Economy of The Oan Isles
The Oan Isles has a GDP of 4,8 trillion SHD. Three quarters of the economy are made up of the state and state-owned enterprise and a quarter is made up of the private sector. The biggest sector of the economy is the services sector which accounts for half of the economy, while the secondary sector accounts for a third and the rest is made up of the primary sector.
The Oan Isles has two currencies. It uses the Kirib for foreign transactions, while it uses the Oan Dollar for domestic transactions. The Oan dollar is pegged to the kirib. The Bank of The Oan Isles is the central bank of The Oan Isles. It issues Oan currency, shapes monetary policy, regulates the banking sector, acts as a lender of last resort and acts as a banker for the state.
The debt of the Oan Isles is over twice the value of GDP and wasted spending runs into billions of dollars. The Oan Isles benefits from its strategic location between the continents of Aurora and Gondwana, from a productive population, efficient management of the economy and access to an abundance of non-mineral natural resources. Although income is distributed unevenly, this is mitigated by high taxes and a large welfare system.
Contents
Monetary policies and issues
Further reading: Kirib, Oan Dollar
The National Council of The Oan Isles adopted the Kirib as a means of easing trade with the rest of Aurora. The use of the Kirib is restricted to international transactions. This was done for a number of reasons. The most important one is that only the National Assembly has the authority to coin currency. This means that only the National Assembly has the power to change the national currency from the dollar to the Kirib. Seeking the approval of the National Assembly (which is made up of 70 million Oan adult citizens) for a full change would have been costly especially if the change did not pass. The state resolved to only partially change over to the kirib.
This means that the use of the kirib in the Oan Isles is limited to paying for imports or receiving payment for exports and transactions with people outside Oan territory. The National Council issued an order whereby Oan dollars can only be converted into kiribs before being converted to any other currency, and other currencies entering the Oan Isles must be converted to Kiribs before they are converted to Oan dollars. When the payment is electronic, this happens automatically. The Bank of The Oan Isles promises to redeem dollars for kiribs and vice versa upon demand, at a set value, determined in line with Oan and Auroran economic trends. Only Oan dollars can be used for everyday payments within the borders of the Oan Isles. The Oan variation of the Kirib, the "Oan Kirib", has no physical units, however the Bank of The Oan Isles does issue cheques to pay the bearer in kiribs or dollars, which it issues itself. This measure can be overturned by a law passed by the National Assembly or by the National Court in a civil dispute ruling against the state as a plaintiff or defendant. So far no serious action to overturn this has gained traction or success.
The Bank of The Oan Isles is a state owned entity that has the authority to issue Oan currency and determine Oan monetary policy. It manages Oan currency reserves, lending to and borrowing money from foreign or local entities or banks on behalf of the government. It has kept interest rates close to zero for over a decade. It makes transactions on behalf of the government. It is governed by a Governor and Board of Directors. The Member of the National Council for Finances, Kia Uye, in her capacity as the Treasurer of The Oan Isles, oversees the Bank and signs Oan currency. The financial policies and accounts of the state are under her authority. During her tenure the state's debt has expanded exponentially, but the overall coffers have also increased and payment agreements have become more beneficial.
Labour and Ownership model
The Oan economic system combines a variety of systems and models to create a unique one: The Oan model. In the Oan Isles, the state is the main driver of the economy. This is a system is or incorporates a form or aspects of state capitalism. State capitalism is usually described as an economic system in which commercial (i.e., for-profit) economic activity is undertaken by the state, where the means of production are organized and managed as state-owned business enterprises (including the processes of capital accumulation, wage labor, and centralized management), or where there is otherwise a dominance of corporatized government agencies (agencies organized along business management practices) or publicly listed corporations of which the state has controlling shares.In this system, however the employees are given shares in the corporate entity as a portion of their remuneration.
There are two types of employees in the Oan Isles: priority contractors and workers. The majority of Oan labourers are organised as priority contractors. Priority contractors are a composite of ordinary workers and contractors. Priority contractors are generally employed in the primary and secondary industries. This is where the priority contractors earn a salary, but their income is supplemented by a commission paid in proportion to the work they do or products they produce. While this reduces their non-state benefits, it allows them to have immense freedom over their work. Some even work from home or a personal office instead of reporting to work everyday. Both priority contractors and ordinary labourers are given shares in the company, earning dividends based on their continued employment or contract. The Oan Isles is one of the few countries in the world in which the citizens and workers are literally owners of the means of production.
Income distribution
In the Oan Isles, the top 5% of employed adults earn an average 1,000,000 kiribs a year excluding other income sources. The bottom 50% earn an average 10,000 kiribs. This vast difference in income is mitigated by a number of factors. The first is tax. The "top 5%" pay 70% of the tax. The bottom 50% benefit from a plethora of state allowances, subsidies and other welfare packages. The top 5% represent the major drivers in the economy owning vast assets.This is mitigated by the fact that most full time workers or "priority" contractors own stakes in the companies in which they work. What would be a Gini coefficient of 0.6 is reduced to 0.1.
Generally Oan household income, including state grants, commissions (refer to the section labour and ownership models) and dividends, including tax is 20,000 kiribs for 50% of people. On top of which, many people have low debt rates and a low cost of living, but high standard of living. Most people are left with a substantial income to spend on entertainment and culture, leisure and recreation and savings, than most people on Urth. Cars and free standing apartments are a luxury item for a very small amount of people. Most live in subsidised apartments, mostly owned by the state, and have long term lease agreements, some as long as 500 years.
The Oan state owns almost everything in the Oan Isles. Because most agencies are organised as corporate entities, they often give shares to employees. This in effect allows citizens an indirect ownership of most assets instead of the state. This close relationship between the people and the state and corporations in the ownership of assets is part of a concept mentioned in the preceding sections and was coined, "The Oan model".
Agriculture, Fisheries and Forestry Sectors
Agriculture is a large sector. Much of it is dominated by practices that have arisen from a lack of land space. This is called factory farming. Animals are bred and produce is often grown in massive factories and greenhouse like skyscrapers respectively. Much of the livestock market is supplemented by massive imports of around 640 million USD from Tuvaltastan of Tuva cattle, sheep and chickens, which are also being proliferated in farms in the newer colonies as a long term breeding exercise rather than a short term consumer spending cut. Through government subsidies, food prices are quite low and food inflation is both constant and low, allowing Oans access to good food. Agriculture is dominated by the production of grains such as maize and meat such as beef and chicken. The Farmers of the Oan Isles Ltd. and Ranchers of the Oan Isles Ltd. are the biggest companies in the sector, pioneering a new model of chain farms, abattoirs and ranches.
Fisheries is a gigantic sector. The Oan Isles has access to pristine and abundant seas. These give it access to a large amount of fish and marine wildlife. The sector is heavily regulated to prevent its abuse by corporations. This has sparked innovation. Fish farms were introduced and are spread throughout the seas. This focused and concentrated production of fish generates massive profits that have far exceeded wasteful fishing practices of many countries. Sardines, mussels, hake, tuna, mackerel and anchovies are the biggest generators of money. Due to the enormity of the available fish and marine reserves expensive animals such as abalone are available, where they are often forbidden from consumption in other countries.
Forestry is another big sector. The Oan Isles benefits from massive forests which are dominated by hardwood trees. This has bolstered the production of paper, furniture, and wood for construction.This industry is also heavily regulated to prevent the ruthless exploitation of natural resources that serve as a home for wildlife. The Oan Isles has always been careful to avoid being heavily dependent on its forests, preferring to preserve them. This is why most of the wood is sourced from invasive trees or plantations.
Construction, Manufacturing and Mining
Mining and mineral extraction have been small parts of the economy, most of the metals and stone, and sand for construction and land reclamation have been imported. The home islands of the Oan Isles did not and do not have abundant mineral resources. This forced the manufacturing sector to innovate by recycling. 95% of the household and business waste is recycled. This allowed manufacturing to remain sustainable for a very long time. Plastic, glass, metals and organic waste (often used for the manufacture of cellulosic ethanol and fertilizers) are the main sources of revenue. This ability to recycle effectively, other than offsetting a lack of resources, has helped to preserve vital marine life, and forests, allowing other sectors to enjoy profits and longevity.
Manufacturing, while large and diverse, generates a large amount of money from electronics particularly foundry chips. Electronics are consumed voraciously. This fact, coupled with state encouragement has created a thriving sector. The total income generated from is around 300 billion dollars. Household electronics and advanced hardware manufacturer, Metatron Corporation is one of the largest such companies in the industry. From furniture, to gym equipment, to televisions and computers, to robotics, the Oan Isles is innovating in a formidable sector.
Construction is another major industry. It stems from overcoming the challenges the Oan Isles. The Oan Isles has significantly more people who need shelter and who need infrastructure to build a productive economy. While per woman fertility is low, overall growth easily outpaces the demand for space. Laws are put in place to protect nature and prevent cities from eliminating what is left of the forests and increasing in girth. This means that builders must always build higher buildings, often demolishing old buildings to make way for taller ones. Many buildings especially in La Rochelle, Port of the Rock and Heavenly City rise well above a kilometre, the highest being the Pinnacle of Heaven, reaching 3 kilometres above the ground. This new construction often needs more roads, railways, sanitation and other infrastructure to be buiit to accompany it. This means that there is always work for the construction sector, which generates impressive revenues and makes extraordinary amounts of money.
Mining itself has sat at the back bench of the economy. But the Oan Isles has almost sextupled its area. Its control of massive waters have availed it minerals it has never fathomed having access to: fossil fuels. The renewable energy industry is firmly established and these reserves could hardly provide for all the Oan energy needs, but they have created an economic opportunity to absorb the impact of overpopulation and the demands it makes and financial gains for the state and prudent companies. While there is very limited exploration or exploitation of these resources, it is believed that the reserves could reach three billion barrels in total.
Services
The services or tertiary sector comprises the bulk of the economy. It is made up, primarily, of the financial services, tourism, information technology and transhipment services.
Tourism
Tourism is mostly comprised of eco-tourism and cultural tourism. The beautiful beaches, gorgeous jungles, mountain sports, marine activities, tropical cuisine, vibrant urban night life and Oan culture are major attractions. There is a large market of domestic tourists. There is a large market for international tourists as well. They are encouraged by free travel and VISA agreements. The Oan Isles has free travel agreements with all and direct flight with some members of the Auroran Continental Assembly, from which many of its foreign arrivals originate.
Information technology
The information technology and telecommunications services sector is a large sector. The Oancom Ltd. is the largest provider of telecommunications services. It bought a large part of the Furnifold dial-up provider and is developing and expanding broadband and other communications services in that country. One of the largest internet service providers in the country, Café Net, based mostly on its browser services, has offices and provides services in Kuthernburg. This sector is a leader in internet services for the world at large. It is supported by fast average internet speed of nearly 50MB/s in some places, an extensive fibre optics network to support a powerful broad band internet network and the easy access to smartphones and other electronics for most people.
The Metatron Corporation is the largest company in the Oan Isles. Its focus in on the manufacture of high tech products particularly consumer electronics. The many smart phones and laptops it produces at low expense to the consumer while possessing some of the most advanced tech on Urth, bolsters the information industries to bew heights surpassing many countries on Urth. In fact its products are so fast that one can download a movie in one second. This speed and accessibility of high tech products has allowed a range of online schools, shopping sites, music abd entertainment outlets, taxi companies to be opened and to operate efficiently and easily, creating hundreds of jobs and generating billions of kiribs towards the economy, through the informaton technology industry.
Transshipment
The transshipment services sector is a powerful one. The Port of the Rock is a major international port, handling much of the cargo that enters the Oan Isles and a vast amount of cargo moving through the Pacific Ocean area. It benefits from its strategic location and proximity to wealty markets. Through its Pacific colonies, it can influence much of the trade between Gondwana and Aurora and Atlantia as well Yasteria and Gondwana and Aurora. It benefits from free trade agreements. Its unique access to Celannica's and Daneelmark's markets in the restricted Gulf of Gondwana, that was largely closed off and difficult to access due to the enmity between the SEPC and FPA. The Oan Isles is notorious for its re-export, where it purchases cheap products from poorer countries and sells them to wealthier markets. Its most notorious use of this process is the re-export of livestock and animal products from Tuvaltastan.
Financial services
The financial services sector is a large industry. It has a tradition of exceptionally low interest rates and fees. It is dominated by investment banking and the exchange of securities and shares. With the proposed creation of the Auroran Continental Bank (to be seated in Sani Bursil the capital of The Staynes Caltharus Empire) and the Auroran Securities and Commodities Exchange, the industry stands to benefit from access to funds and a large market on the Auroran continent. The Oan financial sector and services industry is resilient due to conservative and prudent policies that resist and sometimes benefit from fluctuations in commodity prices or booms in property prices.
Waste industry
Main Article: Waste management in The Oan Isles
Waste management in The Oan Isles is so lucrative and contributes so much to the economy that it is classified as an industry rather than a public service. The industry generates hundreds of billions of kiribs, provides millions of jobs and mitigates the impact of pollution, on top of which it has access to an unending resource: waste. This term encompasses all processes which transport, collect, sort, recycle and reuse waste generated by other human economic activities. This ranges from recycling waste water into drinkable and irrigation water, to turning concrete back into cement, yurning old and discarded glass, paper, metal and other waste into a new product and using discarded pant matter to make fuel. This process affects many other industries and processes and is very intertwined with all aspects of Oan life. Almost 100% of Oan waste is recycled or reused in some way. No new landfills have been opened since 1980 CE. The remaining ones are used to source methane, a by product of decomposition, or converted into parks or residential areas. There is no sea dumping either.
