Kalistani Major History

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KALSIE marks return to Bear Markets
Large scale FDI and new willingness to invest domestically signals growth
Kaliburg, Ananto
March 12, 4762


Investment begins in new sectors of Kalistani Economy, as well as returning to old ones

The Kalsie Index hit 100 once again today, for the first time in recent memory. The score means, there was the same trading activity on the floor as there was when the Kalsie first began measuring stocks.  Analysts were quick to seize on this important news as a sign that Kalistan is recovering from decades of neglect.

Stock analyst Gerorgio Vescuna stated, "As the Kalsie was developed during a major economic period in Kalistan's recent history, hitting 100 once again is pretty special.  We've read about when the Kalsie was at 250, but none of us have ever seen anything like. For the longest time, the Kalsie was dying a slow death while the index couldn't ever seem to get out of the 20s, but now, we're at 100, and things are looking up."

The Kalsie index was buttressed by a prolonging of some measure of economic liberalism and the hesitation of the Socialist Government to return to the Dual System.  But the Government promised that the dual system will be returning, sooner rather than later.  Meanwhile, investors seem to be rushing into the market, to begin dumping money into the economy.

"We've seen dramatic growth in several sectors," said Kalsie President Diane Fishburn.  "The agriculture sector got a major boost a few years ago and now ag producers are beginning to reap the profits and diversify their holdings.  And its a good time to do this too, as there are rumors of the return of the Republican Food Bank and the National Service Program, which will guarantee farm prices for all Farmers.  Now is a safe time for them to expand beyond traditional food development, into perhaps ODEN production or farm machinery industries.  We have also seen dramatic growth in mining and processing, as the National Foundary and several private refineries have come online, and are projecting growth in the Air craft industry, especially given the founding of the new firm Aerokal in Sulari."  The President also noted significant new investment in renewable energy, high tech in the revitalized KalMD, and leisure sectors.

"It seems like the nation is awash in money right now, and people are looking to spend," said Fishburn.

Republican economists warn that high levels of investment and profit expectations could cause a rise in inflation in the Republic.  "This is obviously something we would like to avoid," said Dr. Violet Dumferees, a Government advisor and Professor of Economics at Kaliburg Poly Technic Institute.  "The Socialists have traditionally attempted to keep inflation at Zero, and it is only a matter of time before they return to these policies.  Premier Bennots has ensured me that his Government, following the advice of the Lourennaise Governor General, will not move to reestablish zero growth policies for some time, but he has also expressed reservations about runaway inflation and dramatic increases to the cost of living that accompanies large scale growth.  We have to balance our need to redevelop and the quality of life of the Citizens, and as long as we can keep inflation down, the Socialists will continue these pro-growth policies to help put people back to work and to continue to modernize the economy."

One interesting development on the Kalsie is the amount of private sector paper afloat in the trading session.  "Corporate bond trading is up," said President Fishburn.  "Usually, we do not see stocks AND bonds go up at the same time, as bonds are viewed as safer long term bets, and are usually adopted when stock prices are volatile.  But in this case, the corporate bonds represent efforts at capital improvement, which bodes very good for long term prosperity in the Republic.  When we see a large move from stocks to Public Sector Bonds, this will be a sign of trouble.  But interest rates remain low, and money is plentiful and so corporations are making some much needed improvements to their capital foundations."

Economists also note that, for the first time in more than 15 years, wages saw an increase in the private sector.  "We believe this is due," said Fishburn, "to constant talk in government circles of the return of National Service, which will have the effect of eliminating unemployment in the Republic and greatly tightening the labor market.  Employers are preparing for this, especially following the Financial Minister's speech two months ago which promised that if companies continue to do right by their workers, no need for heavy handed government intervention will exist.  Employers took the cue and begin increasing wages."

Rents, however also slightly increased, primarily in Suldanor and Odufaray, though average rents fell in Neveras and Vrassa, while remaining stable in Ananto.

Generally speaking, the economy of the Republic is finally getting its footing back, as the Socialist Government maintains a tenuous but very real peace with the private Sector, and has taken a generally hands off approach to development in Kalistan, choosing to refocus on rebuilding and expanding its own capital stock in preparation for eventual nationalization.