Economy of the Freethinker Commonwealth

Overview

The economy of the Freethinker Commonwealth is dominated by private sector, free market consumption and spending characteristic of an Anglo-Saxon economy, with the Government regulating and in certain circumstances supplying certain public goods (such as health and education services) where it feels the private sector alone fails to provide the necessary coverage in the relevant policy area. Low regulation, a skilled workforce, large amounts of cheap land and capital and an incredibly extensive trade-based infrastructure make the Commonwealth a popular location for foreign businesses.

Capitalistic free-market systems are the dominant and prefered economic form, and free enterprise and entrepreneurship are encouraged to a significant extent in both public and private institutions and forums, but in turn private and public companies and corporations are also expected to act with social responsibility (respect for personal property rights and the provision of accurate information) as a guiding principle with regards to their employees, resource consumption and production.

Basic Statistics

GDP: purchasing power parity - US$212,877,111,879,432.00 (Mt107,513,692,868,400.00)

GDP - per capita: purchasing power parity - US$45,005.00 (Mt22,730)

GDP by Sector Composition: Agriculture: 1.3%, Industry: 21.3%, Services: 77.4%

Population Below (Relative) Poverty Line: 8.2%

Unemployment Rate (Complete Measure): 4.7%

Unemployment Rate (Benefits Measure): 3.9%

Inflation Rate (Consumer Price Index): 2.5%

Labour Force: 4,100,000,000 (includes unemployed)

Labour Force by Occupation: Agriculture: 2.0%, Industry: 22.4%, Services: 75.6%

Currency: Mintel

Currency Code: FMT

Fiscal Year: 7th April - 6th April

Central Bank, Monetary Policy and Macroeconomic Variables

The Freethinker Government utilises an independent central bank, known as the Freethinker Central Reserve, or FCR , to ensure economic stability and sustainable growth. The FCR was established in the late 1960's as a government answer to several periods of crippling inflation caused by election-time increases in Government spending (to provide short term boosts for economic and political gain). Designed to provide long term stability without the problems of election time economy boosts (and subsequent inflation), the continued successful operation of the FCR and the subsequent steady growth of the economy since its introduction has long been a strongpoint to the Freethinker Liberal Democrats economic credentials.

Instead of Government fiscal policy, the main control of the Freethinker economy is invested in the monetary policy of the FCR. Its capacity to set the interest rate and control the supply of Mintels within the economy allows for more effective and stable control of the economy than government fiscal measures could hope to achieve. The Freethinker National Treasury does, however, set the inflation rate target (currently at 2.5%) for the FCR to follow as a guide , and the FCR adjusts the interest rates and money supply (technically the same thing) to direct the economy towards this level (A low rate of positive inflation is generally seen as an indicator of steady economic growth).

The Government's fiscal policy (Taxation and Spending) is, as under the economic guidelines of the current ruling Freethinker Liberal Democrats limited to providing a break-even zero net revenue loss over the course of a business cycle. This means that limited government spending deficits can only be allowed if directly funded by previous or future surplus from taxation revenue. The excellent economic performance of recent years has, however, ensured that current levels of surplus have far exceeded past expectations and provided the government with sufficient levels of revenue for new increases in the defence and foreign aid budgets without an increase in taxation. Because of this policy and the desire to maintain current economic growth, income tax levels have remained reasonably constant over the last few decades at around 20-25%, based progressively on earnings.

Unemployment is generally seen as acceptable at levels of 5% or less, and the current trend tends towards a rate of 3-3.5% on a national average. Extremely high unemployment is seen as one of the few allowable circumstances that Government intervention is considered beneficial, and localised retraining and subsidy based investment has been practised to prevent economic recession in areas which are suffering in terms of significant job losses and other economic malaise.

Economic Overview By Sector

Primary Tier Economy

Agriculture in the Freethinker Mainland is limited to the temperate irrigated regions and ,with some modest success, commercial level ranching of domestic species in the more temperate areas. Efforts to increase production through large scale desert irrigation projects have been undertaken, with sometimes spectacular results, but nonetheless agricultural output is still significantly below levels of national demand, resulting in a large net import of most foodstuffs. Cereal crops account for about two-thirds of avaliable arable land. Fishing is in a more profitable condition, with large scale operations for harvesting both fresh- and salt-water stocks, but these activities are also threatened by both declining fish populations and falling public demand, although recent trends have raised optimism of a future recovery. Some legal narcotics are also grown, though these markets tend to be somewhat already saturated by foreign imports, which limits the total harvest of the precursor crops. Agriculture and fishing provide about 1.5% of total GDP output.

Forestry is a medium level but rapidly developing industry. Major commercial harvesting is underway in the Corus, Cerberus and Ruyter forests, with successful improvements in infastructure and the reduction in the threat from native wildlife making further expansion profitable. Native subspecies of original Midlonian genotypes are particularly sought after for their hardness and resistence to disease. Some commercial harvesting is also beginning to take off in the Fargon Archipelago, but it remains to be seen how successful this could be given the limited stocks avaliable.

Mineral extraction across the Commonwealth is more common and profitable, and there are significant quantities of Iron ore, Ilmenite and Malachite deposits which are exploited for a variety of metals for both domestic use and foreign export. These operations are sufficiently developed to meet local demand though other ores and materials have to be imported from abroad, notably some precious metals and heavy elements. There are significant new mineral deposits being discovered in the Fargon Archipelago and the Freethinker Martian Territories, but these have so far been under-developed due to geographic factors and the lack of necessary infastructure in place. In terms of precious gems, by far and away the major industry concerns are centred around the production and distribution of Moonstone, a rare and extremely precious stone that is practically indigenous to the Commonwealth. There are also some significant gold and silver extraction operations, but this is mainly done to sate industrial demand for electronics and machinery parts rather than for commercial luxury use.

Oil extraction is a newly developing industry with the recently discovered oil finds in the Middle Sea. A total of 60-70 billion barrels of oil are thought to be commercially viable for extraction, and notably there is a strong domestic demand for fuel oils and plastics (although this is currently heavily sated by cheap imports). The rise of oil extraction and associated industries is heavily relied upon by the government to replace jobs lost to inexpensive imports in the consumer goods market. In particular this has provided a new market to sustain domestic ship building and maintenance.

Secondary Tier Economy

The manufacturing sector of the Freethinker economy is coming out of a major transformation from the old quantative-based to a new qualitive based sector as a result of new and improving trading links with a variety of new international partners.

By far and away the most successful industries within the Commonwealth are shipbuilding and arms manufacturing at the modern and post-modern technology levels (although more advanced equipment has to be imported), both sectors which have been on the forefront of this transformation. The rise of FDI Group, for one, represents the maturation of this sector of the Freethinker economy within the new global and interstellar economy. Other major manufactured items include related industries such as aerospace design and construction, electronic sensor systems, communications equipment and machine power plants.

The Freethinker construction industry is also an extremely healthy performer, and large-scale public works and military fortrification contracts are ensuring this continued growth well into the future. The impressive results of some of these projects has ensured an excellent reputation for many of these firms and as such have secured several contracts abroad. Given current trends for economic growth, increased military spending and an expanding population this industry has a secure long-term future and the sector is a particular favourite for foreign investors.

Although most consumer goods are now imported, there is still a large market in Freethinker-designed luxury products in both home markets and abroad, centred on items designed specifically for life in the Commonwealth and similar environs. Camping and safari equipment, processed animal hide products, jewelry, civilian firearms, and commercial off-road vehicles are some of the products which are currently being concentrated on by many local manufacturers in order to secure their market position. Freethinker goods tend to value practicality and reliability as their main attributes, with the most common manufacturing philosophy indicating that form follows function in terms of a pleasing design, which has lead to increasing sales and some success against cheaper but inferior foreign competitors.

Tertiary Tier Economy

For the last thirty years the economy of the Freethinker Commonwealth (although more in the Mainland than Fargon and the Martian territories) have been dominated by the service industry, in particular there has been a substantial rise in the international banking and commodities trading sector, based on the huge network of tradelinks established by the Commonwealth. Like many advanced Western economies, the tertiary sector accounts for the majority of employment within the Commonwealth.

Financial services are an important revenue earner for the Commonwealth, and its financial networks in terms of security are second only to the likes of significantly more technologically advanced nations such as Menelmacar, a legacy of the vast international trading system that provided the first true boon to the Freethinker economy. Strong international contacts, light regulation, high local expertise and established institutions make the Commonwealth an attractive centre of business, and Navarre in particular is a large and important centre of international banking, considering its position at the heart of both Freethinker commercial life and at the centre of many international trade and travel routes. The Commonwealth is a significant net exporter of financial services and this goes someway into reducing the balance of payments deficit.

Retailing is a major industry, and the larger cities in particular are becoming increasingly dominated by vast shopping arcades and malls. Several large domestic and foreign chains dominate industries such as food, electronics and clothing retail, although many smaller domestic producers have been able to weather the storm by specialising in niche luxury goods and custom designed products. Restaurants and the rest of the dining sector is also dominated by smaller domestic firms, specialising in both local and international cuisine. As in most advanced economies, retailing accounts for an extremely large proportion of GDP (around 24%).

Tourism is fast becoming a major industry with the Commonwealth becoming more popular as a tourist destination for a variety of reasons, numbers boosted by recent relaxations on travel to and from the Mainland in particular. A combination of eco-tourism, safari and big-game hunting, and adventure holidays taking advantage of the vast wilderness have boosted the traditional tourist marketshare, and new interstellar customers in particular have significantly increased the revenue generated by this industry, a particular boon to previously struggling rural economies in particular.

See also: Freethinker Corporations

Economic Issues

As with most developed economies, the high standard of living has resulted in higher wage costs to firms, resulting in increasing costs and reduced efficiency margins for Freethinker companies. This is not considered too much of a major issue at present as most manufacturing positions are based in qualitative rather than qualitive products which are less vulnerable to increasing wage rates. Nonethless the Government and many private firms are implementing large scale capital and training investment to ensure that real competitiveness remains.

The current strength of the Mintel is also causing discontent among manufacturers in particular, due to decreasing competitiveness abroad and the growth in competition at home, and there is particular domestic anger at the current Freethinker Liberal Democrats position of not introducing protective tariffs to reduce the entry of extremely cheap consumer goods from some of the Commonwealth's new trading partners. This has lead to some citing of betrayal by many who have lost work in the respective industries and has sparked riots and protests in several cities. The policy also has had a limited political fallout on the Government itself, though not to a significant degree.

Long-term concerns also include the economic stagnation of several cities (notably Ademsea and Delta City) and industrial districts in the Mainland itself, with the new service-based economy leaving many old industrial towns without principal employers, leaving only mid-scale service sector jobs as the main source of income. Whereas there has been significant investment into creating new job oppurtunities, no major new industries have been established in many places, and most of the new employment options are limited to basic low-skilled service sector positions. In turn this has lead to more negative political consequences, including for the first time in half-a-century the posibility of widescale popularity for far-right and far-left groups in certain portions of the population.

Imports, Exports & Balance of Payments

• Exports: US$62,554,712,077,261.90 (Mt31,593,288,927,910.06)
• Imports: US$64,664,599,599,412.50 (Mt32,658,888,686,571.97)
• Trade Deficit: US$2,109,887,522,150.60 (Mt1,065,599,758,661.92)

• Main Imports: Foodstuffs, energy products, high-technology engineering, chemical products

• Main Exports: Financial services, weapon systems, electronics, construction materials, shipbuilding, heavy machinery

See Also

Mintel - Currency of the Freethinker Commonwealth

Freethinker Central Reserve - Central Bank of The Freethinkers

Freethinker Central Reserve Rating Agency - NS Credit Rating Organisation

Economic Warfare Bureau - Security Service Economic Agency