The Future of Eastern Europe, The Caucuses, and Central Asia

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The Future of Eastern Europe, The Caucuses, and Central Asia

There are three unusual, relatively small regions of the world that aren’t talked about very often. Many interesting countries inhabit these regions. The clever international Alpha Male 2.0 can take advantage of some of these nations. 

-By Caleb Jones

Eastern Europe 

The first of these three regions, and by far the largest and most well-known is Eastern Europe. While there is no consistent official list, by most definitions Eastern Europe includes the Baltic nations of Estonia, Latvia, and Lithuania, the former Soviet nations of Belarus, Moldova, and Ukraine as well as the more “central” European nations including Czech Republic, Slovakia, Croatia, Hungary, Romania, Serbia, and Slovenia, plus some of the more southern nations such as Albania, Bosnia/Herzegovina, Bulgaria, Croatia, Kosovo, and Montenegro. 

Sometimes Austria, Poland, Turkey, and even Russia are considered within Eastern Europe, though I personally don’t. (I’ve always considered Russia as its own category; a huge, bankrupt, corrupt, failed superpower whose major cities are run by a dictator. The USA may even end up looking like Russia down the road.) 

Eastern Europe today is a mish-mash of third and second-world countries, most of whom are shitshows with corrupt or incompetent governments. Eastern Europe gets a lot of press in the West for its more attractive and traditional women and lower cost of living for those who don’t mind roughing it a little. Both of these stereotypes are generally true. My interest in this article is the economics of these countries, as well as their future.  

The good thing about Eastern Europe is that while most countries there are corrupt and/or mismanaged and probably will be for the foreseeable future, there are several diamond-in-the-roughs which are actually embracing free markets, property rights, capitalism, and rule of law as best they can within economic and cultural limitations. These countries might have brighter futures. These countries, at least in my opinion, are Estonia, Latvia, Lithuania, and Montenegro.  

I say might have brighter futures because all countries in Eastern Europe have two major problems. The first one is that dictator in Russia. It is now a matter of precedent that Putin can roll his tanks into pretty much any country in Eastern Europe he wants, take it over on a de facto basis, and neither the USA, Western Europe, or the United Nations will do anything about it other than wag their fingers at him, to which he just laughs.

This means that any nation bordering Russia has a nonzero risk of being conquered by Russia at any point in the future. With some nations this may be a 2% Rule situation, but with others it may not be. It’s hard to say. 

The second and larger problem is that Eastern Europe is in Europe. Defenders of Eastern Europe seem to forget this basic fact. Europe is collapsing right before our very eyes, even faster than the USA. Some people seem to think that when Western Europe collapses in a few years Eastern Europe will be just fine because they don’t allow as much immigration or whatever. Wrong. When Western Europe goes down, most or all of Eastern Europe will likely go with it. Eastern European countries won’t feel the pain nearly as much as Western nations like the UK or Germany, that’s very true, but Eastern Europe is still going to get thwacked pretty damn hard regardless of how nationalist or capitalist they are. 

The Caucuses 

This is a tiny, weird region wedged between the Black Sea and the Caspian Sea that really isn’t Europe or Asia. It includes the countries of Armenia, Georgia, and Azerbaijan. While Azerbaijan is the typical cluster-fuck country similar to Eastern Europe and the Middle East, Armenia and Georgia are surprisingly smart little countries doing a lot of things right to attract foreign money, business, and investment. Outside of the “watch out for Putin” problem (which certainly applies to Georgia), I think these countries are going to do reasonably well in the future.  I have my own five flags plans for both of them (which I can’t discuss right now in detail, for the reasons I covered here). 

Central Asia 

Central Asia is another region no one ever talks about. It’s a little ball of countries right in the middle of the continent. It generally includes most of "the Stans"; Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan. Some people also consider Mongolia Central Asia as well. 

Although Kazakhstan and Uzbekistan are sort of trying (kind of), all these countries are pretty much all terrible at the moment. However, the future of this region is… interesting.  

First, they are far enough from Europe and economically independent to the point where a collapse in Europe won’t smash these countries like those in Eastern Europe or even in the Caucuses.  

Second, they’re in Asia, and Asia is rising. It is very likely that these countries will slowly, ever so slowly start to improve as the rest of Asia rises, similar to Myanmar.  

Third, these countries will directly benefit from China’s massive, multitrillion-dollar Belt and Road Initiate I’ve talked about before. These new trade routes run right through Central Asia. 

It’s entirely possible that Central Asia will be the “next” growth region once SE Asia reaches the first world. This would mean a bright future, but one still pretty far off.  

I have one eye on the Central Asia region and will for quite a long time. We’ll see what happens. 

This article was originally published on April 30, 2020

Comments


  • Fmx 2020-04-30 05:41:53

    Great to see an article about those parts of the world ! I'm from Western Europe, visited some of those, and spent a few months in central Asia. Some ideas and remarks here : I tend to be a bit more nuanced about Russia than as you describe it Caleb : it is indeed, still corrupt, but nowhere near the 90s or early 20s. From what I know, "low-end" corruption is far less that what it used to be. I believe that unless you're a big corporation and / or in some very specific/shady industries, you won't encounter corruption (unless you look for it specifically to do business in some grey zones). Russia would be IMO the most promising of all : biggest economy, lower taxes, stable country as long as you are in the Alpha 2.0 levels. I agree with the Eastern Europe part : I believe it may be a great way for a Western European to go with an alpha 2.0 business while working on a 5-flags system. Also, those countries are way more right-wing friendly. The problem with the baltic states is that they are definitely leaning towards collapsing EU. I also agree with the Central Asia part, though Kazakhstan is more of a 2nd world country, compared to the others where there is almost no economy, and relying on Russia. Kazakhstan is definitely more corrupt than Russia though, EVEN with low-end corruption. Everything is kinda "Grey Zone" there, as business is concerned. One more specific question : Would you say that a well-managed, stable dictatorship/authoritarian regime would be less interesting to look at for an alpha 2.0 than a collapsing "democracy" ? Cheers.

  • Pseudonymous User 2020-04-30 09:36:54

    How many caucuses could the Caucasus cause, if the Caucasus could cause caucuses?

  • Caleb Jones 2020-04-30 10:56:11

    From what I know, “low-end” corruption is far less that what it used to be. I believe that unless you’re a big corporation and / or in some very specific/shady industries, you won’t encounter corruption (unless you look for it specifically to do business in some grey zones).
    Correct. I didn't mean to imply otherwise. I was supposed to go to Russia this year but COVID-19 eliminated that by screwing up my travel schedule for the rest of the year. Maybe in 2022.
    Would you say that a well-managed, stable dictatorship/authoritarian regime would be less interesting to look at for an alpha 2.0 than a collapsing “democracy” ?
    Not at all. The Alpha Male 2.0 has 100% location independent income. The Five Flags Alpha 2.0 also has zero assets within the country he lives. These conditions really free him up to live in all kinds of places others would consider problematic and still live a great life as long as he's prudent and careful. Read this.

  • H2otokyo 2020-04-30 13:19:08

    Do you think Vladimir Putin is an Alfa 2.0?

  • Caleb Jones 2020-04-30 14:32:46

    Do you think Vladimir Putin is an Alfa 2.0?
    Not even close. He's extremely outcome dependent like Trump. Putin is an extreme Alpha 1.0.

  • joelsuf 2020-04-30 16:30:43

    Would you say that a well-managed, stable dictatorship/authoritarian regime would be less interesting to look at for an alpha 2.0 than a collapsing “democracy?"
    tbh I would rather live in a well managed stable authoritarian place than the US. People tend to forget that the US is pretty much authoritarian lite but very poorly managed (as we're seeing now with this virus, all the authoritarian places have this thing beyond covered already). I'd rather be in an authoritarian nation that is improving than a somewhat authoritarian country that has next to zero or negative growth that will become an authoritarian third world country. And yeah, I believe that the US will become a third world country. Probably by the 2040s.

  • Pseudonymous User 2020-04-30 17:41:21

    a well managed stable authoritarian place
    It's a oxymoron. Authoritarianism is inherently unstable, and even if it happens to be well-managed (can you name many examples from history?), that's not for long. I also wonder why the desire for a well-managed country. A goal of a country where things work the way you want them to despite incompetent management, purely by chance, is much more practical.

  • Investor 2020-05-01 06:48:22

    I have personally visited a couple of places in Central Asia and had a great time. There are definitely highly viable places there for people considering rotating home. I would not really think its a good idea for all year because of the extreme continental climate (the most continental you can find on the planet with extreme temperatures in winter and summer though there are a few milder spots). I think Almaty could be a very nice place and Kazakstan is generally slowly rising. Almaty is also slightly milder for temperatures for some reason and the women there will eat you alive with attention if you are a westerner. Kyrgystan next door is great if you want a cheap holiday with fantastic nature and nice people but I would not do business there or live there long term unless you wanna live like a hermit and hide from civilization (then its great). I know people like Andrew Handerson talk a lot about Estonia, Montenegro and Georgia. I am personally planning to move my business to Estonia via the e-residency sometime this year, possibly within a few months. Central Europe might do quite ok if they leave the EU, start their own pact and build a walk on the western border. I also expect en mass immigration from the west into this region in the coming years which complicates what might happen a lot. I think there will be a lot of immigration from the west also to russia, central asia and australia maybe to canada. These are places with a lot of space and relative friendly climate and people, same or similar cultures. I think Putin is already planning for something like this with some plans to build new cities in siberia. One of the main limitations of Russia right now is that its a huge country with not so many people considering the size and too many different ideas in the individual republics, this would play to Russia's advantage.

  • Sonny 2020-05-01 09:39:57

    Hi Caleb, There is a thought process & prediction in many circles that manufacturing will move out of China and into India in a big way after the coronavirus fiasco. Could this mean India might again become a growth center ? In any case I think Somebody's  gotta win out of this , right ? What are your thoughts ? https://www.google.com/url?sa=t&source=web&rct=j&url=https://thediplomat.com/2020/04/after-covid-19-manufacturing-indias-new-economic-potential/&ved=0ahUKEwiUjufTjJPpAhVAzzgGHZu_ATYQxfQBCCowAA&usg=AOvVaw3Fkrd8l7zc8zpXHcFMSWYQ

  • Investor 2020-05-01 10:09:55

    There is a thought process & prediction in many circles that manufacturing will move out of China and into India in a big way after the coronavirus fiasco.
    Out of china yes but into india? Haha no way they do not have the discipline nor the fascilities. I think it will be a mix of different countries. Besides what would it help to move it from one country to another the point is to make stuff locally or at least have it spread out.

  • Fmx 2020-05-01 10:47:05

    I’d rather be in an authoritarian nation that is improving than a somewhat authoritarian country that has next to zero or negative growth that will become an authoritarian third world country.
    I definitely agree with you, Joelsuf on that point.
    It’s a oxymoron. Authoritarianism is inherently unstable, and even if it happens to be well-managed (can you name many examples from history?), that’s not for long.
    I see what you mean, I would mention Singapore or UAE, even China (to an extent) : feels definitely stable and well-managed from my point of view. From an Alpha 2.0 perspective, at his scale, democracy or dictatorship are not that big of a deal.

  • Caleb Jones 2020-05-01 13:37:43

    I think there will be a lot of immigration from the west also to russia, central asia and australia maybe to canada.
    Possible.
    There is a thought process & prediction in many circles that manufacturing will move out of China and into India in a big way after the coronavirus fiasco.
    Highly unlikely due to logistics alone. But anything is possible, sure.
    Could this mean India might again become a growth center ?
    India already is a growth center.
    In any case I think Somebody’s  gotta win out of this , right ?
    Yes. Some of the smaller, leaner, more maneuverable, capitalistic countries will win. Not India. India is the opposite of all that.
    What are your thoughts ?
    As I've said before, India could seriously be the greatest superpower of all human history and running the entire planet right now if they weren't so irrationally collectivist and bureaucratic. That's not changing. If anything COVID-19 will probably make that worse.

  • H2otokyo2@me.com 2020-05-01 17:01:16

    Speaking of Russia, do you think Ayn Rand’s philosophy of Objectivism coincides with the philosophy of the Alfa 2.0?

  • Burns Vaughan 2020-05-01 18:12:06

    Interesting article, thanks Caleb. Climate would be a limiting factor for living in some of these countries. They get too cold in winter and too hot in summer. That isn't my cup of tea personally. It seems you were more looking at it as places to invest in or base a business there. That sounds like a good idea, but I'd have to look into it. Not being religious but some of those countries are predominantly the m-word. Which isn't particularly good or bad, but maybe a factor.  

  • Caleb Jones 2020-05-01 19:28:03

    Speaking of Russia, do you think Ayn Rand’s philosophy of Objectivism coincides with the philosophy of the Alfa 2.0?
    Yes.
    They get too cold in winter and too hot in summer. That isn’t my cup of tea personally. It seems you were more looking at it as places to invest in or base a business there.
    Correct.

  • Sonny 2020-05-02 11:16:59

    Caleb, Why do you say India  "could be the greatest superpower in human history and be running the world right now " You do realize that's a very strong statement to make right ? Even if its hypothetical What in your mind does India have going for it that would make you say something like this. Truly curious. PS: I'd like to elect you prime minister !

  • Caleb Jones 2020-05-02 13:50:44

    What in your mind does India have going for it that would make you say something like this. Truly curious.
    Remember my repeated warnings to you about digging into off-topic conversations in blog threads. This thread is about Central Asia and Eastern Europe, not India.

  • Pseudonymous User 2020-05-02 17:51:08

    So are you going to fix the spelling of Caucasus?

  • Caleb Jones 2020-05-02 18:28:37

    So are you going to fix the spelling of Caucasus?
    Nope. I'm going to leave it there to drive nitpickers like you insane.

  • Dmytro 2020-05-03 05:26:21

    If government of Ukraine would ask you for an avice - what would you advice to them?

  • Sonny 2020-05-03 07:38:53

    Caleb, If hypothetically eastern europe or central asia were to have high rates of economic growth , how would you seek benefit / extract gain from it ? Examples: Buy properties / real estate , invest in the local stock market , invest in local companies , buy the currency etc Hopefully This question is very much on topic.  

  • Michal 2020-05-03 09:58:44

    Caleb, I was wondering why you group Chech Republic, Slowakia and Hungary into Estern Europe, but exclude Poland? This countries are very similar both culturalry and economically. Thanks, Michal

  • Redbaron 2020-05-03 20:18:46

    I was actually looking into moving around Tbilisi, Georgia. In addition to the economic activities, the climate there seems reasonably temperate and bearable without incurring heavy HVAC costs. It’s not exactly a mediterranean climate, but its leagues better than the hot and humid nightmare that is SE Asia where, despite its projected economic boom, you need to carry a portable AC (technology that doesn’t even exist yet) around with you everywhere you go. Not sure how hot the local women are there - I did a quick Google search for “Tbilisi women” and the results, well... they didn’t make little brain too enthusiastic... Maybe a quick plane trip to Tbilisi might show me something different and change my mind

  • EEguy 2020-05-04 11:01:56

    Interesting take on Europe. If somebody is interested in doing business in Eastern Europe or whatever you want to call this region, I suggest incorporating business in Estonia, not because of taxes but because of ease of doing business. Many businesses from other two baltic states register in Estonia. As you said, Baltic states "might" be better, but what is alternative for them besides European Union(Europe?). They receive lot of funds as well as other countries from EU, and they can participate in "free" market which we can debate how free it is. You say Western Europe is going down and Russia is a wild card. What is the best direction?  

  • Caleb Jones 2020-05-04 12:30:06

    If government of Ukraine would ask you for an advice – what would you advice to them?
  • My standard advice to all countries, but the big one for Ukraine is the bolded one:
    • Cut taxes (on people and businesses)
    • Cut regulations on businesses
    • Cut or eliminate welfare spending (I realize they don't do as much of this as Western Europe but that's a pretty low bar)
    • Enforce rule of law and imprison anyone guilty of bribes or corruption no matter who they are
    • Rigorously enforce and defend private property rights
    They should also read my article series on how to form a prosperous and free country.
    If hypothetically eastern europe or central asia were to have high rates of economic growth , how would you seek benefit / extract gain from it ? Examples: Buy properties / real estate , invest in the local stock market , invest in local companies , buy the currency etc
    All of those things, depending on your goals an resources, as well as start a business there.
    I was wondering why you group Chech Republic, Slowakia and Hungary into Estern Europe, but exclude Poland? This countries are very similar both culturalry and economically.
    Yeah, that's a grey area. I happen to think that Poland is moving much more the direction of Western Europe than those other countries you mentioned (and I realize Poland is not a part of Western Europe), but one could certainly consider Poland a part of Eastern Europe.
    I was actually looking into moving around Tbilisi, Georgia. In addition to the economic activities, the climate there seems reasonably temperate and bearable without incurring heavy HVAC costs. It’s not exactly a mediterranean climate, but its leagues better than the hot and humid nightmare that is SE Asia where, despite its projected economic boom, you need to carry a portable AC (technology that doesn’t even exist yet) around with you everywhere you go. Not sure how hot the local women are there – I did a quick Google search for “Tbilisi women” and the results, well… they didn’t make little brain too enthusiastic… Maybe a quick plane trip to Tbilisi might show me something different and change my mind
    I was supposed to be in Tbilisi for a week a few weeks ago and was going to write a full report on it but COVID-19 killed those plans. I agree with pretty much everything you said though.

  • Caleb Jones 2020-05-04 13:32:52

    As you said, Baltic states “might” be better, but what is alternative for them besides European Union(Europe?).
    Countries far away from Europe, particularly in Asia.
    You say Western Europe is going down and Russia is a wild card. What is the best direction?
    I don't understand the question.

  • EEguy 2020-05-05 02:37:00

    My question was what is the best way for baltic states, Western Europe or Russia, which you answered with Asian countries. If we are talking about China, then I say good relations will not be possible for a long time because people hate "communists" with burning passion. Ok, fair enough, East is rising and business will be there, but isn't it a bad thing that you don't trade with your closest neighbours? Also off topic for those who are interested in investing opportunities in Eastern Europe. If you want to invest in stock market, I would suggest that you reconsider, because stock market is not advanced as you might think from American perspective. I would suggest real estate or starting your own company, or knowing great company to invest in by yourself.  

  • Caleb Jones 2020-05-05 10:38:44

    My question was what is the best way for baltic states, Western Europe or Russia, which you answered with Asian countries. If we are talking about China, then I say good relations will not be possible for a long time because people hate “communists” with burning passion.
    No. In business, most people don't give a shit about any of that and just want to make money. I don't care how much you hate communists; if a wealthy, growing communist country like China offered you $50 million for a construction project for example, you'd take it.
    Ok, fair enough, East is rising and business will be there, but isn’t it a bad thing that you don’t trade with your closest neighbours?
    No but it is a bad thing if 80%+ of your economy and/or exports are all your closest neighbors if your closest neighbors are on the verge of collapse. This is why Canada is fucked even though they're not doing that much wrong; they rely too much on the Collapsing USA for their economy.

  • Investor 2020-05-06 01:38:09

    I don’t care how much you hate communists; if a wealthy, growing communist country like China offered you $50 million for a construction project for example, you’d take it.
    I am surprised you seem to think China is communist. What exactly do you think is communist about China? It is long gone those days that it was communist. Nowadays China is a capitalist far right winged country. USA and most of the west is far more communist nowadays than China.

  • Investor 2020-05-06 07:01:35

    I was wondering why you group Chech Republic, Slowakia and Hungary into Estern Europe, but exclude Poland? This countries are very similar both culturalry and economically.
    Yeah, that’s a grey area. I happen to think that Poland is moving much more the direction of Western Europe than those other countries you mentioned (and I realize Poland is not a part of Western Europe), but one could certainly consider Poland a part of Eastern Europe.
    In most countries of Europe the opinion is exactly opposite than this.

  • Caleb Jones 2020-05-06 09:47:22

    I am surprised you seem to think China is communist.
    I don't. I was using his wording. China is authoritarian capitalist, not communist.

  • POS 2020-05-09 09:53:55

    FYI Caleb, all of your so called East European countries within EU are fucked as EU (read Germany) made them economical vasals. The only "good" thing about being inside is that Russia will not dare invading the EU. At least not yet. And Poland is Eastern Europe as well. Austria and Turkey are not.

  • Caleb Jones 2020-05-10 08:25:50

    FYI Caleb, all of your so called East European countries within EU are fucked
    Yes, they very well may be.