Kalistan

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Minister Marian Divya Jones ushers in new "Imperial Economics"
"A new way forward" aims to tie foreign economies to Kalistan
Kaliburg Grand Duchy of Ananto
October 18, 5582


Her Imperial Majesty's Finance Minister Marian Jones brings a new approach to "Imperial Economics"

The Finance Minister of the Anantonese Empire is not a person who usually makes the front page of The Kalistani Republic daily.  "It is widely believed that if the Finance Minister is in the press, that is a bad thing," said Her Imperial Majesty's Minister for Finance, Marian Divya Jones.  "But I think the correct funding of Government programs is certainly something that needs to be paid attention to, because it is literally how we pay for everything else.  It is, you might say, the beating heart of the modern bureaucratic state."

Never one to shy away from a little self-aggrandizement, Minister Marian Jones nonetheless remains down to earth.  "There is only so much I can do as finance minister.  I happen to possess a lot of tools that my colleagues in liberal nations do not possess.  For example, I can fund by definition, non-profitable sectors, like public heath, with eternally profitable sectors, like our National Steel Industry or the royalties Kalistan earns from ODEN, and balance our books.  I can take steps to protect our entire economy against global commodity shocks, and ensure that our currency holds its value, whereas people in liberal nations, whether they admit it or not, are almost entirely at the mercy of the chaos caused by allowing egoist individuals make individually rational, but collectively irrational decisions and calling that a market.  That said, I am not a miracle worker, and a lot of the things I do are reacting to foreign events, using the levers I have available to me to shore up here, to recycle there and keep the ship of state on an even fiscal footing."

To do so, Jones has, to date, maintained many of the policies of her predecessors.  "Massive government surpluses, for example, not only mop up extra money in the economy, keeping inflation at almost nothing, but also provide Her Imperial Majesty's government with a more than adequate rainy day fund, which can be drawn upon, spent down and etc, as needed, and is then annually topped off, without putting budget pressure on any one or several sectors.  It works.  It has worked for thousands of years.  What we don't use, above and beyond the permanent rainy day fund, is simply zeroed out at the end of the year.  We have no foreign debt, the Trade Minister astutely and obsessively manages the trade balance, and we don't live outside of our means.  The people and Kalistani businesses benefit from a regular and expected tax rate and know that when there is a need, the Government can step in and fund the entire operation of the Government for two years without a single cent of revenue if needed.  It works, it ensures low wealth inequality in the Empire, and ensures all have what they need to live happy lives."

But Jones also would like to innovate with some of her tools.  "We would like to renew our push to make the Kalistani Ruble a stronger international competitor against currencies like the LFR.  Not saying we want other nations to peg their currency to the Imperial Ruble; only that we would prefer they trade with Imperial Rubles and purchase Rubles as a solid, slow growth investment with ZPG policies underlying the currency.  If you would like to protect your national wealth from wild swings of market based currencies, the Imperial Ruble should be the choice for you.  If you see currency purchases as an opportunity to earn lots of money through speculation, while suffering the equally likely chance that you will be left holding the bag if that currency tanks, the Ruble is not for you.  But every nation and most private investors should have a stock of Rubles in their portfolio because it is a good way to stash money in a vault for the long term, essentially.  Its value will grow slowly and steadily, and when you come back to it in thirty years, the value of it will have doubled.  Its a better bet than you will often get when you play the market.  Not always of course, but most of the time, especially over the long term."

To promote this "new way forward" as Jones describes, she wishes to encourage nations to use the Kalistani Foreign Investment Bank.  "Deposit in LFR, or some market based currency, withdraw in Rubles.  It's fast, it's cheap and it's secure.  It's the best way to acquire Rubles internationally, and best of all, it will protect your investments against practically any economic swing one way or another."  The Bank earns its money in fees which it collects on deposits and withdraws of foreign currency denominations.  "A 1 percent deposit and withdraw cambio fee is applied each time.  The Bank needs that to protect its own investments against market downturns," said Jones.  "Because when the Bank buys LFR, for example, at a specific rate, and tomorrow the LFR tanks, the Bank will be the ones holding the bag.  So the markup, especially on the front end is hedging against the market."

This promotion of the Imperial Ruble into new areas is part of a broader strategy where the Empire seeks to subtly insinuate itself into foreign economies.  "We trade the safety of the Ruble for the ability of Kalistan to work with foreign economies," said Minister Jones.  "Naturally, we don't expect other nations, like Kundrati, for example, who may wish to purchase Rubles, to politically unify with the Anantonese Empire.  But if they hold Rubles, they are more than likely going to want to spend them.  And where will they spend them?  Certainly not Luthori.  Instead, they will spend them in Kalistan.  Selling Rubles abroad opens our markets to new customers.  And every purchase Kundrati makes from Kalistan is a purchase they are not making from Luthori.  It therefore works to tie Kundrati closer to Kalistan, making us more attractive, relatively speaking than someone like Luthori who doesn't accept our currency."

The sale of Rubles through the For-In Bank will also protect Kalistan against tariff regimes imposed on Kalistani goods by nationalistic governments.  "If they have to pay in Rubles, they pay in rubles.  We still make the full value of our money, and then the tariffs are slapped on to foreign goods when those goods arrive in the sanctioning country.  The tariffs do not hurt Kalistani manufacturers.  They hurt the consumers of the countries who are imposing the tariffs.  But by the time the tariff is actually imposed, we have already sold the thing:  We already have the money, denominated in Kalistani Imperial Rubles, and we've already paid our workers, factories and distributors.  and if those countries buy less from us because of tariffs, well, we just sell to someone else, or shift those industrial resources into a new sector.  Because the Empire is not a liberal state, we find ourselves able to sidestep any economic pain imposed on us by protective tariffs with ease."

The new approach to promotion of the Kalistani Currency abroad has been the primary task assigned to Minister Jones by Her Imperial Majesty.  "The Empress has commanded me to take all steps to improve the image of the Imperial Ruble in other nations.  This was part of the reason for the redesign of the currency:  not only will a currency with solid anti-counterfeit measures included protect the integrity of the money supply, but it will increase confidence that the currency will hold its value."  The Minister is also interested in new requirements for use of the currency in Gaduridos, which currently uses LFR as their currency but must also legally accept the Ruble.  "We are looking at requirements that the Kingdom of Gaduri pay its imperial fees, as laid out in the Articles of Empire, in Kalistani Imperial Rubles.  The only difference this will mean for Gaduridos is that they will have to acquire Rubles, either from the people who use them locally, or purchase them directly from Kalistan to pay the tax.  This will increase the pressure in Gaduri society to increase acquisition of Imperial Rubles as opposed to LFR (especially if the Government of Gaduridos imposes taxes payable in Rubles) and will deepen the financial bonds between our two nations."  Changes along these lines remain under review and Ms. Jones will seek input from the Gaduri Government.

"Whatever happens," said Minister Jones, "the Anantonese Empire is entering into a period of Imperial Economics.  These economics will be built to promote the Empire over all else, and to bring those we are close with closer to us.  It is a form of soft competition, I suppose, on the International scale, and doesn't seek to complement what other nations are doing or integrate us into an international, global economy.  It is instead pragmatic and self-interested, and it is our hope that we can offer those who are not interested in what others are selling, to take a look instead at the advantages that association with the Empire can offer.  Kalistan will be fine.  Gaduridos will be fine.  With or without other nations.  But others can gain advantages working with Her Imperial Majesty that they simply will not get working with market based economies.  Stability is chief among them.  They won't get fabulously wealthy like they would with market based approaches.  But also, they will never be poor either.  That's a trade off, for sure, but the Empire comes out ahead in the final analysis over the long term."