Kalistani Major History

[Doc]

The Great Kalistani Recession:  A retrospectiveA Year later
Kaliburg, Ananto
September 17, 4441


President of the Republic Reina-Rodriguez discusses the State of the Kalistani Economy following the Great Kalistani Recession

The dust has settled, and all economists in Kalistan agree that Kalistan has put years of recession following the assassination of President Al-Khali in its rearview mirror.  The Republic sat down with Al-Khali's replacement, President Reina-Rodriguez, who is beginning the last year of her first term as President.

[The Kalistani Republic's] D[amon] F[ierro]:  Comrade President, welcome.  We're happy to have you provide this interview.

M[aria] R[eina-Rodriguez]:  Thank you.  I don't get down here enough.  I'm happy to finally get a chance to speak with you.

DF:  The recession has been over, by economic definitions, for more than a year now.  Can you give us a brief history of the downturn?

MR:  Sure.  Al-Khali's assassination was only tangentially related to the recession. It happened, we discovered, to coincide with certain currents in the Kalistani economy, which themselves coincided with political currents swirling around at the same time, to create a perfect storm.  This is something that we haven't seen in Kalistan for quite sometime.  The assassination, while we were attempting to negotiate trade deals in both Lourenne and Vanuku touched off a powderkeg of investor insecurity that led us first to the rabbit hole.  And then the reaction of the Government, some missteps at important junctures, and the slowness of recovery all added up to a complete disaster.

DF:  Why did investors get nervous following the death of the President?

MR:  Internal crises, coupled with some decisions we had made to counter the influence of ephemeral Parties in Kalistan made them jittery.  My appointment as Interim President made a lot of the liberals in our society quite spooked.  And then the dissolution of the main opposition Party at about the same time, which was unapologetically a Party of the Right, caused a crisis of confidence on the hard Right, and well, most of those bastards held most of the investments.  Our Ruble was rock solid, and decades of anti-growth policies of the Socialist Party left the Ruble critically strong and the economy teetering on zero percent growth.  As we slipped into a period of deflationary prices, investment from foreign countries could have potentially kept the inflation rate on the positive side, but delays in those negotiations tipped the scales and people started selling.

DF:  And when people started selling overseas how did this turn into a monetary crisis?

MR:  Well, when the sell off began, people started getting laid off.  And when people started getting laid off, they started drawing on their savings to buy things which were becoming fewer and fewer in the market.  The Money was worth more, but there was less to buy.  And meanwhile, more people were drawing on the social safety net, because they were out of work, and requiring more help from the government.  The surplusses we built up for years and years were depleted in months, because tax revenues dropped sharply, and nothing was coming into to replace what we were putting out the door.  To protect the reserve, we had to close the banks.  I finally got the government to finally raise taxes and lay out more money for social services and for job creation, but because the tax bill was not passed at the same time as the spending bill, people saw this as incompetence, and continued to sell off.  And we have to keep the banks closed.

DF:  Eventually, foreign investors rushed in and began investing.  What effect did this have?

MR:  Of course: they waited until they could snatch up a bunch of Kalistani stock super cheap.  So you will forgive me if I don't count foreign investors as saviors of the nation.  We were lucky and found local investors to partner with the foreigners.  And we started putting putting people back to work.  Soon, money began trickling back into the treasury, and we were able to open the bank again., and we haven't closed it since August of last year. By the beginning of this year, we got the currency problems back under control, and purchased back the first batch of District scrip.  The increased confidence in the Ruble, and soon, the New Ruble had fully replaced the old one.  We opened new businesses across the Republic, divested the KALNAMOCO, and put a lot of people back to work. The last two quarters were positive for job creation.  Though things are pretty anemic, economists predict that we will spend the next decade rebuilding from the economic storm that swept the country.  Which means that there will be bad months, there will be a lot of months where we don't hit our targets and so forth.  But I want to stress, the Republic is back in business.

DF:  Any final words?

MR.  Yes, we'll be opening a stock exchange and all Kalistani owned companies which are publicly traded will be listed there, rather than in foreign exchanges which the Government has no control over.  I don't want to cast aspersions, but, it is better to keep commodities and securities trading at home.

DF:  Very well.  From The Republic, thank you.

MR:  You're totally welcomed.