FANDOM


Economy header
Economy side


Star media

20 July 2017
Lovia: $2.50 (USA: $2.50)

The money behind the election

Election time is upon Lovia. Promises are being made, parties are extolling their virtues and ripping apart the other parties in contention. Economy, though polled Lovians on a few financial issues and the results were fairly interesting.

Business was one of the key areas which will need to be looked at by the next government, especially in regards to them being competitive abroad. Lovians were asked if they felt the government should promote or be assisting Lovian businesses abroad, and this led to a fairly even result. Still, some 54% of those polled do not support such ventures. What is impressive is that Lovian businesses, especially internationally have been on the decline, with foreign activity very minimal. People are moving to prefer small and medium-sized businesses, which could account for the lack of wanting support for bigger businesses.

The next question was in regards to an issue that does transcend the economy, into security and defense. Lovians were asked if they found a military necessary, and people were equally split on that decision. Asked if they support a military given they are more likely to pay higher taxes, a resounding 58% opposed a military.

Looking into Lovia's recent history, one can see enough reason for having a military without needing militias and significant foreign assistance, yet it is interesting to see people not seeing a need despite that. The average Lovian will need to pay more for a military, but it is one of those things that is needed for the overall security of the country, to deal with armed groups and foreign aggressors. The costs for training, equipping and funding a military would be steep for a nation with no military spending in its history, but in the long term it should be an investment for the better.

Who's paid what in IWO countries

These are the people who lead countries, determine policies and shape the future. Others are merely figureheads representing the state. Some of these may earn a vast fortune each year while others may make a minimal wage.

Brunant's Queen Helene earns over $300,000 each year, a high sum for an unelected figure, though one-third of that is donated to charities. Still, such a figure is more than two times what is paid to the prime minister. Prasian leaders' salaries are in the tens of millions of pesos, though converted to dollars are less than $200,000.

Unlike other nations, Lovia and Cettatie's public salaries are not known to the public and cannot be scrutinized. In Cettatie it has been known that King Jean-Louis went all of 2013 without receiveing a single euro in salary, though in 2011 it was estimated he was paid over 300,000 euros.

Name Position Country Salary Salary in US$
Helene Queen Brunant 242,000 € 300,870
Sofia Gimenez President Prasia 21,000,000 PR$ 252,100.84
Cristian Ramirez Prime Minister Prasia 13,000,000 PR$ 156,062.42
Marco Gašpar Prime Minister Juliana 1,300,000 J. 144,228.10
Dianna Bartol Prime Minister Juliana 1,234,000 J. 136,905.75
Peter Wostor Prime Minister Brunant 107,000 € 132,600




At the gates of recession in Brunant

Signs are beginning to show that Brunant is descending into an economic downturn, given recent events over the past 12 months. Most recently the government has proposed raising the Brunanter VAT tax (the IVA) as part of a plan to increase government funds to mitigate the effects of the recession.

Other signs are more telling of this, such as the appearance of the first austerity protests and in construction development, where several newer retail and residential buildings seeing low occupancy. Good government policies and enough public spending have kept the recession at bay and though financially the country is unlikely to stay as strong, a Spanish-style collapse is nowhere near happening.

Clean Slate could wipe clean Lovia's coffers

The Clean Slate operation plan proposed by the CNP in congress does appear to be the way forward for Lovia after the invasion, being quite comprehensive. But, this may be the largest undertaking ever attempted by a government and one that is sure to exceed even the most liberal cost estimates.

The proposals include creating pools of funds for affected states, sending aid to affected areas, plus other rebuilding projects in various states and communities. The thing is, there has not been much talk on the bill for such a project. Rebuilding is necessary, but given the precarious financial state of Lovia this could very well bring the country on the brink of bankruptcy.

With such little taxation in effect it that would/could only cover a small portion of expenses, and even then some politicians have even advocated for a freezing of taxes. Now a number of foreign aid organization have come forward, but we have to ensure we can get grants, donations and technical aid over loans, since repaying these would only hinder financial growth.

Sooner rather than later Lovia should have put into action a plan for reconstruction, but the real task will be ensuring that is can be done smartly while protecting the country financially.

Collapse of Lovia's economy?

Recent upheavals in Lovia, ranging from a marxist-leninigs insurgency in the north, a right-wing coup in Sylvania and opposition to the government have left the country deeply divided and pose a major threat to economic stability. For the past three years the country has seen civil war, various coups and coup-attemps and a general instability that has seen little growth in the Lovian economy. With the complete division of the country along political lines, there is the threat of large business being forced to close down.

A number of large multinational businesses, from Brunant, Libertas, Traspes and elsewhere have opened in Lovia in the past few years and have gained significant market shares, but as is seen in other countries,  instability often leads to a near-collaps in revenue. Stores are forced to shut down, looting is commonplace and everyday business is disrupted. The most common solution seen is exiting the market, and it is very likely that many foreign firms may simply pull out of Lovia due to an inability to operate safely.

To maintain financial and economic stability, there would need to be political stability, and given the unlikely chance of unity among parties involved, there is little security that foreign business would want to remain in Lovia.

Wikinational banks struggling

KCVD Group released its latest bank ratings and most wikinational banks have dropped in ratings. Libertas' De Vrye Banck and Brunant's SD Bank were the rare gainers, due to increased customer satisfaction and general financial stability, though LBS Bank still remained on top across the board. Most banks, though, were unable to repllicate that success.

Market competitiveness and significant economic losses have led to some banks losing money and leading to overall customer dissatisfaction. A few banks in Brunant and Lovia dropped down in the ratings with Pacific Bank and Insurance at a C+, lowest at the moment, though they are being taken over and reorganized by the Traspesian BBSM. It is yet to be seen if wikinational banks can rebound from this low. A few more stable banks have been taking over ailing ones in an attempt to instill confidence in these and to expand their reach, and these may well be helful in the long term.

Could Clymene's policies be detrimental?

Under Governor Villanova the state has put into motion a plan to nationalize bus transport and could possibly move to nationalize other industries as well. The fear among many, especially those with business interests is that they may lose their operations and market with these socialist-inspired policies. On top of that, nationalizing too many industries will be detrimental to financial growth, given that the state is not usually involved in running a business.

On the upside, there are certain industries that have benefited from state ownership and regulation. Healthcare and education is among the best in the state, with a comprehensive system in place. Various analists have found that this system in Clymene has broadened access to these services by the people while maintaing them efficient to run and financially viable.

Now, if Clymene were to nationalize other sectors more traditionally belonging to private business they are likely to be unable to effectively operate them. Too much nationalization will scare away private investment and financial losses are certain to follow. What the state must do is to limit public enterprises to basic necessary services, while at the same time encouraging public investment and expansion of other private businesses to ensure the continue to operate in Clymene.

Spending key for new governors

The election of two leftist politcians as governor, plus the inclusing of several others in their state governments as deputies is likely an indication of increasing spending for the future. Already we have seen promises of governors to spend well towards healthcare and education, all good signs that the state will still ensure the welfare of citizens.

But in these days of economic uncertainty, we have to stop and thing 'when does spending become too much a burden'. The states should strive at spending towards gooc and comprehensive welfare systems, but spending excessively can become an issue. This sort of spending is likely to significantly empty state funds (or federal, if they're mooching off of NC). This ultimately leads to a rise in taxation across the board, and with most people just scraping by, t would make a significant reduction to their free income.

Spending oversight should become the norm for this new period of governorships. Being miserly and not spending is not a good solution, but governors (with state councils) should set limits to public spending to ensure taxation does not increase and they have healthy financial reserves.

Lovian Banks: Lagging behind the IWO

KCVD Group in Brunant publish a yearly report on banks in the IWO, and while the Lovian National Bank went up to receive an excellent A rating, most Lovian banks are not doing too well. The ailing First National Bank and PB&I have been placed at a B rating, due to declining customer service and innovation compared to others.

The best banks overall, for top customer service, stability and overall financial gains all came from Europe. The best bank for 2012 was LBS Bank (of Strasland), which has been the exception during the recession, earning it's customers more money and growing financially. Libertas' De Vrye Banck and Unie Spaarbank of Brunant (a savings box) all were at the top for customer satisfaction and market performance.

So, what's next for these lackluster Lovian banks. Reports suggest that Lovian National Bank may take over some of these entities, and LBS as well, as they look to expand in Lovia and make use of existing networks.

Retail at the top
For those who complain too much of minimal foreign trade, one should take a look to retail to see it's not the case everywhere. From Brunant, Traspes, Strasland and Insel Islands a number of businesses have been expanding beyond their home countries. Supermarkets and fashion stores are driving this and we can see that this is good, apart from the "where's Lovia?" From Lovia a few food chains have been able to expand abroad, but not at the rate or size as some other foreign businesses. The new government should focus on improving this, or else they could be left captaining a sinking financial ship.
Broadcast boom sees little gains
Lovia's recent boadcasting boom could have been seen as a promising sign of a resurging economy, but it was just a temporary up in Lovia's economic activity. Kaboom TV led this so-called boom and soon Brunant's BBN entered the market, but after some short-term initian growth and speculation, there was no noticeable effect on other sectors, and the economy as a whole. The more introvert, isolationist trend being followed by most Lovian businesses just keeps on digging a deeper hole in the recession, though some are starting to expand outside the country to try and generate more market activity.
Maxi leading IWO economy
Brunant's Maxi Group has been the most important actor in the inter-wikinational economy the past few years. With the decline of large Libertan multinationals and an inability or lack of wanty for governments to fill these voids, some Brunanter firms have begun to expand to other countries. This lack of large firms has led to a rise in more local companies, which is good for specific national or regional economies, but as a whole does not contribute much to thee greater economic sphere. This mentality, though, is changing and we could very likely see new actors in the multinational stage.
Should Lovia have a floating dollar?
With the U.S. economic downturn, having the Lovian Dollar linked to the U.S. dollar may not be such a good idea. If this were to happen, we would see the value of our dollar tank, but given time it would return to a more stable rate. A floating dollar would be an encouraging sign to investors and the market and over time we would likely see further investment in Lovia and our currency.
Public spending a sign of more jobs
The recent promises by Lovia's governors to spend big on welfare and transportation is a sign of job growth. While this may take a while, we are already seeing more doctors and nurses being hired in Clymene hospitals. Soon, public transportation systems state-wide will need drivers, mechanics and other positions which will allow for more jobs and a reduction in our nation's unemployment.

This is Brunant 1

Ad blocker interference detected!


Wikia is a free-to-use site that makes money from advertising. We have a modified experience for viewers using ad blockers

Wikia is not accessible if you’ve made further modifications. Remove the custom ad blocker rule(s) and the page will load as expected.