Which Country to Invest in

Sadly, I am rather ill this week. I’ve been struck down by drugs that are supposed to be healing damage to my right foot. Unfortunately they are inflicting damage elsewhere, and my voice is almost non-existent. So this week’s blog will be restricted to a text version.

Carrying on from last week I am going to look at the other side of the metrics from European countries in terms of whether, looked at as companies, which, if any, might be regarded as worth investing in.

First we could look at the countries that are going broke:

Here’s a map. The darker the colours the worse the performance.

In other words, Southern Europe, but including France, the Balkans, and Finland look to be a disaster area.

Among this group there are also those that are actually going bust. Here’s a list of the worst

The star ratings show which are the worst of the worst. One star indicates a country or area that is not exactly heading towards bankruptcy but dangerously close to the edge.

Two stars shows they have reached the stage of borrowing to lose money, and so they are now on the downward path.

Three stars shows they are dangerously into a debt trap from which recovery will be seriously difficult.

More stars show the country is, financially speaking, a write-off.

What about countries that appear to be growing?

If we take two figures, the annual growth and set that against annual inflation, I can only find one country that is growing enough to offset inflation, and that country is Poland. The rest of the EU is supposedly on 1% growth, whereas inflation is running at 2.2%, which means that in real terms the EU is declining in wealth.

Now let’s try to look into the future. One way of doing this is to look at youth unemployment. This gives a look at where a country is headed.

I wish to point out that by the end of this decade, maybe even before that, this metric may well be obsolete because of the effects of AI and the advance of robotics. From 2030 onwards we may find that 50% or more of employment will not be human, and so youth unemployment may well cease to be an important metric. But for the moment, the figures are alarming for certain nations. They include all of southern Europe, France, the Baltic states and most of Scandinavia, plus the Balkans.

In other words, however you choose to look at essential metrics across Europe the results are seriously poor.

The country most vilified in Europe, or at least, by most European governments, is Russia. There, debt to GDP is negligible at 17%. And the inflation rate is currently 0.4% a month, and dropping.

I would invest in Russia if the climate was more amenable. The cost of living there is cheaper than where I am currently, and the cities are cleaner and better run than the majority across Western Europe, and the people seem happier and comfortably well off, which is more than can be said for most European countries.

It’s a long time since I was in Moscow, but friends tell me the place is thriving, but I was recently in St Petersburg, and that is currently one of my favourite cities.

As a teenager I did start to learn Russian when the BBC started a course in the language. And that’s when I first visited the country with a contract to ask Dimitri Shostakovitch to write a percussion concerto. Sadly, when I got to Moscow I learned that he was gravely ill in hospital, and sadly he did not recover.

That, incidentally, was when I first visited Ukraine. For some unknown reason I headed from London to Paris, and then travelled due east expecting to hit Moscow. Obviously at school Pete Chapman failed to get me to understand East European geography. When I looked at the maps in Kiev I found I was seriously off course.

One thing I did learn and that is that things get seriously cold in the that part of the world as winter approaches. I have spent a winter by the Black Sea. I remember walking with friends to a restaurant one evening. The temperature was -15C. Half way there we seriously considered returning to our hotel because we feared we’d die of exposure.

On another visit I made the mistake of venturing outside in winter to stand on a minute balcony. Unfortunately the wind blew the french windows shut, and I couldn’t get back in. I had to jump from a third floor window into the back yard snow drift. I landed on top of a shed, so had to jump again, and hobble through snow that was more than four feet deep, back round to the road, and arrived in the hotel hall covered in snow and nearly dead.

Luckily the locals rallied round and plied me with copious amounts of vodka, while laughing uproariously about my predicament. And that’s the trouble with the Balkans. The languages are not easy on westerners. Job prospects are close to zero, and the weather doesn’t suit me. I loved living in Hungary, and had a Hungarian girlfriend. I found the people very friendly, and when stopped by the police on one occasion they shared their lunch with me. I particularly looked forward to saturday nights eating in one of the big hotels and joining in the singsongs where the customers very often shouted down the bands. The sheer volume and exuberance was amazing, and some of the tunes were so emotional. Those evenings were incredible. But I cant handle the winters.

That means I’m tempted instead to try a move to Malaysia.

Debt to GDP: 65%. Still rising, which is worrying, but not near the danger levels yet.

Current growth rate: 4.4%

Inflation: 2%

Youth Unemployment: 12%. Not good, but half the rate in Spain.

And the official languages include English.

From where I’m sitting the jury is still out. But Europe is dying, and for someone of my age that is depressing. The one thing I really miss these days is good news.

Let me know if you would like me to share more of my memories of foreign parts. I have written several books on my travels, which range from France to Tehran, and from Northern Scandinavia to Central Africa. Plus travels across the USA and Central America.