your feet

And if you, like many others, are convinced that Somaliland is the emerging "Dubai of Africa", then it might certainly be worthwhile to dip in your feet and see what the excitement is all about.

Disadvantages

There is always a terrible disadvantage for any investor who pours money into a country that literally does not exist. No proper insurer will cover your investment and nor will it be easy to move capital in or out the "country". While Somaliland s much safer that its motherland Somalia, this does not make it immune to terrorist strikes, kidnappings or any other dangerous situations being experienced by those on mainland Somalia.

Given Somaliland's unstable supply of electricity, a heavily rationed water supply and a risky banking system, you may probably want to ponder whether you are prepared to take all of the associated risks in this country just to earn a few dollars more.

South Sudan


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Even though it is the youngest country in the world, confronted with a continuous state of civil war, South Sudan has been labelled as one of the fastest growing economies in the world.

Founded in July 2011, this country of more than 12 million people has an appetite for investments in almost every sector.

Given how "fresh" it is, this new country basically needs everything from agricultural investment, construction investment, educational investment, services investment, commercial investment, and everything else that any nation might need.

So even a mere $10,000 invested into the right sector may have you end up with a neat profit that would be hard to get in a more developed nation.

Therefore, if you have the stomach to brave their internal ethnic conflict, and the desire to make a lot of money from a small investment then it may definitely worth giving the Republic of South Sudan a shot.

Disadvantages

South Sudan is saddled with a continuously violent ethnic war that has no consideration whatsoever for investors.Its rate of hyperinflation, shortage of trading currency, a troubled black market economy and open racketeering can also impact negatively on your investments there.

This sub-Saharan country is also burdened with a border conflict with its neighbor in Khartoum, which has continuously threatened its fragile economy with military intervention.

And even though the South Sudanese Government may offer assurances to you as an investor, the unstable economic state of this country can send your investments under in a matter of weeks.

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