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Like life, countries, and economies go through different periods, sometimes difficult sometimes strong. There are times when the world is knocking at your door, desperate for that commodity or service that your country exports. Most countries can point to a time when this was the case. History will show that India exported spices, China – silk. Or in modern times, where the Gulf States export oil, and Australia its coal and iron ore.

And yet sometimes, your competitive advantage or your currency or commodity is not in high demand or your natural resource has dried up.

Wars, social issues, government instability or corruption and the like have taken many once-stable or promising economies and turned them into disasters. Once great countries are turned into basket cases, as the wheel of fortune turns away from them.

But some, like a phoenix, have been known to rise from the ashes, proudly growing where no growth looked possible. Suddenly a shoot pushes its way to the sky, the beginning of a new sign of life, of opportunity. Soon, the fruit begins to grow amongst the weeds and rocks. And slowly but surely this new resource is cultivated and able to harvest a small crop.

These are the phoenix economies. The developed world’s command over global commerce, the search for value is an ongoing pursuit. It is those signs of regrowth in a Phoenix economy that fund managers and investors look for when trying to find value and high investment returns.

Most of these economies are not simply return-from-the-dead stories. Reincarnated economies are immensely rare due to the veracity of reforms needed to right the sinking ship, being too difficult for most economies to swallow, a good recent example being the austerity measures in Greece. Like the Greek situation, forcing strict reforms on an economy takes massive political will, and like the Greeks, most nations, would rather not deal with the unpleasantness of reform.

Most phoenix economies are therefore countries that fall somewhere beyond even emerging markets. In fact, you could look at the Phoenix economy as the stage before a market becomes an emerging market. But like buying Bitcoin at 5 cents in 2010, any small change has a significant impact on value. Future seeking investment managers will go to places that look to have a sapling poking through the rocks to see whether there is a bit of gold hidden in there.

Probably the closest we have to a Phoenix economy is Pakistan. Pakistan has seen something of a revival in the last four years. In 2012, it had a GDP at 3% and inflation above 10%, and a ballooning budget deficit. Now the deficit has dropped to 4% of GDP and GDP is above 5%. Still burdened with significant social, corruption and other problems, by achieving at least a stable footing, there has been a rapid improvement as foreign investors look towards Pakistan as a solid future bet in economic gain. As a result of foreign investment since 2012, its stock market cap has grown significantly, almost doubling in that timeframe.

All of the potential Phoenix countries share significant social issues or are at the very early stages of recovery or growth. There are countries like Zimbabwe, showing some positive signs after years of corrupt governance. There are initial stage recoveries like Egypt, with their own socio-political issues, to countries that have begun stronger recoveries, like the Philippines.

Even those which have successfully overcome entrenched social or political issues to become a more stable country, the game doesn’t stop there. Recovery must be sustained, and often early investors will look to go out on top and pull their money from the economy once it is strong, searching for new yield. Often IMF funding is removed and the country now has to learn to survive without a stimulus. All too often this precipitates a new fall down that long black hole.

Foreign investment is a tricky game, and predicting a turnaround is sometimes like betting on garbage bonds. With so many different competing elements, it is shaky, risky ground. It is best left for those who trade other people’s money and can take a longer-term position in the hope of unearthing a diamond. Because of the risk, phoenix economy investments should only be a small part of a portfolio, with an amount that doesn’t hurt to lose.

But for those that look to invest when there is blood in the streets, investing in a Phoenix economy is often the closest way that you can achieve this.