Economy of Flamaguay

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Economy of Flamaguay
Milan skyline skyscrapers of Porta Nuova business district.jpg
Sisto, the financial capital of Flamaguay
CurrencyPeso Autónomo (₳) (PAF)
Statistics
GDP$4,800 billion (PPP, 2018)
GDP rank8th (PPP)
GDP growth
3.7%
GDP per capita
$55,700 (PPP, 2018)
Population below poverty line
5.1%
27.8
Labour force
50.2 million (2017 est.)
External
Main export partners
 Saratovia: 15%
 Zegora and Bogatovia: 11%
 Taihei Tengoku: 9%
 Poláčekia: 9%
 Zavala: 8%
 Fanta: 5%
Others: 43%
Main import partners
 Saratovia: 11%
 Taihei Tengoku: 9%
 Poláčekia: 9%
 Zegora and Bogatovia: 8%
 Fanta: 5%
 Prekovy: 4%
Others: 54%
Public finances
6.4% of GDP (2018 est.)
List of countries by credit rating
AAA
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The Economy of Flamaguay is the eighth-largest by purchasing power parity in the world. A high-income economy, Flamaguay ranks 4th in the world in per-capita GDP-PPP. A mixed economy, Flamaguay has historically been a center of finance and trade, a position it has retained to the present.

The Flamaguayan economy is centered on the production of high-investment, complex manufacturing and the provision of specialized services. Espousing a liberal trade policy, Flamaguay interacts majorly with other Wallasean economies, which drive a large portion of Flamaguayan trade. A considerable amount of trade is also carried out with Veridis, importing natural resources and exporting finished goods.

The economy has traditionally been dominated by conglomerates ever since the industrial revolution, although small and medium enterprise has remained relevant with the shift from de-industrialization towards a high-value service economy. Flamaguay is characterized by having a large proportion of the population as part of the active labour force, with a very high participation rate of the female population in employment outside the home.

Government intervention is limited, with Flamaguayan fiscal policy considered to be conservative, embracing a long-term outlook. Net government debt is kept low, being counted at 6.4% of GDP in 2017. Government-provided services and goods amount to a large proportion in certain sectors, such as education, health care, child-care, security and defense.

History

Post-war period

The conclusion of the civil war in 1951 left large swathes of the country in ruin. Fiscal policy was directed to the aim of maintain a low level of inflation and stable public finances, with the sole objective of allowing Flamaguay to re-enter the worldwide credit market in order to acquire funds for reconstruction. The post-war period was capitalized upon as an opportunity to re-work the economic framework of the country as business activity was relaunched. The importation of new best practices and modernized business procedures, particularly from Senland, served both to provide the Flamaguayan economy with a new foundation, and to incorporate a more flexible approach to management practices that has remained to the present.

State-directed projects were focused on urban reconstruction, with rural development occurring on the flanks of the national railway network. Acquiring vast amounts of devastated rural land at cheap prices, railway conglomerates greatly expanded their networks, re-developing or newly-building communities intrinsically linked to railways being newly laid or upgraded. Highway construction was eagerly undertaken as being an affordable means for state investment to employ large quantities of workers and offer an indirect subsidy to the automotive industry.

Demobilization following the conflict was rapid, with the state scarcely being able to afford to maintain a large standing force. Although criticised for failing to provide a proper safety-net for former soldiers, the government persevered with the intent to depress the cost of labour as a way to indirectly re-start industrial production. Wages sank to well below pre-war levels enabling industrial activity, led by the heavy-industry and automotive sector, to begin a consistent recovery. The booming industrial sector served to mechanize the agricultural sector, further freeing large quantities of workers towards urban industrial and service sectors.

Crisis

The post-war economy recovery had been sustained by a large trade surplus, facilitated by a peso which was weak in comparison to other regional economies. This had made Flamaguay highly competitive in Wallasea through the 1970s, placing it under diplomatic pressure from Saratovia, Poláčekia, and Zegora to rectify the perceived imbalance in the exchange rate. The Palacio de Valores slowly began to appreciate the peso, and by 1986 had reduced Flamaguayan export goods in Wallasea and Veridis to half the level of their 1979 peak. Speculation resulted in the selling of other Wallasean currency and the purchase of peso, which resulted in a higher level of appreciation than what had originally been planned. In parallel, Flamaguayan industry began to lose competitiveness in the early 1980s, as newly industrialised countries, specifically from Questers and Veridian economies such as Zavala.

The Palacio de Valores responded with a reduction in short-term interest rates, but this failed to halt the slide of appreciation in comparison to foreign currency. Simultaneously, this provoked a sharp growth in the money supply, which began to outpace growth in GDP. This rapidly began to poise a threat to a considerable amount of Flamaguayan industry. Wages that had steadily risen through the 1960s and 1970s were now deceasing again, specifically in cheap consumer-oriented light industry sectors such as textiles, household electric appliances, and cheap plastics.

Large cities such as Funes, Lajadira, Éntaquera, and Xiricada saw heightened demand for property, which regardless increased in value as the peso appreciated. Large cities proved to be the most resilient to the economic downturn, building demand in their real estate markets. However, properties in high-demand areas were quickly placed out of reach for regular consumers, who were experiencing a decrease in their real purchasing power.

The Flamaguayan economy as a whole entered into a recession.


Recovery

The central government responded by liberalising both fiscal regulations and land use laws. This was coupled with a full shift to high-investment industry and services, accompanied by an increase in research and development. Low-investment industry was substituted by Zavalan imports, which was then bolstered by investing in, and incorporating imports from, Taihei Tengoku beginning in 1998.

Policy

Monetary Framework

The Palacio de Valores in Funes is the headquarters of the Flamaguayan monetary system.

The supreme monetary authority in Flamaguay is the National Value Reserve, which functions as the country's central bank. The National Value Reser*ve, in addition to serving as the lender of last resort, counts with a notable degree of autonomy regarding the management of the money supply and the setting of interest rates. The Peso Autónomo (₳) is a floating currency issued by the National Value Reserve. Flamaguayan monetary policy is characterized as inflation-targeting, seeking to maintain predictable and low levels of inflation.

All private commercial banks in Flamaguay must be registered with a Confederation Bank accordingly to the March in which they operate. Each Confederation Bank is led by a board, the members of which are appointed in part by the local Plenary of the Levy and in part by the commercial banks of the March in accordance to the amount of stock they hold in the Confederation Bank. Board members then elect a president from the nominees put forward by the Plenary of the Levy. The National Value Reserve is also host to the National Mint Commission (Comisión Nacional de la Casa de Moneda), which sets monetary policy. It is composed by 9 members of the Board of the National Value Reserve and the 19 Board Presidents of the Confederation Banks, 10 of which have voting rights at a single time on a rotary scheme.

Trade Unions

The Supreme Corporate Committee of National Representatives of Flamaguayan Trade Unions is the only legal national-level labour organisation constitutionally recognised by the State. The Supreme Corporate Committee is an umbrella organisation that incorporates all legal trade unions in Flamaguay, irrespective of sector. All legally recognised trade unions must be registered as part of, and elect deputies to, the Supreme Corporate Committee. The Supreme Corporate Committee has the constitutional responsibility to act as the interlocutor between trade unions and the State. The Supreme Corporate Committee puts forward recommendations to the State on matters of workplace conditions, such as workplace safety, minimum wages per sector, and maximum working hours. Corporate Work Councils are established at the company level by workers. There may only be one Corporate Work Council per company, although individual workers within a company may be enrolled in different sectors as per their trade union membership.

The trade union system in Flamaguay has been harshly criticised by some. The North-Point based Oryontic Observatory on Workshop Conditions noted that "the Supreme Corporate Committee of National Representatives of Flamaguayan Trade Unions is for all purposes an extension of the Flamaguayan State [...] constituting little more than a social contention apparatus that is firmly in-line with central government policy".

Unemployment is illegal in Flamaguay, and is not reported in any metric. Individuals finding themselves out of employment are mandated by law to report to the National Labour Reserve within a period of ten days. Individuals out of other employment are placed into the National Labour Reserve Active Corps, a form of unpaid labour. Active Corps "work groups" are tasked with simple jobs requiring little to no training, and in many cases are deployed as auxiliaries to skilled state employees. Members of the Active Corps are provided with a meal, and if deployed outside their municipality of residence, a place to sleep. Although members of the Active Corps cannot form Corporate Work Councils, the Supreme Corporate Committee is responsible for their labour representation. An estimated 4.4% of the working age population was part of the Active Corps in 2018.

Economic Sectors

Agriculture

Agriculture has dramatically declined as an important sector of the economy since the beginning of the 20th century. The majority of farms in Flamaguay by number are small family-operated farms amounting to less than 10 hectares. There are between 505,000 - 600,000 migrant workers in the Flamaguayan agricultural sector, depending on season. The vast majority of migrant agricultural workers are Veridian in origin.

Industry

The automotive industry is represents one of the most innovative and resilient sectors of the Flamaguayan economy. Unlike other manufacturing sectors, automotive production has resisted competition from emerging industrial economies such as Taihei Tengoku.

Defense

The Flamaguayan defense industry is considered to be a strategic sector of the Flamaguayan economy, and has a much higher degree of state participation than any other area of the economy. The main customer of the Flamaguayan arms industry is the Flamaguayan government, although it also constitutes one of the largest weapons exporters in the world.

Tourism

The southern Flamaguayan riviera is a touristic hotspot.

Flamaguay is often ranked as one of the world's top tourism destinations, with over 85 million visitors staying over 24 hours in 2016. The tourism industry has grown greatly over the past four decades, with the most dramatic growth occurring within the last 15 years. Flamaguay counts with multiple cities of great cultural interest (such as Funes, Éntaquera, and Alpacuerta), excellent beach and seaside resorts, a multitude of developed ski resorts, and an extensive and pleasant countryside widely well-regarded for its tranquility and good cuisine. Low rates of crime, a robust hotel industry, and an extensive and well-connected transport network make Flamaguay an attractive destination for tourism.

Cultural and seaside tourism represent the oldest and traditional areas of the sector. For centuries, rich Wallaseans of all nations have visited Flamaguay for its deep cultural heritage and relaxing coastal resorts. Religious tourism has also been a permanent fixture for Oswinist pilgrims. With tourism becoming accessible to larger segments of the population, other forms of tourism have blossomed. Flamaguay hosts various sub-sectors, such as: winter tourism, nature/eco tourism, cuisine tourism, sports tourism, among others.

A series of government reforms in the late 1990s saw barriers of entries for tourists greatly reduced, particularly in regards to those originating from Commonwealth countries. Most recently, the explosion in popularity of low-cost carriers has seen record amounts of visitors arrive in Flamaguay. Rising purchasing power in other nations has generated a more diverse makeup of visitors, with the proportion of Taiheis and Veridians visiting Flamaguay increasing.

Infrastructure

Energy

Iquel, a 6-unit powerplant constructed in the 80s and 90s.

The Flamaguayan energy sector is a robust element of the economy, hosting energy giants such as ECSRL, ENFASA, EneNuc, CONAHI, and represented by its world-leading nuclear sector. Flamaguay is an energy-exporting nation.

Nuclear power has been consistently increasing as a proportion of the country's total electricity production, accounting for 78% in 2017, up from 5% in 1964, 19% in 1979, 45% in 1995, and 64% in 2005. The management of radioactive waste, particularly high-level waste, is carried out by the publicly-owned National Entity for Radioactive Residue (Ente Nacional de Resiudos Radiactivos). As of 2016, the majority of radioactive waste is kept on-site, with a plan to move a minimum of 85% of high-level waste to the deep geological repositories of Praisera and Tosamilla by 2025. Of all advanced industrialized economies, Flamaguay is the smallest emitter of carbon dioxide due to its heavy reliance on nuclear power.

The energy sector in Flamaguay is almost wholly privately owned and operated. Electric distribution is guaranteed by the majority-public ENBADIEN, which regulates electric power transmission. The 1960s and 70s saw considerable state encouragement of the nuclear sector as a way to pursue energy independence, specifically from Prekovy. Presently, government intervention in the energy market is minimal.

Renewable energy has emerged as a high-growth element of the Flamaguayan energy sector, particularly after recent drops in the price of solar panel construction and their increased efficiency.

In 2017 Flamaguayan electric generation was composed as follows:

  • 78.2% was produced by nuclear power generation
  • 9.1% by hydroelectric power
  • 6.2% by solar and geothermal power
  • 5.1% by fossil-fuel power
    • 2.9% by natural-gas power
    • 1.6% by coal power
    • 0.5% by other fossil fuel generation (fuel oil and gases by-products of industry such as blast furnace gases)
  • 1.4% by other types of power generation (essentially waste-to-energy and wind turbines)

Transport

A V-500, introduced in 2011, this model has a service speed of 320 km/h.

The rail network of Flamaguay is one of the most dense in the world, totalizing some 82,747 km, of which 68.2% are electrified. Rail services in Flamaguay are provided by more than 100 different companies, of differing scale, type, and purpose. Railway companies may be divided into four broad categories:

  • The eight companies of the United Flamaguayan Railroads Group (GFFFU, Grupo Ferrocarriles Flamaguayos Unidos), which together provide cross-country and intercity passenger service throughout the entire nation.
  • The three major freight conglomerates, which have a firm hold on operations at a national level.
  • Urban mass transport and commuter rail operations, with more than one company or subsidiary operating within one urban area.
  • Dozens of smaller private railways, in many cases offering niche industry transport services or operating passenger service in specific conditions.

Rail companies are consistently rated among the top-preforming corporations in the economy. Rail development was often spearheaded by private corporations, with the intent of developing integrated communities along railway lines between urban centers. Rail companies operate diverse portfolios that capitalize on these railway communities, with operations extending into residential and commercial real estate, construction, retail, and other sectors. March governments often provide rail services in conjunction with private companies. The national government maintains a small fleet of rolling stock for strategic purpose, and is to be granted freedom of passage on any track in the country. Private freight traffic accounts for a large proportion of the movement of commodities and commercial goods in the country.

The Flamaguayan national-level high-speed passenger network is one of the largest in the world. The Funes-Valdontero line was the first high-speed line opened in the world when it began operations in 1965. All major Flamaguay cities count with high-speed rail service. The high-speed train fleet numbers over 230 trains at a national level, with classes entering service since the late 1990s routinely operate at speeds above 300 km/h. Flamaguayan trains are known for their high standard of punctuality, with delays of over 90 seconds are considered late in urban transport, and delays exceeding 180 seconds are considered late for inter-city travel. A rail company operating a late service is obligated by law to issue a "delayed journey note" to passengers, with many companies providing automatic discounts and rebates based on ticket price.

Alpacuerta, Àsleussa, Almigüeñete, Castellterçol, Consatapeyes, Éntaquera, Funes, Grañoto, Llorixioçes, Rubí, Valdontero, and Xiricada have subway systems of varying length and coverage. Almost all cities count with streetcar networks, and some also with monorail systems. Suburban commuter systems, popularized in the post-war reconstruction of the late 1950s, shift the majority of daily passenger traffic.

Flamaguay has counted with exclusive motor-vehicle highways since 1924, within a decade over 500km of multi- and single-lane motorways had spread to connect all major cities. Today, there are more than 1.1m kilometers of paved road in the country, unified in a single network built by the state and leased out to toll-collecting enterprises, which maintain it. Speed- and access-divided toll roads connect all major cities. Cars, both new and used, are available at inexpensive price points, with a significant part of the motor fleet being composed of electric vehicles due to the robust domestic energy market. A sliding car ownership fee is levied at the national level in order to promote energy-efficiency.

There are 119 paved airports in Flamaguay, with three international hubs in Funes, Éntaquera, and Alpacuerta. 17 airports are owned by the national government, and 102 by march governments, all airports are leased out and operated by private companies. The civilian air fleet is registered at over 450,000 units of various types and sizes.

Flamaguay has traditionally boasted a strong maritime sector, presently, 51 Flamaguayan ports are classified as "major seaports" with many ranking highly by cargo tonnage transferred. Flamaguay processes a large amount of shipping entering and exiting mainland Wallasea. Flamaguay has very lax shipping regulations, and counts with the largest non-commonwealth commercial fleet, standing over at just over 5,000 Flamaguayan-owned vessels either flying the Flamaguayan merchant standard or operating under a flag of convenience.