SR - Economy
Economy
The modern Republican economic system is the brainchild of Marabou native Lynda Sevigny. As vice-president to Emile DeGarmo at Baron's Munitions, she honed her extraordinary grasp of local economics and learned from a genius the art of macroeconomics. Just prior to the assassination of DeGarmo, Sevigny was no longer a fledgling but a financial genius in her own right. DeGarmo's confidence in her abilities was so great that he appointed her his successor as president of Baron's Munitions when he commenced his political career. Sevigny's influence, along with that of General Wilfred Vyes, made it possible for DeGarmo to receive the city council's approval for the experimental raid that led to the assimilation of the surrounding city-states into a republic. Following the assassination of DeGarmo and the conquest of Siwa Oasis, the Marabou council found themselves with two city-states and lacking financial guidance. For these reasons, the council elevated Sevigny into their ranks, while the Marabou Marauders continued their war.
Sevigny's vision, unlike DeGarmo's, was not of conquest by arms but of conquest by financial means. She combined the war-fractured financial structures of Marabou, Port Oasis, Siwa Oasis, Ashanti and Ankara to form a complimentary power base for the Marabou army and the economic basis for a new nation. Pooling the geological and industrial assets of the first city-states of the Republic, she initiated an amazing recovery from the devastation of war, as well as a financial boom that unified the citizens in a bond stronger than fear, in a bond of interdependence. Her success in forging a truly diverse economic structure during the last cycles of the First Unification Campaign, elevated Sevigny to a position that she had never sought to attain. In TN 1545, she was given the seat of First Councilor in a unanimous show of support from her fellow councilors. In her two cycles in that position, Sevigny developed the governmental finance and taxation system that runs the Southern Republic to this day. Although she was assassinated in the last echoes of the First Unification Campaign when Marabou was sacked by her enemies and the Order of the Falcon rose to power, the Republic thrived on the Sevigny Economic and Taxation System (SETS) for the next twenty-five cycles. So much so, in fact, that the Second Unification Campaign was funded mostly by proceeds from that period of growth.
The Sevigny Economic and Taxation System (SETS)
SETS is a unique and custom-made financial system for the Southern Republic. It allows the government to both assist the people and ensure a steady financial growth through intense involvement in all levels of the economic structure, while simultaneously limiting the effects of economic factors such as shortages and business cycle swings. Most foreigners and a few vocal Southern financial gurus are critical of the system, arguing that it allows the government a tyrannical hold on industrial and personal finances, and prevents free market equilibria. These selfsame gurus, however, cannot deny that the system affords the Republic a nearly nonexistent unemployment rate and the economic stability for the nation to function through military conflicts.
The Economics Directorate is the government agency responsible for maintaining SETS, but the Banque Republicaine influences the market on a daily basis. The Banque is the sole chartered bank in the Southern Republic. In this capacity, it heads the financial industry by offering a clearance service for the myriad trust, brokerage, insurance and realty firms. The Banque also provides clearing links for Republican investors with other AST member financial institutions through the Southern Republican Exchange. While the Banque provides this service for internal investors, it abstains from offering these services to external ones due to the foreign ownership restrictions invoked by the Economics Directorate. The largest market player in the financial arena is the government, which operates through the Banque Republicaine by offering guaranteed partnership funds for a multitude of purposes, such as scholastic, development and realty funds. These funds provide the same growth potential as savings instruments issued in other leagues, but also ensure the market spending that the perpetual growth economy depends on.
The Southern Republic Exchange is comprised of a central trading center in Port Oasis which serves as a money, stock and bond exchange with a control desk for the commodity exchanges that exist in each of the city-states. These microexchanges facilitate the purchases of foodstuffs, natural resources and manufactured goods by industrial, distribution and refining companies. One product can trade on the exchange in many forms. For instance, in Bethany, a farmer can sell his sapa crop to a refinery, the refinery then sells the processed sugar to a distillery, that sells the distilled liquor to a distribution or a retail company, and finally to the consumer. The local offices of the Banque ensure that all trades are completed in a fashion satisfactory to all parties involved, by certifying contracts and collecting the required taxes.
Foreign investors wishing to purchase commodities must do so through a sub-committee of the Economics Directorate, called the Exportation Bureau, which is housed within the offices of the Banque Republicaine. Internal investors wishing to purchase goods from outside the Republic's borders may do so through any Republican financial institution. Due to articles in the Allied Southern Territories treaties, Republicans can buy other Southern goods with ease, but retaliatoy trade restrictions imposed by Northern governments make it more difficult to purchase goods manufactured in the Confederated Northern City-States. Government income is secured by the small sale fees affixed to all market, consumer and contract transactions (MCC sales tax), in addition to standard income tax revenue. The government takes this income to form a budget, whereby they distribute the funds to various government departments, foremost among these is the Prefect's Council (Milita y).
Everybody Economics
To the average Republican, economics entails the earning of wages to support self, family circle and the Republic. Citizens generally apply themselves to their occupations in a structured, enthusiastic manner for the good of the nation. Wages are paid by employers through the Banque Republicaine's Asset Distribution Service (ADS). ADS allows citizehs to allocate portions of their wages to various government sponsored funds, investment dealer portfolios and debit union accounts. This central payroll system provides the Economics Directorate's Taxation Bureau with an accurate income tax projection every fiscal cycle.
Everyday expenses are paid using debit card transactions. These cards are issued by debit union institutions to allow the consumer to withdraw funds or pay for purchases directly. The debit system is a contract signed by the card holder with the issuing debit company, filed with the Banque. This contract authorizes the Banque to release funds to the debit company in accordance to the holder's allocation instructions on a per periodic basis. Debit company accounts can be used to accumulate funds for large purchases or overdrawn to a set limit. This limit is set according to the holder's salary per cycle and may increase according to any wage adjustments or assets gains (such as an inheritance). In small communities, citizens generally use cash or barter, which is extremely difficult for the Taxation Bureau to monitor. Most rural citizens prefer this no-nonsense approach to spending. They like to exchange a tangible item for a dinar in hand, or for other tangible goods.
Some citizens acquire the services of investment dealers. These broker/accountants provide the average person with access to various markets. A citizen. through the Banque, allocates a portion of his or her wages to a dealer, who in turn invests these funds according to the static goal instructions in the citizen's portfolio such as a minimum return on investment or a cap on risks taken. A portfolio can be comprised of stock, realty or a combination of both. The dealer presents a proxy file to the client, detailing the proposed investment. If the client accepts the file, an investment contract is reached. Investments are paid in a lump sum manner to the dealer or are contracted for payment in a multiple payment plan. These multiple payment plans are drawn between the dealer and client, then filed with the Banque Republicaine, which allocates the funds on a per pay period basis according to the contract specifications. Opting for multiple payments is more costly than a lump sum payment through a debit union, but it allows citizens with lower incomes to finance a portfolio that would normally take a long time to save for.
The most common form of wage allocation is government-sponsored funds. The Military Fund for instance, is comprised of share holdings in companies that are related to the military in a production or research capacity. This form of fund exists for all major industries, such as energy, transportation and agriculture. The most unique is the Realty Fund, comprised of various construction projects. These projects, once completed, are sold or leased, and the proceeds are returned to the fund. These influxes of capital increase the value of realty units, which are divided before they reach a level beyond the purchasing power of the average citizen. All fund units can be sold back to the government at any time through any branch of the Banque Republicaine, barring a national crisis.
The Business Development Plan
Government income is reinvested in the economy through the Business Development Plan (BDP). The BDP is the key to the Economics Council's control of the Southern Republic's economic infrastructure, whereby all business ventures must seek the approval of the Business Development Bureau. If the plan is approved, the venture is sanctioned along with the Bureau's guarantee to invest enough funds to hold a ten to fifteen percent interest in the newly-formed company. This amount of government investment is generally enough to supply the needed start-up capital to get the company off the ground. This policy is the cause of many complaints by private sector investors of government and/or military buyouts of promising young companies. In the long run, these invested interests produce a diversified income platform whereby the government receives dividends, preferential product purchases and most importantly, direct involvement in all areas of the leawe's financial infrastructure.
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