Economy of the Torentine Empire
As one of Aurora’s emerging industrial nations, the Torentine economy has markedly expanded since the industrial revolution. Agricultural exports, which in 2064 contributed a respectable 25% of the gross national product GDP and employed 35% of the labor force, in 2070 contributed only 11% of the GDP and employed only 22% of the active labor force—despite continued increases in the value of agricultural production. Agriculture's contribution to the GDP further declined to 5% by 2114 or just around sustenance level for the nation. Conversely, the importance of industry has increased dramatically. Industrial output almost tripled between 2070 and 2095 and generally showed steady growth during the 2110s; in 2112, industry (including fuel, power, rubber and construction) contributed about 30% to the GDP. Precision machinery, electronic components and motor vehicles have led the surge in manufacturing, and Torentine has generally been competitor in industrial design and fashion in recent decades. Services in 2114 accounted for approximately 68% of the economy. Today Torentine is a leading exporter of bauxite, sugar, iron and rubber with growing influence in the international oil and coffee markets. The nation is also home to a modest automobile industry and to several large manufacturing corporations.
Another of Torentine’s strengths is the thriving state of its small firms, which are often family owned. Out of a total of 11,000 joint stock companies, 8,000 have fewer than ten employees. These small businesses are able to succeed in niche markets. Torentines love shopping, spend more per capita than many other nations on clothes, shoes, bars, restaurants, and hotels. Because most citizens (even families) share their living spaces until retirement, expenditure on housing is relatively low.
Problems and Solutions
Despite the nation's recent economic achievements, a number of basic problems remain. Accessing abundant natural resources over the vast area on Lusitierra paired with a relatively small population has proven to be a challenge. Inherently xenophobic, Tor's have shunned immigrants until very recently. The many years of Aspenish conflict on Lusitierra are now fading into the past and Torentine has finally begun to relax its borders allowing in a much needed labor force for mining and heavy industry (especially in the south). Generous policies from the capital, including free education and entrepreneurial grants, have all but silenced once problematic Commonwealth groups that in the past have called out for secession from the mainland.
Partly because of increased energy costs, inflation increased from an annual rate of about 5% in the early 2040s to an annual average of 16.6% during 2055–60, well above the international average. This increase spear-headed the effort to develop Torentine’s oil resources. This investment paid off and by 2071 inflation was brought down to 14.6% and was further reduced to between 4 and 6% during most of the 2080s. In 2100 it was down to under 2%, its lowest level in 70 years where it is expected to remain through the end 2115.
Recession and Reform
From 2049 through 2065, Torentine endured a period of recession, with rising budget deficits, interest rates above 20%, virtually no GDP growth, and an unemployment rate approaching 10%. Unemployment hovered around the 10 to 12% range for most of the 2050s and at 9% into the late 2060s. Between 2070 and 2090, GDP growth averaged 1.9% a year and gradually rose to the current rate of 4.6%. This welcome upswing in the economy was a long term result due almost single handedly to the intervention of the Emperor. Emperor Milix’s aggressive economic reform policy and infrastructure modernization was adopted in 2064. This policy, not to mention his personal contribution of more than 12 billion crowns, jump-started the economy.
Like Antara, Torentine uses a 3-sector hypothesis to track it's economic progress:
- Primary sector: Involves the extraction and production of raw materials, such as corn, coal, wood and iron. (A coal miner and a fisherman would be workers in the primary sector.)
- Secondary sector: Involves the transformation of raw or intermediate materials into goods e.g. manufacturing steel into cars, or textiles into clothing. (A builder and a dressmaker would be workers in the secondary sector.)
- Tertiary sector: Involves the provision of services to consumers and businesses, such as baby-sitting, cinema, transportation and banking. (A shopkeeper and an accountant would be workers in the tertiary sector.)