BOSTON, MA – 05/09/23 – The white paper “Ending Devastating Crises While Earning Investment Returns” is one of the most important documents I wrote at Beyond Borders Investment Strategies. The paper explains how the firm pursues the twin goals named in its title – ending devastating crises (impact investing) and earning investment returns (traditional investing). In the paper, I wrote about how my experience of living through a catastrophic crisis that hit all former Soviet republics and seeing how foreign aid was mainly misused and stolen motivated these goals’ development.
A Devastating Crisis Next Door: In the paper, I also answered a question I have often been asked. People assumed that devastating crises happen only in emerging and frontier countries. This assumption is not correct. In the paper, I analyzed some consequences of the European Sovereign Debt Crisis (2008-2012) for developed countries like Portugal, Ireland, Italy, Spain, and Greece. Due to the incredibly high unemployment, especially among youth, these countries lost some of the most intelligent and best-educated young people through emigration. This loss will reverberate and negatively impact the nations and their citizens – both people who were forced to leave abroad and their loved ones who stayed home – for decades.
As Armies of Evil, Crises Kill People or Make Their Lives Miserable: In the paper, I compared some debilitating consequences of crises (i.e., poverty, hunger, societal division) with the Horsemen of the Apocalypse. I often think about the Horsemen as the terrifying faceless and invisible Dark Riders masterfully described by J.R.R. Tolkien in his “Lord of the Rings” trilogy about the war between good and evil and not less masterfully created by the makers of the movies based on the books. In my opinion, ‘Unemployment’ is a Horseman who shows up during every crisis, often leading other Horsemen. In battles against crises worldwide, we target the ‘Unemployment’ Horseman first and foremost. BBIS’ approach of investing in stocks of public companies all across crisis-stricken countries helps prevent unemployment from spreading across the crisis-stricken countries as an epidemic that amplifies the magnitude of the crises dramatically.
The Foreign-Aid-Based Approach of Helping Countries Does Not Work in Most Cases: The firm was founded to help countries recover from crises because the most dominant approach to doing this is wildly inefficient. It works in less than a quarter of cases. During the 60 years from 1960 to 2019, foreign governments and multilateral organizations distributed a tremendous amount of money as foreign aid. According to the World Bank, foreign aid distributed during the 60 years constituted an extraordinary amount of $5.15 trillion in inflation-adjusted 2020 US Dollars. [1] Unfortunately, the assistance did not lift most countries from poverty, nor did it enable them to face new crises without relying on foreign aid. Most countries receiving assistance at the beginning and in the middle of the period continued to receive aid at the end. Out of 179 countries and territories that received official development assistance (ODA) during the 60 years, only 42 countries (23.5%) graduated from the group and ended their dependence on the aid by the period’s end. [2] A strikingly high number of countries, 137 (76.5%), continued to receive assistance in 2019. [3] It is hardly an efficient process of helping countries recover from crises sustainably when more than three-quarters continue to depend on foreign aid as addicts depend on drugs or alcohol.
Under the foreign-aid-based approach, most funds are delivered to these countries’ governments or non-profit organizations’ offices. While both types of entities use the money to pay off immediate debts and, sometimes, feed the populations in the short or medium term, neither is suited for efficient job creation. But job creation – not government payments or handouts – helps countries achieve sustainable economic development. While working for companies and corporations, people develop or hone skills that make them valuable to their current and future employers and allow people to feed themselves and their loved ones for the rest of their lives. Unfortunately, people do not develop any skills when they get payments or handouts from governments or charities, as it is so common under the foreign-aid-based approach. As a great proverb says, “Give a person a fish, and you feed the person for a day; teach a person to fish and you feed the person for a lifetime.”
In the paper, I described eight reasons that make the foreign-aid-based approach to helping countries recover inefficient. They range from giving money to people not experienced in creating jobs to the politicization of the aid distribution both within the foreign aid grantors and recipients to the outright theft of the funds.
The Firm’s Supporters: In the paper, I described BBIS’ supporters, who include clients, potential clients, interns, Advisory Board members, and many friends and colleagues spreading the word about the firm, and whose valuable advice and sometimes just kind words benefitted the firm tremendously. Generally, the firm’s supporters are globally-oriented conscientious people who are humanitarians and pioneers. As humanitarians, they want to help crisis-stricken countries and their citizens recover from significant crises. As pioneers, they do not want to rely solely on the prevalent but not efficient – and often damaging in the long term – foreign-aid-based approach to helping crisis-stricken countries recover. The firm’s supporters believe in investing money in the stocks of private sector companies and incentivizing them to add new offices and factories and hire people, or at least not close their facilities and fire people during crises. Our supporters do not believe in the government distribution of foreign aid as the primary method for getting countries out of crises.
Instead, our supporters implicitly believe in Adam Smith’s ‘invisible hand’ metaphor that this Scottish enlightenment thinker described in his famous book “The Wealth of Nations” in 1776. [4] According to Investopedia’s “What is the Invisible Hand in Economics?” article, “The invisible hand is a metaphor for how, in a free market economy, self-interested individuals operate through a system of mutual interdependence. This interdependence incentivizes producers to make what is socially necessary, even though they may care only about their own well-being.” [5] Our supporters rely on the millions of ‘invisible hands’ of people working in the private sector’s corporations – rather than on the hands of governments, charities, or multilateral agencies such as the International Monetary Fund (IMF) and World Bank – to earn salaries for themselves and generate profits for their employers, deliver investment returns for investors who invested in these corporations, and – in the process – help countries recover from crises.
The firm’s supporters understand and share the firm’s mission and have a fierce desire to help people in crisis-stricken countries recover while earning returns from investing in companies. BBIS’ supporters are not satisfied with just sitting and hoping that the foreign-aid-based approach would miraculously start working more often than it did in the past. They have an intense focus on the mission, sharp intellect, incredible ingenuity, healthy disregard for dogmatic thinking and obstacles, the ability to coolly assess risks and not panic while facing them, and tremendous perseverance required to make a new way of solving previously unsolvable problems work. In fact, BBIS’ supporters are not unlike the US Marines, who are often called to duty in many dangerous places around the world and solve problems deemed unsolvable before their involvement. Our firm’s and its supporters’ motto is related to the Marines’ motto, “The Few. The Proud. The Crisis Fighters. Earning Returns While Helping People in Crisis-Stricken Countries Recover from Devastating Crises That Destroy Their Standards of Living, Dignity, Families, Health, and Lives by Investing in Companies That Create Jobs.” [6]
Below is a quote from the white paper on how our supporters measure success. “We have been lucky to attract supporters who share our mission of helping crisis-stricken countries, their companies, and people to recover from crises. Our supporters share the meaning of what we do. They care not only about earning returns on their money but also about protecting and creating jobs in crisis-stricken countries. These jobs feed parents who would not have to sell their organs to provide for their families or give up their kids for adoption. These jobs provide income to women who would not have to get on a panel to earn a living. These jobs give youths a much better alternative to joining gangs and killing or terrorizing each other and other people. The jobs enable men and women to provide for their parents in countries with weak social protection nets. Through taxes on these jobs, countries can take care of their senior citizens by paying them pensions that would provide them with dignified lives rather than reducing them to living in fear of death from hunger. By investing with BBIS, you would be transformed from just an investor to a big-hearted superhero who comes to the rescue of people in crisis-stricken countries worldwide.”
If you are interested to learn more about BBIS’s pursuit of the goals of helping countries recover from crisis and earning returns while doing this, you can read one of the three versions of the report:
Please let us know if you want to:
Thank you!
Best regards
Vitaly
Vitaly Veksler, CFA
CEO & Portfolio Manager
Beyond Borders Investment Strategies, LLC
vveksler@bbistrategies.com
[1] The World Bank, “Net Official Aid Received (Constant 2020 US Dollars).” Downloaded on February 21, 2023.
[2] Ibid.
[3] Ibid.
[4] Adam Smith, “An Inquiry in the Nature and Causes of the Wealth of Nations,” 2018. First published in 1776.
[5] Christina Majaski, Michael Sonnenshein, and Ariel Courage, Investopedia, “What Is the Invisible Hand in Economics?” January 1, 2023.
[6] The short version of the motto reads, “The Few. The Proud. The Crisis Fighters. Earning Returns While Helping People in Crisis-Stricken Countries Recover from Devastating Crises by Investing in Companies That Create Jobs.”
A Devastating Crisis Next Door: In the paper, I also answered a question I have often been asked. People assumed that devastating crises happen only in emerging and frontier countries. This assumption is not correct. In the paper, I analyzed some consequences of the European Sovereign Debt Crisis (2008-2012) for developed countries like Portugal, Ireland, Italy, Spain, and Greece. Due to the incredibly high unemployment, especially among youth, these countries lost some of the most intelligent and best-educated young people through emigration. This loss will reverberate and negatively impact the nations and their citizens – both people who were forced to leave abroad and their loved ones who stayed home – for decades.
As Armies of Evil, Crises Kill People or Make Their Lives Miserable: In the paper, I compared some debilitating consequences of crises (i.e., poverty, hunger, societal division) with the Horsemen of the Apocalypse. I often think about the Horsemen as the terrifying faceless and invisible Dark Riders masterfully described by J.R.R. Tolkien in his “Lord of the Rings” trilogy about the war between good and evil and not less masterfully created by the makers of the movies based on the books. In my opinion, ‘Unemployment’ is a Horseman who shows up during every crisis, often leading other Horsemen. In battles against crises worldwide, we target the ‘Unemployment’ Horseman first and foremost. BBIS’ approach of investing in stocks of public companies all across crisis-stricken countries helps prevent unemployment from spreading across the crisis-stricken countries as an epidemic that amplifies the magnitude of the crises dramatically.
The Foreign-Aid-Based Approach of Helping Countries Does Not Work in Most Cases: The firm was founded to help countries recover from crises because the most dominant approach to doing this is wildly inefficient. It works in less than a quarter of cases. During the 60 years from 1960 to 2019, foreign governments and multilateral organizations distributed a tremendous amount of money as foreign aid. According to the World Bank, foreign aid distributed during the 60 years constituted an extraordinary amount of $5.15 trillion in inflation-adjusted 2020 US Dollars. [1] Unfortunately, the assistance did not lift most countries from poverty, nor did it enable them to face new crises without relying on foreign aid. Most countries receiving assistance at the beginning and in the middle of the period continued to receive aid at the end. Out of 179 countries and territories that received official development assistance (ODA) during the 60 years, only 42 countries (23.5%) graduated from the group and ended their dependence on the aid by the period’s end. [2] A strikingly high number of countries, 137 (76.5%), continued to receive assistance in 2019. [3] It is hardly an efficient process of helping countries recover from crises sustainably when more than three-quarters continue to depend on foreign aid as addicts depend on drugs or alcohol.
Under the foreign-aid-based approach, most funds are delivered to these countries’ governments or non-profit organizations’ offices. While both types of entities use the money to pay off immediate debts and, sometimes, feed the populations in the short or medium term, neither is suited for efficient job creation. But job creation – not government payments or handouts – helps countries achieve sustainable economic development. While working for companies and corporations, people develop or hone skills that make them valuable to their current and future employers and allow people to feed themselves and their loved ones for the rest of their lives. Unfortunately, people do not develop any skills when they get payments or handouts from governments or charities, as it is so common under the foreign-aid-based approach. As a great proverb says, “Give a person a fish, and you feed the person for a day; teach a person to fish and you feed the person for a lifetime.”
In the paper, I described eight reasons that make the foreign-aid-based approach to helping countries recover inefficient. They range from giving money to people not experienced in creating jobs to the politicization of the aid distribution both within the foreign aid grantors and recipients to the outright theft of the funds.
The Firm’s Supporters: In the paper, I described BBIS’ supporters, who include clients, potential clients, interns, Advisory Board members, and many friends and colleagues spreading the word about the firm, and whose valuable advice and sometimes just kind words benefitted the firm tremendously. Generally, the firm’s supporters are globally-oriented conscientious people who are humanitarians and pioneers. As humanitarians, they want to help crisis-stricken countries and their citizens recover from significant crises. As pioneers, they do not want to rely solely on the prevalent but not efficient – and often damaging in the long term – foreign-aid-based approach to helping crisis-stricken countries recover. The firm’s supporters believe in investing money in the stocks of private sector companies and incentivizing them to add new offices and factories and hire people, or at least not close their facilities and fire people during crises. Our supporters do not believe in the government distribution of foreign aid as the primary method for getting countries out of crises.
Instead, our supporters implicitly believe in Adam Smith’s ‘invisible hand’ metaphor that this Scottish enlightenment thinker described in his famous book “The Wealth of Nations” in 1776. [4] According to Investopedia’s “What is the Invisible Hand in Economics?” article, “The invisible hand is a metaphor for how, in a free market economy, self-interested individuals operate through a system of mutual interdependence. This interdependence incentivizes producers to make what is socially necessary, even though they may care only about their own well-being.” [5] Our supporters rely on the millions of ‘invisible hands’ of people working in the private sector’s corporations – rather than on the hands of governments, charities, or multilateral agencies such as the International Monetary Fund (IMF) and World Bank – to earn salaries for themselves and generate profits for their employers, deliver investment returns for investors who invested in these corporations, and – in the process – help countries recover from crises.
The firm’s supporters understand and share the firm’s mission and have a fierce desire to help people in crisis-stricken countries recover while earning returns from investing in companies. BBIS’ supporters are not satisfied with just sitting and hoping that the foreign-aid-based approach would miraculously start working more often than it did in the past. They have an intense focus on the mission, sharp intellect, incredible ingenuity, healthy disregard for dogmatic thinking and obstacles, the ability to coolly assess risks and not panic while facing them, and tremendous perseverance required to make a new way of solving previously unsolvable problems work. In fact, BBIS’ supporters are not unlike the US Marines, who are often called to duty in many dangerous places around the world and solve problems deemed unsolvable before their involvement. Our firm’s and its supporters’ motto is related to the Marines’ motto, “The Few. The Proud. The Crisis Fighters. Earning Returns While Helping People in Crisis-Stricken Countries Recover from Devastating Crises That Destroy Their Standards of Living, Dignity, Families, Health, and Lives by Investing in Companies That Create Jobs.” [6]
Below is a quote from the white paper on how our supporters measure success. “We have been lucky to attract supporters who share our mission of helping crisis-stricken countries, their companies, and people to recover from crises. Our supporters share the meaning of what we do. They care not only about earning returns on their money but also about protecting and creating jobs in crisis-stricken countries. These jobs feed parents who would not have to sell their organs to provide for their families or give up their kids for adoption. These jobs provide income to women who would not have to get on a panel to earn a living. These jobs give youths a much better alternative to joining gangs and killing or terrorizing each other and other people. The jobs enable men and women to provide for their parents in countries with weak social protection nets. Through taxes on these jobs, countries can take care of their senior citizens by paying them pensions that would provide them with dignified lives rather than reducing them to living in fear of death from hunger. By investing with BBIS, you would be transformed from just an investor to a big-hearted superhero who comes to the rescue of people in crisis-stricken countries worldwide.”
If you are interested to learn more about BBIS’s pursuit of the goals of helping countries recover from crisis and earning returns while doing this, you can read one of the three versions of the report:
- To read the full 50-page report, please Click Here
- To read an 8-page firm profile, please Click Here
- To read a 1-page firm snapshot, please Click Here
Please let us know if you want to:
- Invest with Beyond Borders Investment Strategies (BBIS) and help crisis-stricken countries and their residents recover from crises that destroy their standards of living, dignity, families, health, and lives;
- Learn more about BBIS’ country investment analysis consulting services; and
- Ask questions about BBIS or the firm’s investment strategies or would like to be on our publication distribution list.
Thank you!
Best regards
Vitaly
Vitaly Veksler, CFA
CEO & Portfolio Manager
Beyond Borders Investment Strategies, LLC
vveksler@bbistrategies.com
[1] The World Bank, “Net Official Aid Received (Constant 2020 US Dollars).” Downloaded on February 21, 2023.
[2] Ibid.
[3] Ibid.
[4] Adam Smith, “An Inquiry in the Nature and Causes of the Wealth of Nations,” 2018. First published in 1776.
[5] Christina Majaski, Michael Sonnenshein, and Ariel Courage, Investopedia, “What Is the Invisible Hand in Economics?” January 1, 2023.
[6] The short version of the motto reads, “The Few. The Proud. The Crisis Fighters. Earning Returns While Helping People in Crisis-Stricken Countries Recover from Devastating Crises by Investing in Companies That Create Jobs.”
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