OAD
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| Headquarters | Effawan Building, Agnannet |
|---|---|
| Established | October 20, 1924 |
| Director | Istal Magrat |
| Central bank of | Charnea |
| Currency | Azref Aga |
The OAD (Tamashek: ⵧⵔⴰⵢ ⴷ ⴰⵎⴰⵏ ⴷⴻⴽⴻⵜⴰⵏ, Oraɣ d Aman Deketan, lit. "Reserve of Gold and Water") is an institution of the Charnean government which exercises control over monetary policy. In this capacity, the OAD acts as the central bank of Charnea. The powers and responsibilities of the OAD include the issuing and regulation of currency in circulation, maintenance of the national gold reserve, and the administration of the Charnean dual currency system. The OAD plays a central role in Charnean economics through its control over the country's gold standard currency as well as its parallel currency of water-based banknotes. By extension the OAD also exercises a degree of control over the extraction and circulation of virtual water within the Charnean economy, making it one of the most influential institutions of the national government. The vital role the OAD plays in the functioning of the Charnean economy and the state has enabled the institution to persist largely unaffected by the various political upheavals that have hit the country over its modern history.
Dual Currency System
The Charnean economy uses two distinct currencies as mediums of exchange, both controlled by the OAD through separate and parallel systems of valuation. This is known as the ABC, short for Alxalat Baddal n Charnea (lit. "Charnean system of exchange"), and has existed since the foundation of the OAD in 1924. The underpinning of the ABC is the virtual water trade that has for centuries served as the foundation of the Charnean economy. In the environment of the Ninva, water is the limiting factor which restricts the supply of all necessary goods and services including the production of food, provision of building materials such as wood and adobe, and the products and services derived from animals. The value of labor in Charnean society came to be determined by the cost in water of keeping a worker alive, indirectly making labor costs measurable in water.
For centuries, the nature of this system of exchange was hidden due to the use of the Azref (pl. Izerfan), a currency backed by precious metals which has been in circulation in one form or another since the foundation of the Charnean nation. This was suitable for the overland traders and the businesses of the pre-industrial era, as the gold or silver Charnean coinage or in later eras the banknotes which could be redeemed for those valuable metals would retain their value outside of the then-poorly defined Charnean borders. However, as the process of industrialization began in earnest in the early 20th century, it became necessary to more closely control economic growth to ensure that the industry and population growth did not outstrip the available water resources. The solution the government devised was to establish the OAD and grant it legal ownership of Charnea's water supply, empowering the organization to issue water chit to local communities which would grant the holder of the note the right to draw a certain amount of water. The law mandated that these promissory notes be honored at any well, pump or other source of water, and enabled the papers to be exchanged freely among the citizenry, effectively creating a currency with a fixed water-value which could be used as a medium of exchange for the goods and services which the desert-dwellers customarily valued in terms of water costs. This currency was called Aga (pl. Igaten), the Tamashek word for the bag dipped in the watering hole to extract water, and it was standardized to entitle the bearer of each note to extract one liter of water from the source. The exchange rate of one Aga to one liter of water became known as the Aga rule, enforced by agents of the OAD through a system of limited extraction rights and contracts which leveraged the OAD's legal ownership of Charnea's water supply as a means to ensure compliance with the Aga rule.
Under the dual currency system, the prices of daily necessities for the Charnean citizenry are denominated in Aga, as are wages and salaries. The Azref currency is reserved for major commercial transactions, as well as for international trade. The dual currency system therefore consists of a currency of personal transactions and daily life in the form of the Aga, and a separate currency of capital transactions which is used in the upper echelons of the economic scale. Export firms and major businesses sell their goods for Izerfan, a portion of which must be converted into Igaten at market value to pay the workforce as well as to exchange for any water that might be necessary as an input in the production process. Certain sectors, such as agriculture, deal predominantly in Igaten due to their reliance on water as an input as well as their chiefly domestic market.
Water extraction policy
Through the creation of the water-backed Aga currency, the OAD became one the primary government institutions controlling the extraction of water. In order to honor the exchange rate of the Aga banknote, the OAD would need to ensure that the various wells and pumps used across the arid nation would comply with the dictates of the OAD in the form of the issued Igaten. It would also need to ensure that no water would be extracted except in exchange for Aga currency, otherwise the primary motivation for the dual currency system to control the amount of water usage within the economy would be undermined. To meet these requirements, the Charnean government nationalized the mineral rights to every aquifer within Charnean borders, as well as what few sources of surface water could be relied upon including the tenuous Charnean water claims from the Kira river used to mark parts of the far eastern border. These rights were given to the OAD, legally empowering it to impose rents and require extraction contracts of any person or organization wishing to draw water anywhere in Charnea. This would provide the framework for the extraction caps and the Aga rule to be imposed on the well and pump operators across the country.
Under the OAD's extraction regime, operators place bids denominated in Igaten for the rights to extract water from the aquifers as well as the man-made water relocation systems which have been built since the implementation of the ABC. Nominally, the bid constitutes an among in Igaten exactly equivalent to the volume of water the contract allows the bidder to extract, subtracting the operating costs of the extraction. In such cases, the highest bids promise to extract with the lowest possible overhead and pay the closest fee to the water volume equivalent in Igaten. Most contracts operate on a limitation system which will automatically pause the right to extract when a given volume has been drawn within a stipulated span of time. This system exists in an attempt to prevent the extraction of water to outpace the natural regeneration rate and direct injection which would eventually cause the water table to drop and the aquifer to recede beyond the reach of existing wells. In locales where the only available groundwater is fossil water, the limitations are purely volumetric and not time constrained as the aquifers' reserve in question does not regenerate over any amount of time. All extraction contracts stipulate that the Aga rule must be honored for anyone who comes to the source bearing the currency. In order to make water extraction more commercially viable, many groups which bid for extraction rights also operate local distribution networks of their own in which they take the extracted water at a nominal rate of one Aga per liter and move it elsewhere to resell it for a markup to include the costs of transportation and labor as well as overhead. This is legal in the eyes of the OAD as the Aga rule applies only to the original source and not to a point of dispensation such as a domestic faucet or a vendor of bottled water.
In order for the ABC scheme to operate as intended, the OAD must exercise the capacity to enforce its legal rights over the underground aquifers and must see to it that the extraction contracts it issues are not violated. This was of particular concern in the early years of the ABC, in which the new system had to be imposed on scattered extraction sites across the vast expanse of the Charnean nation. The OAD therefore created the Alqabulat Shamashal Hewwa (lit. "Contract Enforcement Unit") to serve as the enforcement arm of the OAD which would ensure that the Aga rule was respected at all sources of water, that no price gouging was taking place, and which would also enter into the secondary function of providing an internal OAD security unit which could be used to provide additional projection to the gold reserves and currency mints run by the organization.
Currency valuation
Azref
The value of the Azref is pinned to market value of gold at an exchange rate of one Azref to one milligram of gold. Charnea is one of the largest gold producing countries in the world, enabling the Charnean government to exert a degree of influence over gold prices and by extension the value and inflation rate of the Azref. The currency peg on which the Azref's value depends is administered by the OAD through its control of the national gold reserve of Charnea, which buys gold from Charnean mining companies in exchange for Izerfan to increase the amount of currency in the economy and sells gold for Izerfan when the government's normal revenue streams are insufficient to fund the state. This process of buying and selling Izerfan controls the supply and market value of the currency and is used to uphold the face value of the Azref as being equal to the value of one milligram of gold. At current market values, the Charnean Azref is worth 0.13 Latin solidii.
Aga
The water-backed Aga currency can be can be exchanged for the right to extract 1 liter of water. The validity of the exchange rate is enforced by the OAD, which holds the rights to the underground aquifers as well as manmade and natural surface water such as oases and rivers. The OAD issues extraction contracts which stipulate adherence to the fixed exchange rate of one Aga per liter of water, known as the Aga rule, granting the OAD the legal authority to impose penalties on extractors which do not abide by the Aga rule. The value of the Aga is affected by two factors, these being the amount of Aga currency in circulation and the overall demand for water and water-based products, which is often used as a shorthand for the size of the local economy.