Lost Decade (Pulacan)

The Lost Decade, also known as the Pulatec Steel Crisis, was a time of protracted economic recession in Pulacan. Beginning in 1992 with the collapse of the MAUN Steel industrial calpolleh conglomerate, the ensuing contraction spread to connected economic sectors and neighboring countries as a series of Pulatec governments were unable to provide long-term aid to affected workplaces and industries. The recovery was slow, and affected sectors of the economy of Pulacan only returned to pre-recession growth rates in 1999; repercussions continued until 2002.

The steel industry in Pulacan, already in decline before 1992, would never recover to pre-1992 levels of production. A lack of mass orders for cheap steel from Zilung Chen in the early 1990s caused over-leveraged steel plants to overproduce, flooding the market with so much steel that prices became unprofitable. The steel industry was forced to heavily downsize, and became a much smaller part of the Pulatec industrial economy from the 2000s onward. The Lost Decade prompted a dramatic shift in industry for much of the Pulatec industrial sector, with additional focus on manufacturing finished products such as automobiles and on emerging work in the digital sector in order to "future-proof." The Lost Decade forced a political reckoning, with many political parties either reshuffling, rebranding, or disbanding entirely. Pulatec political society polarized during this period as diverging methods for resolving the economic slump grew in popularity then came into conflict.

Background

A steel mill near Ghanzi, one of the main cities for steel production, 1948

For much of the twentieth century, Pulacan's industrializing economy was buoyed by the twin pillars of resource extraction and steel production. With the help of state aid and a rapid influx of urban workers after the Hanaki War, the Pulatec steel industry underwent a period of rapid expansion. By the 1940s it had become one of the dominant manufacturing sectors in Pulacan; peak steel production was reached in fiscal year 1965, when up to 28.9 million tons of steel were being manufactured annually by all Pulatec steel firms. This growth had been in part nurtured by the national government, which had aided in consolidating the steel calpolleh into various groupings based on region. In 1936, these firms then were placed under a quasi-governmental body, the MAUN Steel conglomerate, to regulate prices for the consumer and to promote sensible growth. This policy was kept in place for several decades during the peak decades of steel production. By the 1970s, however, the Popular Alliance government under Coyolton Acolmiztli began a process of deregulating major industries, including the steel industry. The MAUN Steel conglomerate was almost fully privatized and heavily restructured into a private association of the Pulatec steel producers throughout the year 1973. During this process, several smaller calpolleh groups broke away from MAUN Steel, forming a smaller, rival business association. By 1973, the Pulatec steel industry had been past its peak by almost a full decade. The shock treatment meant to make the steel industry competitive again instead sank many firms, slowing the decline of some but hastening others'.

Zilung Chen derived much of its steel intake from the neighboring nation of Dzhuvenestan. While Dzhuvenestan was a convenient location for cheap steel, by the late 1970s, cracks were beginning to show in its political system that made the long-term stability of the state come into question. To resolve the risk this posed to Zilung industry, several Zilung firms reached out to newly-privatized MAUN Steel to secure a new import route. The prospect of supplying Zilung Chen's steel needs not only buoyed the hopes of MAUN Steel, but also surrounding industries. For the first time in decades, overall steel production rose and investments were made into reactivating downsized and mothballed plants to meet new demand. Critically, loans from both domestic and international sources were secured, backed by promises of future shares in the profits from steel exports. While some of the short-term loans and investments were made good, this only prompted further solicitation of investment by the steel cartel, eventually far outpacing the production capacity that could reasonably be generated from trade with Zilung Chen by the 1980s. This coincided with a general economic upswing in Pulacan that saw many more eager to invest, in hopes of replicating previous financial successes. Additionally, the 1980s saw turmoil within Dzhuvenestan reach a fever pitch, impacting its steel production significantly and opening a wider niche for Pulacan to fill. The sudden lack of cheap steel caused prices to rise substantially. Investments, combined with subsidies from the national government, were acquired by MAUN to fund long-term projects to expand production. However, by the end of the decade, Zilung firms and state agencies realized that the economy was spending far more on imports and services than it could hope to generate, especially to pay off its ballooning national debt. Several spending cuts were made in the early 1990s, inducing a sharp decline in steel orders from Pulacan. Though MAUN was developing a foothold in several major markets in competition with nations such as Dzhuvenestan, none were as large as in Zilung Chen; as such, the number of interested customers were now below predicted levels; production targets for the following fiscal year (1992) were now far in excess of predicted demand. MAUN directors were now left with a choice: either their calpolleh could produce as planned, producing a steel glut and flooding the market; the other option was to ask subsidiary calpolleh to slash production, potentially leaving many of these workplaces without enough money to provide services or pay their members.

The problem of managing the steel glut was further compounded by a sudden lack of capital to reimburse or compensate investors. The sheer size of MAUN, as well as the number of industries interconnected with steel manufacturing, meant that a collapse or decline in MAUN would have high risk of contagion. For example, once production of steel began its rapid decline, industries such as iron mining, shipping, and others connected to steel suffered as well. In the end, MAUN leadership elected to gradually drop production quotas to allow time for individual calpolleh to either restructure or change industries. This process, however, was not enough to rectify the immediate issue of steel overproduction. Throughout 1992 and 1993, overproduction was often such that steel had to be given away or sold for a small fraction of typical sale price just to keep space open in warehouses for more new steel.

Political situation

The Republican Palace in Mabesekwa, site of M.T. Chabaya's suicide

The 1990s saw an acute crisis of national leadership spawn from the fallout of the steel collapse. As the steel crisis unfolded into a wider economic recession, chief ministers became increasingly short-lived; as they were unable to achieve lasting economic improvement early in their terms, they were often forced to resign or voted out of office. The cycling between parties and failure to form a long-term strategy engendered a sense of voter fatigue within the Pulatec population, in turn radicalizing several groups within the country either towards extraparliamentary political groups, anti-government groups or new religious movements. Those that remained politically invested became increasingly polarized as fighting over Pulacan's economic future grew increasingly bitter amidst the backdrop of a paralyzed government.

At the onset of the steel crisis, Motlasi Themba (M.T.) Chabaya of the Popular Alliance for the Republic had been Chief Minister since 1986. Going into the 1990s, he enjoyed high popularity through staking the legitimacy of his government in the rapid economic growth of the late 1980s. Additionally, under his government, the Pulatec central bank had offered several low-security loans to MAUN Steel from 1987 to 1990 in addition to subsidies ostensibly designed to fund expansion. As the conglomerate collapsed, Chabaya was left with no plan of action; public support for his regime collapsed as the situation spiraled faster than the government could feasibly act on it. The timing of several financial injections, coming right before MAUN collapsed, also served to raise public suspicion that the Chabaya government was somehow aware of the imminent collapse in steel prices and failed to act accordingly to insulate the conglomerate. (Even if they had known beforehand, the potential effectiveness of preventative measures remains in dispute.) As Chabaya failed to rouse a comprehensive plan to rescue the MAUN calpolleh or otherwise rectify the economy, the calls for his resignation grew. The Alliance even suffered defections and resignations, while several politicians (including an aging Coyolton Acolmiztli) came forward to challenge Chabaya's party leadership. By the start of 1993, piecemeal changes had been made, but they were not sufficient to stem popular unrest. In March, a multiparty collection of parliamentarians began calling for criminal investigations into Chabaya's Secretariat of Finance. On April 9th, 1993 the House of Delegates voted to begin procedures for a vote of no confidence. Chief Minister Chabaya rose to challenge the vote. His speech was subsequently interrupted by repeated jeering from the assembly. During the middle of the speech, he appeared to suffer a nervous breakdown, and nearly collapsed over the podium mid-sentence. Overcome by grief and conflicted emotions, he chose not to complete the speech and instead committed suicide via autodefenestration, the only Pulatec politician to successfully do so. Chabaya fell from near the top of the Supreme Colloquy building, and died on impact with the street below. President Capanilla Tezozomoctli chose to appoint Esau Moremi of the now-defunct Pulatec Party of Rights as caretaker Chief Minister until such time as general elections could be held. The Party of Rights was junior partner in coalition with Popular Alliance; it was hoped that such an appointment would allow for continuity of government while preventing any one Jubilee notable from receiving an undue incumbency advantage. Because the Popular Alliance internal elections were forced to occur at roughly the same time as compete in the election, it was unable to form a cohesive electoral strategy.

The national shock and remorse at the unprecedented suicide of a head of government overshadowed all other issues during the subsequent October 1993 general election. The end result was one of the largest upsets in Pulatec electoral history: the Popular Alliance and Party of Rights were both wiped out; their combined majority was reduced to minor crossbench status. The Party of Rights fell to just five seats, with Moremi losing his own seat; Popular Alliance fell to 20 seats, and has never come back to government since. In their stead came the Nguzo Party, which through a coalition with the New Progressive Front, was able to form a government by December 1993. At their head was Pantla Papalotl, Pulacan's second female Chief Minister and the first from Nguzo. Hopes were initially high for swift reconciliation of the crisis. The Papalotl government made some initial changes that alleviated the financial pressure on the failing calpolleh, creating a temporary stipend to keep workers and their families afloat until such time as a long-term solution could be found. Other stopgap measures were overshadowed by Papalotl's pursuance of reversing the policies of Chabaya. While many were very unpopular in the wake of the MAUN collapse, the exuberance and focus on repealing them was seemingly taking primary focus, at the expense of long-term financial rectification. This policy of mass reversal of Alliance standards once again induced economic uncertainty, and further divided public opinion. Capanilli Tezozomoctli, in one of his most controversial final acts as President of Pulacan, threatened to dismiss Papalotl as Chief Minister unless her Cabinet could produce a new plan for conclusively rectifying the economic recession. As Tezozomoctli was elected along with a Popular Alliance government, Papalotl publicly accused that he "would find no plan acceptable" and that his ultimatum had been made in bad faith so as to get her to resign. Seeing the Legislative Assembly increasingly divided and unable to pass resolutions, along with collapsing public opinion in the government as a whole following Tezozomoctli's stunt backfiring, calls increased for a vote of no confidence. The situation inside the Legislative Assembly had spiraled into a full-fledged political crisis for the second time in just a handful of years.

In an attempt to save face, Papalotl resigned as Chief Minister on May 20th, 1997. She also stepped aside as Nguzo Party leader, forcing the party to undergo an internal leadership election. President Tezozomoctli, seeking a total break from Papalotl, failed to accept any of the remaining Cabinet members as caretaker Chief Ministers. As such, the Nguzo Party put forth several candidates, only to fail to see appointment. In yet another unprecedented move, Tezozomoctli was refusing to carry out his prescribed duty to appoint a Chief Minister, causing the 30-day time limit for forming a Government to elapse and for snap elections to be called. Tezozomoctli's actions, from the ultimatum through to abstaining from appointment, were unprecedented to the degree that they provoked a constitutional crisis. While the Political Settlement, Pulacan's supreme political document, specified that the Chief Minister was to be appointed by the President, it did not specify whether or not the President could dismiss the Chief Minister. Likewise, the President was to appoint a Chief Minister, but the Settlement did not create enforcement mechanisms to compel them to do so, or specify that they should be punished if they neglected to do so. As such, while their unpopularity and brazenness were certain, their illegality was less assured. Several National Gendarmerie units under the command of Colonel Thabo Banika (T.B.) Tshola attempted to force an end to the deadlock through an attempted coup d'etat on May 30th. The city of Aachanecalco was occupied by the coupsters for two days and Tezozomoctli was briefly placed under arrest; when units outside Aachanecalco failed to join the mutineers and protests broke out against the coup, Tshola negotiated a stand-down in exchange for leniency in punishment. Tshola and a co-conspirator were later found dead in military custody before being able to stand trial. Tezozomoctli withdrew his already-unpopular re-election campaign for the Presidency a few days following the May Coup, as the crisis would later be known.

The June 1997 snap elections saw Nguzo humbled at the polls, though not as severely as Popular Alliance had previously. Complicating matters was the fact that no party had achieved a clear majority or even a substantial plurality in the polls. Though the economy was somewhat improving by the end of the 1990s, a decision was reached to form a unity government between the New Progressive Front, Nguzo, and Juwa until such time as the economy was finally rectified. Since the most recent Nguzo leadership election, all three parties were now led by moderates that were amenable to working with each other and with foreign nations to resolve the crisis. To form the Cabinet, roles were distributed among the parties; Nguzo leader X received the Foreign Secretariat, NPF leader Y received the Financial Secretariat, and Juwa leader Z received the Chief Ministry. One of the major components of the national unity government was the internationalization of the recovery process. While minor economic aid had been sought since the early Papalotl administration, it was under the national unity government that aid, principally from nations such as Pulau Keramat and Zacapican, was acquired.

Repercussions

The Lost Decade had far-reaching implications for the Pulatec, and wider Ozerosi, economy. The national unity government of the 1990s was forced by the crisis to engage in major economic restructuring. The chief aim of this restructuring was to keep as many calpolleh intact as possible, and to minimize employment loss due to the outsized role that the calpolli plays in Pulatec civic life. As a result, social welfare programs aimed at providing employment at the calpolli level were heavily strengthened; individual-level social services were also improved by Nguzo policies in the early 2000s.

To alleviate the potential mass loss of employment caused by the steel industries' collapse, many calpolleh were re-rolled into working for refined manufacturing groups. Butale Automobile Works, for example, worked with the Finance Secretariat to absorb former steel calpolleh left without work as automobile workers to power an expansion of its foreign exports.

Other calpolleh were temporarily given roles as cleanup crews, assigned to decommission the sites of abandoned steel mills and mining facilities. Given the extensive environmental degradation caused by steel refining, this work often lasted for decades. Around Ghanzi, some calpolleh are still contracted by the local government on industrial decontamination duties as of 2024. Some of these calpolleh opted to reroll full-time as environmental safety workers; in 1999, with the help of the Association of Ozeros Nations, the Bureau of Environmental Safety was elevated to ministerial status as the Secretariat of Environmental Health and Sustainable Development, with many former steel calpolleh contracted under the Secretariat's new Environmental Health Restoration Agency (EHRA).