Verdean Economy
| Economy of The Republic of Isla Verde | |
 The Open Market in La Llava | |
| Currency | Meridonian Unit (μ) Billeta Verdista (βV) |
| Fiscal year | 15 de Mesjula-14 de Mesjula |
| Statistics | |
| GDP | $3,561,025,047,500 NSD |
| GDP growth | +1.2% (2016-2017) |
| GDP per capita | $15,850 NSD |
| GDP by sector | Primary: 16.6%; Secondary: 45.8%; Tertiary: 37.6% |
| Inflation | 1% |
| Population below poverty line | 5.9% |
| Labour force | 134,802,210 |
| Labour force by occupation | Primary: 9.1%%, Secondary: 48.1%, Tertiary: 42.8% |
| Unemployment | 7.14% |
| Average gross salary | $22,860.15 NSD yearly (2017) |
| Main industries | Film Production; Industrial Production; Ships, Maritime Equipment, Light Watercraft, Solar Panels, Wind Turbines, Automobiles, Armaments, Consumer Materials such as apparel, shoes, toys, and consumer electronics; Minerals and Ore Processing; Oil, Coal, Copper, Silicon, Rare Earth Elements, and other Metals; Tourism; Hospitality, Ecotourism, Cultural Exports; Agricultural Products; Rice, Legumes, Fish, Beef, Poultry, Corn, Fruits and Vegetables |
| External | |
| Exports | $685,650,140,178 (2017 est.) |
| Export goods | Films, Ships, Light Watercraft, Maritime Equipment, Solar Panels, Wind Turbines, Cultural Products, Fish, Armaments and Apparel |
| Main export partners | Capisaria, Ghiraul, Datchlia, Plata, Dorado Lesser Verde Finorskia, Los Cuarzos, Diamante, Bozton |
| Internal | |
| Imports | $683,870,147,195 billion (2017 est.) |
| Imported goods | Wheat, Fruits and Vegetables, Armaments, Traincars, Rails, Consumer Electronics, Telecommunications Equipment, Iron, Aluminium Steel, Gold, Datchium, Consumer Goods and Rare Earth Elements |
| Main Import partners | Capisaria, Datchlia, Dorado, Plata, Finorskia, Bozton, Ghiraul, Walakia Vershina Hutizan |
| Public Finance | |
| Public Debt | $3,320,501,746,226 (93.25% of GDP) |
| Budget Deficit | $150,751,122,356/year |
| Revenues | $1,709,292,022,800/year |
| Expenses | $1,860,043,145,156/year |
| Credit Rating | MEDU BBB |
The economy of Isla Verde is among the oldest in Greater Meridon, and is rooted traditionally in both agriculture, but also in seafaring. Early Verdean societies were initially formed around fishing and agricultural villages located on the coast and along major rivers. These early villages would later form larger cities that would become the basis of the Verdean economy. Metallurgy, and mining of metals would become an important part of these early societies, though the Verdeans were somewhat late to ironworking as a result of a shortage of iron in the Archipelago. Early societies would eventually coalesce into the First Verdean Empire, which would become a major epicenter of trade in Greater Meridon. The Imperial Economy became an example of pre-industrial global trade, and would eventually be a leader in the earlier phases of the Industrial Revolution. When the First Empire fell, Verde remained a relatively influential nation in global trade, but went into steady decline as the mainland nations eclipsed the old nation. This would culminate with the subjugation of a divided Archipelago by Capisarian invaders. De-nativization attempts by the Capisarians broke an already weakened economy, resulting in massively increased poverty rates throughout the Archipelago. Verde would liberate itself in DI 91, and would immediately reconstruct the economy from the ground up. This economic renaissance resulted in Verde becoming a major regional, and global economic player once again. However, as a result of the Doradan War, economic development has slowed as a result of many development resources being tied down during the conflict.
History
Imperial Verdean Economics
The first real economic system in the Verdean Archipelago was founded with the First Verdean Empire which bound what was largely loosely held together city-states into a unified nation-state that kickstarted the basis of transcontinental trade. This early economy was, initially, almost entirely based in subsistence agriculture and remained largely so in the first few centuries of Imperial Rule. However, in the largest cities of the Empire, Corazón del Río, La Llava, Puerto Bello, and El Dorado, the a small class of skilled workers formed, and produced manufactured goods for the benefit of people in Verdean cities, and for the nascent shipping industry. Towards the end of the Early Imperial Period this economy began to explode, before the Imperial Civil War brought an end to the prosperity, and reversed Verdean gains until the rise of a mercantalist state in the AdI 790s.
The Middle Imperial Period was marked by the foundation of the mercantalist state, when the Verdean Empire came out of its deep retractionary period and began to explore and colonize the far reaches of the world. These colonies were folded, mandatorially into the Verdean trade network, and Especia in particular would be made to export minerals to the Archipelago. In the earlier years of the Middle Imperial Period, this would feed into a massive trade loop with the Meridonian Continent. However, the Empire closed itself under the orders Andreas the Preserver, and this great trade loop broke down in favor of a reduced, but still significant internal trading loop. This isolationary period however, result in the rapid growth of foreign competitors in the form of the ascendant mercantile class of the Capisarian Empire, the Valden Empire, and the recently founded Ghirali Trade League.
As the Empire reopened itself to foreign trade in the Late Imperial Period, it found itself struggling in a uniquely weak position. It had not experienced a period where it was not the dominant trading power in Meridon, but had to struggle against several competitors during this time. Attempts to dominate the continental markets resulted in a shift in methods of production. The work of individual craftsmen rapidly became de-emphasized in favor of early manufactories. During the earlier phases of the industrial revolution, the Verdeans had a slight edge over the other major economic players, however, when the First Empire began to crumble in last years of the 14th century AdI this edge fell away.
Decline
After the fall of the First Empire, the weakened Verdean Economy struggled to rebuild, before gradually regaining its footing under the new capitalist order in the middle era of the Republic. Industrialization would continue apace throughout the Republican Period, though the economy would go through crises in the DI 20s, and again the late DI 40s. These crises slowed industrial development, and further weakened the position of the Verdean Republic in relation to the other Meridonian powers. A recovery in the DI 30s briefly put Verde back on top of the global trading arena. The crisis of the DI 40s however was more disastrous, and the resulting chaos set the stage for the fall of the First Republic, and the ascendancy of Carlos XII Parisa.
The rise of the Second Verdean Empire would see the rapid buildup of wartime industry throughout the Empire. This industrialization resulted in the rapid, if short lived, growth of the economy. This wartime industry went hand in hand with the rapid buildup of the Verdean Armed Forces, in preparation for the Invasion of Los Cuarzos and the Carlosian War. In opening phases of these conflicts the Verdean Empire did quite well, gaining territory, as well as resources from its conquests. As the war began to turn against the Verdeans however, the economy suffered, especially as greater and greater numbers of workers were pulled out of the factories and fields, and onto the battlefield. At the end of the war, with an economy devastated by the war, the Verdean Empire went into a steep decline.
Though industrialization would continue throughout the coming decades, the Verdeans were completely eclipsed by the ascendant Valdens. A growing class conflict, heralded by the birth of socialism due the works of Mariana Ortega, resulted in increasing instability, and a larger number of crises in the economy. This would eventually lead to the outright collapse of the Second Empire. Though the restoration of republic would see a brief economic renaissance, the disastrous Valden War, would see the collapse of a unified Verdean Archipelago, which eventually resulted in the colonization of the Verdean Archipelago by Capisaria.
The Economy Under Capisaria
Under the rule of the Capisarians, efforts were made to break the native industry. Isla Verde was one of the islands spared the worst of it, with economic activity largely going on uninterrupted until DI 154. However, starting with the first major de-nativization attempts made in DI 154, the Verdean economy plummeted. Unemployment skyrocketed from 5% in DI 154 to 35% in DI 155. The Billeta Verdista was abolished in DI 155, and the deflationary tactics employed by the Federal Republic resulted in the plummeting standards of living for people living in the colonized lands. Poverty rates on Isla Verde in particular increased from 6% to 45% by DI 155, and 58% by DI 156. These major destabilizations of the Verdean economy resulted in massive riots throughout the island, which weakened the economy further.
In the DI 60s and DI70s, economic conditions remained poor for Verdeans, though for the large numbers of imported Capisarians lived in luxury, and their expenditure of money did create a new tourism market that augmented the cash crop, mining, and heavy industry already extant on the island. Conditions gradually improved throughout the late DI 60s and early DI 70s, with unemployment falling to 22%, and the poverty rate reduced to 56% by DI 73. Instability in Capisaria, crop failures, and the collapse of the Federal economy resulted in the end of this brief relieving period, and the resumption of riots against Capisarian occupation.
In the DI 80s, economic activity was greatly reduced as a result of constant instability. An active insurgency, paired with brutal crackdowns saw to the closure of most industrial centers on Isla Verde. Unemployment rose to nearly 75%, and poverty increased to 68% throughout the duration of the conflict. As the island was liberated by the insurgents, economic activity resumed, with the rebels reopening factories and securing them against counter-attacks. This reindustrialization helped revitalize the economy in the revolutionary state, resulting in a gradual, exponentially declining rate of unemployment, and poverty with unemployment rates falling to 15% and poverty rates falling 22% by DI 91.
Post-Revolutionary Economy
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For the first few years after the liberation of the Verdean Archipelago from the Capisarians, there was a strong emphasis among the Verdean government to rebuild the economy from the ground up. Development initiatives reestablished the economy around market socialist principles. The economy, worth a total of 1.2 trillion NSD in DI 91 rapidly expanded as native industry, most notably the shipyards at Corazón del Río were restarted, and by DI 200, increased to nearly 2.8 trillion NSD. Unemployment fell to a little over 8%, and poverty a little over 7%. This rapid expansion continued throughout the early half of the DI 200s, though economic growth slowed after the end of the Parisa administration, and the weaker, less energetic rulership of the Palenque administration.
The pattern of growth continued under the rule of Palenque, with the economy growing to slightly under 3.3 trillion by DI 210. The unemployment rate fell to less than 4% under the administration, while poverty rates fell to less than 5%. Minor liberalization initiatives attracted some foreign business, but the real growth in this period came from the rapid expansion of the tourism sector. The economies did suffer a major hit when in early DI 212, the city of Bastille suffered a nuclear strike from the Doradan ethnonationalist government, the attack, though not hitting a major economic area, did kill seventy five thousand people, and caused nearly one hundred billion NSD in damage, and halted economic activity as the cleanup ensued for months.
Fighting during the Doradan War massively reduced the rate of growth of the economy, and increased public debt. The initial invasion of Dorado cost the Verdean government nearly 1.5 trillion NSD, and followup operations cost half as much. The focus on war, has resulted in fewer resources for economic development. Loss of faith in the continuance of the war has resulted in a further depression of economic activity. A slight recessionary trend occurred in DI 215, however this was eventually reversed and economic growth, though slight, resumed in DI 216. Prospects have been reduced, and public debt has increased, though the development project continues.
Labor Market and Wages
Since the revolution, unemployment has fallen steadily. In DI 192, unemployment was 35%, which rapidly fell to 10% by DI 206, unemployment continued to decline throughout the early years of the Palenque administration. Since the start of the Doradan War, unemployment rates, after rising briefly, fell to around 8% and has remained steady around that particular mark. Wages have increased since the revolution, and now stand at an average of around $22,000 NSD.
Foreign Trade
Since the fall of the Capisarian Federal Republic, the Verdean state has begun trading regularly with the outside world. Its primary trading partners are the new Capisaria, and other Verdean nations. The Verdean economy does run a slight budget surplus, seeing almost 700 billion NSD in both exports and imports. Verde largely is largely known for exporting products from its maritime industry, and cultural exports, most notably Verdean films. Its primary imports are consumer goods, and food, which the Verdean Republic struggles to produce enough of, in spite of its own massive agricultural industry.
Sectors
Primary
The primary industries of Isla Verde are massive, and do, for the most part meet the needs of the Verdean economy. Most of the labor force in the primary sector are agricultural workers who represent of 66% of the primary sector workforce, which includes subsistence farmers, who are formally unemployed. Extraction industries represent a larger share of the economic value of the primary sector. The total economic value of the primary sector is $591,130,157,885 NSD. In spite of this, the Verdean economy is lacking for resources, and as a result must resort to a lot of importing of natural resources to develop its industry.
Secondary
The secondary industries of Isla Verde are also quite large, and represent the lion's share of the Verdean economy. Industrial production on Isla Verde is primarily oriented towards production of consumer goods for its population, as well as maritime shipping, equipment, and infrastructure both for domestic use and for export. 64,839,863 people work in this industry accounting for almost half of the Verdean workforce. The largest secondary sector in the Verdean economy is the maritime industry which accounts for roughly a quarter of industrial output in Verde, and almost one tenth of the total value of the economy. The total economic value of secondary economic activity $1,630,949,471,755 NSD which includes production and infrastructure.
Energy
Energy in the Verdean economy is, thanks to the effort of the government almost entirely powered by renewable sources, with hydroelectric power providing the bulk of renewable sources, though there remain a few fossil fuel oriented energy production facilities in the Verdean economy.
Infrastructure
Infrastructure in Verde is developed, in large part to multinational partnership. Emphasis is placed on rail transport, particularly high speed rail, with air travel, and sea travel also providing a large amount of of the transport infrastructure available for the economy.
Tertiary
Tertiary industry represents another major aspect of the economy with film production and tourism acting as rapidly growing sectors. Film production is the largest single contributor to the tertiary sector with it accounting for over a quarter of the tertiary industry, and nearly ten percent of the total GDP of the Verdean economy. Secondary to this is the tourism and hospitality industry, which is smaller. In comparison, the financial sector of the Verdean economy is comparatively small with there being no national scale, government endorsed stock exchanges on Isla Verde. The total economic value of the tertiary sector is $1,338,945,417,860 NSD.
Currency
Currently, the Verdean economy runs primarily on the Billeta Verdista (βV), which is used as the primary unit of exchange, particularly within the country. The Billeta remained fairly stable since the revolution, though the use of quantitative easing, resulted in a short hyperinflationary period, since that panic, inflation rates have stabilized near 1%. Since joining the Meridonian Union in DI 200, and the Meridonian Common Market in DI 210, the Meridonian Unit (μ) has also become an accepted national currency, especially when trading among outsiders.
Budget and Debt
The government primarily maintains solvency through taxation, though import tariffs, and export of products built by the government also make up a significant proportion of the national government budget. Taxes are levied at the national and local level. All sources of government funding take up a total of 48% of the economy, with the majority of government income going to the national budget. The national government also funds the district governments, but not normally to the local governments who raise their own taxes. The taxation of the Verdean Republic is progressive with the top income earners paying 75% of their income to the government. The top quintile of income earners pay 42.3% of their income in taxes, the second pays 35.6%, the third 28.8%, the fourth 15.5%, the lowest quintile pays an average of 4.4% of their income in taxes. The constitutions and laws delineate where the responsibilities of each level of government lie, which are as follows:
National: social welfare, the national health system, the national park system, national defense, scientific grants, the aeronautics administration, cultural export management, maritime administration, the national armaments system, the space program, foreign aid
District: long distance public transport, the power grid, the National Guards, universities
Local: police offices, intracity public transport, primary and secondary education
The aggregate public budget is roughly $1,709,292,022,800, and the government has expenditures of $1,860,043,145,156, resulting in a $150 billion budget deficit. Historically the Verdean government was quite scrupulous with its budget, however the continuance of the Verdean-Doradan War, as well as managing a weakened economy, resulted in a major spike in public debt, and the Verdean government has not managed to run a budget surplus since the start of the conflict. Currently there is $3,320,501,746,226 in public debt held by the government which has resulted in several reductions in the credit rating of Verde.