Doing Business in the Hardest Spots on Earth

By Jake Cusack and Matthew Tilleard,

This is the first in a series of dispatches from a pair of investment advisors who work with growth companies in Afghanistan, South Sudan, Iraq, Haiti, and other countries devastated by war and poverty. The entrepreneurs you will meet in the coming months use tenacity and ingenuity to overcome obstacles both recognizable and unimaginable to their western counterparts.

You can learn a lot about a country on the way over, just by looking around you. Kabul International is among the world’s busiest single-runway airports, and the noon Safi Airways flight is one of eight commercial flights from Dubai to Kabul each day. Crammed into a humid bus, we bump along the tarmac in Dubai and then mount the stairs to the plane.

Roughly half our fellow passengers are Afghan, the other half foreign workers. Bald security contractors with hard eyes and superfluous biceps sit across from aid contractors in safari vests with superfluous pockets. A young British NGO worker tugs at her headscarf as she walks past the Afghan men in business class. A South African cameraman off on an embed shoves his dusty flak jacket and helmet into the overhead locker. Clearly, we are headed for a place defined by insecurity and deluged by the spigot of international aid.

A week and half later, a different flight tells a different story. Planes don’t leave often from Kabul to Dushanbe, the capital of Tajikistan, and the transport seems correspondingly ad hoc. Somewhere over the mountains of the Hindu Kush the pilot remembers to turn on the economy cabin lights and the lights on the wings flicker simultaneously. In the seats around us, western faces are rare. Arriving at the airport, we see Russian, Indian, Chinese and Afghan businessmen–many in traditional dress, some in suits–collecting bags stuffed with commercial samples and construction contracts. The implication: Tajikistan is a country on the move, but Western aid is not powering that progress.

In our line of work, such observations are important.

The World’s Toughest Markets

We are partners in an investment advisory firm that does the ordinary work of connecting good entrepreneurs to capital and vice versa. But the territory in which we operate is anything but ordinary. We focus on conflict and post-conflict nations: places like Afghanistan, Iraq, South Sudan, Sierra Leone, Tajikistan, East Timor, and Haiti. These countries have a long way to go before earning the optimistic label “emerging markets.” Corruption, violence, poor infrastructure, and a lack of basic institutions can make life very difficult for entrepreneurs and investors.

We have our reasons for choosing this work. They include financial self-interest: conflict and post-conflict countries offer huge opportunities. Amidst instability, entire industries must be created or restored. Large returns, minimally correlated with developed markets, are possible for entrepreneurs and investors who venture where most capital fears to tread.

More altruistically, we believe deeply that prosperity is an engine of peace. Growth in per capita income can directly reduce the risk of conflict, as Oxford economist Paul Collier has documented. Connecting capital into these fragile societies has an outsized positive impact.

Proceed with Caution

We recognize the potential hubris in these ambitions. Our backgrounds have motivated us to make a difference but also made us painfully aware of our limitations. As outsiders, we know it is easy to overestimate our importance to local narratives that we do not control. Jake served several years in combat as a Marine officer in Iraq, growing frustrated with the paucity of economic development — the absence of tools for hope — to accompany the raids he led against insurgents. Matt left a blue-chip private sector job to work in civilian aid delivery in Afghanistan. The instruments he used were more promising. Yet he, too, was dissatisfied with their unwieldiness.

Our distaste for grand plans led us to the private sector. We do not think business can solve all ills. But we do believe that the right kind of investments into real growth companies can nudge economies towards prosperity. By providing entrepreneurs with capital we instill accountability and transparency and enable local agents of prosperity. In these nations, it is people who sustain hope and are vested in peace that will drive long-term change.

The Fundamentals Still Apply

And it’s the people that matter. On the streets of Baghdad, Juba or Kabul you experience cliché as a revelation: people everywhere are more alike than they are different. The CNN broadcasts of angry crowds and forgotten victims are not the reality for most Afghans. Walk out the mirrored glass doors of Kabul City Center shopping center and in the surrounding streets you will not see opium bazaars and Kalashnikov vending machines but rather an ice cream vendor, a sporting-supply store where you can buy cricket gear, and an advertisement for KFC–Kabul Fried Chicken–that looks suspiciously similar to a better-known fast food brand.

Similarly, entrepreneurs in Basra or Kandahar face many of the same challenges and opportunities as their counterparts in Boise or Kansas City. They too are ambitious, savvy, and reluctant to learn Quickbooks. They operate under additional uncertainty and risk but are inherently optimistic, investing time and money in pursuit of a better life. At once pragmatic and adaptive, these entrepreneurs represent the best hope for their countries’ revival and a tantalizing opportunity for those courageous enough to do business beyond the frontier.


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