Expat Living: Why ALL Expats Should Watch Events In The Ukraine Carefully
They say that history repeats itself.
If that’s true, then hold on… The Life Lessons I learned from the Russian Meltdown of 1998 will be useful once again.
For those not familiar with the back-story, I had been in Baku, Azerbaijan for just over 3 years at the time the global financial markets began to collapse like dominoes in a row.
I was recently divorced and had no bank or credit connections left in the United States, aside from my mother who was reaching the end of her expected life after being diagnosed with cancer. To say this was not an ideal situation for an expat is a major understatement.
And yet, I still hear other dreamers and expats today who are as exposed as I was.
I’d like to share a couple of reasons why that’s a risky way to live.
1. If you don’t know your options, you’re at risk: It’s romantic to live abroad, much like a college kid backpacking around Europe for a year. But it’s less romantic when you suddenly need cash or help and don’t know what your options are. That leaves you at the mercy of the unscrupulous, or, in medical emergencies, without proper care at all.
2. If you aren’t familiar with international labor rules, you’re at risk: Back in the less regulated days of the 70s and 80s, it was many people’s fantasy to travel and live off the land as this popular song suggests…
Sorry to burst that bubble, too, but those days are gone. With current regulations designed to limit foreign workers, it isn’t easy to find unsponsored work overseas, or here in America for that matter.
Today, having an expat assignment, and having the safety net of being tied to a company that sponsors you, is the best way to protect yourself if you want to stay abroad.
In Baku, there were any number of expatriate men (and a handful of women) who shifted from one job to another within the oil business, but without a company sponsor, oftentimes they ended up in grey market jobs (unofficial work) with under the table pay- a short-term solution with lots of re-entry trouble waiting at the end of the job.
When I wanted to repatriate to the United States, it took me all of 5 years- even though I was doing the right things as far as documents. Then, why so long for a citizen? My question exactly!
The key issue was that I had no US bank account after the divorce. I also had no home address or credit card. When my driver’s license expired, I had no way to renew it from abroad. These 3 issues made it next to impossible to unravel the knot of repatriation problems.
I had to work through my own Soviet-style “5-Year Plan” to get things back to normal.
I couldn’t rent a car or get an apartment without a job, yet I couldn’t get a job at home without a car and a place to live. Quite a “Catch 22“- a bad situation to be in if you’re an expat wanting to get home.
Then and Now
When the Asian Contagion and Russian Meltdown created havoc around the world, I was an expat living quietly in post-Soviet Azerbaijan.
“The Asian financial crisis that was triggered in July 1997 was a shocker. Even two years after it ended, anxiety still loomed over global financial markets. What was at the time perceived to be a localized currency and financial crisis in Thailand, soon spread to other Southeast Asian countries–including Malaysia, Indonesia and the Philippines.
By the fall of 1997, the contagion extended its reach to South Korea, Hong Kong and China. A global financial meltdown had been ignited. In 1998, Russia and Brazil saw their economies enter a free-fall, and international stock markets, from New York to Tokyo, hit record lows as investors’ confidence was shaken by the volatility and unpredictability in the world’s financial markets.“
Today we have been reminded once again (all too clearly) how intertwined the international currency markets still are, for better or worse. This is why it is important for ALL expats to watch these events carefully.
Expats need to keep their eyes and ears open for signs of change and make certain they have cash on hand in case plane tickets or other cash payments are required. Credit cards are often the first thing to be eliminated in a crisis. Usually US Dollars or Euros will work when other currencies won’t.
That’s one piece of advice I wish I had been given then. My mother was near the end of her life and I had no way to make an emergency flight back to the United States without the help of others. As it turned out, I arrived just in time and she passed away as I held her in my arms. That’s just too close to gamble on. You can see why I take this bit of advice seriously.
Recurring Bad Dream
“March 23, 1998
Russian President Boris Yeltsin abruptly dismisses his entire cabinet, including Prime Minister Viktor Chernomyrdin. Yeltsin appoints Energy Minister Sergei Kirienko as acting premier.”
June 1, 1998
Russia’s stock market crashes and Moscow’s cash reserves dwindle to $14 billion amid unsuccessful attempts to prop up the ruble and pay off burgeoning debts. President Clinton pledges support…
June 12, 1998
Japan announces that its economy is in a recession for the first time in 23 years.
August 3, 1998
Wall Street reacts to the deepening crisis; the Dow plunges 300 points in its third-biggest loss.
August 11, 1998
The Russian market collapses. Trading on the stock market is temporarily suspended. World markets are rocked by fears of a financial meltdown in Asia and Russia.
Vladimir Putin assumes the Presidency of Russia December 31, 1999 as Boris Yeltsin resigns. One of Putin’s first acts is to grant immunity from prosecution to Yeltsin.
April 1, 2000
“Vladimir Putin will be strongly tempted to revert to the traditional paths of autocracy and statism. As a former intelligence officer and head of the secret police, he has the right profile to emerge as a centralizing, strong leader in the tradition of Peter the Great, or even worse, Nicholas I, the preeminent monarch-policeman of the first part of the nineteenth century.
Putin’s entry into the political scene is inescapably connected to the war in Chechnya, which, the critics say, was engineered to launch the “Putin for President” campaign. He may see both the fate of Russia and his rule through the traditional prism of military prowess and conquest.”
In today’s electronic and connected world, change happens much more rapidly. Be alert! Don’t get caught up in work to the exclusion of keeping up with world events. The timeline above shows how rapidly things went from bad to worse in 1998. Today, the situation could deteriorate equally quickly or more so.
For Expats living in any of the former Soviet States in Eastern Europe, or in any of Russia’s trading partner states, the coming weeks will be a time of testing.
As markets get nervous, currencies will feel the pressure. Last time it was the war with Chechnya, this time it’s the Ukraine- what are the chances that’s a coincidence?
A better question: Are you willing to gamble to find out?
- If you have all your savings in local currency, plan to convert some or all before the exchange rates fluctuate away from your favor.
- If you think you may be at risk for evacuation or at least a trip out of harm’s way, have your medical and legal records scanned and on a flash drive that you can keep in a safe place.
- If you think leaving may be necessary, make sure your passports and visa still have at least 6 months left on them before you need to travel- many countries will not issue a visa with less than 6 months left on a passport; some countries will not allow you to return with less than 3 months left on a multi-entry visa.
- If you have assets in local banks, remember that Foreign assets may be frozen in times of stress on banking mechanisms. I had $15,000USD in a local bank and only by sheer insistence was I allowed to make the withdrawal- only to find the bank closed due to insolvency the next morning. (Read Ex-Pat Living: What I Learned… My Plan For Repatriation and Resilience)
- If you have family and pets, think carefully about what you might need if required to evacuate in 30 minutes or less. What happens to your pets if you evacuate? Do you have a “Go Bag” ready for each family member? Contact numbers in hard form in case your phone or electronic data is not accessible (battery dies, different cell system, cell service is jammed, wi-fi is unavailable or unreliable).
- If you have local or non-electronic medical records, read this: Expat blogger Naomi Hattaway just posted a great article on medical preparedness so let me include her link here for you: Healthcare & Medical While Living Abroad. Some very important advice there too.
Overall, the point I’d like you to take away today is simply this: Be alert, Be ready, Be prepared.
Nobody can cover all the problems, but by having a plan and taking precautionary (preparatory) actions, you give yourself and your family a better chance of surviving in times of financial or political/military turmoil.
And, to me, that’s all anyone can ask.
http://www.pbs.org/wgbh/pages/frontline/shows/crash/etc/cron.html (Timeline Events)
Late Update: “To get an idea of the poor hand Putin is playing, look at what happened when markets opened on Monday morning.
Not only did the stock market fall by about 11%, Russia had to spend $10 billion to prop up the Ruble. Putin has ample reserves of nearly $500 billion, but simple arithmetic reveals at that rate Russia won’t last much more than a month and a half. And economic sanctions haven’t even started yet.
There are already reports of dollar shortages on the streets of Moscow—which, I imagine, invokes a flurry of bad memories—a comprehensive sanctions regime would likely bring back the empty shelves and breadlines of the 90’s..