Meeting new friends

[Serenierre]

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Imperial Treasury
Shahdara
​

The Imperial Treasury was an impressive building. Built in the 1850s, the building had been one of the first to be constructed after the country had begun its drive towards a more efficient, westernised system of administration - a time period which had seen the grand councils of state separated from the confines of the Imperial Fortress and given their own premises. And this imposing structure was the dominion of Shehrbano Hazuri, the Grand Councillor for the Treasury. That post was a very senior post in the Imperial Government - some would argue perhaps second only to the Chancellor - and had often times provided many politicians with the kind of launching pad they needed to capture the Chancellorship for themselves. But given its high rank in the order of precedence, the choice of Shehrbano Hazuri was strange, given the fact that she was the only member of the Suleymani cabinet belonging to the fairer sex - a most unorthodox choice. But over the past five years, she had shown herself to be a sound minister, who had steered the Sikandari economy out of troubled waters.

That day, however, she had been joined by two of her colleagues, Shahrokh Husseini and Abdullah Tirmizi, the Grand Councillor for Petroleum and Natural Energy and the Grand Councillor for War, respectively. The three of them had met a week before the official visit from their counterparts from [MENTION=19]Längerland[/MENTION] had commenced to discuss the agenda and several advisory papers had been received by the three of them from other members of the Cabinet, to refine their view of the meetings. Based on seniority alone, Grand Councillor Hazuri had been chosen to lead the Sikandari delegation.

As the guests from Längerland had arrived, they had been greeted officially by the protocol officers and been brought to the conference chamber where the three Grand Councillors were seated. Grand Councillor Hazuri had spoken first, "Pleasure to meet you all. I hope your journey was pleasant," as she spoke, she did not extend her hand, as Sikandari women did not shake hands but rather gave a respectful nod in greeting others. The other two Grand Councillors did shake the hands of the visiting delegation. Once the formal pleasantries were finished, the ministers from both sides took their seats on either end of the conference table. Aides and translators were carefully positioned around the ministers. A silence descended over the room.

"Good morning," Hazuri, again, was the first to speak, "I welcome you all to Sikandara and hope that your visit so far has been agreeable. For the benefit of all present, let me state the agenda that we shall pursue. First, we shall discuss details of an oil agreement that will see Langerland receive a favourable rate on their purchases. Second, we shall discuss avenues of cooperation in the realm of trade cooperation. Third, we shall discuss the issue of military and defence cooperation. I welcome input from you all on the agenda for this meeting to help inform this discussion." She looked at the senior member of the delegation from the Germanic country to see what the other side would start with.

 

[Längerland]

Imperial Treasury
Shahdara

Special Envoy Jens Kleidmann had served in the Ministry of Foreign Affairs for over twenty years. Rising from the tanks of a humble clerk at the head offices in Lörrach processing visa applications, he eventually began travelling the globe advising various Längisch ambassadors on foreign policy issues in the countries they were stationed in. Now, in his mid 50s, he had been promoted as a Special Envoy, meaning he was sent on the most important meetings with foreign delegations. His knowledge simply couldn't be surpassed, except, perhaps, by Minister of Foreign Affairs Mauritz.

His aides took their seats and his interpreters as well. Kleidmann shook the hands of the gentlemen and gave a respectful bow of the head to Hazuri. Before beginning he instructed one of his aides to find out if they could get some coffee and pastries brought in. The thought of starting the day without that was simply horrific to any Längisch man.

'Grand Councillors, thank you for hosting me and my delegation. We are so delighted to be here. May I also say that as we arrived the day before yesterday, we have had the opportunity to tour your capital and take in all the beautiful sights, fantastic cuisine and meet the friendly people. Although I must also add that we are not accustomed to the heat and humidity!' he smiled and turned to the agenda that had been printed out and set before him on the table.

'The agenda looks splendid, however on item number three, please note that our discussions on military cooperation will have to remain limited to the sale or purchase of military equipment and technology. As a proud neutral state, Längerland cannot enter into any sort of defence treaty or agreement, even though we view the Sikandari as our friends. I hope you understand that position.'

The coffee and pastries arrived and Kleidmann gave a subtle sigh of relief. As much as he loved the local cuisine in the Orient, he simply needed a Germanian-style pastry in the morning.

'Perhaps I can begin with the subject of oil. Now, as you may know, Längerland lacks oil and coal reserves. We import most of these in order to produce energy and fuel our transport fleets, public and private. Also, presently, we are facing an impending budgetary issue. We have a welfare system that has been put under strain due to lower exports, higher energy prices, etc. What I am hoping, among other things, to achieve here today is the securing of a long term oil deal that will provide my country with reduced prices for oil in exchange for goods and services we can offer.'

'For example, although we lack oil, Längerland has high grade iron ore, which can be milled into some of the best steel in Europe. This is obviously useful for construction of buildings, but also ships and aeroplanes. We mill much of our own steel, which can be sold at a reduced rate to Sikandara, but we can also sell the raw iron ore. In addition we have a tradition of shipbuilding. Merchant marine vessels, ocean liners, as well as naval warfare ships. The skill of our shipbuilding craftsman is nearly unmatched. Discounts can also be offered. Lastly I would like to come to a point which bridges the agenda items number one and three. Sikandara manufactures a fighter jet that we have viewed with some admiration. Our Sky Force is in desperate need for an upgrade to keep up with the defence demands of the current age. Naturally we want to keep costs low. However, in return for a favourable oil deal, we could offer a significant contract for these jets. Even with a discount offered, I can tell you that we would need at least 30 jets within the next two years and probably more thereafter. I am sure it would be a boost to your jet manufacturing industry.'

The coffee was a bit sour compared to a Längisch roast, but it wasn't bad. Perhaps if time permitted he could visit a coffee plantation here. That would interest him a great deal.

'The jets would have to meet our requirements and safety and performance standards, naturally. But from what I have heard, this shouldn't be a problem.'

 

[Serenierre]

Imperial Treasury
Shahdara, SKD.

Grand Councillor Hazuri listened to the Special Envoy from Lorrach as she scribbled notes on the files opened before her. She took a sip from her glass of mint lemonade, rather appalled that anyone would want to have anything so "warm" as coffee - that was a drink reserved for winter in Sikandari households. As relief on the foreign man's face when the pastries were brought in was not lost on any of the three Grand Councillors. From the reports delivered to them of the man's adventures, the day before, it was clear his hunger for pastries and sweetmeats was insatiable. As Kleinmann had spoken of Längisch neutrality, Hazuri couldn't help but wonder what old Grand Councillor Tirmizi (War & Defence), a gruff man with little patience for spinelessness would think of that statement.

Clearing her throat before beginning, Madame Hazuri looked at the delegation sitting opposite, "Preferential oil supply agreements are indeed a possibility. We have worked out favourable arrangements with the Kingdom of Eiffelland and the Grand Duchy of Bourgogne - both of which have benefited tremendously by the reliable and discounted supply of oil and coal. As you may know, the Almighty has gifted our country with ample sources of natural energy - and we are not averse to the idea of others also benefiting from our good fortune." She flipped open a file, sent over to her office from the Grand Council for Information, "However, before we talk about the possibility of Längerland also securing such an agreement, I must draw your attention to a rather interesting article which we noticed in your domestic press," she handed Special Envoy Kleinmann a clipping of

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published in the Lörrach Morräpost. She let him read it before continuing. "Is this true?" she arched her eyebrow, "Because this cannot be allowed under any potential POS Agreement... the discounted rate for natural energy resources is solely for domestic use. Mr. Kleinmann, I'm sorry to disappoint you but this is an absolutely non-negotiable point for us."

She tipped her spectacles on to the tip of her nose. "I assume that you understand. And if that is acceptable to you, we can move onto discussing the finer aspect of such an agreement, such as the rate of discount and other such things." Here, Grand Councillor Husseini (for Petroleum & Natural Energy) walked the visiting delegation on the price mechanism which had been determined by an independent analysis to be favourable for both parties. He spoke of the supply chain that would be initiated if the deal went through. Oil tankers would be loaded up in the city of Azirmeh in northern Sikandara, once the oil had been refined into either diesel or petrol or whatever else was sought, and be shipped to Burjzam, whereupon a significant portion would continue its journey to Längerland by sea, but a considerable amount be sent over by rail through the Trans-Touyou Railway network, through Tyarin-Sabassia. The two pronged supply was a new strategy to offset the instability that was possible on the high seas due to the recent tensions the region had seen following the shipping crisis in May. If all went smoothly, at no point in time would the Längisch have disturbances in their oil supply.

"Thank you, Grand Councillor Husseini for your thorough review of the mechanism of the proposed agreement," Grand Councillor Hazuri said when he was done, as he had spoken, she was flipping through a number of pages which covered Längisch-Sikandari trade. "Mr. Kleinmann, the iron ore that you speak of, indeed, is attractive to many Sikandari industrialists but that is not the area where our two economies can interact. Having gone over a detailed study of your economy, I can see that there is huge potential for our trade links to grow, provided both governments enact policies which encourage such a trend. I think that, perhaps, we can also fly in Längisch experts into Sikandara to work for our private sector - on a contractual basis - to help spur innovation here and also serve as a solid source of remittances for your country." Given the precarious nature of the economy in the Germanic country, such an offer was thought to be a good measure to stabilize the currency in that country by boosting the foreign reserves there. "Thinking about it, perhaps it would be a good idea to have some Sikandari companies to open domestic subsidiaries in your country to help stimulate the economy by encouraging local production and vice versa."

"Further, I think it would be a good opportunity for our universities to interact closely and to develop links to enhance their research capabilities. My colleague with the education portfolio would be most pleased I brought up this matter," she said, smiling a rather charming smile.
OOC: The military and strategic aspects of the meeting will be resolved after we have sorted out the mainstream economic matters. I hope you don't mind I split the discussion into these two segments.

 

[Längerland]

Imperial Treasury
Shahdara, SKD

Kleidmann paid no attention to the face that Tizmiri made after his comments about Längisch neutrality. At least it's kept us free from the scourge of war for over a century, he thought.

'Grand Councillor Hazuri, I believe your government has misunderstood the contents of this news article, with all due respect. At present, Sikandari oil is purchased at market rates. State and private companies in Längerland refine it in Melmö and sell it - sometimes domestically, often internationally. Melmö has been a key international logistics and shipping hub for many years, including the oil refining business.'

Kleidmann left his coffee untouched after a few sips. It was simply too stuffy inside. He drank from his water instead.

'Now, if this deal is sealed, that will change. Allow me to explain how. Discounted oil would be refined, either in Sikandara or Längerland, and it would be sold and used internally within Längerland. Full stop. Sikandari oil purchased at regular market rates, free of the negotiated discount, would be refined in Längerland and sold abroad at the market rate for diesel, petrol, jet fuel, etc. This does not circumvent the deal on oil. All discounted oil would only be sold and consumed in Längerland. But as the market permits, nothing would stop firms from purchasing Sikandari oil at the regular market rate, processing it and then selling it on. Do you see what I mean?'

'Now, in terms of your proposal for inviting Längisch companies to send workers to Sikandara, very interesting I must say. Längisch employees are accustomed to fair pay and benefits, set hours, etc. Naturally the labour law differs between our countries, but I'm sure agreeable situations could be agreed upon. As far as Sikandari firms setting up subsidiaries in Längerland, again all those employed there, foreigners and locals alike, would receive fair pay, benefits, set working hours and all the protections afforded to the worker. This, as you know, means that labour is more expensive in my country, but our productivity rates are high, as is the quality of work and output. Let me explain why this would still be profitable for Sikandari companies.'

'Our market of not even 8 million people is small. There is business to be done there, but the real markets lie further afield in Gallia and Germania. Eiffelland, Großlausitz, etc. We have excellent rail and road links to all. But if your subsidiaries were headquartered in Längerland, they can make use of a clever tax regime unique to our country. For example, Sikandari Company A builds automotive parts. It sets up its head office for the subsidiary in Melmö. A factory in Melmö produces automotive parts for use and sale in Längerland. All profits are taxed at the normal Längisch corporate tax rate, which is high. But the Längisch market is small - the real profits are to be made in Eiffelland, which has a huge automotive industry. Sikandari Company A builds a factory there. It makes a large profit there, but it routes the profits back to its head office in Längerland through a Längisch holding company at a Längisch bank. Because the profits were made outside Längerland, you avoid paying Längisch corporate tax, just a very low transaction tax. Do you follow? This could be replicated across the huge market of Gallia and Germania for any number of companies and industries.'

It was complicated and he might need to provide further examples, but Kleidmann would get back to that later.

'Now back to oil. I imagine most oil will be shipped by sea as it's more economical, but I understand the need for some to be shipped via rail. This is a good idea. I have a better one.' Kleidmann gave a playful smile.

'A Trans-Toyou oil pipeline.' he let the words sink in. 'Imagine, pumping oil from Sikandara, across Tyarin-Sabassia, into Längerland and connecting beyond to the Gallia and Germania pipeline network. It would be cheaper in the long run than shipping via train and much, much safer. More oil could be transported for far less cost and it would be largely immune from meddling in shipping in the Long Sea. Längisch companies have the expertise to help build this and I am sure our mutual friends in Tyarin-Sabassia would be very interested in exploring this further.'


OOC: no worries, sounds good to me.