GREY:BSRAF - Post by User
Comment by
Ticker28on Jan 11, 2013 5:26pm
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Post# 20828274
RE: Bloomberg article on Besra
RE: Bloomberg article on Besra Vietnam is similar in politics as Mongolia. Although Mongolia is a democratic state the governments think very similar when it comes to taxation models and not committing to long term contractual agreements. Of course this reflects in the inherent lack of foreign investment in both countries. They tend to get greedy and bite the very hand that feeds them.
A good example is SouthGobi resources or Turquoise Hill Resources and the effect this has had by creating a negative view for committing further foreign investment to that country, whether by existing investors or new investment opportunities. These governments fail to see the exuberant growth that can be added to their GDP resulting in benefit to the country as a whole. They also neglect to realize in their delusion the negative impact on future investment as all eyes watch these developments. They can't see the forest for the trees and are forsaking a lot of money for a small amount of short term money.
I think a big part of the problem is these are frontier economies and have yet to fully realize the benefits of foreign investment. Also these countries are not overly wealthy so they see these resources as a key to solving their financial short fall. In my opinion it will smooth over and many of these companies work very hard at this by deploying PR with local government officials.
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