A Battle Unseen

[Elena1012]

A Petition
March 3rd, 5693
Metz-Leonid, Karoboro Canton
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To; Commissar of the Peoples Committee of Financial Management, Tamdin Tamang
From; Deputy of the Sub-Committee of Monetary Management, Metok Chopin

Subject; Looming Trade Deficit Issues & Potential Resolution(s)
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It's no secret that trade is a major avenue for Xsampa. It is also no secret that we're surrounded by capitalism globally. Xsampa is a lone socialist island. While Alter-Globalism has seen us push forward into the global market more and more, while still protecting socialism, there is an issue looming. As stated in an earlier report last December, there is a looming trade deficit. It's not that foreign economies are out producing us. Rather, we're suffering from success.  There is demand for our goods, but we are paid with currency that is for all intents and purposes, functionally useless in Xsampa. It can't be spent domestically, and presents 3 glaring issues that must be resolved.

Issue one; this is an inefficient use of foreign reserves. Export payments are remaining idle, and produce little to no value and zero strategic value.

Issue two; this presents a looming trade imbalance risk. Continuing the status quo and allowing for this proverbial mountain of useless foreign money to accumulate will likely result in future headaches, and lead to diplomatic or even economic tensions with trading partners.

Issue three; this is causing missed development opportunities. As of 5693, Xsampa formally lacks a proper, legal, coherent and controlled mechanism to deploy foreign currency abroad for usage (whether it be buying foreign debt, expanding the New Hope Initiative, Investment or stabilizing trade).

Last month, the Sub-Committee of Monetary Management petitioned the People's Committee of Financial Management regarding foreign currency and accepting it, akin to how the Egelian Crown is accepted and used in Xsampa. This petition was shot down. The Sub-Committee of Monetary Management has been working day and night to find a solution, one that is not only aligned with socialism, but realistically possible, tangible and able to pass not only the People's Committee of Financial Management but also the People's Assembly of Xsampa and the Premier. 

After much effort, I would like to formally petition the People's Committee of Financial Management once again regarding our new solution. The External Value Reserve (EVR). Otherwise refered to as the Jar.

If endorsed, the EVR would collect all foreign currency in Xsampa, and all foreign currency made from exports would be deposited into the EVR. 

To ensure domestic economic and financial stability, no foreign currency may be permitted to float within the Xsampan Internal Market. The Egelian Crown is exempt from this as per BREFA. No citizen, Social Enterprise (domestic or foreign), or Local Committee may be in possession of foreign currency, or exchange it. All must return it to the EVR and will be compensated in Xsampan Peoples Tangka's.

Funds within the EVR would be used exclusively for foreign matters. Such matters may include the New Hope Initiative, purchases of foreign debt, payments for imports to stabilize trade, and support for diplomatic goals established by PAX.

If approved, expected benefits are as follows;

The looming trade deficit would be significantly mitigated, albeit not erased. By actively deploying foreign currency and putting it to usage, the EVR (informally the Jar) transforms idle, useless foreign reserves into productive assets, reducing the practical burden of trade imbalances that may arise within the future.

Monetary stability would be safeguarded, as the People's Tangka would remain fully in state control, and not pegged to a foreign currency (thus threatening state power over the economy, and threatening socialism).

Strategic leverage would also be applicable, if desirable. The EVR would ensure a legal, and transparent mechanism for soft power engagement (via efforts such as the New Hope Initiative) and long term investment.

Finally, and most importantly, alignment with socialist principals. Domestic markets remain safe and secure from capitalist infiltration or quasi capitalist actors.

It is worth considering, should this petition be accepted, that the EVR be it's own separate Sub-Committee within the People's Committee of Financial Management. This Sub-Committee is expected to report quarterly to PAX, and the Peoples Committee of Financial Management. It would also furthermore, create a list of approved currencies (of which only approved currencies would enter the Jar), and finally, it is requested that PAX be petitioned for the formal creation of the EVR, and proper laws to designate regulations on foreign currency or speculative usage of foreign currency.
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The ultimate conclusion is, the Sub-Committee of Monetary Management requests the approval of this petition. A centralized, state controlled mechanism to manage foreign currency will not only alleviate current issues but also prevent the emergence of worse issues down the road. If approved, the Sub-Committee of Monetary Management is more than happy to work with PAX on formally outlining further what the EVR would do, and ensure it works to its best capacity.

Submitted for consideration by Deputy Metok Chopin.