The outlook is more encouraging from Kazakhstan!

Ah salam oo alekum, mienung atum Aristan, which in English is Hello, my name is Lion (the closest the Kazakhs have for Arthur!). I have just returned from a two-week visit to Kazakhstan with some family members who are working in the exciting Kazakh city of Almaty. It’s my third such visit and very enjoyable it was too.

The outlook from the UK

The latest Nationwide Consumer Confidence Index at 51 points is 11 points lower than at the same time last year, and 28 points below its long-run average. The Index measures a representative sample of 1,000 UK adults about their view of the current general economic situation, employment conditions and future prospects of the UK. Following on from this I suppose it is natural that the view of the average UK investor is determined by the same UK factors and increasingly the negative information each time that Europe is mentioned. But step outside of the UK for long enough and you might get a somewhat more upbeat view of our prospects.

The outlook from Kazakhstan

When I first flew with the Kazakh national airline - Air Astana - in 2008, it had just been admitted to the register of the IATA Operational Safety Audit (IOSA). I remember the flight well because they gave me a large glass of neat gin to drink although I am happy to report that they now include tonic upon request. From just three planes in their fleet in 2001, Air Astana now operates a fleet of 24 western aircraft and this is projected to grow to 34 by 2014 following the addition of the new Airbus 320 family aircraft, and then on to 63 by 2022.

The UK and the US are places that might as well be on Mars as far as the average Kazakh is concerned. Our little island is so stuffed full of the technology, experience, know-how and financial resources that places such as Kazakhstan will increasingly need, that it is impossible not to see the tremendous potential that there is for our economy for decades to come. Kazakhstan is five times the size of France and shares its longest borders with Russia (4,251 miles) and China (951 miles) - yet it’s population is just 16.5m (April 2011), which is only 25% more than the population of the London Metropolitan area. Since gaining independence in 1991, Kazakhstan has emerged as a leader in Central Asia with an excellent macro-economic reform record and abundant natural resources – it’s potential oil reserves are on a par with Kuwait. Kazakhstan’s national objectives are to achieve economic growth based on the continued development of a market economy augmented by high levels of foreign investment in health, education, the well-being of its citizens, power engineering, energy and mineral resources, financial services, and infrastructure, with emphasis on transportation and communications. These are all areas where the UK excels.

We should worry less and grasp the opportunity

As a result of my family involvement Kazakhstan has an important and growing place in my consciousness. However, there are many countries in the world which are just as needy of what we so easily take for granted in the UK. If we would but see the vast potential that we have in these small islands in which we live, we might worry less about our job security or whether interest rates might go up but a few percent. If, as investors, we could get a better grip of what is happening in places like Kazakhstan and the way that the needs and desires of peoples like the Kazakhs will drive the world’s economy, we would stop leaving quite so much money in deposit accounts where it is of little use to anyone. Instead we would invest in companies both here and abroad which can take advantage of the great global advancement in places which, until now, we might have found difficulty in finding them easily on a map.

What we have

At just after 1.00pm yesterday I ordered four new Dell flatscreens for our business via a Buy it now offer on eBay from a Dell reseller in Essex. The price was very competitive and the postage free. I paid securely via PayPal and got a healthy cash back via Quidco. The four screens were delivered to our office in perfect condition by the courier at 10.30am this morning. The people of Kazakhstan would dearly love to enjoy such luxury. They cannot use eBay as no one will post items to Kazakhstan as the postal service there is so awful, with a large percentage of items simply never arriving at their proper destination. Those that do arrive can be weeks or months late.

By investing our money in real businesses both in the UK and around the world, we not only have a better chance of receiving a real return (in excess of inflation) but we provide those companies with the capital they require to employ more people and make their goods and services available to a wider customer base.

Rahmiet, sowbolinguz (Thank you, and goodbye for now)

LV=Little Book of Protection

This is a well produced and interesting booklet which is hot off the press. It is full of helpful information and interesting facts such as between the ages of 1 and 4, a child costs their parents an average of around £53,586 ( Source: LV= Cost of a Child Report 2011). You can download your pdf copy of the Little Book of Protection from the front page of our website www.arch-fp.co.uk.

If you would like to discuss your own investment planning please ask your usual Arch adviser, telephone 01483 204600 or email enquiries@arch-fp.co.uk.

This entry was posted on 21/07/2011 at 04:19 pm and is filed under Blogroll. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response or trackback from your own site.

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