NationStates Jolt Archive


A Play for Foreign Exchange

Undershi
11-08-2007, 02:24
Undershi City, Undershi Province, The Undershi Empire

Aleksander Miller, the Leader of the Undershi Empire, rubbed his chin as he listened to the men from the Ministry of Foreign Affairs speak. He'd already heard the delegation from the Ministry of Production speak, and he had to admit, their words had been more appealing. They had said that Undershi had the resources to export - everything from excess oil, practically unheard of in an industrialized nation, and not available in large quantities even in Undershi where more than eighty percent of all electricity was generated with atomic power. But still enough to export. Or they could send diamonds, or tin or silver or iron or even wheat - the massive agricultural projects of the western steppes produced an amazing surpluss in grains most years, after all.

They could even export industrial machinery - they had the factories to make it, and man-power was never in short supply... any finished product could be made, really. They could not make luxury goods, though - they lacked few areas of manufacturing, but that was one of them. It was just that... well, True Undershis were supposed to make a virtue of austerity, and the norms, those illiterate slave masses, could not really afoard any luxuries.

It was the problem of the norms which kept coming up in the speach made by the men from the Ministry of Foreign Affairs. Because almost all, in fact basically all, Undershi products were made by norm workers who were little better than slaves... albeit slaves with decent health care and tolerable living conditions... and it seemed that no foreign nation really wanted to purchase Undershi products under those conditions.

The head of the Ministry of Foreign Affairs delegation kept speaking, and Aleksander listened:

"We do indeed conduct a great deal of commerce with our allies within the Corporate Alliance, but it is effectively a closed system, more so since the war with the NPE began. We trade with eachother, generating wealth, but are cut off from the wider world, at least to a large extent. We have had some success marketing our products through front companies to nations which do not have trading agreements with us... but such things have recently backfired - as is witnessed by recent events in The World Soviet Party, where some damned norm escaped inside of a shipping crate, which is now leading to the front company we employed for the shippment he was in losing all credability. It is collapsing as we speak - soon we will have no choice but to liquidate its assets and attempt a new begining." the man kept speaking for a while after that, going on about various concerns, before making a closing appeal:

"In this modern era, we must increasingly turn to trade as a source of wealth. And not just trade in raw materials! That was fine when we were selling tin and lumber to buy rifles to pacify the tribesmen in the western steppes. Now we are an industrial power, with factories and cities of our own. Now we must sell to the world. In our father's time, conquest was the quickest route to wealth. When we beat the Northlanders, we nearly doubled our industrial capacity. Nowadays, though..." he trailed off for a moment, before begining again:

"Nowadays, though, we find that military conquest has continually lesser returns. Twelve years ago we took Paxton, and we barely broke even on the exchange. Four years ago we took Jenshalem, a tiny nation with huge oil reserves. There we were able to turn a profit. Now there is the matter of Saint Rynald, our most recent conquest. There are still guerillas and terrorists on the loose there, as is the case in Southlands Province. Already we have outdone ourselves in brutality, crucifying thousands and slaughtering tens of thousands... and, such tactics are working. Saint Rynald Province is being brought into a state of order. However, costs are rising. We are already in the red as far as Saint Rynald is concerned - we will need to work the norms there for years, in as brutal a fashion as possible, in order to break even with the costs of the occupation. Future conquests are likely to be even more costly." Aleksander nodded, and, taking the nod as a cue, the speaker continued:

"Military conquest is clearly not the way to go. Military actions cost more - in the past, even as late as the early phases of the war against Northland, all that you needed to have a deadly force was 10,000 bolt-action rifles and a few machine-guns. Now we need tanks and airplanes and carriers and airborn divisions and mechanized divisions. In other words, war has become more expensive. Already it is no longer a profitable venture." Aleksander nodded again, so he continued:

"So we need trade, we need trade if we are going to make the wealth we need." and the Leader of Undershi nodded for a third time, and smilled, and clapped, and asked:

"And how do you suggest we go about acquiring foreign contacts when no liberal nation would touch our products with a ten-foot-pole?"

The speaker smilled, and replied:

"A simple answer. Sell to developing nations."

Official Undershi Announcement

The Undershi Government is pleased to offer ultra low cost industrial machinery to developing nations. A wide range of options are available, including machinery for the production of textiles, steel, automobiles, chemicals and a wide range of other goods.

Interested parties are invited to contact the Undershi government.
Kilrany
11-08-2007, 03:41
Pavel Kasatikin, the Kilrany Empire’s current Foreign Affairs Minister, smiled as he stood up out of his seat and offered his hand across his desk to his colleague, Yuliya Katinya, Minister of Finance. Both Kilrany were in their mid forties and wore respectable tailored suits that hid their equally respectable physical build, “Good afternoon Yuliya, thank you for coming so soon.”

Katinya accepted Kasatikin’s hand in a firm handshake before she took a seat in front of his desk, Kasatikin sitting down as she did “No problem Pavel, to what do I owe this pleasure?”

“The Diplomatic Corp. recently got wind of an announcement from the ‘Undershi government.”

“Never heard of them.”

“We’ve never had any dealings with them in the past, but from what we can tell they’re a fairly large nation, industrialized. They’ve recently announce they’re looking for new international trade partners, now it would seem it was directed at developing nations, but the Emperor agrees with me that it’s worth contacting them anyway.”

“Go on …”

“We’re running into slight difficulties in Khurzav, we’ve been keeping them quiet for the time being because we’ve been able to compensate for certain short comings. But we’re going to need more equipment, more importantly foodstuffs, too keep everything running smoothly. The military did it’s best not to destroy Khurzav infrastructure, but their farmland took a major beating in the war, entire crops were obliterated in artillery barrages and bombings, farm equipment lost. We just can’t replace it all overnight, and we’ve yet to get all Khurzav’s manufacturing up to full production again.”

“ … What’s the catch?”

“Apparently the Undershi are not exactly popular in how they treat their workers. I don’t know all the details, but they’re not treated as well as most like. I’m not entirely fond of the idea, but they have surplus that we’re going to need to keep things running in Khurzav for the time being. We don’t need people starving and rioting, it only brings the attention of meddlesome, busybody nations.”

He picked up a file folder off his desk and leaning forward he passed it to her, “That contains a brief of the situation and most of what we’d like you to try and acquire from the Undershi. I doubt they’d turn down business from us even if were not a developing nation.”

Both of them grinned slightly, “Alright Pavel, I’ll read through this and draft a message, see if I can drum up some trade for you.”

As Katinya stood up to leave Kasatikin smiled and gave her a parting thanks.

-----

Sealed diplomatic communication

To whom it may concern

Greetings to you of the Undershi government, on behalf of his highness, Emperor Ivan Sviatov, I contact you now in the hopes of establishing a trade agreement with your fine nation. Recently we were forced to intercede in a war taking part along our border and despite our efforts to limit collateral damage it has left a nation injured. While we currently are administrating the country, we have need of foreign suppliers to properly rebuild the nation.

We seek to buy large amounts of grain, farm and machinist equipment and heavy construction machinery; bulldozers, large dump trucks, front end loaders, etc …

If you are interested in doing business with us please respond with what you are willing to sell us along these lines and the prices you are willing to sell them at. To note, we are more then capable of transporting the goods through our own container and transport ships, so you need not calculate the cost of overseas transport.

I await your reply.

Kilrany Minister of Finance
Yuliya Katinya
Undershi
11-08-2007, 04:32
From: Aleksander Miller, Leader of The Undershi Empire
To: Yuliya Katinya Kilrany, Minister of Finance of The Kilrany Empire
Re: Trade agreement
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The Undershi government welcomes your overtures. Our own agricultural yields are more than sufficient to meet any requirements you might have, as is our capacity to produce the farming equippment and industrial machines you described.

You have not given us specifics as to exactly how much you are interested in purchasing, although we are aware of the areas that interest you. As far as our capabilities are concerned, you have simply to name an ammount and we will be able to match that ammount in production.

In terms of grain, we are prepared to offer five kilos for one USD. In terms of construction eqipment, matters become more complex - trucks and bulldozers could sell for as little as 10,000 USD each as a special offer. However, Undershi only produces one model of truck, the Ox. Different variants of the Ox can be used in different roles, however.

As for industrial equippment, individual units are available for several hundred USDs - prices varry depending upon which type of machine is in concern. Entire sets of equippment for a factory can be purchased for about 30,000 USDs, with the additional offer of trained opperators available with purchase, either enough workers to run the factory or merely train the new workers. The cost for a trained worker varies by specialty, but not greatly. On average, a single skilled worker would cost 1,000 USDs.

We hope these terms are acceptable to your government. We acknowledge that our prices might seem suprisingly low, but we can indeed still turn an honest profit - we produce nearly all of our raw materials at very low costs, and the cost of labor in Undershi is extremely low as well.
Vetalia
11-08-2007, 04:57
Ministry of Trade

The Vetalian government would like to negotiate the purchase of 200 million tons of steel and 5 billion tons of petrochemicals for use and testing to see if these goods are of suitable quality for use in our military industries. Our machinery for producing these goods is among the best in the world, but the sheer pressure of arming and equipping our troops requires us to go beyond domestic production for imports. Price estimates for these goods would be appreciated so that we could determine if it is economical to pursue this deal.

Any potential deals will be paid for in hard currency, our Vetalian Solaris, which currently exchange for 1 to $1.86 USD.

Further discussion will be conducted through official communique,
Proconsul Vladimir Trepov, MoT
Undershi
11-08-2007, 05:12
From: The Undershi Ministry of Foreign Affairs, Sub-Ministry of Trade
To: Proconsul Vladimir Trepov, MoT
Re: Proposed plans
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The current price for steel on the international market is, accoarding to our research, 280 USD per ton. We would, however, be prepared to sell you steel for as little as 235 USD per ton, as due to our low labor costs, lack of enviornmental regulations andlow raw material costs, we would still be able to turn a profit.

As for petrochemical products, there exists a wide range of such products, available at a wide range of prices. We would be willing to send you a sample kit of common Undershi petrochemical products, however, until a clear explenation is made of which particular products you are interested in, a precise price quote is not possible.

As far as your request for steel is concerned, at our reasonable offer of 235 USD per ton, your requested purchase of two hundred million tons would come out to fourty seven billion dollars.

If you are still interested, we can begin delivery of the steel immediatly.
Kilrany
11-08-2007, 19:55
Katinya smiled as she read the reply she had received from the Undershi, rather pleased that the foreign government was willing to do business with them after all. Lifting the same folder Kasatikin had given her the day before, she double-checked the figured listed within. She had intentionally kept the specifics out of the original message to the Undershi most to save a little time incase the Undershi chose not to do deal with them in the end.

After taking a few moments to check the figures and do some minor calculations she drafted a new message, though she hesitated at first as to whom to send the message to. Though the reply had said it came from the leader of Undershi, she wondered if that was indeed who she should send the list too, thinking it odd that the leader of the nation would concern himself with the minor details of a trade agreement such as this, however, she quickly pushed that thought aside as it occurred to her that the Emperor was often involved in such mattes as well.

-----

Sealed Diplomatic Communication

To: Aleksander Miller, Leader of The Undershi Empire

I am pleased that you have decided to do business with us, as I’m sure the Emperor will be as well, I will keep this short however and give you a proper list of what we would like to acquire, and the number.

To begin with we would like to purchase five hundred thousand (500,000) metric tons of grain each month for the next year. My calculations put that at one hundred million (100,000,000) USD per shipment. If this is acceptable, payment would be received each month, as the order is to be loaded. I would also state now that we may wish to extend for another year if required.

Second we would like to purchase thirty-five thousand (35,000) trucks and five thousand (5,000) bulldozers a month for six months. My calculations put forty thousand (40,000) such vehicles at your quote to be four hundred million (400,000,000) USD a month.

Third, we will need to acquire enough machining equipment to properly outfit ten textile factories, five pulp mills and forty meat processing facilities. At your quote I calculate that to come to fifty-fifty (55) factory sets, coming to roughly one million, six hundred and fifty thousand (1,650,000) USD. However given the implied message to this regards, we recognize that the individual price per set could be slightly different and we are willing to alter the figure accordingly.

For the time being this is all we require, though I can promise that should these dealings go well, we will consider your nation for more such business transactions in the future.

Kilrany Minister of Finance
Yuliya Katinya
Undershi
11-08-2007, 21:25
From: Aleksander Miller, Leader of the Undershi Empire
To: Yuliya Katinya Kilrany, Minister of Finance of The Kilrany Empire
Re: Order
--------------------------------------------------------------------------

The figures you have named are, for the most part, acceptable. As far as the offer for the industrial equipment was concerned, the figure you suggested was indeed close to the price we are willing to offer, but unfortunately did not exactly match it. We would like to request a total payment of 1,750,000 USDs as opposed to your previous offer. We hope that this will not negatively affect your acceptance of this deal.

Total costs will be 501,750,000 USDs for the first month, then five hundred million per month for another five months after that, and then a mere one hundred million USDs for six months after that.

Payment could take the form of gold, currency or SDRs (Special Drawing Rights). Additionally, if your nation produces rubber, we would be interested in recieving some portion of our payment in the form of a discount on rubber imports - rubber is one of the few things that the Undershi Empire needs but does not produce.

Hopefully a deal will be reached - we look forward to trade between our nations, and to perhaps an improvement in relations.

On a side note, a pair of Undershi destroyers has been dispatched to Novajey - we hope they might prove useful in the problems you are encountering with your protectorate.
Vetalia
11-08-2007, 21:34
The final parts of the deal were handled informally through a conference call to the Undershi government. Proconsul Trepov personally called to finalize the deal with the government while having his staff prepare the formal documentation for the purchase.

"Our country will be willing to purchase the aforementioned 200 million tons of steel at the market price of S150 per ton, primarily due to the laws against dumping of products on the market below the established price. This comes to approximately 30 billion Solaris for the full delivery without taxes, which will work out to an additional 8.7 billion Solaris in payment to your country, assuming standard excise fees of 29%.

We would also like a sampling of your petrochemical products for quality testing and will pay a total of 100 million Solaris for one ton of each product you produce. This comes to S38.8 billion for the entire purchase. Funds will be wired as soon as possible and we begin payment upon reception and inspection of the steel.

All purchases and payments will be in Solaris, since it is a more valuable hard currency for foreign reserves and purchases than the USD."
Kilrany
12-08-2007, 03:25
OOC: Special Drawing Rights? Not heard that term before, what’s it mean?

Katinya subconsciously nodded her head as she read over the counter-offer of sorts from the Undershi, she had anticipated a potential change in the amount for that particular section of the offer, and the minor adjustment was well within reason. She thought about the method of payment for a moment, though the Empire wasn’t in dire need of rubber, there wasn’t a substantial surplus, she doubted it would make a significant impact. Quickly she went to work to draft up a simple and quick reply to seal the deal.

-----

Sealed Diplomatic Communication

To: Aleksander Miller, Leader of The Undershi Empire

We find your terms quite acceptable, and in accordance to the figures mentioned in your last communiqué, I would like to formally accept these terms. Unfortunately as half our own rubber supply comes from imports, we do not have a significant enough surplus to offer in trade.

Our form of payment will need to come in the form of currency, as long as this is acceptable to you, I believe we can close this deal.

Kilrany Minister of Finance
Yuliya Katinya
Undershi
13-08-2007, 03:54
The response to the Vetalian government was simple enough - they accepted the offer, and prepared a shippment of petrochemical products. Considering the huge number of substances that fell under the heading of 'petrochemical products,' they restricted themselves to the more interesting and high value substances.

This list included the following:

- Ethylene, a chemical used to artificially rippen fruit.
- Polyester (the synthetic fabric)
- Synthetic rubber (an Undershi specialty, since rubber is one of the few things Undershi imprts in quantities)
- Epoxy resins
- Nylon (which has many more uses than just clothing)
- Several different kinds of chemicals used in animal feed
- Polyvinyl Chloride (PVC)
- Undershi-made anti-freeze
- Undershi-made industrial solvents
- A letter advising that if additional specific substances were requested, they would be delivered for consideration at no extra cost.

--------------------------------------------------------------------------

From: Aleksander Miller
To: Yuliya Katinya Kilrany, Minister of Finance of The Kilrany Empire
Re: Agreement
--------------------------------------------------------------------------

The Undershi government is happy to accept your currency. Delivery will begin as soon as your freighters arrive in our harbours. We look forward to any further buissiness our two nations might enter into in the future.

OOC: Special Drawing Rights are a real life monetary unit issued by the International Monetary Fund and used in international trade between nations. Basically, their purpose is to allow international shifts in money without the need to ship gold across the border.