Economy of the Freethinker Commonwealth

Economy of the Freethinker Commonwealth
File:Navarre10.jpg Commerce, Navarre
Currency	Mintel (Mt)
Fiscal year	Calendar year
Statistics
GDP	US$ tbc
GDP growth	1.2% (2150 SC) 4.2% (2151 SC)
GDP per capita	US$75,000 (PPP)
GDP by sector	agriculture: 2%; industry: 20%; services: 78%
Inflation (CPI)	1.2%
Population below poverty line	5.6% (50% median income level)
Labour force	15,570,000,000
Labour force by occupation	agriculture: 2%; industry: 16%; services: 82%
Unemployment	3.1%
Main industries
External
Exports	$230.1 trillion (2011, RL)
Export goods
Main export partners	Midlonia, The Ctan, Menelmacar, Allanea
Imports	$210.9 trillion (2011, RL)
Import goods
Main import partners	The Ctan, Menelmacar, Roania, Midlonia

The Economy of the Freethinker Commonwealth is an one of the world's largest, most developed, and trade-orientated economies. The country is a major source and destination of foreign direct investment, and enjoys high rankings in economic stability, openness, and 'ease-of-business' in comparison to many of its peers. The country also enjoys generally low levels of unemployment and monetary inflation, but also increasingly suffers from rising income inequality.

It is the largest economy of the Pax Midlonia, overtaking the more populus Greater Kingdom. The GK remains the Commonwealth's largest trading partner, but increasingly the Freestian economy is becoming more integrated with more advanced trading partners. Interstellar commerce is now as much a component of the Commonwealth's trade as its formally dominant maritime-based industry.

Overview

The Freestian economy is characteristic of a deregulated, developed economy, with the central and regional government institutions regulating and in certain circumstances supplying public goods (such as health and education services) where the broader consensus feels the private sector alone fails to provide the necessary coverage in the relevant policy area (see Freethinker Classical Liberalism). Government spending and investment at all levels accounted for approximately 32% of all economic activity, though this includes the activities of government owned industrial concerns.

There is an advanced social welfare infrastructure, primarily dedicated towards the provision of healthcare, pensions and unemployment support, distinguished by geographic and demographic specificy (compare to universal provision) and there is significant personal control of welfare accounts.

There are significant commercial players, known as Crown Corporations, which are in large parts owned by the government which serve either a social function or are held as investments. The Government budget generally runs as either balanced or at a small deficit. As a percentage of GDP, public debt has been on a gradual downward trend since the Second Moonstone War. The bulk of Freethinker sovereign debt is issued as long-term, low-yield gilts and bonds by various investment bodies, mostly domestic. There is also a sizable sovereign wealth fund. Sub-national polities can also raise debt and establish wealth funds, to certain limits.

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. 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 to clients) as a guiding principle with regards to their employees, resource consumption and production. Cooperatives and employee-owned firms are common.

As a resource-rich 'Anglo-Saxon' economy, international trade is an important part of the Freestian economic litany, and international finance, aerospace and maritime engineering, resource extraction and private security provision are the mainstays of the economy. Foreign investment and ownership in various industries is significant, and in turn a large number of foreign assets are owned by Freethinker corporations. Navarre and Benarbor are major business and finance centres, currency trading pairs between the Mintel and other major currencies form a large proportion of net currency trades. Several Freestian ports, and Navarre in particular, vie for the title of the largest transhipment centre in the world. The same cities' compete similarly as international service centres, particularly for financial, insurance and supporting services.

Thanks in part to its high level of commodity exports, the Commonwealth runs a small net trade surplus, though this is highly varient dependent on trade flows. Long terms trends are towards a neutral balance of payments. As a multitech society, the Commonwealth has a variety of different trading relationships, its trade with high technology, near post-scarcity powers, for instance, tends to be based around cultural and professional services exports and high technology imports. In comparison, with other societies on a similar technological footing this relationship tends to be more one based around the import and export of resources and manufactured goods.

The country is a member of a number of international trading blocks, and tries to use this influence to promote liberalism and free trade throughout the world. Seperate to these, the Freethinker Commonwealth maintains' free trading areas with Midlonia and Kouralia, along with several other powers.

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 (SC) as a government answer to several periods of crippling inflation caused by election-time increases in Government spending by the administration of the time.

Proposed and 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, a policy that was carried on by the Freethinker Conservative Party when it came into power.

Instead of government fiscal policies, the main control mechanisms 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%) for the FCR to follow as a guide , and the FCR adjusts the interest rates and money supply (technically the same thing as far as policy is considered) to direct the economy towards this level (A low rate of positive inflation is generally seen as an indicator of steady economic growth). The FCR is given inflation to control as it's primary target, it may use other economic variables for guidance but the control of monetary and price stability is seen as the principle goal of the Reserve.

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, localised unemployment is seen as one of the few circumstances that government intervention is considered beneficial by the Freestian populace historically, 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. The Economic Transition Board was created to manage these interventions effectively with limited political control.

Taxation and Government Spending

The Government's fiscal policy (Taxation and Spending) is, as under the economic guidelines of the current ruling Conservatives limited to providing a break-even zero net revenue loss over the course of a business cycle, audited by the independent Budget Overview Office. 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.

The primary expenditure is on defence and security (including certain engineering and social funds related to military activities and national service), followed by infrastructure, healthcare and welfare spending. Because of certain government policies, the practical aspects of some defence and infrastructure projects serves as de facto welfare spending as well. Freestian benefits tend to be generous but tied to individual contributions and performance during receipt. Many social welfare funds are managed either by individuals or semi-private entities.

Economic Overview By Sector

Agriculture, Forestry and Resource Extraction

Agriculture

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. A large number of smaller landholders exist on the fringes of incorporated areas providing a variety of niche products. Most cereals are grown and harvested in the Guilder and Green Valleys, and are domestically consumed. Domestic livestock and animal husbandry is a larger the principal agricultural export, in particular Freestian-specific breeds of game and reared domestic animals are much prized abroad.

Freestian Amalgamated Foods is a large operator of commercial farms. Other big firms include the Benarbor Spices Company, the Ranch Network is a large cooperative of Outback ranchers.

Fishing and Aquaculture

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. John Corman Ltd is the largest of the Freestian fish merchants. Foreign fleets are a common sight in many Freestian harbours, and as fishing licenses are issued locally these are an important source of revenue for many coastal communities. North Atlantic fish, including cod and haddock, are frequently landed. Native species of shellfish and crusteceans are also popular.

Some legal narcotics, notably cannabis and deriviatives, 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. The rise of Heraklion as a major food producing colony is also predicted given the expanses of arable land and a lack of major natural obstacles.

Horticulture and Forestry

Horticulture and 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. Heraklion appears to have significant forestry reserves that could be exploited once a full colonisation effort has been completed.

Mineral and resource extraction across the Commonwealth is extremely common and profitable, and there are significant quantities of 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 Heraklion, 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, mined almost exclusively by the National Moonstone Company. 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.

Hydrocarbon extraction is a newly developing industry with the recently discovered oil finds in the Middle Sea. A total of 160-170 billion barrels of oil are thought to be commercially viable for extraction in this region, 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. The Midlo-Freestian Oil Company and United Atlantic Oil are the two largest companies involved in the sector, and account for a growing proportion of Freestian shipbuilding and maintenance orders.

Manufacturing and other producing industries

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.

Maritime Shipbuilding and related industries

By far and away the most successful industries within the Commonwealth are shipbuilding and maritime engineering 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. Freestian shipbuilding is held to a high standard internationally, and the industry has significant foreign export success.

Aerospace and Defence

Aerospace design and construction is a growing area, boosted by the FDI Group but also with several newcomers with new and innovative designs. Avon Aviation is notable for its VTOL aircraft.

Communication and sensor systems, linked to the large maritime industry and the increasingly large space industry, is also a growing sector. Demand is also very strong from foreign buyers.

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. Significant foreign investment, especially from Midlonia, is a noticable trend in this sector.

Consumer durables

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. Most Freethinker

On a related note, some formerly declining heavy manufacturing concerns have found new life as research and development houses for larger intersystem manufacturing concerns, able to 'Freestify' imported designs to make them more attractive and effective for terrestrial markets in extreme climates. This has formed the new heart of the Freethinker automotive industry. The largest domestic manufacturers still wholely Freestian owned include Titan Trucks Ltd and the luxury Arborian brand.

Services, the 'Knowledge' sector and Research and Development

For the last thirty years the economy of the Freethinker Commonwealth (although more in the Mainland than Fargon and the offworld colonies) 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 smoothing the balance of payments deficit with more technologically advanced economis. Commodity exchange, shipping registration and related industries in particular are a Freestian speciality. Notable firms in this field include;

Professional Services are another major earner, and both Benarbor and Navarre can lay claim to several large accountancy and legal services firms.

Information Technology is another medium sized sector, with the main trade in defence systems programing, banking systems, outsourcing and project management.

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

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: NAMEX

Imports, Exports & Balance of Payments

The following section is outdated and will be revised shortly

• Exports: US$262,554,712,077,261.90 (Mt131,593,288,927,910.06)
• Imports: US$264,664,599,599,412.50 (Mt132,658,888,686,571.97)
• Trade Deficit: US$2,109,887,522,150.60 (Mt1,065,599,758,661.92)

• Main Imports: Basic foodstuffs, hydrocarbons, high-technology consumer goods, high tecnology consumer durables.

Imports reflect in part both the hazardous nature of the Commonwealth and the growing needs of a high tech economy.

• Main Exports: Aerospace systems, electronics, construction materials, shipbuilding, heavy machinery, financial services - insurance, financial services - support services,

As noted above, the strongest Freestian industries enjoy good international sales, taking full advantage of the Commonwealth's position as a leading trade hub.

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
• NAMEX - Listing service for Freethinker companies