Economic: Framland
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Economic Overview
In the 19th century Framland evolved from a largely agricultural economy into the beginnings of an industrialized, urbanized country. Poverty was still widespread in sections of the population. However, incomes were sufficiently high to finance emigration to distant places, prompting a large portion of the population to leave, especially to the USA. Economic reforms and the creation of a modern economic system, banks and corporations were enacted during the latter half of the 19th century. By the 1930s, Framland had one of Europe's highest standards of living. Framland declared itself neutral during both world wars, thereby avoiding much physical destruction like several other neutral countries. The post‐war boom propelled Framland to greater economic prosperity, putting the country in third place in per capita GDP rankings by 1970. Beginning in the 1970s and culminating with the deep recession of the early 1990s, Framish standards of living developed less favorably than many other industrialized countries. Since the mid-1990s the economic performance has improved.
The economy of Framland has a developed diverse economy, aided by timber, hydropower and iron ore. These constitute the resource base of an economy oriented toward foreign trade. The main industries include motor vehicles, telecommunications (35% owned by Framish government), pharmaceuticals, industrial machines, precision equipment, chemical goods, home goods and appliances, forestry, iron and steel.
There is an appreciation that the internal market is not large enough to support its ambitions and that a light touch is more effective than a restrictive one and privately owned firms account for 90% of industrial output. There are, however, strict limits on foreign ownership of Framish companies. Timber, hydropower and iron ore constitute the resource base of an economy heavily oriented towards foreign trade. Agriculture accounts for only a small element of GDP and employment. They also have an abundance of iron, copper, aluminum ore with some gold and silver deposits.
The unemployment rate is traditionally low and this is a contributing factor to the encouragement of immigration (to bring in more workers). Starting a business in Framland is straight‐forward and only takes an average of 7.6 days for a citizen. For a non‐citizen, it takes much longer and also requires a language exam. Larger corporations bypass these requirements through complex corporate structures involving minority subsidiaries and A and B class stock offerings or franchising. Coca‐Cola and Pepsi products are readily available throughout the country.
The government has tried to spur growth in the area of pharmaceuticals and information technology with mixed results. They do have some domestic manufacturing capacity, but are reliant on trade for most finished products. Exports are primarily raw or semi‐processed materials (iron, steel, copper and aluminum, wood) while imports are primarily finished goods. Key exceptions are trucks (commercial) and cars, which are built and exported, as well as vacuum cleaners. The government is actively pursuing development up the value chain to increase exports (and independence).
The country is mostly self‐sufficient in terms of building and construction, and has a small active ship‐building industry. Fishing and shipping are historically prominent and currently strong sources of outside currency, particularly as the Framish are the world‐leading producers of pickled herring, turbot, and plaice.
Political Context
Framland is a Parliamentary monarchy with socialist democratic leanings and values. The economy is a major element of sustaining Framland's ability to retain its independence from Torrike. Sustainability and trade leading to growth and independence.
National Development Plan. This is the political vision of the future road for Framland. Entitled 'Transforming Framland – 'A Better Quality of Life for All'', sets out the roadmap to Framland’s future. The USD280 billion Plan represents another major milestone in building a prosperous Framland for all people, characterized by sustainable economic growth, greater social inclusion and balanced regional development. The main elements to the original plan were the development of a national motorway network between the major cities in the Framland. The upgrading of the rail network was a secondary scheme.
Framland is categorized as a Mixed Economy.
Economic Data
| Measure | Data | Remarks (if applicable) |
| Nominal GDP | $102.55 billion | Agriculture 1.0%, Industry 20.5%, Services 78.5% |
| Real GDP Growth Rate | 0.4% | 5 year average 3.2% |
| Labor Force | 1.9 million | Agriculture 2.6%, Industry 37.2%, Services 60.2% |
| Unemployment | 5.3% | |
| Poverty | 12.7% | % of population living below the international poverty line |
| Net Foreign Direct Investment | $2.51 billion | No outbound FDI |
| Budget | $38.42 billion revenue
$51.23 billion expenditures |
|
| Public Dept. | 18.7% of GDP | |
| Inflation | 1.9% | 5 year average 1.7% |
There is a small underlying mismatch between tax revenues and the level of expenditure. It is appropriate that fiscal consolidation has already begun and further measures will be required. Restoring the budget to a sustainable path will require both increases in revenues and some cuts in public expenditure. Tax rates could increase and the tax base should now be broadened by reducing inefficient tax expenditures, introducing a property tax and making more people pay income tax. Further reductions in the overall level of government expenditure will also be required. The public sector pay bill could be further curtailed and benefit payments could be reduced at least in line with falling prices. There is scope for efficiency improving measures, focusing on improving value for money and modernizing the public service.
| 2013 | 2014 | 2015 | 2016 | 2017 | 2017 | |
| Function | USD
billions | |||||
| Total function | 100% | 100% | 100% | 100% | 100% | 51.23 |
| General public services | 9.02% | 8.24% | 8.17% | 7.92% | 7.74% | 3.97 |
| Defense | 1.30% | 1.25% | 1.19% | 1.16% | 1.00% | 0.51 |
| Public order and safety | 4.32% | 4.45% | 4.40% | 4.34% | 4.08% | 2.09 |
| Economic affairs | 11.13% | 11.79% | 11.37% | 13.80% | 15.04% | 7.70 |
| Environment protection | 2.58% | 2.76% | 3.06% | 2.88% | 2.756% | 1.41 |
| Housing & community amenities | 4.54% | 4.86% | 6.00% | 4.66% | 4.19% | 2.15 |
| Health | 19.74% | 19.32% | 18.90% | 18.25% | 18.12% | 9.28 |
| Recreation, culture & religion | 1.87% | 1.97% | 2.03% | 2.13% | 1.74% | 0.89 |
| Education | 13.55% | 13.42% | 13.09% | 12.61% | 11.44% | 5.868 |
| Social protection | 31.95% | 31.93% | 31.81% | 32.25% | 33.88% | 17.36 |
Economic Activity
The general attitude to the economy is to maintain control through central socialist policies. This has provided a strong regulatory base which began to be eased in the mid‐90s. This allowed greater private sector growth which produces a greater capacity for wealth creation. This success was enhanced by the high growth rate in the early 2000s. Banking regulatory control was maintained and this helped the housing market to maintain a strong stable market which although adjusted during the 2008 – 2009 financial crisis ensured that there was not a run on the market leading to bankruptcies or market instability. Framland has moved towards a strong mixed economy which allows for enterprise in industry and services whilst maintaining a strong regulatory control on fiscal coordination.
The economy is undergoing adjustment. Past imbalances are gradually unwinding in banking, the housing market, the government budget and the labor market, leaving an impact on public debt and unemployment. After two years of deep recession, activity seems to have reached a bottom in the first half of 2010. A mild recovery is projected to be driven by exports, while domestic demand is likely to remain sluggish. The government intends to continue policies to bring the fiscal accounts closer to balance and to restore competitiveness. If sustained, this should help bolster activity and support employment growth in the medium run. The banking restructuring strategy aims at transferring non‐performing loans to government backed entities, and then injecting public funds in under capitalized banks. While this approach has the merit of preserving banking stability, it comes at a high cost for the public finances and is creating stress in the Framish sovereign debt market. Specifying and then implementing the recently outlined 4‐year consolidation plan will be essential to achieve the government’s ambitious objective of reducing the deficit to 3% of GDP by 2021.
Pre/Post-World War II
Before the time of industrialization, most of Framland’s imports consisted of consumer goods, while raw materials made up the largest part of the exports. This is a situation we recognize from developing countries today. In the late 1800s, the share of consumer goods in the exports increased a trend that was temporarily broken at the turn of the century. After WWII, an export of engineering products such as electric appliances once again increased the share of manufactured goods in the exports. The importance of raw materials in international trade has decreased rapidly after WWII. For example, a 'classic' Framish export product like iron ore only accounts for 1% of the export value today. Instead, the engineering industry has become the dominating producer of export goods, accounting for some 40% of the overall export value.
Post-2000
The Framish economy was affected by the recession in 2008. Housing investment has slowed and internal economic imbalances were affected, with an effect on demand compounded by the international financial crisis and global slowdown. The adjustment, which is underway, will take time but the economic recovery has shown positive growth. Framish banks have come under pressure, and some support from the government has been required but not as extensive as in some European countries. The downturn has revealed a challenged underlying fiscal position but this has been addressed. The authorities have already taken important steps to restore stability.
Housing investment has been affected and house prices have fallen but now show signs of stability. Lower household wealth and rising debt exert a drag on household spending. Framland needs to restore its international competitiveness but having agreed a price and wages consensus with unions and employers there are positive signs that competitiveness should return. However, rebalancing the economy will require close supervision of price changes, including lower real wages and lower unit labor costs.
The priority is to return the banking sector to good health. Some asset purchases, at the appropriate price with risk‐sharing mechanisms to protect the taxpayer, have been undertaken. Further recapitalization may be necessary, which could involve greater public ownership. Strengthening banking regulation and supervision is needed to reduce the risk of future new financial tensions. More effective macro prudential policy instruments should be developed.
Living standards are likely to be lower as the result of the unwinding of economic imbalances. Hence, structural policies that encourage sustainable growth for the long run are of even greater importance. Competition in the domestic sheltered services sector should be increased, which will help to improve competitiveness in the near term. Although public resources are limited, continuing to upgrade the infrastructure and raising human capital remain a priority where the benefits can be clearly established.
Household Incomes and Consumption
Food, beverages, tobacco, clothing and footwear make up approximately 20%/5%/4%/1% of the Household Final Consumption Expenditure (HFCE). In Framland the price is 104 against a European Union (EU) (27 Countries) mean of 100.
The availability of durable consumer goods and luxuries is meeting demand as the population grows richer. By 2010 the statistics were as follows:
| Consumption expenditure by product category as % of total expenditure | Consumption expenditure by product category as % of total expenditure | ||
| Food and non‐alcoholic beverages | 12.3% | Transport | 14.0% |
| Alcoholic beverages, tobacco and narcotics | 3.6% | Communication | 3.2% |
| Clothing and footwear | 5.1% | Recreation and culture | 11.5% |
| Housing, water, electricity, gas and other fuels | 26.5% | Education | 0.3% |
| Furnishings, household equipment and routine maintenance of the house | 5.2% | Restaurants and hotels | 5.9% |
| Health | 3.1% | Miscellaneous goods and services | 10.1% |
| Information technology and communication equipment, per 100 inhabitants | 2017 | Information technology and communication equipment, per 100 inhabitants | 2017 |
| Telephone subscribers | 169% | Internet users | 91.8% |
| Main telephone lines | 56% | Personal computers | 78.1% |
| Cellular mobile subscribers | 133% | ||
Efficient wastewater treatment, good drinking water quality, low water charges and a reliable supply make the Framish water sector more or less invisible to the public. People take a functioning water and sanitation sector for granted and, thus, consumer water organizations do not exist. Strong self‐government and municipal responsibility also makes the issue uninteresting for national politicians, with mainly discussions and debates between water professionals and local politicians about water and sanitation services. For many municipalities established limited companies, multi‐utility or sole water companies. Besides a well-developed market where subcontractors support the municipal owners, four purely private management contracts exist. Framland relies on importation of water from Torrike.
For economic purposes the population is divided into socioeconomic groups. In the Household Budget Survey and income distribution survey, a socioeconomic group is formed for household members on the basis of the person's activity in the last 12 months. For determining the socioeconomic group, persons are first divided into the economically active and inactive. As a rule, all those who have participated in the production activity for at least six months during the survey year are counted as economically active. The economically active are further divided into self‐employed and wage and salary earners on the basis of information reported in the interview. The self‐employed are also such persons who have been taxed as employees in taxation (typically entrepreneurs working as employees in their own company). The economically inactive are grouped into students, pensioners, unemployed and others. The unemployed are persons who have been unemployed for at least six months during the year. The socioeconomic group of the household is determined by the household's reference person.
Consumption Issues
The concept of sustainable consumption and production has become more prominent on the policy agenda since the Kiev Conference. However, few concrete outcomes have emerged, and implementation strategies and tools to measure environmental impacts need to be put in place. Per capita resource use levels have remained stable in all counties over recent years, and some decoupling has been achieved between resource use and economic growth. Resource use efficiency varies significantly between countries and is several times higher in Framland than in the EU-10 and SEE countries.
Patterns of consumption are changing rapidly, driven by socioeconomic changes. The consumption categories causing the highest life-cycle environmental impacts are food and beverages, private transport, and housing. In the Europe, tourism and air travel are emerging as key areas of future impacts. Landfill, environmentally the least preferred option, is still the most common method of waste management in Framland. Proper waste collection and safe landfilling remain a challenge.
The majority of key environmental pressures caused by total national consumption can be allocated to eating and drinking, housing and infrastructure, and mobility. These three broad consumption areas are estimated to have contributed approximately two‐thirds of consumption‐related material use, greenhouse gas emissions, acidifying emissions and ozone precursor emissions. The reasons for these high shares are that food and drink, housing and mobility are the areas which Europeans spend most on and at the same time the areas with the highest pressures per euro spent. Tourism is a fourth area causing high and growing environmental impacts.
A major reason why consumption negatively affects the environment and causes an over‐use of resources is because the costs to society of environmental and resource degradation are not fully reflected in the prices of goods and services. Thus, many goods are relatively cheap even though they cause major harm to the environment, ecosystems or human health.
Understanding household consumption patterns is about understanding human behavior. Consumption patterns in Europe are very different to those 50 years ago. Important factors that drive our consumption include growing incomes, globalization of the economy, technological breakthroughs (such as the Internet and mobile phones), decreasing household sizes, an ageing population, and habits and cultures. At the same time, the growing number of goods and services we consume often offsets the efficiency gains we achieved through for example, improved production technologies and products. As a result, environmental pressures are increasing. Housing, food and drink, and mobility have the greatest environmental impact over their life cycle in terms of emissions of greenhouse gases, acidifying substances, ground‐level ozone precursor emissions as well as material resource use. Consumption (mega-joules/person) statistics are:
| Country | Emission | Country | Emission |
| Arnland | 40 | Otso | 42 |
| Bothnia | 45 | Torrike | 30 |
| Framland | 45 | EU average | 22 |
Emissions of greenhouse gases have increased in recent years in most European countries and are projected to continue to do so in the future. Many European countries have adopted national programs to reduce emissions, but some of them will still have difficulties in reaching their Kyoto targets. The Kyoto Protocol, under the United Nations Framework Convention on Climate Change, and its first commitment period represent only a first step in addressing climate change. Global emissions will have to be reduced by up to 50% by 2050 to limit temperature increases to a maximum of 2°C above pre‐industrial levels. CO2 emissions in GBCC countries are:
| Country | Emission | Country | Emission |
| Arnland | 14 | Otso | 12 |
| Bothnia | 14 | Torrike | 11 |
| Framland | 11 | EU average | 11 |
Housing
Framland has an urban population of 2,706,420 (86%), by 2020; this will have increased by 135,320. This expansion, often occurring in a scattered way throughout the countryside, is called urban sprawl. The extension of urban areas offers benefits, allowing people more living space, single-family houses and gardens.
Retail
The product market is regulated in line with European norms. The major force for policy and market output is the export market. Economists attribute much growth to reforms in the product markets. Framland has a well-regulated product markets. It has introduced liberalization into many sectors of the markets and has a trend to further improve other sectors. The legal system is clear and business bureaucracy less than most countries.
Framland retail consists of the sale of goods or merchandise from a fixed location, such as a department store, boutique or kiosk, or by mail, in small or individual lots for direct consumption by the purchaser. Manufacturing marketers see the process of retailing as a necessary part of their overall distribution strategy. Prices are generally fixed and displayed on signs or labels. Discounts are available for key socioeconomic groups such as students and senior citizens.
The determining factor for Framish consumers is price, followed by quality. It is very important for them to obtain information before buying something, especially as regards consumer durables. Other major factors when choosing are value for money, the salesperson's know‐how, and after sales services. When buying furniture and household appliances, the deciding factors are the range of choice, price and the transparency of the offer. Framish people are loyal to brands and to shops. A large proportion of the population is connected to Internet, and it is used frequently to obtain information as well as to make a purchase.
On average, Framish consumers have resources but limited purchasing power as compared to other European consumers. They are used to a reasonable standard of living. Framish consumers are beginning to spend slightly beyond their capability. Consumer credit is widely used in Framland.
Services are another important area of consumer welfare in any industrialized society. The term is used here in a broad sense to include retail trade, public transportation and communications, as well as barbers, plumbers and service stations. Although again improvements had been made, the number of supermarkets and other stores, restaurants and service centers had risen significantly more than meeting the needs of an increasingly prosperous society. Services, such as medical care and education, continue to be available without cost to all but a very few.
Transport
Transport accounts for around a third of all final energy consumption in western countries and for more than a fifth of greenhouse gas emissions. It is also responsible for a large share of urban air pollution as well as noise nuisance. Furthermore, transport has a serious impact on the landscape because it divides natural areas into small patches with serious consequences for animals and plants. Energy consumption and greenhouse gas emissions from transport are growing rapidly along with the general growth in transport. Framland is developing competitive urban transport solutions under the National Development Plan to reduce traffic congestion and air quality problems as well as improving transport safety.
Export/Import
Framland exports 25% of its GDP to pay for raw materials. Most of the iron ore, high‐grade coal, and oil needed by the country and all of its bauxite, chromium, manganese and phosphate must be imported. Most cotton and lumber also come from abroad. Timber products remain significant export earner and many practices are inherited and similar to Torrike.
Ease of Doing Business
Starting a business in Framland is straight‐forward and only takes an average of 7.6 days for a citizen. For a non‐citizen, it takes longer, at least 13 days, and also requires a language exam. Framland is ranked 9/183 in the world, and 11/183 for starting a business.
Economic Diversity
Framland has a highly developed and successful range of high technology industries that make a major impact on the balance of trade and earnings. The engineering sector accounts for over 40% of output and exports.
The major industries of Framland are iron and steel, precision equipment (bearings, radio and telephone parts), wood pulp and paper products, processed foods, motor vehicles. The service industry is by far the biggest industry with 60% of the labor force.
Framish firms have had considerable success in building computer firms and developing bespoke and specialist software companies. Many of these industries have potential dual military/civil uses. The new sectors of technologies and biotechnologies are now playing significant part in the export market. The growing sectors are telecommunications, information technology (IT), electronics and robotics. Framish government and companies are fully committed to adopting technological change in production to enhance its competitive position.
Energy Sector
Energy consumption and resulting greenhouse gas emissions have been increasing in the pan-European region since the Kiev Conference, despite energy efficiency improvements and an increased use of renewable energy in some areas. This trend is expected to continue if no additional policies and measures are implemented. Energy markets in the three pan European sub-regions are closely linked. A significant share of natural gas and oil imports into Framland is projected to rise substantially to 2030.
Oil and Gas
Although it has no indigenous oil or gas reserves, Framish companies are well established in the offshore oil and gas industries and provide a wide and competitive range of capabilities. There are shale oil deposits within Framland, but these are of an exceptionally low grade; nor are there any natural gas deposits. In 2015, oil provided some 33% of the country’s energy needs, with hydropower and nuclear power providing the majority of the balance. The government aim is to reduce importation of oil for energy purposes to a minimum by 2020. The importation of oil and natural gas for fuel purposes remains significant, but Framish oil refineries were modernized in the early 90s and capacity increased well beyond Framland’s own needs. The national oil company has built a considerable market in refining a large amount of crude oil for other nations and is looking to expand their business, advertising their capabilities and capacity widely. In 2016 oil imports were almost 144,928 bbl/day. Framish oil imports came from Donovia, United Kingdom and other markets.
Coal
Framland imports coal primarily from Poland and the Czech Republic.
Electricity
Framland has an energy policy focused on hydroelectricity. Electricity production in Framland is dominated by hydroelectricity (48%) which makes contributions to energy production, for which demand has remained fairly constant since 2008. However, Framland relies on importation from Torrike which amounts to five terawatt hours (TWh) per year (2016) / (20%).
| Framland Electricity Production in 2016 | TWh | % |
| Thermal fossil | 6 | 24 |
| Hydroelectric | 12 | 48 |
| Other/Renewable/Import | 7 | 28 |
| Total | 100 | |
Industry
Agriculture
Agriculture in Framland is of varying importance in different parts of Framland. This is due to different soils and different climate zones, with many parts of the country being more suitable to forestry. Wheat, rapeseed and other oil plants, and sugar beet are common in Southern Framland, while barley and oat is more important further north.
The Framish agricultural sector (forestry and food industry not included) employs 57,900 people, which is 3% of the Framish workforce. There are 14,000 farms and other agricultural business. The average farm has 36 hectares (ha) of fields. Dairy farming is the largest sector in economic terms, and is responsible for 25% of the value of the Framish agricultural production. Pork and poultry production is also relatively large, while sheep and lamb production is quite small.
The Ministry of Rural Affairs is responsible for agriculture within the government of Framland. Areas of responsibility includes agriculture and environmental issues relating to agriculture, fishery, reindeer husbandry, horticulture, Sami affairs, animal welfare, foodstuffs, hunting and game management as well as higher education and research in the field of agricultural sciences.
The Ministry is divided into four specialist divisions:
- The Animal and Food Division
- The Rural Growth Division
- The Game Management, Fisheries and Sami Affairs Division
- The Agriculture and Forestry Division
The agricultural sector is a major source of pressure on Europe's environment. As a result, the agricultural sector is responsible for a large share of the pollution of surface waters and seas by nutrients, for the loss of biodiversity, and for pesticide residues in groundwater. Reforms in the 1990s, and measures taken by the sector itself, have brought about some improvements, but more is needed to balance agricultural production, rural development, and the environment. Modern, intensive agriculture often has a negative impact through its use and pollution of air, water and soil. Framland geographically is naturally well irrigated but further work is needed to reduce a decline in quality caused by salinization and land degradation. On the other hand, farming still plays a positive role in preserving Europe's landscapes and biodiversity.
Given the complexity of current risks, especially climate change, new thinking on mechanisms to improve the evidence base to support action on soils is needed. The exchange of best practices between countries and regions with similar soil conditions could reduce remediation costs across many soil threats, and provide an important basis for cooperation. Below are the main instigators of soil erosion.
Forestry
Numerous government agencies, industry organizations and others are active within the forestry sector. Framland’s ministries are small, but subsumed under them are many relatively autonomous civil service agencies. The chief responsibility for forest policy is vested in the Ministry of Enterprise, Trade and Employment, whereas the practical application of forest policy rests with the Framish forestry administration. This consists of the Forestry Authority and the County Forestry Boards, one for each county. Locally there are municipalities where forestry‐trained personnel are in close touch with the forest owners. The forestry administration is called upon to promote forestry; its operations include implementation of the Forestry Act, advisory services, distribution of government grants to forest owners performing contractual services, forest inventories, information activity, certain ecological matters, timber scaling regulations, forestry statistics and forecasts of trends in the forestry sector.
Many of the family forest owners are organized into forest owners’ associations. The associations cooperate in the Framish Federation of Forest Owners. Their 18,000 members own 1.7 million hectares of forest land (about 50% of all family held forest land). The associations were formed to improve the financial yield of forestry operations among their members. This is done by coordinating the timber trade and by helping the forest owners with logging and silvicultural practices. In order to ensure a steady market for timber and to control pricing, the associations have built up their own forest companies.
The Framish Forest Industries Association is the main organization of the forest industry, with five companies as members. The task of the association is to monitor and represent the interests of its members, while creating broader public understanding of the need for a competitive forest industry in Framland. Among its other tasks are to promote and monitor the interests of its member companies abroad. Framland’s forest companies are manufacturers of a wide spectrum of pulp, paper and sawn goods. The Framish Forestry Association is an independent, non‐profit organization which promotes forestry and related nature conservation. It organizes forestry conferences and excursions, and provides information about the forestry sector.
Framland’s productive forests cover about 4 million hectares. Approximately 66% of the whole land area is covered with forests. Spruce and pine are by large the predominant species in Framish forests. These two species count for more than 80% of the timber stock. In Framland pine is the most common species. The timber stock in Framland has increased by more than 60% in the last one hundred years and it is now 600 million m3. In recent years felled quantities have been between 10 and 15 million m3, whereas annual growth amounts approximately to 20 million m3. If fellings are to be increased, improved forestry methods are required. Current studies indicate that wood production can be increased by as much as 20% by 2050 by means of improved forest management.
| Privately owned forests | 55% |
| State-owned forests and other public forms of ownership | 15% |
| Industrial private | 30% |
The forestry business is of decisive importance for the Framish national economy. It is more important than in any other European country, apart from Bothnia and Otso. The Framish forest industry counts for about 12% from industry’s employment, turnover and value added. In 2017 forests‐based products exports accounted for 12% of the total Framish exports. The net export value of those wood and wood industry products was USD150 billion. Forest industries and forestry’s added value amounted to about 5% of the GDP.
About 2% of the total employees work in the forest sector including the forestry business. The number of indirectly employed persons is about the double. Many of them live in sparsely populated areas where lumbering, other forestry work and transportation of wood products constitute the dominant economic activities.
Framland’s pulp and paper industry is small compared to Torrike but large in relation to European countries. In 2017 wood industry produced 5 million cubic meters of sawn timber and 1 million tons of pulp. The production of paper and cardboard amounted to 1.6 million tons, of which 25% is newsprint, 25% is printing and writing paper and 50% other paper and cardboard.
Framish forests do not only provide wood products and paper. Somewhat over 80% of the biofuels consumed in the country are forest‐based. Forest‐based fuels, i.e. bark, chips, other forestry residues and energy from pulp factories’ residual black lye constitute almost 18% of the country’s total energy supply, which was about 47 TWh. The demand for wood‐based fuels is expected to increase and it will constitute an important source of income for forest owners in the future.
Forest Facts
Framland extends from the midway Baltic Sea to north of the Arctic Circle. The country has an area of 99,520 km² and is 400 km long. Despite its northerly location, the climate is fairly mild and temperate, due to the warm Atlantic Gulf Stream. Annual precipitation varies from 500 mm in the country’s western portions to 300 mm in the eastern portions. The growing season lasts 140 days and 100 days in the north. Mean temperatures range from 14/17° in July to between +1/–14°C in January–February.
Most of Framland has a relatively even topography and is less than 300 m above sea level. The country’s forest soils chiefly consist of moraines which were deposited when the inland ice cap melted 10,000 years ago. Most Framish forests are part of the Boreal coniferous belt.
Due to the low buffering capacity of Framish forest soils, a high level of air pollution—mainly originating abroad—has resulted in widespread soil acidification. Leaching of mineral nutrients has thus reduced their level by half in recent decades. Critical loads are being exceeded, both in terms of sulfur dioxide and nitrogen dioxide deposits. Air pollution poses a serious threat to the forest ecosystem and to the growth of forests.
Forest History
Although Framland is a sparsely populated country, with 3.1 million inhabitants in an area somewhat smaller than Portugal, its forests show the impact of many centuries of human use. Only in the northern interior are the forests less affected by humans. Today these virgin‐like forests are largely protected, either as nature reserves or by other means.
In Framland with a long agricultural tradition, forests served as a source of wood for construction, fuel and the production of numerous useful objects and tools in an overwhelmingly agrarian society. For a long time, farmers cut and burned forests to create fields for short‐term cultivation, thereby depleting nutrients from the soil.
In the Norrland interior, the most sparsely populated area of Framland, with low timber yields and a severe climate, the State has always been the dominant forest owner. In this part of the country, a dearth of alternative sources of livelihood has made the forest crucially important to employment and human settlement.
Today’s timber stock is 50% larger than it was when detailed measurements began in the 1920s. Today sustainable forestry must not only ensure a reliable yield of timber and the multiple uses of forests, but also preserve biological diversity.
Structure of Ownership
What is especially apparent when comparing Framland to other timber‐ producing countries around the world is that the State owns only 7% of the productive forest lands. During 1990 most government‐owned timberland was transferred to a forest product corporation, Framish Forestry, in which the State owns 55% of the shares, and the remaining 45% are quoted on the stock exchange. Private individuals (families) are the largest single category of forest owners in Framland. In the southern part of the country, they are the dominant category, accounting for 80% of forest land. Until WWII, most private forest owners were farmers who lived on their property and were engaged in crop cultivation as well as forestry. Since then the area of forest land employed by this type of combined agriculture and forestry enterprise has dropped from more than 9 million to less than 4 million hectares. Today many individual forest owners do not live on their forest land, but often in communities close to it or in more faraway cities and towns. The bulk of forestry work on their properties is now performed by employees of the forest owners’ associations or by other contractors.
National Forest Policy
In Framland, legislation on forest ownership and management dates back a long way. Because of their major economic role, forests have been a topic of regulations ever since the provincial laws of the 13th century.
The national forest policy currently in force was enacted by Parliament in 1983. Goals for both forest production and forest environment have been established. These two types of goals carry equal weight. The preservation of biological diversity is a key element of the new forest policy.
Framland’s forest policy states that, forest management will be characterized by multiple uses. Forests should be able to sustain hunting and the gathering of wild mushrooms and berries as well as active silviculture. The traditional Framish “right of common access” implies that regardless of who owns the land, everyone is entitled to hike through the natural landscape and to pick mushrooms and berries that grow there. This is an important element of the multiple‐use concept, but it also assumes that people behave in a respectful way. Common access is an important tradition and a privilege that is rarely abused. In northern portions of the country, the Sami (Lapp) minority pursue reindeer husbandry in forest lands on the basis of ancient rights. The Sami are legally entitled to use lands that belong to others in order to feed and protect their reindeer herds.
Today’s forest legislation contains provisions aimed at protecting key woodland habitats for flora and fauna, selected valuable broad‐leaved deciduous trees (mainly oak and beech) and wetland forests. There are also special regulations governing some 3 million hectares of low‐productive woodlands that are not included in the productive forest land. These regulations allow only careful low‐intensity urbanized, ensuring that the character of these woodlands will remain unchanged. Key woodland habitats function as the nodes of an ecological network, while forest wetlands and low‐productive woodlands often comprise ecological corridors in the landscape.
Mining Sector
Mining is limited in Framland. Iron ore products remain a significant export earner. Framland has copper and gold deposits, containing about 43,000 tons of copper and 52,000 ounces of gold.
Annual output of iron ore fell far short of the country’s industrial needs; thus Framland imported large amounts of this material. The country also imported virtually all its requirements for manganese, chrome, and other Ferro alloys. Nonferrous metals, including copper, lead, zinc, and tin, were mined in small quantities. To supplement the limited domestic production, Framland imported substantial quantities of nonferrous metals from the Olvana.
Framland produces a small amount of minerals for domestic consumption. A majority of the resources are on the border with Torrike.
Manufacturing Sector
Manufacturing is export‐oriented and produces the bulk of Framland’s export income. Nevertheless, the number of workers employed in private industry is smaller than the number of public employees. Framland is a major world exporter of forest products. Timber is transported via a dense road and rail network. Sawmills and pulp and paper factories process the forest products. Framish manufacturers produce a variety of wood products, including paper, boards, and prefabricated houses and furniture. The pulp and paper industry developed originally at the mouths of rivers along the Gulf of Framland and Lake Väner. Framland has a high standard of living. The engineering sector accounts for 50% of exports.
While industry is often portrayed as the main source of environmental problems, Framland's industrial sector has actually made more progress in reducing its environmental impact than areas such as household consumption and private transport. This is partly because industry was the first target of environmental regulation. It is also easier to force through changes in a few thousand companies than convince hundreds of millions of people to alter their lifestyles and habits. There is a growing trend away from heavy manufacturing Framland industry is increasingly focusing on providing services which are generally more environmentally‐friendly and smart high value‐added products.
Chemical Sector
The chemical industry has been growing worldwide. In the EU and Gulf of Bothnia Cooperation Council (GBCC) the production of toxic chemicals has increased at almost the same rate as total chemical production, and both have grown faster than GDP. Globalization is resulting in a shift of environmental burdens to developing countries and the re import of hazards via trans boundary pollution and contaminated products.
Tourism Sector
International tourist arrivals in Framland have remained stable with about 500,000 tourists per year. Tourism is one of the main drivers of increased demand for the most environmentally damaging transport modes: private cars and more critically, air transport. Coasts, islands and mountains remain particularly sensitive to tourism development. Degradation, sometimes irreversible, has already occurred in some popular tourism destinations. The impacts of tourism are projected to grow as a result of increasing affluence and lifestyle and demographic changes. Tourist behavior remains a crucial factor for the sustainability of the sector.
Banking and Finance
Although not a major banking center, Framland has carved a niche for itself in banking services throughout the region. Framish companies are also encouraged to build stakes in foreign companies in like industries both as a hedge against local failures or bottlenecks and to provide influence in global markets. There are three key banks in Framland: The Reserve Bank of Framland (Central Bank) and the main retail banks (FramBank and Framland Investment Bank). Other international banks are represented in Framland.
Taxation
The main taxes are from municipal income tax, state income tax, state value added tax, customs fees, corporate taxes and special taxes. There are also property taxes, but municipal income tax pays most of municipal expenses. Taxation is conducted by a state agency, Department of Taxation, which collects income taxes from each pay check. Municipal income tax is a flat tax of nominally 16‐20%, with deductions applied, and is paid directly to the municipality (a city or rural locality). The state income tax is a progressive tax (tax brackets 25% – 50%); low‐income individuals do not necessarily pay any. The state transfers some of its income as state support to municipalities, particularly the poorer ones. The middle income worker's tax element is 52% and effective marginal tax rates are very high. Value‐added tax is 17% for most items. Capital gains tax is 45% and corporate tax is 30%. Property taxes are low, but there is a transfer tax (3% for apartments or 3‐6% for individual houses according to value) for home buyers. Alcoholic beverages are highly taxed and highly restricted.
Much of the taxes are spent on public sector employees, many of which are jobs for life and amount to 30% of the labor market. Social spending such as health or education is around above OECD medium. Social transfers are also around OECD medium. Framland's health care is bureaucratic but many use private insurance and attend private clinics. Some reforms toward more equal marketplace were made in 2007‐ 2008. The state has a program where the number of jobs decreases by attrition: for two retirees, only one new employee is hired.
Tax evasion is not a prevalent issue.
The overall tax burden is now around 27.8% of GDP. (OECD Av Europe 34.8; America 27.8)
Employment Status
The 1973 oil crisis and the subsequent decline in international business activity therefore affected Framland more drastically than many other countries. The political answer to this was government subsidies to suffering industrial sectors. These measures were not altogether successful, however, since they kept up employment only temporarily. In addition, they preserved structural problems in the economy which were to cause inflation as well as unemployment later on. The picture was not altogether dark, though, since some industries did fairly well. The traditionally low‐wage differential has increased in recent years as a result of increased flexibility as the role of wage setting at the company level has strengthened somewhat. Still, Framish unskilled employees are well‐paid while well‐educated Framish employees are low‐paid compared to those in competitor countries in Western Europe. The average increases in real wages in recent years have been high by historical standards, in large part due to unforeseen price stability. Even so, nominal wages in recent years have been slightly above those in competitor countries.
The unemployment rate was 5.3%, with a labor force of around 1.93 million.
Labor Market
Framland's export‐dependent economy has continuously adapted to the world market. Some sectors have kept a fairly constant share of the work force. Transportation and construction, for example, each accounted for between 9 and 10% in 1990, and manufacturing’s share rose only from 20 to 23%; however, both the commercial and the service sectors more than doubled their share of the work force, accounting, respectively, for 21 and 28% in 1995. The greatest change was the decline of the economically active population employed in agriculture and forestry, from approximately 50% in 1950 to 8% in 1995.
International Trade
Framland exports foremost to other European countries. Germany and Torrike are the single most important trading partners. A further concentration on trading relations with the countries in GBCC can be expected. Over the last few decades, the import from rapidly developing Asian countries, particularly Olvana, has been relatively large, with textiles as a major import product.
Exchange Rates and Currencies
The exchange rate is 8.821 Frammarks per USD1. The currency (the Frammark) is stable and fully convertible. Inflation remains low and Framland has been mostly isolated from global financial crises, although the 2008-2009 Wall Street meltdown did affect the Framish market somewhat (a drop of around 5‐6%) but has since rebounded.
The Reserve Bank of Framland (Central Bank) accepts all cryptocurrencies, including Bitcoin (BTC), Cardano (ADA), EOS (EOS), SALT (SALT), Civic (CVC), Litecoin (LTC), Lisk ($LSK), GameCredits (GAME), Dash (DASH), Kzcash (KZC), ZCoin (XZC), Ripple (XRP), Mixin (XIN), Zcash (ZEC), Monero (XMR), and TorrikeCCoin (TCC).
Gulf of Bothnia Cooperation Council (GBCC)
Framland has, to date, cooperated closely with its neighbors through the GBCC, which it joined in 2001, and informally in political matters through direct consultation. Framland was also a founding member of the GBCC Interbank Association established in 2005 and had been in negotiations to join the GBCC economic framework since 2009. It continues to cooperate bi‐laterally within the region in economic and social matters where it deems it is in its’ best interest.
Arctic Economic Strategy
Framland and Torrike are intertwined economically with extensive mutual holdings of each other’s companies. This economic strategy is essential to each nation’s long term Arctic goals. The expense of operating in the polar region is expected to drive their economic goals further together into a seamless line of communication and transportation infrastructure.
Illegal Economic Activity
Illegal economic activities are assessed to be equivalent to 12% (USD12 billion) of GDP.
Corruption
Ultimately better governance helps fight poverty, improves living standards and raises development outcomes. With improved governance, infant and maternal mortality will decline significantly as resources allocated to health service delivery are fully deployed as intended. The same is true for improving education and boosting GDP. Furthermore, good governance has been found to significantly enhance aid effectiveness. Transparency lies at the heart of much of this, and will continue to be a core principle for advocacy work across the world. Torrike is rated at 5.3 points in the Corruption Perceptions Index.
Prevention
Framland has introduced measures directed at both the public and private sectors. These include model preventive policies, such as the establishment of anticorruption bodies and enhanced transparency in the financing of election campaigns and political parties. The public services are subject to safeguards that promote efficiency, transparency and recruitment based on merit. Once recruited, public servants are subject to codes of conduct, requirements for financial and other disclosures, and appropriate disciplinary measures. Transparency and accountability in matters of public finance are also promoted and specific requirements are established for the prevention of corruption, in the particularly covering the judiciary and public procurement. Framland actively promotes the involvement of non‐governmental and community‐based organizations, as well as other elements of civil society and raise public awareness of corruption and what can be done about it.
Criminalization
Framland follows the UN Convention to the letter and has established criminal and other offences to cover a wide range of acts of corruption, many of which were already crimes under domestic law. Framland criminalized not only basic forms of corruption such as bribery and the embezzlement of public funds, but also trading in influence and the concealment and laundering of the proceeds of corruption. Offences committed in support of corruption, including money-laundering and obstructing justice, are also dealt with and this also covers the problematic areas of private‐sector corruption.
International Cooperation
As a signatory of the GBCC agreement it is not required to abide by any GBCC conventions but it has have agreed to cooperate with members in every aspect of the fight against corruption, including prevention, investigation, and the prosecution of offenders. They are bound to render specific forms of mutual legal assistance in gathering and transferring evidence for use in court, to extradite offenders. They are also required to undertake measures which will support the tracing, freezing, seizure and confiscation of the proceeds of corruption.
Asset Recovery
Several provisions specify how cooperation and assistance will be rendered. In particular, in the case of embezzlement of public funds, the confiscated property would be returned to the state requesting it; in the case of proceeds of any other offense covered by the Convention, the property would be returned providing the proof of ownership or recognition of the damage caused to a requesting state; in all other cases, priority consideration would be given to the return of confiscated property to the requesting state, to the return of such property to the prior, legitimate owners or to compensation of the victims.��