Economy of Azazia

The United Kingdom of Azazia is a leading economic power within the Nationstates world, with the port city of Philadelphia as the financial capital for the whole of the Kingdom. Ostensibly the UK is driven by the pressures and demands of a market economy with low levels of government interference; however, especially with recent successful elections by left-of-centre political parties, government spending has been on a slow increase.

Despite increasing government spending, the current administration of Prime Minister Tetley had pursued a policy privatizing key industries, including the transit, energy, and defence industries – although some companies still profit from large government subsidies.

Economic Sectors

Primary Sector

Agriculture and Fishing

While contributing less and less each year to the nation’s GDP, agriculture remains a highly mechanized and efficient industry within the UK utilizing the latest in modern technology to reduce production costs to balance rising land costs. With the Home Islands increasingly appropriating open land to commercial and industrial uses, crop selection has moved from land-intensive, low-yield crops to more high-yield genetically engineered crops that require less horizontal space. An example would be new strains of wheat and other grains featuring stronger stalks and narrower xylem and phloem allowing for a higher reach of water in the stalks.

However, owing to the Kingdom’s imperial designs, several lands with significant areas of open space were acquired, including the Royal Crown Colonies of Novikov, Atlantis, New Corcyra, and to a lesser extent the Republic of Juristan, and the Royal Crown Colonies of New London and Port Elizabeth. With the climates in these territories widely varied, there are an appropriately wide selection of crops grown for both domestic and international markets, in large demand being the tea from the subtropical environments while Port Elizabeth has become known in small, but growing, circles for its indigenous sweet fruits similar to mangoes.

As a maritime power, the UK depends on an extensive fishing fleet, although in recent decades overfishing has depleted several previously plentiful fisheries, in particular the Azazian Sea, which at one point served as a common border between the various colonies all under the yoke of different mother countries. However, learning from these earlier mistakes, Parliament has passed the Fishery Reform Act that ought to provide better protections to the potentially valuable fisheries in the developing colonies of the United Kingdom. Fishing fleets are based primarily out of the colonial capitals, or their primary ports if the capital is itself not the main port. Port Elizabeth continues to witness fantastic growth as its fishing fleet continues to expand, while the older fleets at smaller towns such as Nimberhead and Clifton Heights in the Home Islands continue in their gradual decline.

Mining

At one time, the United Kingdom sported large reserves of strategic minerals such as iron, aluminium, and titanium – however in recent years the continuing rapid growth of the Azazian economy has seen these vast lodes and mines exhausted.

Yet, this article would be remiss if it did not mention that one main impetus for the imperial expansion of the United Kingdom was to secure significant deposits of several strategic minerals so as to lessen the Kingdom’s dependence on foreign powers. In particular, the colonies of New Corcyra and Novikov offer large mineral reserves that will sustain continued Azazian economic growth.

Energy

Similar to the mining of mineral resources, the desire to maintain supplies of petroleum for domestic consumption has led to the imperial expansion of the Kingdom. Colonies such as New Corcyra, New London, and Port Elizabeth offer the Kingdom enormous untapped reserves that should continue to provide sustainable petroleum supplies for domestic consumption for the next few decades. However, with significant investment required, the fields will be largely incapable of producing surplus supplies that could be used for export. This lack of exportable petroleum is a frequent point of contention between the governing Tetley administration and the opposition Conservatives.

In time petroleum will expire, and the UK is considering several alternatives quite suitable to the country’s isolated maritime geography. In addition to an expanding civilian nuclear power programme, government projects continue to explore the feasibility of offshore windfarms in addition to still nascent wave and tidal power stations. It should be noted, though, that as of yet, these new fields of energy exploration have yet to meet with serious commercial success due to the difficulty in obtaining both requisite capital and government permission to build such platforms with no data on long-term effects of the stations on the environment.

Secondary Sector

The United Kingdom faces serious change in its long-important secondary sector, where increasing wage demands by the labour market have left manufacturers deciding between domestic location of industrial plants, and therein lower profits, or foreign plants, but higher profits.

Textile Industry

The textile industry provides one of the finer examples for the continuing decline of the manufacturing sector. As a light industry, requiring little capital investment, the profit margins for most companies have shrunk considerably considering the increasing production costs and the decreasing prices from cheaper overseas imports, imports unhindered by tariffs from the free trade policies of the Tetley administration.

Since the import of the industrial revolution to the United Kingdom, the nation has even witnessed the migration of major textile centres from the east to west, this owing to the superior economic development of the English colonies that saw rises in wage demands far sooner than the poorer Russian northwest. It is this very geographic migration of this economic sector, and its subsequent emigration to foreign countries, that has caused the economic depression of the Russian northwest.

Yet, the imperial conquests of the UK may see a return of textile industries to the underdeveloped colonies, where unskilled and uneducated labour forces demand no appreciable wages while the Azazian merchant marine and Parliamentary subsidy of colonial infrastructure depress the costs of production and transport, leaving textile firms with potentially highly-profitable areas of expansion.

Metal Refineries and Chemical Facilities

In the Home Islands, the mining of mineral resources continues to decline with the gradual exhaustion of native resources. With the industry highly sensitive to geographic location, many plants, such as refineries of iron, aluminium, and titanium, have begun to invest in plants in the developing colonies of the UK. Government predictions place Novikov, with its skilled labour pool largely displaced and therefore accepting lower wages, as the next industrial powerhouse within the Kingdom. Longer range forecasts predict that in a few decades these corporations will build new plants in the lesser-developed colonies of New Corcyra and New London.

Most petrochemical facilities, also sensitive to geographic location with relation to the proximity of oil refineries, have begun to shift to areas away from the Home Islands for the reasons listed with mineral refining. However, for those chemicals not requiring petroleum-derived ingredients, the Home Islands remain a popular location with access to a highly-skilled and educated labour force. The Big Four (the cities of Breningrad, Philadelphia, Portsmouth, and Artega) have all begun offering financial incentives to those chemical companies looking to expand their operations, and as such the growth of the chemical industry in those four cities continues unabated.

Heavy Manufacturing

Unlike metal refining and petrochemical production, the manufacture of heavy goods, i.e. aircraft, ships, automobiles, industrial machinery, remains unbounded to geographic location due to the heavy interdependence on numerous sources of raw materials. While Azazian capital may finance heavy manufacturing companies, with ever increasing frequency, assembly and manufacturing plants frequently find themselves outsourced to developing and undeveloped countries that offer large pools of un- or semi-skilled labour. For those aspects of manufacture requiring skilled and educated labour, i.e. aircraft electronics, maritime computers, onboard automobile computers, small, highly efficient, highly mechanized factories remain in the Home Islands.

Similar to the textile industry, enormous potential may be found in the recently acquired colonies of the UK which offer such labour pools.

Specialised Manufacturing

Unlike the unskilled labour forces preferred by the heretofore mentioned industries, there remain several industries that require small, highly-skilled, highly-educated employees. Firms employing computer-controlled machining for electronic circuitry or other similar equipment require such a labour force to maintain their expensive and complicated equipment. These firms have yet to emigrate in large numbers from the Home Islands in part because of the world-renowned Azazian education system. Unlike the other industries, it is unlikely that these specialised manufacturing companies will relocate to the developing colonies anytime in the near to intermediate future.

Tertiary Sector

As the aggregate wealth of the UK continued, and continues, to increase the need for proper management and investment of profit and capital has become paramount; and so in the late 20th century the tertiary sector replaced the UK’s secondary sector as the most important to continuing the power and vitality of the UK economy.

Finance, Insurance, and Real Estate

The continuing need for expansion of facilities and product lines requires the expenditure of capital that should be properly invested, and doing so requires significant banking and financial resources. It is here that the UK specializes, offering loose regulations and high degrees of bank-customer confidentiality in order to attract foreign investors. The combination of foreign and domestic investors has resulted in a booming financial industry for the UK.

Business Services and Producer Services

Although numerous old industrial companies have relocated their plants and operating facilities overseas, the fact remains that the UK offers some of the best trained and educated professionals in the world and it comes as no surprise that many UK companies continue to run their business from corporate offices located mostly within the Home Islands. Such offices require support industries, from simple office supply companies to more specialized electronic information network suppliers and technicians – all of which have begun to see a market expansion as the UK economy continues to expand into the post-industrial era.

Transportation and Telecommunications

As a disparate collection of islands and overseas territories, the UK depends on an efficient, safe, and extensive transportation and telecommunication network. Unlike many industrial nations, automobiles feature very little in comparison to expansive and interconnected systems of mass transit that litter the islands of the UK. Trends in the 20th century have led to Azazia Rail becoming the predominant civilian rail provider throughout the Home Islands, and in the 21st century the company is expanding operations to the lucrative new markets of Juristan and Kingsland.

And as the islands are not physically communicated, the problem of efficient and complete communications networks is also paramount to the continued success of the UK. In the past ferry services provided the sole means of communication of letters, though in the modern era developments such as the telegraph, radio, and telephone allowed more instantaneous connections. The most revolutionary advent, however, has been the civilian satellite industry. Numerous telecommunication firms have launched satellites with the intent of linking all the numerous areas of the UK into one network, from the highly connected areas of the Home Islands to the more isolated (geographically and technologically) areas such as Port Elizabeth.

Wholesale and Retail

With economic prosperity comes income, and with increasing incomes come the demand for consumer goods. The UK’s wholesale and retail sector accommodate this demand, and while the population largely can be considered to fall into the category of one exhibiting a low time preference for spending of their superfluous income. In short, the retail markets are not as widespread as in some other consumer and market-driven economies, but not through any shortcomings of the UK supplies themselves, instead the UK market prefers saving and long-term investment as a unique aspect of their economic culture.

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Economic Geography

(For more information see the Economic Geography of Azazia.)

International Trade

Economic Problems