Economy of Esthursia
 Brough of Weskerby, the financial centre of Esthursia | |
| Currency | Arian shilling (EAS, ʃ) |
|---|---|
| 1 February - 31 January | |
Trade organisations | IEF, V3 and UAS |
| Statistics | |
| Population |  131,718,405 (January 2023) |
| GDP |
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GDP growth |
|
GDP per capita |
|
GDP by sector |
|
| |
| 2.2% | |
Population below poverty line |
|
 24.7 low (INS, 2022) | |
| |
Labour force |
|
Labour force by occupation |
|
| Unemployment |
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Average gross salary | ʃ633.93 / $973.08 weekly median (2023) |
Main industries | List
|
| (Very easy, 2020) | |
| External | |
| Exports | $n billion (2021 est.) |
Export goods |
|
| Imports |  ~$n billion (2021 est.) |
Import goods |
|
FDI stock |
|
| $11.8 billion (2022) | |
Gross external debt | $1.881 trillion (2021) |
| +$1.139 billion (2021) | |
| Public finances | |
| |
| |
| Revenues | 51.6% of GDP (2023) |
| Expenses | 53.5% of GDP (2023) |
| Economic aid | $71 billion (2022) |
| |
Foreign reserves | $471.8 billion (31 January 2021) |
3.1% (year to February 2023)The economy of Esthursia is a highly industrialised, mixed economy with a high degree of welfare and government intervention. The largest sector of Esthursia's economy is services at 80.8 percent, followed by manufacturing at 18.4 percent. Primary production - centrally agriculture - is 0.8 percent. Esthursia's economy has low levels of relative poverty and inequality, a large proportion in government spending of GDP, and extensive universal provision of utilities, such as education, healthcare, energy, water and housing. At a yearly gross economic output of nearly 7 trillion UBI, it is a major regional economy of Auroria, integrated into the Aurorian market.
With respect to foreign trade, the key economic sectors are manufacturing, healthcare, education and energy. The largest industry by far is healthcare, followed by energy. Esthursia has extensive geothermal, wind and tidal energy reserves, while having considerable nuclear production, and exports nearly half of the energy it produces. The agricultural sector is particularly reliant on government intervention, although healthcare also remains primarily nationalised and centralised. The metropolitan areas of Brantley and Weskerby generate around a third of Esthursia's GDP. Finance also remains key to the Esthursian economy, although is diminishing as a proportion of the economy - particularly during the 2009-11 economic crisis - while remaining central in the city and capital of Weskerby.
High-technology manufacturing in Esthursia ranks particularly highly, meanwhile - due to high levels of investment out of Esthursia while inward investment is low - Esthursia remains a creditor nation. Short-term outlooks for the Esthursian economy remain bullish due to an extensive infrastructure and welfare programme aimed at redistribution, although domestic credit scores have been destabilised due to this. Esthursia has one of the largest information sectors, and its healthcare sector is by far the largest employer, followed by the education, finance and construction sectors.
Esthursia has not typically been heavily integrated with the world economy, however its recent entrance into the FSO, entrance to the Union of Aurorian States, bilateral relationships with other Ethian states, and increased participation in the global economy have increased trade markedly. Trade with the rest of the Union of Aurorian States, especially the other V3 nations, represents over half of the country's total trade. Trade policy remains mainly under the jurisdiction of the Esthursian government. Esthursia has operated under its "arian shilling" since the Union's founding in 1508, and in totality since 1588, which remains independent and partially managed.
Government involvement is primarily exercised by His Highness's Chancellery, headed by the Chancellor of the Landsfere, and the Redery for Economic Affairs. Since 1926, management of the economy has followed a broadly Asmontian approach, especially in the wake of the late 1980s and 2010 crises. The Union Bank of Esthursia is the Union's central bank, and since 1916 its Minting Chamber has been responsible for setting interest rates, quantitative easing, and forward guidance.
History
1911-1926
The Esthursian economy in the early Edmundian era was the formation of decades of to-and-fro over state involvement and worker control. In 1911, the election of Neville Salisbury brought over a decade of Liberal government to an end, however did not heavily depart from its widely centre-right economic positions.
In 1916, Esthursia experienced a close call with a bank run in the Panic of 1916, in which the country narrowly avoided recession. During the course of the year, Salisbury's one-nation conservative government set up a central bank, as well as beginning the barebones of laws later scrapped by Thorne and replaced fully by Asmont that would guarantee verified banks' clients had a limited guaranteed payback. The Union Bank of Esthursia (UBE) was formed in the same year, a state-run central bank with independence over monetary policy, which has remained running for over a century since.
In 1922, Esthursia began a conflict with Scalvia. This conflict proved divisive and economically costly, thus the government sharply cut welfare, spending and wages to fund its military missions. Decades of gradual erosion of working rights and freedoms, and now falling wages and worsening conditions, drove many into striking, with a General Strike declared from December 4, 1922, until April 24, 1926. This strike, and latent issues with Esthursia's underproducing economy, caused it to fall into the greatest economic crash it has ever faced; living standards dropped markedly, and unemployment rose to 17%. This period is known as the War Crash, and ended when socialist and trade union leader George Asmont won the 1926 general election, ending 15 consecutive years of Conservative government.
1926-1950
The generation after the War is known as the Asmontian era, thanks to 18 of 24 years having Asmont as Forethane. George Asmont was a strong proponent of left-wing socialist economics, and seeing a key reason for Esthursia's economic hardship lying in its socioeconomic inequalities and lack of rights, his government's key priority was promoting economic growth through intervention.
Thereafter, Esthursia experienced an economic boom known as the Asmont years, or sometimes the Esthursian Miracle. Although growth slowed in the 1930s, it had returned to pre-1933 levels by the end of the debate, and the economy remained out of recession for 26 years after 1926. Living standards improved markedly, and inequality closed dramatically; a key tenet of Asmontian economics is land and wealth redistribution, and solidarity taxes were at first particularly heavy on aristocratic estates and individuals. Construction, healthcare, transport and infrastructure, education and automotives were beneficiaries of this new public intervention, with the public sector swelling over the course of the government; the UHCS, Union Care and Health Service founded in 1927, remains the largest employer of Esthurs.
Asmontian economics particularly promoted an irregularly large amount of worker control despite retaining private property rights to some degree, earning itself the contemporary nickname of "people's capitalism". Aspirational socialism remains another term for this economic strand to this date. After Asmont left in 1944, having heavily developed Esthursia's infrastructure, consumption and spending, his successor Philip Whittaker proved more economically radical; changes instituted included closed shop workplaces, nationalised steel, airlines and gas, as well as workers' councils being trialled in 1949.
This period of relative stability and prosperity, under which new cities were formed - with Brantley becoming a new second city after having been a semi-minor city before 1926 - contrasts heavily against a backdrop of global instability and warfare known as the Fascist Wars collectively, which have been accredited somewhat with some of the reasons why Esthursia was able to grow with less bounds.
Upon the Workers' Union government finally leaving office in 1950, 24 years after first being elected, the economy had doubled in size and wages had dramatically increased, while control of land and wealth was far less concentrated. This radical change, however, promoted a pushback by those disadvantaged by redistribution.
1950-1982
The period between Philip Whittaker leaving office and William Greenwood entering in 1982 was particularly volatile and uncertain, unlike the two previous periods. The gradual decline of the Workers' Union, and failed communist candidate Rickard Wilmer, had ushered in a radically rightwing leader. Olafn Arbjern's leadership turned from nationalist to conservative to autocratic, as he gradually sought more power and less accountability. This approach was matched in economics, as he sought to roll back the system created by his predecessors.
Although initial moves, such as to scrap workers' councils, proved popular or accepted, later policies in 1953 and 1954 triggered public outcry as public sector workers were made redundant in large numbers, while pay for those remaining was cut. Arbjern attempted to interfere with monetary policy by ordering the decrease of interest rates in 1954, triggering a sudden dramatic rise in inflation that had been held back by robust policy for a decade. As the crisis deepened, another General Strike was called for political reasons alongside the poverty caused by government cuts and pay loss. By 1957, Arbjern had attempted to reimburse aristocrats for their land, while the economy had fallen by a tenth in output.
The Liberal government ushered in the 1957 election under Edith Newell almost immediately undid the work of Arbjern in his later years on economic affairs, while institutionalising many of Asmont's changes in the Constitution. The Liberals adhered to a soft Asmontian viewpoint, becoming centreleft, and programmes aimed at social cohesion - particularly the encouragement of Cumbric people through affirmative action - were instituted.
The Liberal government of the 1960s provided stable economic growth after another decade of gradual descent into chaos. Pensions were reformed after being almost completely scrapped in the 1950s, while Esthursia's energy network now included about 25% nuclear energy. Newell also oversaw the gradual privatisation of the coal industry, as coal was gradually phased out during the period, while housing construction picked up. Private transport, however, was promoted heavily; the Redgrave Cuts saw much local trains and some trolleybus or tram systems scrapped, while Newell opened twenty-two new motorways across the nation.
The 1970s saw a terse confrontation between onenation conservative Anthony Moore, and socialist David Holmfirth. Holmfirth instituted a four-day work week by switching back to the Esthursian calendar, renationalised water, and put overwhile pay into law, while Moore promoted the finance industry and deregulated the farming markets substantially. The failure of Esthursian Steel, and the halted privatisation of Atlish Airways, alongside economic stagflation in the early 1980s, depopularised the economic system and consensus that had developed.
1982-2011
William Greenwood was elected in 1982, and given a large majority in 1982, primarily because he was a major departure from the economic battlegrounds of the earlier parts of the century. A staunch monetarist and neoliberal, Greenwood privatised the aerospace, steel, gas, oil, automotives and railway sectors, while deregulating the financial industry significantly. Incessant strikes in the early 1980s promoted Greenwood to engage in legislative battles - trade unions' latent Nationalist problems made this hard to oppose.
The mid-1980s, primarily between 1982 and 1986, saw extensive economic growth and the reduction of inflation, though unemployment rose significantly. On the other hand, with housebuilding almost completely stopping and public infrastructure contracts drying up, the infrastructure and construction industry collapsed.
In 1987, Greenwood attempted to privatise the UHCS, and hand it to private providers. Blocked by a significant body of liberal Conservatives in the legislature, trade unions, doctors and nurses as well as other staff and leftwing politicians joined an increasingly cohesive alliance against the policy. A policy to mandate minimum service in healthcare flopped, and similar action against police and railway workers failed. By 1988, a General Strike had been called, over stagnating pay and lost benefits despite strong economic growth; 1989 registered the first recession since 1973-4, while Greenwood lost the 1990 election.
1990 began the Grantham ministries; a leftwing Social Democrat and historic Union of Unions leader, Grantham set about large-scale investment in public services. Dubbed "People's QE", quantitative easing was instituted by Grantham in 1992 through 1995, aimed at public and community investments as well as infrastructure spending. The wealth tax was reintroduced for the first time in forty years, while the railways and airways were renationalised. Grantham also heavily altered the energy mix, leading the rush for geothermal energy in the 90s, as well as expanding hydro and pioneering work into solar and wind energy, which later would become significant sources of Esthursian power.
Tax rates rose again for the highest rates, and government spending rose back to generational highs as a result; economic growth remained high, especially in the mid-1990s, however began to slow down in the late 1990s, especially as regulation on finance tightened. The period from the late 1990s to early 2010s saw a "business-friendly", supply-side orientated economic policy consensus, with both the Social Democrats and Conservative Union favouring more neoliberal, monetarist market policies; this consensus was reversed during the 2010s, following the 2009-11 financial crisis, change in government to increasingly left-wing socialist Social Democratic governments under Harold Osborne, and the move to the political centre by Rosemary Manning's and Jowan Perran's Moderates.
