Economy of Iboma

The economy of Iboma takes place in the framework of a mixed Socialist-free market economic model characterized by state regulation and control of key sectors alongside private property rights and free enterprise. As an upper-middle-income newly industrialized emerging economy, it has a GDP of 1.026 trillion SHD and a GDP per capita of 18,000 SHD.

Experiencing growth rates of 3% or more annually, it has leveraged its fertile soil and low-cost highly productive labour to become a major source of foodstuffs and a competitive supplier of low to middle value-added goods. With its primary exporting nations being Novarian, Concordian and Gondwanan nations, it is a major exporter of consumer goods, industrial equipment components and agricultural products like rubber, grains, fruits, and beans. It imports lots of vehicles, military hardware, chemicals and petroleum.

With the national currency, the Ibomian rawa (IRW) worth 58 IRW for 1 SHD, has a highly stable inflation rate managed by the Ibomian Reserve Bank. Unemployment remains incredibly low, but figures are obscured by high rates of seasonal agricultural labour and high rates of males who stopped looking for work due to domestic responsibilities. Due to the high purchasing power of the Ibomian currency and low cost of goods, people enjoy lifestyles comparable to those in matured industrialised nations. Although Ibomians are long-lived, they can work for over a century. Moreover, because Ibomians are so long-lived, they prioritize personal fulfillment and tradition instead of innovation. This has led to lower economic productivity relative to economic potential.

Economic model

Business culture

Ibomian business culture is shaped by Akronism and the fact that people live for a very long time (about 150 years on average). Because the punishment for crime or stain to one's reputation for incompetence can linger for well over a century, business culture upholds integrity and fairness. Because most Ibomians live much longer than dwarves and humans, they feel less inclined to feel the need to be economically aggressive. Moreover, people believe self-fulfillment and traditions are more important than material wealth. Thus, the profit motive in business is much less pronounced than most countries. Thus, businesses will strive for products and services of beauty and quality at the expense of cutting costs, growing their market share and being innovative. This leads to businesses remaining fairly small. Furthermore, due to Akronism, Ibomians have a matriarchal society that distrusts patriarchal norms from abroad. Thus, businesses prefer to work in Iboma and rarely venture for overseas growth.

Governmental oversight

Akronism and longevity have shaped the government's views on economic affairs and management of the economy. Because people live very long, the country has been able to observe cycles of economic prosperity and suffering and grow accustomed to them. Thus, the Ibomian government has developed the idea that things will always get better. Thus, their economic policy focuses on long-term goals and they direct resources toward long-lasting investments because even if their people suffer temporarily, they will enjoy a better life in the future. Furthermore, the Ibomian government is confident that because people live long, they will eventually fend for themselves and do not need to be coddled. Thus, Iboma does not have an abundance of welfare programs and people are expected to save for old age and life's misfortunes.

This laid back approach does not mean that the government is laissez-faire. The government feels that nature and people's emotional and personal contentment matters more than large accumulations of wealth or transient bursts of economic growth. Thus, it protects the environment and worker's rights at the expense of economic growth. It is also very wary of speculative economic activity that could lead to financial or housing bubbles. Thus it carefully regulates the investment market to prevent these bubbles from occurring and popping. As a result, the country might not grow quickly, but it has remained economically stable and weathered the most severe economic challenges. The State Office for Economics advises the government on and implements economic policy.

Labour market

The Ibomian labour market is highly influenced by the incredible longevity of its people. The average life expectancy is 150 years. This is due to both the genetics of the people and the healthy diet. People in Iboma do not value personal enrichment or company loyalty. They value personal fulfillment. Thus, many people in Iboma prefer to work in the arts, humanities and close to nature etc. Thus, the country has an unusually low proportion of people in science, mathematics, technology, engineering or finance. Furthermore, most people will frequently change jobs to pursue new interests and emotional goals. Thus, the work culture in Iboma is very relaxed. Ibomians usually work for a small part of the day compared to most countries and rarely strive for corporate promotion. Instead Ibomians will strive for beauty and quality especially in the manufacturing sector and they have an unusually long time to build skills and expertise in an area, leading them to be workers who strive for beauty and quality in the things they create or the services they deliver. As part of the pervasive focus on tradition and self-fulfillment, Ibomian work culture has developed such that Ibomians have plenty of days-off, work culture is very relaxed and people enjoy an abundance of labour rights.

Consumption and investment

In most societies one would expect a long-lived population to have higher rates of savings and thus enjoy longer-term economic dividends. As people in other countries are much more afraid of dying or losing the ability to work, they are much more likely to save money for the future or for their children. In Iboma, most people are confident that they will live long happy lives, Moreover, most of them are confident that their children will live long enough to build their own lives. Thus, Ibomians do not feel the urge to save money and accumulate wealth. As a result, the country has surprisingly low-rates of savings and investment. Contrasting, people prefer to spend money on things that will make them happy. Thus, most household income goes to consumption. This is also why people do not mind taking a long loan on a house because compared to humans and dwarves it makes up a much smaller part of their lifespan. So, most people own houses and have a pension. Beyond that, people rarely invest or save.

Finances

Taxes

The government wants to allow people to spend their money in a way that makes them happy. At the same time it expects people to save for their own misfortunes and take care of themselves. As such, it does not have a large welfare system that requires high taxes. Therefore,taxes in Iboma are very low by international standards. Personal income tax is 20% for the wealthiest earners (1 million SHD and above) and 0% for the least wealthy (those earning 7,000 SHD and lower per annum). Company income tax is charged on profits not reinvested into the company at maximum of 15% for a company that makes a profit of 2 million SHD or more. Capital gains tax is fairly high, at a rate of 40% for gains above 1 million SHD, to prevent the uncontrolled growth of speculative investments. Value-added tax is low to encourage people to consume, at a rate of 5%. Taxes are charged on goods that the government feels will shorten people's Lifespan. They aim to drive up the price of these goods to reduce demand. Thus, taxes on tobacco products, alcoholic beverages and high-in-sugar foods and drinks can be over 70% of the purchase price.

Debt

Opposing forces influence how the government, businesses and people take on debt. On one hand, because people live long, the period of time required to pay off debts is much shorter relative to their lifespan. Thus, people are willing to take on long-term debts that will improve their quality of life in the future such as student loans, mortgages and car loans. One the other hand, people are confident enough in their ability to work long enough before acquiring possessions like furniture, having a child or saving for a trip overseas that they avoid short-term debt. Furthermore, because of the distrustof foreign patriarchal financial systems, the government, local businesses and everyday citizens avoid borrowing money from foreigners as much as Possible. Thus, the country has a low rate of Foreign debt. As a result.the government has been able to comfortably pay off debt and keep debt rates fairly low.