Economy of Ebenthal

From MicroWiki, the micronational encyclopædia
Jump to navigation Jump to search
Economy of Ebenthal
Notas.png
A pile of Δ200 banknotes
CurrencyKupfermark
Fixed exchange rates𝒦ℳ1 = 0.1g CU (copper standard)
Fiscal yearCalendar year
Statistics
GDP 𝒦ℳ 410,000 (2022, nominal)
𝒦ℳ 560.000
GDP growth 100% (2022, nominal)
120% (2022, PPP)
GDP per capita 𝒦ℳ 2,029 (2022, nominal)
𝒦ℳ 2.772
GDP by sectorServices: 66%; Farming: 18%; Industry: 10%; Banking: 6%; (est. Feb 2022)
InflationSteady 1%
Labour forceSteady 82 (est. Aug 2021)
Average net salary 𝒦ℳ 1.368 (est. Mar 2022)
Main industriesConsumables • construction • Decoration goods • Telecommunication • Beverages • Wood
External
Exports𝒦ℳ 150.000 (2022, reintroduced on the national budget)
Export goodsApples, wheat, meat, sausages, furniture, curtains, stained glass, wood, liquor, candies, informatic pieces, tea
Main export partners Brazil 50%
 China 25%
 United States 20%
 European Union 5%
Import goodsMachinery and equipment, computational technology, textiles and footwear, chemicals, agricultural products, natural gas, minerals and fuels
Main import partners Brazil 89%
 Argentina 7%
 European Union 3.9%
 New Southern Rhine 0.1%
Public finances
Public debt0% of GDP (2020)
Budget deficit0% of GDP (2020)
Expenses𝒦ℳ 110.000 (2022)
Foreign reserves𝒦ℳ 150.000 (Royal Ebenthali Treasure only)
All values, unless otherwise stated, are in

The Economy of Ebenthal is a micronationally advanced emerging economy, largely based in the service sector, banking as well as private investments in the public sector. Other active areas are agriculture and the production and export of manufactured products. Taken together, the services and financial sector accounts for almost three quarters of the national GDP, while the private sector alone representes 98% of Ebenthal's total economy.

As of 2022 Ebenthal has two official currencies, the Kupfermark, which is the main domestic currency and legal tender, backed by a 4.1 kg copper reserve through the copper standard, used in day-to-day micronational business, and the Conferential Doubloon, backed by the Conference of Santiago's common pyrite reserve,[1] pegged to the Kupfermark through a dual currency bond and used in intermicronational transactions, particularly among the member states of the Conference of Santiago. According to the Conference of Santiago Financial Authority, the Ebenthali GDP of 2022 is that of 𝒦ℳ 410.000, with a GDP per capita of 𝒦ℳ 2.029 per citizen.

Due to its status as a self-proclaimed microstate without wider international recognition, Ebenthal is unable to enforce tax collection, so the maintenance of the state depends entirely on private investments in the public sector, mainly in administrative bureaucracy. The State only considers economic activities carried out by citizens of Ebenthal inside or outside its borders with financial return to the micronational State as part of the national economic activity. As such, the State considers only companies based in Ebenthali territory as part of the national production activity.

The Ebenthali economic system works with a very low rate of bureaucracy. Ebenthal's economic and cultural norms are based on a principle of balance between the individual, the source of income and the State and in understanding the economic limitation of a micronation (compared to a sizeable internationally recognized sovereign country). There are no formal trade unions in Ebenthal, but workers' rights are constitutionally safeguarded, as well as the principle of workers' self-management.

Ebenthal's economic policy is set by the Ministry of Commerce and Public Works under the designs of the cabinet in power, and is implemented by laws and institutions such as the Bank of Ebenthal and the Ebenthali Royal Treasure. Subsequently, the Ministry of Commerce works in close partnership with the Conference of Santiago Financial Authority, participating in the common market of the Conference of Santiago. Ebenthal was also a member state of the Micronational Economic Group until its dissolution.

History

Components

Service sector

The services sector is the main component indirectly responsible for Ebenthal's GDP, accounting for 66% of the total. Since before the independence of Ebenthal, services have been the mainstay of the economy in the region that today makes up the national territory. Especially after 2019, with the expansion of the territory and consequently of the inhabitant population of Ebenthal,[2] services took the place of agriculture as the main source of income for the Ebenthali population.

Most of the population working in the service area works outside the country, for foreign companies, the vast majority of which are private and Brazilian, but also there is a sizeable group autonomous micro-entrepreneurs in the commercial sector. Roughly 17% of those enrolled in the services sector works within Ebenthal, even though still providing services for foreign private companies.

Farming sector

Agriculture and livestock contribute heavily to Ebenthal's overall income, although the share of farming in GDP has been declining since 2018, peaking in early 2020, due to population growth and increased participation of the service sector. It is estimated that at least a quarter of the Ebenthali territory is composed of farmlands, and that small livestock farming is practiced even beyond this percentage, in areas of low population density and urbanization. Agricultural production in Ebenthal, which ranges from low to medium-sized, however, has been constantly hampered by Brazilian economic policies and the global production crisis, as Brazil is the main importer of Ebenthali production.

The main agricultural products produced in Ebenthal are wheat, apples, with corn production being permanently dismantled due to constant losses and the need to expand wheat production, given the increased demand, specially from Argentinian companies, for consumables derived from wheat. In addition to agriculture, livestock plays an important economic role. Most of Ebenthal's cattle are swine, raised on a relatively large scale for sale to local Brazilian industries and for domestic production of processed foods such as sausages. Cattle and poultry are also bred for foreign industry and for domestic consumption. In addition, tea and spices such as pepper are also produced, on a small scale, and sold locally along with processed foods such as sausages, bacon and pork rinds.

Industry

The manufacturing sector is responsible for a smaller but significant part of the national income, accounting roughly for 10% of it. Ebenthal's industries are limited by the micronational nature of the country, i.e. the lack of geographical size, available resources and adequated finances, but they do exist on the form of manufacture of furniture, household goods such as curtains and blinds, textiles such as blankets and clothes, and also stained glass and toys. The entire manufacturing industry in Ebenthal is private and of national origin, and its distribution is mostly for Brazil, and a minority for Ebenthal.

Although most of the agricultural production of Ebenthal is transferred to foreign trade, a small part is processed by the national industry for the production, national consumption and also exportation of sausage and tea, the main food products of the national industry.

Banking

The banking sector is the smallest of Ebenthal's economic sectors, accounting for 6% of GDP. It is, of all the sectors, the only one that is mostly formed by the public sector, although the private sector is also significant in the area. Ebenthal's banking sector is mainly composed of the movement of values between national financial and administrative institutions, mainly between public bodies and making especially use of the domestic currency, the Kupfermark. The Bank of Ebenthal holds the hegemony in the banking sector, being the only active bank in the country and responsible for the administration of all bank accounts of civil servants, the Royal Family and part of the civilian population.

National companies

The State of Ebenthal owns a few, and a nominal majority, state-owned companies, active especially in sectors considered to be of primary national importance. In addition to state-owned companies, Ebenthal hosts several national private companies and is also served by the activity of public and private companies of foreign origin.

The country's state companies are:

Economic model

Ebenthal's financial policy mixes elements of State Capitalism with Free Market, and is sometimes billed as a kind of Thatcherism. The Ebenthali State is strong and interventionist in areas of the economy in which it is able to exert direct influence and even control, such as in the direct receipt of contributions from the private sector and in their conversion to domestic currency, and consequently in the entire maintenance of the economic model adopted. Nevertheless, the range on which the Ebenthali State is able to exert influence, let alone control, is small, and therefore most of the economy is left unchecked, suffering greater influences from the Brazilian market, in which it also operates, and global markets.

Sustainability

Ebenthal is not physically capable of forcing tax collection, and therefore the maintenance of the state and the domestic economy (or micronational economy) depends entirely on private investments (contributions) in the public sector. All money available to be invested in the maintenance of Ebenthal, in any currency, is converted through the copper standard into Kupfermarks that feed the country's internal economy. In order to avoid a budget deficit, however, and the growth of public debt, the parliament votes annually, together with the annual budget, to acquire, through private contribution, a sufficient quantity of copper to supply the equivalent amount spent on Kupfermarks ensuring a surplus margin, maintaining stable economic growth.[1][3]

Furthermore, as a member of the Conference of Santiago common market, Ebenthal has access to 27kg of pyrite from Conference of Santiago Financial Authority for use in printing Conferential Doubloons for its own use both in intermicronational commercial relations, and as a reserve, at a fixed exchange rate, for the issuance of Kupfermarks if necessary.

References

  1. 1.0 1.1 Ministry of Information. Economy on focus. Retrieved on 1 September 2021. Publiched on 7 April 2021.
  2. Ministry of Information. Census 2021. Retrieved on 1 September 2021. Published on 8 July 2021
  3. Ministry of Information. Ebenthal adopts universal basic income. Retrieved on 1 September 2019. Published on 1 June 2021.