5 Oct 2021, 17:13

Economy of Istkalen

(WIP)

The economy of Istkalen is developing, largely dependent on agricultural and mineral exports, with industry, albeit mostly handicraft and light industry, playing a role. There is a significant emerging service sector, growing largely due to lowered demand for unskilled labor in rural areas, as well as higher demand for such labor in urban areas, primarily in the retail sector. The "information" sector is also prominent, and is more well-established than the service sector, but does not contribute to the economy as significantly as other sectors.

The country's economy has stagnated in recent years, largely due to mismanagement, and is expected to decline significantly this year. In particular, agricultural output in 2021 is far lower than normal; while the country was previously able to narrowly get by with what it produced, while at the same time being able to export, produce is now far lower than what is necessary to sustain the population on mere survival rations. Mineral extraction has also ground to a virtual halt; virtually all remaining extraction does not contribute to Istkalen's economic output, as it is conducted by the Archrepublic of Vayinaod and the Kingdom of Reitzmag. The light and handicraft industries, without the necessary materials deriving from agricultural and mineral produce, have also collapsed. Supply chains have also been severely disrupted by the destruction of major transportation arteries, several of which remain damaged.

Prior to the invasion, Istkalen's primary exports were uranium, iron ore, cobalt, various rare earth metals, lumber, and agricultural products , particularly potatoes and other similar indigenous root vegetables, although cereals and poultry were also a significant component. The country also exported, to a lesser extent, light industrial products and handicrafts such as paper, textiles, glass goods, and leather goods. A small amount of steel was also exported; however, most was reserved for domestic use. Its primary imports were refined metals, including steel, cereals, other agricultural products, particularly fruit, and machinery, particularly agricultural machinery.

Industrial productivity in the country is low. A significant portion of its industry is handicraft in nature; light industrial plants, which also exist on a significant scale, often have no or little division of labor within them, which in many cases hampers production. Agricultural productivity, particularly outside of the cities, also lags behind the rest of Europe, although not as significantly as in industry - this has been attributed to the dominance of smallholdings (the average plot size is about 3 hectares). A significant percentage of the crop is also consumed by their growers, although this has reduced as time has progressed. While what is produced is under normal circumstances enough for the population and some export, there are often visible shortages within the country, coupled with prices that are on average significantly higher than elsewhere. In order to prevent "foreigners" from taking advantage of this, successive governments have imposed virtual bans on the importation of a number of products, as well as high tariffs on many others.

The country's economic output is largely decentralized. While there are significant concentrations of the population in certain areas, particularly Kirelesile, in reality industry, apart from heavy industry, is decentralized and spread throughout the countryside, as is agriculture and forestry. Cities are mostly self-sufficient, and consume virtually all of their economic produce, although they are largely developed, housing most of Istkalen's "modernity," including attempts to fuse traditional handicraft industry with modern industrial techniques, as well as collective agriculture.

The country generally exports in the summer months and imports in the winter. Throughout the summer, the country is able to export its primary good - agricultural products - as most of the population is employed in agriculture. In winter, however, as agriculture becomes impossible, the population will temporarily transition from agriculture to other industries, particularly light industry, crafts, construction, and mining. The demand for raw material increases accordingly, eventually requiring importation - largely unnecessary during the summer months.

Most businesses in the country take the form of cooperatives, which are termed "collectives," "dual proprietorships," which arose by consequence of the development of the "partnership of labor" under the Social Democrats, and "sole proprietorships." Family businesses are nominally permitted, but the family, largely as a result of Social Democratic rule, barely exists in Istkalen anymore. These different ventures are organized through municipal trade organizations, which demand of their members various duties in production, and cooperation in the accomplishment of these duties. The trade organizations are further organized into broader national "people's syndicates," which themselves demand certain duties in production and cooperation from the trade organizations to implement plans set out by local, regional, and national "Congresses of Producers." This has been criticized as inefficient by a great number of economists; Istkalen's government argues that it is traditional and allows for a greater dignity and equality than any other system existing in Europe at this time.