MY BIG mistake was investing in a Third World country without first researching its political stability.
In 1989 my brother-in-law and I opened two factories in Haiti, where my wife is from. It wasn't the first time I had done business there; we had a factory in 1979 that made garments for export but closed it seven years later when its success began to wane. This time I had done a deal with a well-known jewellery wholesaler in the US, winning a five-year contract to make rings and bracelets.
The situation in Haiti was that Brigadier-General Prosper Avril had ousted General Henri Namphy and installed a civilian government under military control. The US had resumed aid to Haiti and, since manufacturing costs were very low there, it was an opportunity to make a good return on my investment.
I had put dollars 200,000 (pounds 130,000) of my own money into this project. Once it was up and running I returned to London to continue with my other responsibilities, leaving my wife in charge. Twice a month I flew to Haiti to make sure all was well, and at first the future looked good.
We employed 400 workers in each factory, all of whom had had to be specially trained. Every week dollars 1m of gold would arrive from the US to be made into jewellery. By the end of the first year our factories were making substantial profits and our company, Handimax, was off to a good start.
We had only been going for about two years when the political situation in Haiti deteriorated and the insurance companies refused to underwrite the gold shipments. As a result, the suppliers refused to send them. So we suddenly found ourselves with two factories and 800 workers, but no gold. Without raw material we were forced to stop production and close the operation. It was as simple as that.
One reason that this was my biggest mistake is that, since 1972, in addition to being in business, I had a parallel career as a journalist specialising in politics and economics. I had been a magazine editor in the Arab world and even wrote a book analysing the Gulf war.
Yet I had failed to study the political situation in Haiti before investing my own money. I should have had a better grasp than most people of what was likely to happen in the future. Instead, I made decisions based on the status quo, even though the country had a history of dictatorship and military takeovers.
Now that the Clinton administration has taken a stand on Haiti, it is suffering even more acutely from a lack of money and lack of work. There are no flights, no medical supplies, no petrol, and so on. Meanwhile, our factories are still sitting there empty.
The first lesson it taught me was that before you invest in a Third World country, you must make sure you are able to see politically at least six or seven years ahead, because it will take that long to make a good return on your money.
The second lesson was not to be greedy. One of the reasons that so many companies manufactured in Haiti was that the workers were only paid about dollars 60 a month, which meant there was a lot of money to be made.
It also taught me to avoid dictatorships. There is nothing wrong with doing business in a Third World country that is politically stable, but it must be a democracy.