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Scouting The Triple D (Diesel, Dust, Dreams) Markets

June, 28 2012

In Latin America we would prefer Columbia, looking how developed and safe that had become. As someone who had grown up in the ’80s, back then Medellin was Pablo Escobar’s hometown, and now you can go there and it’s a perfectly safe place, and again fairly developed, as well as Chile and Peru over Brazil that is much less appealing. Brazil is a market that we think a lot of investors generally have a favorable opinion of as a place that will bloom and continue to bloom, but a lot of investors don’t appreciate how difficult it is to do business in Brazil. You can look at the “ease of doing business” rankings compiled by the World Bank every year, and Brazil scores very low. It’s easier to do business in Rwanda or Pakistan according to those rankings. That’s not to say that, over the long haul, there won’t be interesting ideas from there, but that was one market that surprised me because it wasn’t what I expected it to be, in a bad way.

We also would prefer Cambodia over India, and prefer Mongolia over China. Exploring these different markets, you find some markets that are not so much in the limelight that are appealing. Another market that I really like now is Mongolia, which is a market that certainly is on no one’s radar, but is really coming on fast and growing 50% this year.
Coming back from Russia I feel that the country is approaching a point of no return as innovation is the required next step. Today, just months after the presidential election, government policies as regards modernization may still be unclear. I think that over the course of this year the administration will probably change a few faces and policies. My personal opinion is that these changes will inevitably, in the long run, accelerate the drive toward innovation.