Please begrudge me the quote from V for Vendetta,  but I’m really starting to worry about what’s going on in the United Kingdom.

On Wednesday I wrote about the UK’s “Interception Modernisation Programme.” New rules under the program require wireless companies and internet service providers to archive phone records, web history, and emails for a period of 12 months, and to make that data available to 600+ government agencies without a warrant.

Naturally, the erosion of privacy was absolutely shocking, and I was sickened… at least until the next day when I read an even more disturbing story, also out of the UK.

Now the British government has announced that it is going to maintain DNA profiles of innocent people for ‘only’ six years. 

You see, this is actually a shift in policy. Since being established in 1995, the government has built up it’s “National DNA Database” to over 4.7 million people, and it grows by 30,000 per month. This is about 7.6% of the population. Oh yeah, and it costs British taxpayers about $100 million/year.

How did the database get so large? The UK’s Criminal Justice Act of 2003 authorized DNA samples to be taken by police on everyone they arrest or detain… you don’t even have to be charged with a crime.

Without any consent whatsoever, police can take oral swabs, footwear impressions, fingerprints, and in some cases blood, urine, semen, and dental impressions.

Until now, the British government has maintained DNA profiles indefinitely, even for people who had been found innocent and released from police custody without ever having been charged. 

In a historic case, the European Court of Human Rights recently ruled that Britain’s policy of keeping the DNA data indefinitely was a clear violation of human rights… so on Wednesday, the British government announced that it would discard innocents’ DNA profiles after 6 years.

The great irony with both the DNA compromise and the Interception Modernisation Programme is that they were announced right around the same time that European leaders were collectively celebrating the end of communist tyranny and the secret police.

Naturally, the British government doesn’t consider keeping DNA records to be remotely totalitarian; rather, authorities maintain that the information helps the war on crime and terrorism.

According to the government’s statistics, 6,504 rape and murder crime scenes over the last 8-years have had DNA evidence matching a profile in the national database.  Apparently this is supposed to make people rest easy.

Personally, I’m left wondering about the other 4.7 million DNA profiles that weren’t involved in these crimes. I’m also left wondering how many of the 6,504 profile matches just coincidentally happened to be near the crime scene but were not involved with any criminal act…?

The scariest part is the following line I copied from the government’s website– 
“Maintaining and developing the [DNA] database is one of the government’s top priorities.”

I almost passed out when I read it.

Yes, I recognize that there are people out there who believe that, “hey, if you have nothing to hide, why are you so concerned about the government monitoring your emails or maintaining your DNA records?”

This ‘nothing to hide, nothing to fear’ argument is flawed for two key reasons.

First, it means that the individual agrees to a ‘guilty until proven innocent’ paradigm; in this case, you may have nothing to hide, but you are agreeing that the government will assume your guilt until it goes through your private affairs to prove innocence.

Second, it is the mother of slippery slopes. In a span of three days, the British government has announced its electronic surveillance program, and now an insipid response to the European Court of Human Rights for its DNA database standards.

What will it be tomorrow for the Brits– a national ID card? Oh wait, that’s in the works already.

Look, I’m an incredibly positive and optimistic person, but these clowns are really going down a dangerous path… rather than spend an entire letter decrying the British government’s complete disregard for civil liberties, however, I will leave you with a few suggestions.

If you’re looking for privacy, stick to smaller countries that would never cough up so much money for complicated DNA databases. Panama comes to mind. Croatia. The Philippines. Chile. Moldova. Tanzania. Ecuador. Mongolia. Uruguay. 

I will be discussing these in more detail, and next week try to write something up about PGP and email security as I promised on Wednesday.

Of course, I’d like to hear from you about your own experiences.

I’ll admit, even I was surprised.

When I think about Asia growth and investment opportunities, places like Singapore, Thailand, Vietnam, and even the Philippines come to mind.  But lately, in my regular discussions with key Asia contacts– brokers, sovereign wealth fund analysts, etc., one place keeps coming up again and again.

Mongolia.

Mongolia is one of the largest, most resource rich countries in the world with a population smaller than Panama– that’s a lower population density than Wyoming.  And with such a low population to support with its abundant resources, the country has the good fortune of being sandwiched in between resource-hungry China and Russia.

Many of my friends and colleagues who are based in Asia make routine trips to Mongolia and describe it as the Wild West– young, fast-paced, and full of opportunities with neither the benefits nor restrictions of established structure.

My old friend Christine Verone, who has an uncanny 6th sense about Asian markets, recently sent me this in an email:

———–

I’m not buying in China right now because I’m not seeing the right indications from the government yet. I will let you know when things change and we can start making money in Shanghai again. In the meantime I am buying in Mongolia as fast as possible.

The stock exchange there is among the smallest in the world; it had a 68% run-up but has since rebalanced to 50% below that level, and there are some fantastic buys. Aside from the broad “metals and mining” sector which is all most people know about Mongolia, there are many plays to found in uranium, cashmere, agriculture… and even new changes in toll roads and water.

It can be seen as another way to play China seeing as nearly 80% of their exports are to the mainland, and an absolute tidal wave of Chinese money is being invested in Mongolia– new infrastructure, luxury hotels, telecom deals, real estate developments, etc.

Everyone from American Express to Ericsson to ZTE is establishing themselves in Mongolia– even Blackberry is launching service in the country… all because a flood of investment dollars and joint venture projects to tap natural resource wealth is creating legitimate, overwhelming demand for services.

I am also looking at clues in demographics– population trends are good predictors for change, and Mongolia is a country that is dominated by young people: 70% of the population is under the age of 35.  This means that they move extraordinarily quickly and are hungry to get deals done.

The stock exchange was started in the 1990s by a 26-year old entrepreneur– this culture is full of people who want to make things happen.

In contrast to my time working in Switzerland in private wealth management, the Mongols move at light speed.  If I were you, I would get this out to your community to see if there’s any interest… and I would suggest two things:

1) The Mongolian Stock Exchange is sitting on multi-year lows; the entire market capitalization is less than $250 million, and daily turnover is often less than $1 million… so institutional capital tends to move prices in a big way.

It’s fairly transparent for foreign investors to get in to this market– which is exactly what I am doing right now. My guess is that there will be a Mongolia ETF very soon once the market has tripled and you start hearing about it on CNBC.

Too late in my book.

2) I know you have a lot of expats who read your letter and are looking for a place to go… I would highly suggest Mongolia– if you have the means and are looking for adventure, Mongolia is a land of opportunity.

Mongolian entrepreneurs are itching to do JV deals with subject matter experts to bring new services to the country… and there’s no such thing as ‘paying your dues’ in Mongolia. You show up, and if you’re smart, you move to the top of the food chain immediately.”

———-

Simon again. What Christine says rings absolutely true… to me, the biggest benefit of living the expatriate lifestyle isn’t the cultural adventure or cheap cost of living– it’s being able to immediately plug in to the movers and shakers who can get deals done and make things happen.

In New York City, San Francisco, LA, etc., it can take years to clutch and claw your way up the ladder and get noticed. Around the world, though, in places like Colombia, Mongolia, Palau, and Panama, it’s possible to become a player very quickly.

Before moving anywhere, though, it’s always a good idea to see the country first hand and scout the opportunities for yourself on the ground. If you’re interested in Mongolia, consider checking out the annual Mongol Rally which takes place in September each year… there is no more unique way to see a country in my opinion.

Let me know if you want to hear more about investing in or moving to Mongolia, and I will do my best to answer your questions.