The Private Equity for Families Blog

An Emerging Third World Opportunity

There is always a large dose of wonder and a small amount of dread about travel to developing parts of the world. The electrical grid and connecting your devices usually mean at least 5 different connector models, none of which really work when you actually get to your destination. Cell service is spotty even if you have an international plan.

Then there is the Center For Disease Control (CDC), and the regimen of drugs for known diseases like Malaria and Typhoid as well as possible gastro intestinal challenges from water, fruits and vegetables. In some venues there are sanitary issues with open sewers and public toilets. Ultimately, your travel plans are sculpted by the weather, the people, the local politics, personal safety, natural beauty and quality of the experience.

An Interesting Opportunity

In researching Rwanda, Zambia, Zimbabwe and Botswana for a recent trip of a lifetime, I came across this interesting review of an emerging third world opportunity:

“The weather is superb. Endless sunny days with low humidity, pristine beaches, snow capped mountains and beautiful seasonal breezes. The gross domestic product is the 5th largest in the world, and the diversity of climate supports agriculture and one of the largest wine industries in the world. Education is exceptional and many the best universities in the world are located here. The intellectual capital is enormous and the businesses headquartered here are renown for worldwide leadership in the digital revolution, social media, the movie industry and autonomous vehicles.

 Recently wide swaths of the parched land have been on fire, and there is endless environmentally protected “natural” deadwood to feed its continuous renewal. There is no reliable power grid because the dominant energy company has been bankrupted by litigation blaming it for setting the land on fire. Connecting your devices has become a challenge as the electrical grid shuts down.

One of the most famous cities in the world is headquartered here on the Pacific Ocean. It serves as a sanctuary for 6,000 homeless people who are protected and encouraged by $350 million of annual subsidies. The result is unsanitary conditions, open drug use and spent drug paraphernalia. The residents pick up after their dogs, but not their homeless.

Vagrancy, the grid and pop up fires mean this destination is a third world bargain. Bring your travel dollars and best sense of humor to California.”

We Chose Africa Over California

As compelling as this California opportunity seemed we chose Rwanda, Botswana and Zambia. It turned out to be wise.

These countries are also parched by their own drought, but they undertake endless “controlled burns” to stop spontaneous combustion which they blame for all of their fires. There is a rudimentary power grid but we never experienced any black outs. There was no sign of human waste in the streets and no evidence of drug paraphernalia either.

Capitalism and Hard Work Are Evident

Although their GDPs are respectively #141, #117 and #109, capitalist business models in these countries encourage hard work from dawn to dusk. While many families are devastated by HIV, their villages take care of their homeless orphans without subsidies from anyone. The tourism industry attracts the best and brightest people who make your stay enjoyable and memorable. Everyone speaks English as the preferred language and their vocabulary is startling. While poor and lacking resources, you can see the growth of civilization in Rwanda, Zambia and Botswana.

The young and ambitious citizens in Rwanda, Zambia and Botswana all want to come to America and will be happy to speak English as their first language.

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Rob McCreary

Rob McCreary has more than 40 years of transactional experience as an attorney, investment banker and private equity fund manager, and has spent his career in building entrepreneurial organizations with successful track records Founder and chairman of CapitalWorks, he is responsible for developing and maintaining senior relationships with investors and portfolio governance.

This blog represents the views of Rob McCreary and do not reflect those of CapitalWorks or its employees. This blog is not intended as investment advice. Any discussion of a specific security is for illustrative purposes only and should not be relied upon as indicative of such security’s current or future value. Readers should consult with their own financial advisors before making an investment decision.

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