Economy of Akashi
 | |
| Currency | Ryō (AKR) |
|---|---|
| Common Monetary System | |
| Calendar year | |
Trade organisations | Common Sphere |
| Statistics | |
| GDP | NSD 261,4 billion (PPP, 2020 est.) |
GDP growth | 1,96% (2020) |
GDP per capita | NSD 25.310 (PPP, 2020 est.) |
GDP by sector | Services: 64% Industry: 30% Agriculture: 6% |
| 2,7% (2020) | |
Population below poverty line | 1,5% (2020) |
| 24.8 (2020) | |
Labour force | 7,2 million (2020) |
Labour force by occupation | Services: 59,3% Industry: 36,2% Agriculture: 4,5% |
| Unemployment | 2,2% (2020) |
Main industries | List
|
| External | |
Export goods | List
|
Import goods | List
|
The economy of Akashi is a highly developed mixed economy. It has an export-oriented developmental state economic model, characterised by high taxation, economic interventionism, and use of economic planning. It has very good standard of living and quality of life indicators, low inequality, and an extensive welfare state.
Akashi has a largely post-industrial economy: the services sector accounts for 64% of GDP, industry for 30%, and agriculture and raw materials for 6%. The industrial sector is dominated by high-tech, precision goods, and niche markets.
Significant characteristics of the Akashian economy include extensive public ownership, a robust cooperative sector, small and medium-sized enterprises as the basis of the private sector, and a strong element of industrial democracy.
The period of rapid growth after the Akashian Civil War ended abruptly with the Summer of Freedom, by which time Akashi had rebuilt and become a middle income country. Following a period of economic stagnation coinciding with a strongly socialist policy shift, the economy attained its current model of export-oriented industrialisation coupled with cooperativisation and policies favouring small business in the 1980s. Akashi is a member of the Common Sphere, which has an important influence on economic policies.
History
Since the Akashian Civil War, there have been three major phases of its economic model: import-substitution industrialisation and the construction of the Yurikaran consensus (1940–1970), the "siege economy" (1970–1982), and an export-oriented industrial policy with a small business-dominated landscape (1982–present).
Yurikaranomics
The years 1940–1970 were dominated by the construction of the Yurikaran consensus. Akashi pursued a strategy of building up its industrial base through import substitution and protection for nascent industries. The state assumed a significant role in planning, regulation, and intervention, with its directions carried out by the private sector. In addition to state-owned enterprises, the state purchased shares and obtained part-ownership of many private companies.
Overall economic growth was very high during these decades: 10,81% on average in the 1940s, 9,93% on average in the 1950s, and 4,98% on average in the 1960s. Government policies of progressive taxation and social corporatism translated growth into general prosperity and low inequality. Labour law was union-friendly, and a welfare state based on a mixture of social insurance and direct assistance was constructed.
Yurikarist policies produced a paternalistic business environment, characterised by strong company devotion, lifelong employment, and social activities to maintain team cohesion. Working hours trended slightly longer than the Eracuran average, a legacy of the drive for reconstruction and industrialisation. By the mid-1960s, conservatism in economic culture bred discontent. Workers grew irritated with the rituals of social corporatism, working hours, and the deferential leadership of the Zenrōkyō. The policy of national champions caused concern about inequality and corporate welfare, and fears that they were undermining the common land system.
"Siege economy"
Simmering unrest finally erupted during the Summer of Freedom: protests begun in May 1968 escalated into nationwide civil unrest, lasting well into 1969. Demonstrations were accompanied by general strikes and occupation of universities and factories, which helped destroy the Zenrōkyō. The government took a restrained approach that allowed the crisis to fade away by itself.
The Summer of Freedom marks the destruction of the old economic model, and the onset of the "siege economy" (包囲経済 Hōi keizai). The Akashian economy contracted by -10% in 1968 and -5,7% in 1969. Throughout the 1970s, it was beset by industrial unrest and economic stagnation. The new Sōhyō took a more aggressive stance, and wildcat and sympathy strikes occurred regularly. Economic growth was paltry, averaging 1,06% for the decade.
The 1970s saw Akashian politics dominated by a leftist bloc, which took advantage of economic stagnation to pursue radical policies. SP-led governments used taxation policies to attack wealth concentration, broke up large companies, strengthened trade unions' power, and heavily favoured the cooperative sector, whose share of the economy increased from 15% (1968) to 42% (1979). Reforms changed the welfare state from a mixed model to a social democratic one, particularly in healthcare.
While Akashi had been a founding member of the Common Sphere, membership assumed increasing importance to economic policy during the "siege economy". Economic planning through the Hermes Programme gained a larger role in the economy. Governments used deficit spending in an effort to stimulate the economy, and increased social spending as part of a socialist push. Although they managed to hold the line on unemployment, it was the cost of higher inflation, putting pressure on the ryō in the Common Monetary System, and a tough fiscal position, with persistently high deficits and increasing public debt.
The "siege economy" reached its lowest ebb in 1979–1981, when the economy fell into recession, contracting for three consecutive years. The 1980 election produced a badly fractured National Assembly, depriving the country of stable government in a time of necessity.
Contemporary
Akashi's first centre-right government since the civil war took office in 1982. Led by Ran Tsukuda, it ushered in Akashi's modern economic model.
Ran's government was paternalistic and progressive in character. It succeeded in reviving the economy while preserving the egalitarian legacy of the "siege economy". Their policies continued to favour small business and cooperatives, restrict big business, and conserved Akashi's social safety net. The public sector was reorganised and streamlined, with non-performing assets being cooperativised. Active labour market policies were introduced, including national retraining programs and public employment to maintain full employment.
Ran achieved economic recovery and renewed industrial peace after the turbulence of the 1970s. The economy grew by an average of 3,35% between 1982 and 1989. The government's consensual approach and gradual reformism helped breathe new life into the Yurikaran consensus. Inflation fell to normal levels, inequality did not increase, and the cooperative sector continued growing. A stock market crash in 1987 was met with aggressive economic stimulus, preventing recession.
The maintenance of the state-driven economic model frustrated rich and right-wing Akashians, which ultimately boiled over into the neoliberal conspiracy. Although the neoliberal conspiracy spectacularly failed, it revolted the electorate enough to produce another swing to the left in the 1990s. Akashi's only communist Prime Minister, Shinobu Furukawa, launched another round of big company break-ups, hiked taxes to destroy wealth concentration, expanded planning, and labour reforms to strengthen industrial democracy. The public and cooperative sectors grew during her term, the latter surpassing 50% of the economy.
Subsequent centre-right governments in the 2000s preserved the system, while easing somewhat the aggressive enforcement and pushes for cooperativisation and planning. During the 2010s, the Kōko Kaga government built on this foundation to implement leftist reforms ranging from conversion of the welfare system to a basic income–negative income tax model to strengthening planning and workers' self-management.
Natural resources
Akashi has considerable natural resources, particularly mineral. These include iron ore, tin, nickel, magnesite, bauxite, and limestone.
It lacks domestic energy resources, and has correspondingly invested heavily in hydropower and renewable energy.
Slightly over half of Akashian land is forest. The country's strict forestry management regime maintains high biodiversity and healthy forests. Afforestation is widespread.
Energy
Akashi's main sources of energy are hydropower, nuclear energy, and other renewable sources such as solar energy and wind power.
Nuclear power plants are mostly thorium-based.
Tidal power and wave farms are being explored as potential new energy sources.
Sectors
Agriculture
Agriculture was historically a foundation for Akashi's economic boom, but since industrialisation it has fallen in importance. As of 2020, it accounts for 6% of the country's GDP.
Farming is concentrated in the southern plains and islands. The agricultural sector is small, highly subsidised, and protected. Long-term agricultural policies favour small-scale cultivation and intense cultivation of farmland. A shift towards sustainable agriculture has taken place since the 1990s.
Important produce include rice, wheat, nuts, various fruits and vegetables, and tea. Floriculture is also a notable export.
Livestock raising is a minor activity, affected by strong animal welfare regulations. Major livestock are pigs, and major poultry are chickens, raised mainly for eggs. Fishery has declined considerably in favour of aquaculture.
Akashian agriculture is unique due to its common land (Miranian: 共有地 kyōyūchi; Gothic: 𐌲𐌰𐌼𐌰𐌹𐌽𐍃𐌷𐌰𐌹𐌼𐍉𐌸𐌻𐌹 gamainshaimōþli) system: land is collectively owned by the state, and farmers have usufruct rights. Land is registered and regulated officially through a national agrarian registry.
Industry
Akashian manufacturing and industry is highly diversified, and concentrated in the high-tech and value-added sectors. Industry accounts for 30% of the country's GDP.
Significant industries include electronics, IT, machinery, automotives, construction, shipbuilding, food processing, textiles, chemicals, and pharmaceuticals.
Industry in Akashi consists primarily of small and medium-sized enterprises, with fewer large enterprises.
Services
Services is the largest sector of the Akashian economy, accounting for 64% of GDP. Major industries include telecommunications, transportation, retail, leisure, and tourism.
Akashi has a flourishing entertainment industry, which has become one of the largest sectors of the economy. It contributes significantly to Akashian popular culture and soft power abroad. It encompasses music, film, television, animation, and publishing industries, as well as fashion, nightlife, and a highly regulated adult industry.
Tourism makes a notable contribution to the economy. Akashi is one of the most visited countries in Eracura, with 8,5 million visitors in 2020. Popular destinations include large cities, national parks, and historical monuments.
The financial sector is relatively small, with public banks playing a leading role. Akashi has one stock exchange, the Akashi Stock Exchange (ASE), located in Hirakawa.
The real estate sector is underdeveloped, as most land and housing is publicly owned.
Infrastructure
Akashi's infrastructure is one of the best developed in Eracura. The centrality of large public works projects to historical stimulus efforts and job guarantee schemes has maintained a well-developed and comprehensive infrastructure.
The sophisticated and extensive transport network includes 1,2 million km of paved road, 25.500 km of railways and high-speed rail, 50 airports, and 5 international seaports.
Most national roads are 4-lane roads. Traffic is left-hand, a legacy of Miranian influence.
Rail transport is a major means of transport. Akashian cities are connected by over 250 Shinkansen high-speed trains, known for their safety and punctuality. Cities have well-developed public transport systems, including rapid transit, light rail, monorails, and buses. Train stations commonly have department stores, shops, restaurants, and other real estate next to them, enhancing their attractiveness for transport and tourism.
Numerous policies have been implemented to discourage car use and incentivise public transport, cycling, and walking. Car ownership fees and fuel taxes are used to promote energy efficiency. Most Akashian cities are now bicycle-friendly, and cycling is a common means of transport and leisure activity.
Flying is a popular way to travel. Akashi Airlines is the flag carrier. The number of airports was consolidated and reduced with the expansion of Shinkansen services and abolition of less-traveled domestic routes. A network of ferries and tunnels connects Shimachi to the mainland.
Currency
Akashi's currency is the ryō (㋷). It is part of the Common Monetary System, and is issued by the National Bank of Akashi.
Formerly a free floating currency, the ryō operates a crawling peg relative to other Common Sphere currencies since the creation of the CMS. Its international convertibility was suspended in 1977–1985 and 1990–2002.
Economic policies
Economic ownership in Akashi (2020)
Public ownership and steering
The Akashian state plays a significant role in the economy. It owns the commanding heights of the economy through state-owned enterprises, owns controlling shares in many private companies, has practical control of the banking system, and owns and operates a sovereign wealth fund. The public sector is used both as an investor and catalyst for economic development.
The government uses the Hermes Programme as its primary tool for economic planning, and providing direction to the private sector through the influence of the public sector. Plans are made over a five-year period.
Public investment plays a substantial role in the domestic economy. The government and sovereign wealth fund either invest or own large shares of many companies, which altogether constitute nearly 40% of the ASE's market capitalisation. Profits earned by state-owned enterprises and the sovereign wealth fund are distributed to citizens as social dividends.
The government owns Akashi's land, and over 80% of the population lives in public housing.
The government subsidises and controls prices on a list of essential items to keep prices and cost of living low. Notably, these do not include petrol prices — the subsidy system instead is used to encourage biofuels, renewable energy, and public transport.
Following a historical build-up of the public sector, centre-right governments of the 1980s and 2000s have notably preserved the developmental state model and government influence over the economy. Ran Tsukuda and Anna Carbone have engaged in cooperativisation, restructuring, and employee buyouts and voucher privatisation for non-performing state assets. These programs have made Akashians one of the highest per-capita share owners in the world.
Competition law is strict and stringently enforced. Official policy has remained constant since the 1970s: restricting monopoly power to the public sector and preventing private companies from gaining excessive market power. Notable crackdowns and break-ups of large companies occurred in the 1970s and 1990s, leaving a market dominated by small business and with few large companies, most of which are state-owned.
The result of these factors is a system of state direction executed by the private sector in the context of a market economy, nicknamed "centrally planned capitalism" (中央計画資本主義, chūōkeikaku shihonshugi).
Labour policies
Akashi's labour law is strongly worker-friendly, with extensive labour lights and employment protections. Trade union membership is automatic upon entering the workforce, and union density is very high.
The standard schedule is a four-day workweek with a six-hour day.
Labour law makes co-determination and workers' self-management the foundation of the economy. Every company must implement workplace democracy and oversight mechanisms. Any company above a certain size must allocate half the seats on its board of directors to worker representatives, elected by union members, as well as elect a supervisory board to oversee the company's management.
The Sōhyō is the national trade union centre. It engages in collective bargaining as part of a tripartite system with the Keidanren and the government.
Cooperatives
Akashi has a strong cooperative sector. As of 2020, cooperatives constitute 64% of the private economy, and the majority of state-owned enterprises are also organised as cooperatives. Akashi has the second largest cooperative sector in the Common Sphere, behind Gylias and Megelan, and ahead of Delkora.
Cooperatives are a mainstay of Akashi's rural economy, and are also dominant in the retail and finance sectors.
The Kyōkuren is the national cooperative federation, and one of the largest federations in the Akashian economy. It has links to the National Cooperative Party, a highly influential kingmaker in Akashian politics.
Taxation
Akashi has a progressive tax system with high marginal rates. The effective taxation rate is cited as among the highest in the world.
The primary taxes are income tax, corporate tax, and capital gains tax. Income tax is negative and provides a basic income threshold of ㋷30.000 per month. Capital income is taxed at higher levels than labour income.
The tax code and marginal rates are structured to incentivise small business and discourage big business and accumulation of wealth. Inheritance tax is high. Land value tax and property tax are collected, but have lesser importance due to public ownership of land and housing.
In addition to taxes, both employees and employers contribute to social security system, with taxes automatically deducted from salaries and payrolls.
The tax system emphasises direct over indirect taxes. Consumption tax was introduced late, and is set at 4%, with all essential items being exempt. Financial transaction taxes are levied on financial instruments and foreign currency exchanges.
Akashi operates within the framework of the Common Tax Compliance System, which requires all Akashian citizens to file tax returns even if they are not resident, and all foreign financial institutions to report the assets and identities of persons connected to Akashi to the authorities.
Akashi features a high level of tax decentralisation and fiscal autonomy for provinces and prefectures. Provincial governments receive all taxation levied in their area, and make payments to the central government to cover their share of the cost of nationwide services. Prefectures collect land value, property, and consumption tax.
Budget
Akashi's national budget follows a fiscal year of 1 January–31 December. It is drafted in November for the following fiscal year, and voted on in February.
Between 1972 and 1984, Akashian governments ceased to introduce annual budgets, and instead introduced regular mini-budgets (小予算 shōyosan, "little budget"). Annual budgets were resumed in 1984, but mini-budgets continue to be used throughout the year to make adjustments and respond to economic circumstances.
Trade
Foreign trade is significant for Akashi's export-oriented economy. Akashi's closest trade partners are fellow Common Sphere states, which constitute the lion's share of its trade. Other notable trading partners outside the Common Sphere include Acrea, Ossoria, Quenmin, and Allamunnika. Trade outside the Common Sphere is subject to relatively high tarriffs.
Principal exports include electronics, automobiles and auto parts, ships, steel, plastics, computers, and pharmaceuticals.
Principal imports include foodstuffs, raw materials, thorium, textiles, chemicals, machinery and industrial equipment.
Wealth
Akashi has a high degree of income equality and relatively little concentration of wealth. The system of "centrally planned capitalism" and aggressively egalitarian policies of past governments has produced an economic culture that emphasises patriotic duty to help others, paying taxes in full, not flaunting wealth, and valuing contributions to society.
The richest Akashians in 2020 are Ayane Hoshino, the founder and president of Musex Records, and industrialist Asami Satō.
