Economic: Pirtuni

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Pirtuni is a major industrial and agricultural producer that has a developed economy and is modestly endowed with natural resources. Mineral resources have historically played an important role in facilitating the industrial development of the country. Dependence on Donovia for energy supplies and foot-dragging by bureaucrats in implementing privatization programs have obstructed efforts to bolster a free consumer market that remains vulnerable to external shocks grounded in the interconnected global economy.

Table of Economic Data

Measure	Data	Remarks
Nominal GDP	$339.87 billion	Agriculture 12.9%, Industry 25.3%, Services 61.8%
Real GDP Growth Rate	2.3%	5 year average 2.6%
Labor Force	16.9 million	Agriculture 7.3%, Industry 22.8%, Services 69.9%
Unemployment Rate	9.9%
Poverty Rate	25.2%	% of population living below the international poverty line
Net Foreign Direct Investment	$45.76 billion	No outbound FDI
Budget	$59.98 billion revenue $65.03 billion expenditures
Public Debt	39.8% of GDP
Inflation	25.2%	5 year average 11.0%

Participation in the Global Financial System

When the Pirtunian government liberalized prices and erected a legal framework for privatization nearly 20 years ago, the country’s participation in the global financial system increased dramatically. This happened despite some spotty resistance from highly-placed bureaucrats and a few members of the former economic elite who previously enjoyed special status because of their connections with government officials. Western institutions in capitalist markets have encouraged Pirtuni to quicken the pace and scope of reforms to accelerate economic growth. The country’s economy continued to expand until a trade war began with Donovia five years ago; this, combined with the worldwide economic downturn just two years later, caused the country’s economy to contract. After relations with Donovia worsened, Pirtuni’s membership in the Western European Economic Co-prosperity Sphere brought preferential access to European markets and a measure of stabilization to the national economy.

World Bank/International Development Aid

A large share of Pirtuni’s economic woes stem from its past reliance on Donovia in the energy sector of its national economy, particularly with regard to hydrocarbon extraction and transit. Four years ago, Donovia coerced Pirtuni into accepting a 10-year gas supply and transit arrangement that temporarily managed to reduce hydrocarbon commodity prices down to “world” levels, even as it artificially crippled the output of Pirtuni’s state-owned gas company, Brautnost. Movement toward a closer working relationship with Europe’s business community began after Pirtuni’s economy contracted nearly 15% after the Four Traitors incident, a freefall that only stopped when the International Monetary Fund (IMF) and World Bank jointly intervened with multi-billion-dollar fund transfers. As the political friction with Donovia increased about five years ago, the international community again stabilized the Pirtunian economy by cobbling together a $15 billion assistance package.

Foreign Direct Investment

Pirtuni’s recently-energized privatization program is designed to increase management efficiencies that will attract foreign investors. Despite a government bent on reform, FDI has fallen precipitously over the past few years because of economic instability brought on by multiple, concurrent crises. The State Agency to Achieve Prosperity formally approves business interests that desire to invest in Pirtuni's economy. Once a particular corporation receives national consent to operate in Pirtuni, province-level officials approve the individual projects. The Investment and National Projects Agency also operates a commercial outreach program, called “Picture it In Pirtuni,” that aggressively markets investment opportunities in the country. These efforts have yet to bear fruit because of a large number of cases now being prosecuted by the National Corruption Resistance Board of Pirtuni and negative media reports associated with these cases.

Economic Activity

Pirtuni’s current economic structure and experiment in private enterprise is an indirect result of the Four Traitors embezzlement incident that rocked Donovia 20 years ago. Prior to that time, the latter leveraged profits derived from its vast natural resources to coerce less-powerful neighboring countries, not excepting Pirtuni, into pursuing economic policies that aligned with those sanctioned by Donovia’s leaders. Circumstances changed abruptly when Donovia suffered a major economic trauma precipitated by the discovery of a massive embezzlement scheme perpetrated against the government by members of its own ruling elite. Over a period of eight years four conspirators—including a member of parliament, a high-ranking military officer, a member of an infamous organized crime family, and a chief financial officer of a state-run hydrocarbon industry—skimmed an estimated 20% of Donovia’s revenue before being forced to flee the country once their crimes were discovered. Because the scandal implicated four of Donovia’s highest-ranking and famous/infamous political, military, corporate, and criminal personalities, the episode became known to history as the Four Traitors incident.

The ripple effect of the Four Traitors incident on the world economy did not spare Pirtuni: massive government spending cuts, layoffs, and runaway inflation soon followed. Although currently stagnant, Pirtuni’s potential for a thriving export trade remains high, thanks mainly to its geographical position in southeastern Europe. Although the country’s hydrocarbon extraction industry is only partially developed, Pirtuni is blessed with thousands of miles of pipelines capable of moving gas and oil products to Europe from originating points in Donovia. Informal agreements and patronage between economic oligarchs and high-ranking government bureaucrats currently hamper recent national efforts to fight corruption and curtail illegal economic activity.

In the wake of the Four Traitors incident, Pirtunian authorities embarked on an unprecedented policy of abandoning the traditional state-run economy and replacing it with one grounded in free-market capitalism. Although the country has made significant economic progress over the past two decades, much remains to be done. Over time, as the new policies gradually drew Pirtuni into the economic orbit of Western Europe, the same policies tended to alienate Donovia, a country that until recently considered Pirtuni to fit naturally within its geopolitical sphere of influence.

Next to Donovia, Pirtuni is the most important economic component of Eastern Europe. It still possesses modest natural resources, and continues to be regarded as the breadbasket of Europe. Sugar beets, wheat, meat, and dairy products are its main agricultural products. The country’s major industries include metalworking, machine-building, and construction. The production of tractors, machine tools, and mining equipment accounts for about one-third of Pirtuni’s industrial manufacturing capacity. Despite the challenges inherent in transitioning from a centralized to a market economy, current efforts to stabilize the financial system, open doors to foreign investment, fight corruption, and implement transparent financial practices hold high potential for a brighter future.

Economic Actors

In some respects, Pirtuni’s economy continues to resemble the one that operated before Donovia’s Four Traitors incident provided the catalyst that sparked the experiment in capitalism. Despite the rise of private enterprise, the state still considers itself an honest broker and steward of the country’s natural resources. Before the transition, state-run enterprises wielded considerable influence in controlling hydrocarbon production. Although political reforms have played midwife to a growing and generally healthy market economy, in some sectors it remains hard to tell where state control ends and private enterprise begins. Where government appointees formerly drove the centralized economy, under the new regime corporate oligarchs too often conspire with old-school bureaucrats to prevent genuine economic reforms from jeopardizing privileges they now enjoy as members of a state/industrial power elite.

Trade

Trade contributes significantly to the Pirtunian economy. Agriculture comprises 13% of the country’s GDP, and Pirtuni is a net exporter of food products. These include corn, grain (mostly wheat), potatoes, and a broad spectrum of fruits and vegetables. Pirtuni also exports minerals and industrial products that include mining machinery and transportation equipment. In the realm of hydrocarbons, Pirtuni exports 1,500 barrels (bbl) per day of oil, while it imports 35,000 bbl/day. Although more than 22,800 miles of gas pipelines crisscross the country, Pirtuni lacks sufficient natural gas for export. Instead, it has historically relied on about 930 billion cubic feet of natural gas imported annually from Donovia to meet its hydrocarbon consumption needs. Determining price levels for these gas imports causes serious and chronic discord between Pirtuni and Donovia.

Commercial Trade

Mainly because of Pirtuni’s successful transition to a market economy, commercial trade is becoming increasingly lucrative with the passage of time. The country’s constitution underwrites competition by guaranteeing the rights to private ownership, including the right to own land. That said, challenges remain. Although patent, trademark, and copyright laws are on the books, the exchange of counterfeit goods continues apace. This is especially the case with counterfeit pesticides. Private companies have reported that criminal prosecution for manufacturing counterfeit goods and violations of intellectual property right laws is stalled and ineffective, and that seized products are seldom disposed of in a timely manner.

Military Exports/Imports

Pirtuni’s military-industrial complex is an advanced, highly-developed component of the government- owned sector of the economy. The defense industry manufactures state-of-the-art military hardware, primarily for ground (main battle tanks and an assortment of tracked vehicles) and naval (anti-submarine warfare) forces. The defense infrastructure includes a large facility located near Kharkiv that produces military weapons and equipment for export. Pirtuni is a major player in the worldwide arms market.

Economic Diversity

Energy Sector

The energy sector constitutes the hub of Pirtuni’s economy. Energy supplies from Donovia to Pirtuni, and through Pirtuni to Western Europe, have long been both a national and regional concern. Pirtunian and European customers must always ponder the possibility that Donovia might cut off deliveries of much- needed energy exports.

Oil

Although it is true that Pirtuni exports about 1,500 bbl/day of crude oil, that number is dwarfed by the 35,000 bbl/day the country must import to meet its domestic consumption needs. Meanwhile Donovia leverages Pirtuni’s continuing demand for oil to generate revenues for its own economy. Predictably, this external pressure from Donovia has caused Pirtuni to look elsewhere for a source of crude oil. Meanwhile, American oil production has increased to levels approaching eight million bbl/day, placing the US in a favorable position to provide Pirtuni with a resource option that reduces the need for exclusive reliance on Donovian oil.

Natural Gas

Pirtuni possesses proven reserves of 41 trillion cubic feet of natural gas, and produces around 753 billion cubic feet of the commodity each year. Although this production level allows the country to rank number 30 among the world’s gas producers, Pirtuni consistently consumes more gas on an annual basis than it can generate domestically. This explains why the country exports no natural gas and must instead rely on imports totaling 927 billion cubic feet annually. The US is now helping to meet this demand through deliveries of liquefied natural gas.

Natural gas as a natural resource is one thing; moving this resource through a transport network is another matter altogether. The Pirtunian gas transport network is one of the largest in the world, and includes just under 23,000 miles of pipelines with an input capacity of 10.6 trillion cubic feet and an output capacity of 7.1 trillion cubic feet. Pirtuni’s gas transport network is the main route traversed by Donovian gas en route to European customers. The state-owned Brautnost Corporation runs the network. Pirtuni’s pipeline network was built 40–50 years ago. Although in need of modernization, the system is generally regarded as stable and reliable.

FORESTRY

About 70% of Pirtuni’s forests are managed by the Pirtunian Forestry Service, a subdivision of Pirtuni’s Ministry of Environment and Conservation. Although this sector of the country’s economy currently generates only negligible revenues, it holds considerable potential as a future engine for economic growth. Currently a limited timber harvest is allowed annually in an area covering just over 14,000 square miles of forest land. Given the right economic incentives and appropriate conservation measures, Pirtuni may be able to ensure its future timber supply while retaining environmental benefits derived from its forests. This, however, will entail economic and systemic reforms beyond the scope of the forest sector.

MINING

More than 95% of Pirtuni’s domestic energy resources are in the form of coal. The country boasts 150 coal mines, most of which are located north of the Dnieper River in eastern Pirtuni, an area long known for its rich deposits of anthracite and lignite. Coal mining, the extraction of ferrous and non-ferrous metals, and machinery and transport equipment necessary for large-scale mining operations all number among Pirtuni’s important industries. Since the late nineteenth century, mineral resources have played an important role in Pirtuni’s industrial development.

Agriculture

Pirtuni has a rich agricultural heritage stemming from its abundant resources in this area. Over half of the country (59%) consists of cropland that produces a wide variety of grains, fruits, potatoes, and vegetables; and an additional 14% is pastureland for livestock, primarily cattle. Most agricultural activity takes place in the central and southern parts of the country, with irrigation being practiced in some areas of the latter. Farmers make use of modern technological advances—though not to the extent found in many Western countries—that allow 7% of the population to farm sizeable expanses of land. Although many Pirtunian farms are large-scale, state-owned enterprises, smaller private plots are increasingly productive, and promise to be of greater importance in the future. Agriculture accounts for 13% of Pirtuni’s GDP, and as noted earlier, the country is a net exporter of farm products.

Manufacturing

Pirtuni has a well-developed scientific and industrial manufacturing base. Important spheres within the national economy include heavy machine building; ferrous and non-ferrous metallurgy; shipbuilding; automotive production (busses, cars, and trucks); manufacturing of tractors and other agricultural machinery; diesel automotive manufacturing; manufacturing of machine tools, turbines, and aircraft engines; and production of power plant, oil extraction, and chemical equipment. Pirtuni is also a major energy generator.

Pirtuni is a major producer of military equipment, including tanks and an assortment of wheeled and tracked vehicles, military transport aircraft, surface-to-air missiles, and optical equipment for various weapons and chassis platforms. Vertiflug aircraft, hovercraft, walking excavators, and other types of precision machinery and electrical welding equipment are produced using state-of-the-art technologies, and rank among the world’s best in meeting quality-control standards. The manufacturing sector of Pirtuni’s economy accounts for 25% of the country’s GDP, but the growth rate in industrial production has dropped a total of 13% in recent years because of trade sanctions imposed by Donovia.

SERVICES/OTHER

Pirtuni’s evolution from an exclusively agricultural-based and industrial-based economy toward a services economy accelerated about 15 years ago, until reaching a point where the services sector is now the largest and fastest-growing sector. Formerly the growth rate of this sector averaged about 9% annually. Currently about 70% of the Pirtunian labor force works in the services sector—mainly transport, post, and telecommunications—and this sector collectively accounts for 62% of the country’s GDP. Pirtuni’s information technology services are particularly strong and rank fourth in the world, despite a population that numbers only one-half that of Donovia’s.

EXPAT LABOR

A sizeable expatriate population resides in Pirtuni, mainly employed in the construction, manufacturing, pharmaceutical, and agricultural industries, as well as the financial sector of its economy. Although job opportunities are somewhat limited to foreigners, the number of available positions is gradually increasing, except that prospective employees must often tolerate menial labor with low-to-average wages. Occasionally, arriving expatriates decide to start their own businesses. Pirtunians are a generally welcoming community, and potentially make loyal customers who reciprocate above-average service with consistent patronage. Perhaps more significant than expatriate laborers residing in Pirtuni is a rapidly- increasing outflow of labor caused by economic hardship related to the country’s ongoing trade war with Donovia. Both skilled and unskilled workers are leaving the country in search of more lucrative sources of income. The countries where most Pirtunians emigrate to, or go to work for shorter or longer periods of time, include Donovia, Western European countries, Canada, and the United States.

Banking and Finance

Public Finance

According to a recent assessment by the World Bank and the European Union, Pirtuni scores 3.1 on a 1– 4 public expenditure and financial accountability (PEFA) scale, where 4 is the highest. The assessment report indicates that the country has established rudimentary public financial management systems, but there is plenty of room for improvement. Among 115 assessed countries, Pirtuni rates above the worldwide average of 2.9. Pirtuni performs well on execution control, and transparency and predictability of the budget, as well as on accounting and reporting. However, given its ambitious aspirations and

potential, the country lags behind on credibility of the budget and policy-based budgeting. It scores as an average performer in the remaining venues. For example, external scrutiny and audit is among the weakest categories, undermined by the limited mandate of the Exchequer of Pirtuni (the country’s supreme audit institution), limited parliamentary focus and involvement, and die-hard corruption in isolated sectors of the military-industrial complex.

Taxation

Western fiduciary experts generally agree that recent tax changes initiated by Pirtuni are a step in the right direction. Late last year the nation’s parliament adopted a comprehensive financial package that included the impending budget as well as a modification of former tax policies. Although the package arrived at the legislature too late to facilitate completely dismantling and reconstituting the tax infrastructure, Pirtuni’s parliament did adopt a new and improved version of the current system. Major changes of the tax system that became effective early this year include the following:

·        A cap on employer taxes for social causes, replacing the previous rate that was considerably higher;

·        A progressive personal income tax rate replacing the previous single tax rate;

·        Clarification of procedures for receiving value added tax (VAT) refunds, and curtailment of a VAT privilege regime that formerly advantaged the agricultural sector of the economy at the expense of the other sectors; and

·        An increase in excise taxes on alcoholic beverages (excluding natural wine) and tobacco products.

Most of the changes noted above bode well for private business interests in Pirtuni. Benefits will include reduced taxes in support of social entitlement programs, and simplification of administrative procedures. The significant tax burden on wages was formerly a major sticking point, and generally considered a main reason why Pirtuni’s economy operated at a disadvantage. The excise increase has been met with indignation from lobbyists/representatives of alcohol, beer, and tobacco interests, but these changes are consistent with worldwide practice and will essentially align production of these products with standards common throughout Western Europe.

Financial Policy

A few years ago the National Bank of Pirtuni changed the konopka into a fluctuating/floating currency in an attempt to meet IMF requirements and to try to establish a stable price level for the country’s currency in world financial markets. Not long afterwards the konopka lost about 70% of its value against the US dollar. Pirtuni agreed to an IMF four-year loan program worth about $18 billion, with distributions to occur in eight tranches over a four-year period, subject to conditions regarding economic reforms. However, due to lack of progress in implementing these reforms, only two tranches worth about $7 billion each were paid during the first year. A third tranche of $1.7 billion may be paid within the next six months, subject to enacting several additional reform measures. Some Western analysts believe that large foreign loans are detrimental to reform because under the right conditions corrupt business practices might enable movement of funds out of the country. Because of deteriorating relations, Pirtuni defaulted on a

$3 billion debt payment to Donovia last year that was formerly part of an economic action plan formulated between the two countries.

Inflation

Inflation has been a major problem in Pirtuni, in large measure because of an ongoing trade war with Donovia. The country’s inflation rate now stands at approximately 50%. Two factors have worsened

inflation. The value of the konopka has plummeted since the trade embargo imposed by Donovia began five years ago and the global recession that followed just two years later, driving up the cost of imported products. In addition, energy prices have soared as the government has cut historically high (and popular) domestic subsidies to hydrocarbon products. That has made life difficult for average Pirtunians and for businesses that face high borrowing costs. The country’s finance minister predicts that inflation will decrease moderately throughout the coming 12-month period, but acknowledged the challenges inherent in achieving real economic growth in a business environment that compels companies to borrow at a 30– 35% interest rate. High inflation also drives down the value of the national currency. A major concern is that people will start pulling their money out of banks as collective confidence in the konopka diminishes over time.

Currency Reserves

A year ago Pirtuni’s foreign currency reserves amounted to $13 billion. A weakening currency and dwindling reserves have made it difficult for Pirtuni to pay its debts, including bills for Donovian natural gas imports. Two years ago Pirtuni imposed restrictions on the movement of money out of the country as it burned through its reserves of hard currency. The country’s national bank asserted that the severe restrictions on capital should be temporary, and that the constraints were nested within broader measures designed to shore up the Pirtunian economy over the long term. A sizeable assistance package provided by the Greater Western European Co-prosperity Sphere staunched the outflow of capital over the course of last year after the konopka hit a five-year low against the dollar.

Public Liabilities/Debt

Pirtuni’s public debt status moderately improved throughout the past year. It currently stands at $136 billion US, a decrease of $17.5 billion compared to the previous year. This amount means that last year’s debt reached just over 45% of Pirtunian GDP, a 10 percentage point rise relative to the year before that, when it was about 35% of GDP. Since the beginning of the trade war five years ago, Pirtuni’s debt increased in global terms since the country was impelled to seek Western lenders to support economic reforms. The position of Pirtuni, as compared to the rest of the world, worsened last year in the context of GDP percentage.

Private Banking

Corruption continues as a serious problem endemic with several facets of Pirtuni’s corporate financial world, especially in urban areas, and private financial institutions with access to government patronage are no exception. Large commercial banks are typically owned by a small handful of wealthy oligarchs with close ties to political movers and shakers within the ruling party’s power elite. Although transparency in financial practices is on the increase, inside the banking bureaucracy it is sometimes difficult for outsiders to determine where the boundary is between practices considered to be in the national interest, and the corporate compulsion to regard maximizing profits as the highest priority. On past occasions the military has wielded its influence as part of the defense establishment to insinuate itself into environments where lucrative government contracts can translate into huge profits for public and private officials personally involved in these transactions.

Banking System

Pirtuni’s banking system is best viewed as a small collection of key oligarchs closely networked with each other and a web of well-entrenched government officials whose ostensible function is to ensure transparency and provide administrative oversight in the public interest. Among the oligarch-managed key banks, Grossbank ranks as an equal among equals. It is the largest commercial bank in Pirtuni, in terms of numbers of clients, assets value, loan portfolios, and taxes paid in support of the national budget. Last year a journal specializing in global reviews of financial institutions named Grossbank as the “Best Bank in Pirtuni.” This corporate bank employs more than 30,000 people, and a recent survey conducted by Bundes Data Nummer Schreibners (BDNS—Pirtuni’s stock exchange) found that Grossbank services are used by one out of three Pirtunian banking customers, and one out of four clients uses a wide ranges of services and considers Grossbank as his main bank.

Stock/Capital

As of the end of last year, Pirtuni’s stock of direct foreign investment at home amounted to $130 billion, ranking it number 55 in the world, and its stock of direct foreign investment abroad totaled $8 billion, giving it a ranking of 65 in comparison with the rest of the world. The Pirtunian Stock Market (BDNS) began modestly, registering only 170 at its inception 18 years ago, and in January of this year reached an all-time high of over 1,200. The Pirtunian BDNS Index lost over 100 points at the beginning of the current trade war with Donovia. The BDNS exchange is headquartered in Kyiv, and its mission is to increase the competitiveness of Pirtunian financial markets and attract foreign as well as domestic capital to the national economy.

Informal Finance

For the economically disadvantaged, the salnuc system, an informal trust-based money transfer system grounded in friendships, ethnic provincialism, and family ties, serves as an alternative to formal banking. Transactions within this system facilitate loans and monetary transfers based on a code of honor that typically involves only verbal agreements, but sometimes uses informally-written promissory notes. Harsh reprisals and summary punishments are often in store for those who fail to meet their payment obligations. Few Pirtunians make use of this system outside of a small percentage of the country’s remaining subsistence farmers and those associated with extra-legal mining, terrorists, criminal groups, and individuals desperate enough to be paid “under the table.”

Employment Status

Chronic upheavals in relations with Donovia have kept Pirtuni’s employment status in a state of flux over the past several years. Because Pirtuni maintains cordial relations with neighboring countries of Western Europe, over time alternative trade relationships have evolved with members of the NATO community, even as such relationships have deteriorated with Eastern European countries susceptible to Donovia’s economic manipulation strategies. These new relationships have generated a migratory laboring population whose members traverse international boundaries in search of employment opportunities. In the recent past, this cross-border flow of workers has had the net effect of acting as a drain on Pirtuni’s population, since at any given time the number of prospective employees seeking to improve their financial status outside the country is greater than the number of foreign expatriates desiring work within its borders.

LABOR MARKET

The labor market in Pirtuni has evolved over time. Having endured an almost exclusively agricultural economy through midpoint in the twentieth century, the country’s labor force subsequently played a key role in building a national industrial dynamo. During the latter part of the twentieth century, the country also very gradually started down the path leading to a service-oriented economy. Beginning about 15 years ago, the national labor market shifted to reflect the growing importance of tourism, entertainment, financial management, and information technology as major sectors of Pirtuni's national economy.

EMPLOYMENT

Although the Pirtunian labor force is characterized as highly-qualified and skilled, the level of pay is much lower than in more economically-developed countries. Ongoing political and economic turmoil related to downward-spiraling relations with Donovia has led to a growing exodus of laborers, most typically to Western Europe. Both skilled and unskilled workers leave the country in order to find more reliable and lucrative sources of income. Although firms in the country insist that there is a shortage of skilled workers, many college graduates either don’t find employment or accept work for which they are overqualified. Employment challenges also face prospective inbound expatriates. This occurs largely because many international corporations seek out foreign employees through their branches overseas, as opposed to using public media to fill job vacancies.

UNEMPLOYMENT

Pirtuni’s officially registered unemployment rate is currently 10%, causing it to rank 111 in comparison to the world. However, there is also a large number of unregistered or underemployed workers. For youth within the 15–24 age group, the overall unemployment rate is 18%, or 67 in comparison to the world.

Illegal Economic Activity

Since the late twentieth century, illegal coal mining has emerged as a problem in an area running east and west between the Dnieper River and Pirtuni’s northern border with Donovia. Last year, analysts estimated that an additional 10% of coal was sold over and above the level reflected in official records. Small, illegal “wildcat” mines called kopankas provide coal that can be sold cheaper than deposits extracted through official mining operations. This coal is neither taxed nor mined with regard for worker rights and applicable safety regulations. Data that would correlate mining accidents with the number of work-related deaths and injuries has never been tabulated for kopankas, but Pirtuni is believed to have one of the worst records for mine deaths in the world. It is suspected that many sales from illegally-mined coal are still funneled through legal mines via corrupt political and business networks with connections to organized crime families. When legal mining came to a near-standstill about three years ago in the wake of a worldwide economic recession, some laid-off workers turned to illegal mines because the latter continued to operate after officially-sanctioned mines closed, providing a long-suffering local population a lifeline to economic survival.

Limited cultivation of cannabis and opium poppy persists in Pirtuni, mostly grown for consumption in illicit Eastern European and Mediterranean/North African markets. Some synthetic drug production also targets illicit consumers in the West. Pirtuni’s recent implementation of improved anti-money-laundering controls earned sufficient good faith in anti-corruption efforts to justify its removal from the International Economic Betterment Task Force’s list of Sub-standard Countries and Territories.

Summary

Although Pirtuni’s economy suffered in the past from over-centralization and large, inefficient state-run enterprises, the country today is considered to be well on the road to a robust, developed economy. Pirtuni has undergone an historic transformation in the past few years that has laid the foundation for a dramatically-improved climate for business and investment. Early last year the country demonstrated its commitment to free-market capitalism by implementing decisive measures to enable sustainable growth through comprehensive governance and structural reforms that included introducing a flexible currency exchange rate, stabilizing its financial sector, securing fiscal sustainability, and restructuring the energy sector. However, much more work remains to be done. Implementing a comprehensive program of market reform during a period of political transition, economic contraction, and perennially-strained relations with Donovia presents a daunting challenge. Overall, Pirtuni’s trajectory warrants cautious optimism for a prosperous future, provided that its government sustains current initiatives to create a stable, transparent, and welcoming business climate that also embraces increased trade with Western Europe.