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Lost Decade (Pulacan)

The Lost Decade was a time of protracted economic recession in Pulacan. Beginning in 1992 with the collapse of the X 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 195X, when up to Y million tons of steel were being manufactured annually by all Pulatec steel firms. This growth had been in part nurtured by the federal government, which had aided in consolidating the steel calpolleh into various groupings based on region. In 193X, these firms then were placed under a quasi-governmental body, the X Steel conglomerate, to regulate prices for the consumer and to promote sensible growth. This policy kept X. By the 1970s, however, the National Jubilee government under Y began a process of deregulating major industries, including the steel industry. The X 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 X Steel, forming a smaller, rival business association. By 1973, the Pulatec steel industry had been past its peak by two decades. 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 X Steel to secure a new import route. The prospect of supplying Zilung Chen's steel needs not only buoyed the hopes of X 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.

Political situation

The 1990s saw more general elections than in any other decade in Pulatec history.