Economic: South Torbia

DATE Pacific > South Torbia > Economic: South Torbia

Economic Overview

South Torbia is a highly developed, mixed-market nation with a strong economic core. Sixty to seventy percent of the economy is driven by free-market dynamics. Measured on a purchasing power parity basis, South Torbia is one of the world’s largest economies. For three postwar decades, overall real economic growth was impressive - a 10% average in the 1960s, 5% in the 1970s, and 4% in the 1980s, making South Torbia the world’s fastest growing economy in terms of real GDP per capita following World War II. Growth slowed markedly in the 1990s, averaging just 1.7%, largely because of the aftereffects of inefficient investment and the collapse of an asset price bubble in the late 1980s. This collapse required considerable time for firms to reduce excess debt, capital, and labor. Modest economic growth continued over the last two decades, after governmental reform and reduction of much of the previously entrenched bureaucracy. The economy, however, fell into recession four times in the last ten tears. This pattern echoes a standard structural transition from primary goods into manufacturing and then, ultimately, into services. South Torbia accomplished this transition primarily through labor productivity growth with a focus on exports, expanding their human capital through both education and size of work force. Notably, despite this economic success, South Torbia is still reliant on imports due to a limitation in agriculture diversity and natural resources.

In the last five years, South Torbia has had a slight uptick in growth, due to the President’s economic revitalization agenda of monetary easing, flexible fiscal policy, and structural reform. Led by the Bank of Torbia’s aggressive monetary easing, South Torbia is making modest progress in ending deflation, but demographic decline due to a low birthrate and an aging and shrinking population poses a major long-term challenge for the economy. These challenges, coupled with declining trade with Olvana and the potential for a nuclear North Torbia, are immense. The government currently faces the quandary of balancing its efforts to stimulate growth and institute economic reforms with the necessity of addressing its sizable public debt, which stands at 197% of GDP. To help raise government revenue, South Torbia adopted legislation to raise the consumption tax rate gradually. The first such increase, however, led to another recession, so the government has postponed further increases. The government believes that structural reforms combining a cultural ideal of communal happiness and harmony with a military mindset of discipline, hierarchy, and time management are the keys to unlocking productivity and strengthening the economy in the long run.

South Torbia has one of the strongest economies in not only the region, but also the world. However, economic growth has slowed as the nation transitions from technologically advanced manufacturing exporters to a services-oriented market. While high youth unemployment, a rapidly aging workforce, and declining population present challenges for the South Torbian government, economic conflicts in the region run the gamut from relatively low hostility disagreements over shipping lanes to the potential for full-scale warfare, in part due to economic sanctions South Torbia joins the international community in imposing. Potential flash points with North Torbia and Olvana influence much of South Torbia’s international economic policies.

Economic Activity

Over the past 70 years, South Torbia expanded from abject poverty to one of the largest economies in the world. A combination of government-industry cooperation, a strong work ethic, and an embracing of technology allowed a shift from a closed economy focused on import substitution to an export oriented growth strategy. Export values rose from 5% of GDP to nearly 50%, though the transition was not always smooth nor steady. The South Torbian government actively pursued membership in international trade institutions as well as bilateral, multilateral, and regional free trade agreements. Unlike traditional free-market economies—which see state-driven policies as a hindrance to growth—South Torbia complemented trade openness with a command-driven industrial sector, with emphasis on export manufacturing, a strategy later successfully echoed in part by Olvana. Combined with increasing world demand, the economic growth allowed average incomes in South Torbia to climb from well below global norms to over three times the world average.

South Torbia is one of the world’s leading countries in terms of embracing and adapting information and communications technology. This helped sustain growth coming out of a series of financial crises two decades ago. The South Torbian government also developed a series of reforms as it shifted from strict state control to a more pro-business environment. A restructured corporate sector and labor market produced a leaner and more flexible workforce that then became a main factor in attracting foreign investors.

More recently, the economy of South Torbia began a natural restructuring away from manufacturing and into services. As a result, the growth rate has dropped significantly from previous double-digit growth, to smaller, more sustainable amounts. Small business growth and consumer confidence remain extremely high. A weak currency and healthy global demand are propping up economic activity. However, limited wage growth, uncertainty regarding economic policies in the United States and a sizeable slowdown in Olvana could derail economic stability. The nation faces a potential future crisis with a shifting demographic in its labor pool. The population is both aging and shrinking, with population expected to drop from its current level of 128 million down to 95 million within the next 30 years, due to changes in health, birth, and migration patterns. This has an adverse effect on the country’s economic outlook. Additionally, a looming potential conflict with North Torbia hinders some aspects of economic growth. South Torbia already has one of the slowest per capita growth rates among developed countries over the past decade, with an annual growth rate of only 0.13%, stagnant compared with the rest of Asia. By comparison, the United States had a growth rate of 1.6% over the same period.

Economic Actors

Torbia’s Ministry of Financial Strategy and Ministry of International Trade and Industry (MITI) exert a major influence on the economy. These two ministries drive much of South Torbia’s overall economic policy. Additionally, large conglomerates—wherein corporations have combined together separate companies that make up the entire value chain of a particular product, market, or industry—are also major players in the South Torbian economy. Groups of parliamentarians form familial factions that represent the interests of occupational constituencies, such as farmers, small businesses, and the construction industry. The factions, special interest groups, and bureaucrats all work closely together in formulating policy in such areas as agriculture and environmental issues. The cooperative nature of these groups became a major factor in South Torbia’s tremendous postwar economic growth, because in the pooling of resources, the investments made by these groups in developing industries were large enough to make these industries competitive worldwide. Another key contributing factor to South Torbia’s postwar growth was a generally independent and fair judicial system, providing secure protection of real and intellectual property. The direct exchange of cash for favors from government officials is extremely rare. However, the web of close relationships among companies, politicians, government agencies, and other groups fosters a business climate that is conducive to graft, most often seen in the rigging of bids on government public works projects.

The South Torbian military plays a critical role in economic and international policy development. Military spending takes up an average of 2.5% of the annual GDP and the military leadership supports a partnered foreign military presence, even as popular opinion regarding foreign troops has ebbed and flowed. The civilian leadership in the military has helped guide the development of some key industry to support a future independent military or at least one that has a defensive reach to support allies abroad. Many former military members take jobs in the industries that support military procurement and design after leaving or retiring from service.

International Trade

South Torbia is postured well in the foreign trade arena as an economic and demographic trendsetter among the world’s advanced countries. The nation is a technology and manufacturing powerhouse that plays a leading role in the global economy and international supply chains. South Torbia’s large middle class demands a variety of consumer goods and services and drives a consumer economy that leads the national economy. South Torbia actively pursues bilateral free trade agreements, since the country remains reliant on exports for growth and is therefore vulnerable to continued slowing of the global economy. South Torbia is habitually one of the initial signers of any regional or global trade pact that promises to increase foreign competition and create new export opportunities. Because of concerns regarding food production and agricultural security, however, South Torbia has high tariffs on any food or agricultural product imported into the country.

South Torbia has imposed unilateral trade sanctions on North Torbia based on a number of military actions, including ballistic missile testing and attacks on South Torbian military and fishing vessels. These sanctions historically include banning North Torbian ships from using shipping lanes in South Torbian territory, suspending inter-Torbian trade, and prohibiting most cultural exchanges. Trade tensions between these two nations have broader regional implications. Olvana is the largest trading partner in terms of both imports and exports for both of these nations. Approximately one-fourth of all South Torbian trade is with Olvana.

Commercial Trade

South Torbian trade is diverse in terms of both product and partners. The nation is home to a large middle class and a broad-based, highly developed consumer economy that offers great potential for consumer products and services. Key exports include vehicles and vehicle components, integrated circuits, passenger and cargo ships, and natural gas. South Torbia’s main export destinations are Olvana (24.5%), the US (13.5%), the EU (10.3%), OPEC nations (6.9%), and Belesia (2.5%). Another 26.2% of South Torbian exports go throughout the rest of Asia, with the remaining 16.1% exported to the rest of the world. The value of South Torbian exports is $632.5 billion.

South Torbia’s national policies favor free trade and economic liberalism. They generally seek to establish bilateral free trade agreements with existing trade partners. South Torbia’s free trade agreement with Olvana removed tariffs on 90% of products. The bilateral trade with Olvana exceeds $290 billion per year, making Olvana the nation’s largest trading partner. Olvanan trade volume exceeds South Torbia’s next three partners combined, while South Torbia is Olvana’s fourth largest partner. South Torbia’s reliance on raw materials, however, makes the country vulnerable to economic warfare. South Torbia’s most significant imports are crude petroleum and the materials for the manufacturing of integrated circuits and vehicle components. Olvana tops the list of import trade partners at 22.5%, followed by OPEC nations (15.9%), the EU (13.3%), the US (10.1%), and Belesia (1.9%). Importation from the remainder of Asia stands at 22.5% and 13.8% from the rest of the world. The value of South Torbian imports is $536.6 billion.

Military Exports/Imports

Last year, the South Torbian government relaxed its arms export rules, enabling exports of military technology for the first time since 1967. Now such deals are legal and only require government approval. The government is attempting to bolster the manufacturing industry—especially shipbuilding—by expanding the country’s defense industry, enabling its participation in international weapons development programs and easing rules governing military export products to ensure industrial growth. Olvana warned against this move; South Torbia responded by approving a new national security strategy and increasing defense spending to record levels. Last year’s 1.4% increase was the fifth straight annual increase in outlays, giving South Torbia the fourth largest level of nominal military expenditure in the region at 2.5% of GDP.

South Torbia already had defense industries centered on self-defense and maintaining an economic exclusion zone around its islands. The relaxed restrictions on arms exports should revitalize the defense industry, which for many years suffered from a virtual ban on arms exports and a steadily decreasing defense budget. Like much of the manufacturing industry, focus is on high technology components, such as high-performance sensors for US-manufactured surface-to-air missiles, both for the US military and allies in the Middle East. Soon after the President revealed the new policy on arms exports, the Defense Ministry presented a strategy to boost the competitiveness of the domestic industry, hoping that the loosened restrictions will bring concrete gains. South Torbia relied heavily on its relationship with the West to address traditional military threats. This special relationship enabled conglomerates to access US defense-related technologies through licensing and collaborations on defense R&D. South Torbia does not currently possess a sufficiently developed industrial base to support a completely self-reliant defense sector, but seeks this as an eventual outcome. With these advances, South Torbia is also looking to open military export markets in non-Western markets. In addition to the relaxation of export bans, the defense sector is consolidating, especially in troubled areas such as the shipbuilding sector that agonized over global stagnation in demand. Military procurement is extensive and widespread to counter both the conventional and asymmetric threat from North Torbia. A major percentage of GDP (3.1%) directly or indirectly underwrites importation and research and development efforts for the military. Over the next five years, South Torbia will buy hardware including drones, low-observable aircraft, and amphibious vehicles.

Manipulation/Weaponization of Economic Activity

South Torbia’s free market system enables it to be fairly resilient against economic manipulation by other actors. That said, the open nature of the South Torbian market means that any actor with the means to exert economic influence has the potential to impact the economy. While the overall risk of foreign manipulation may be low, the opportunity for external actors to exert influence within the South Torbian economy is high.

Arctic Economic Strategy

South Torbia’s economic interests in the Arctic are ambitious for a non-Arctic nation. The Government of South Torbia is focused on measures to support South Torbian companies to develop greater awareness of business opportunities in the Arctic. The government is actively involved in networking companies and individuals within the business communities of Arctic nations. The South Torbian Government has established itself as a member of many of the economic councils regarding the development of the Arctic. South Torbia wishes to continue to promote an environment for the utilization of its shipping companies through the Arctic Sea Route by constructing systems to support navigation and predict sea ice distribution. South Torbia desires to manufacture and produce Arctic specific technology and equipment for export to further its economic goals.

Economic Sectors

The three main sectors of South Torbia’s economy are all technologically advanced. Agriculture, the smallest sector, is capable of meeting some domestic needs, although most foodstuffs must be imported. Industry, the second largest sector, has a highly advanced and efficient manufacturing branch that drove economic growth for decades. By developing state-of-the-art finished products, they successfully captured many markets to ensure healthy annual trade surpluses. Like most matured industrial economies, services constitute South Torbia’s largest economic sector. South Torbia has been one of the world’s top countries in terms of embracing and adapting information and communications technology, which helped foster and sustain growth coming out of an Asian financial crisis two decades ago. South Torbia’s past strategic alliances and economic integration with Western nations provides opportunities in innovative sectors including space, defense, and security. South Torbia is a leading importer of US aerospace and defense equipment and, increasingly, an integrated co-developer. Fast-growing markets include advanced manufacturing, healthcare, cyber security solutions, and e-commerce. Although most analysts consider the aging population in South Torbia as a drag on the economy, it also presents business opportunities for development in sectors that such a shift in demographics will drive. These include medical devices, pharmaceuticals, healthcare facilities and infrastructure, biotechnology, healthcare information technology, safety equipment, robotics, leisure and travel, and educational services.

Raw Materials Sector

While South Torbia enjoys a variety of natural resources in terms of both quantity and diversity, industrial demand, particularly in certain rare elements needed for high-tech industry, outstrips proven reserves. Once heavily forested, the drive for industrial growth and agricultural expansion largely stripped the urban areas of trees. The government is making an effort to carry out a greening program in urban environs, replanting trees in numerous city parks. The country’s mineral resources include iron, copper, gold, manganese, and nickel.          

Agriculture

The South Torbian agricultural sector accounts for 2.3% of the country’s overall GDP and 3.5% of total employment. In order to counter the decreasing proportion of arable land to population farmers adopted and improved upon modern Western agricultural methods. This results in one of the world's highest levels of crop yields per unit area. Overall agricultural self-sufficiency rate is about 50%, on fewer than 2.3 million hectares. Still, South Torbia is a major importer of agricultural products and has no significant agricultural exports apart from some fruit. The vast majority of cultivated land—particularly irrigated land—is dedicated to rice production, which is still inadequate to meet domestic demand. While South Torbia maintains a free agricultural market domestically, South Torbian farmers are protected by a wide array of subsidies and import barriers, especially on rice, corn, and sugar. Deficiency payments pay farmers all or part of the difference between a fixed target price and the actual market price in the current year. These barriers, especially tariff rate quotas that can range from 100% to as high as 778% for rice, contribute to high food costs in South Torbia. Despite these protections, South Torbia imports over $30 billion in agricultural products each year. One-third of these imports come from the United States, making South Torbia one of the largest export markets for US agriculture. Domestic fruit is limited in variety; the importation of apples, peaches, pears, oranges, grapes, and plums from the US and Oceania is seasonally dependent.

The future of agriculture in South Torbia is dichotomous. One the one hand, agriculture has a long historical and cultural importance. Recently, a weak exchange rate and greater focus on high-quality commodities lifted food exports by over 22 percent in the past two years. At the same time, however, the agricultural labor force faces both a rapidly declining overall population and migration of young people from rural to urban areas for educational, economic, and cultural reasons. Additionally, South Torbian farmers are taking action to try to counter the effects of climate change. A lengthening growing season requires later planting and rice varieties that are more heat resistant. South Torbian farmers have already seen a decrease in both quality and quantity of paddy rice harvests, with 12–13% decreases expected by the middle of the century. The post-war industrial growth spurt largely stripped the trees from a once heavily forested land, especially in and around urban areas. The nation continues to deplete its remaining forestland at a rate of 0.3% per year.

Climate change poses another potential threat to the South Torbian agricultural market. Researchers at the National Rice Research Institute near Manila have found that for each 1° C rise in average temperature, rice yield drops by anywhere from 3% to 10%. Some researchers believed that warmer temperatures and increasing levels of carbon dioxide could lead to higher crop yields, but it appears that this is more than counter-balanced by other factors such as water availability, better conditions for pests, the timing of the growing season and the impact of heat on flowering.

Forestry

While some paper production occurs within South Torbia, it is not a major economic factor. The trees that are native to the area are not the type that are best suited for commercial enterprises. Sizable forests are located outside of North Torbia, but within easy import distance.

Fishing

South Torbia has the largest, most capable, and most commercially successful fishing fleet in the region. Its capacity far exceeds the productivity of its own territorial waters, both in shallow water and deep-sea fishing. With increasing domestic demand, fishing has become an increasingly important factor in the South Torbian economy. This expansion, coupled with the depletion of fisheries and a global increase in demand, is creating friction and territorial disputes over catch limits and rights-of-passage involving nearly all East Asian countries. These disputes, which in the past have been resolved diplomatically, are resulting in slowly increasing violence and diplomatic crises, a trend that will almost certainly continue.

Oil and Natural Gas Extraction

South Torbia has few fossil fuel deposits on or offshore, making its economy susceptible to global energy price fluctuations and crises. The South Torbian government formed the Torbian National Oil Company (TNOC) to bring stability to the oil and natural gas supply. TNOC, which is 100% government owned, is responsible for the importation of all crude petroleum products, while processing and distribution of refined products is in the hands of the private sector. TNOC is a major player in worldwide oil and gas exploration and the development of non-Torbian natural gas fields.

To compensate for a lack of domestic production, South Torbia has dozens of large oil storage tanks for strategic oil reserve purposes. These reserves are intended to keep the country functioning if imports suddenly dry up. It has stockpiles of 1.1 billion barrels of oil, or enough to last for 172 days. South Torbian refinery capacity is sufficient to meet demand for processed petroleum. In fact, the refining sector has encountered excess capacity because domestic petroleum product consumption has declined, leading to the MITI calling for the petrochemical industry to consolidate production facilities to reduce overcapacity. This decline is a result of the contraction of industrial output, the mandatory blending of ethanol into transportation fuels, more fuel-efficient vehicles, and shifting demographics leading to less driving each year. Crude oil production averaged 6,600 barrels per day (bbl/d) over the last two decades, ranging from a high ten years ago of 13,000 bbl/d to a record low of 3000 bbl/d last year.

Because domestic production is minimal, South Torbia imports about 97% of its natural gas, all in the form of liquefied natural gas (LNG). Import volume amounts to over 4.7 billion cubic meters annually, 60% of which comes from Southeast Asia. This makes South Torbia one of the largest natural gas importers worldwide, making up about 35% of all globally traded LNG. Most of the LNG is used for electric power generation, and natural gas accounts for 24% of overall energy consumption. Those natural gas fields that South Torbia does possess are located along the western coastline. The state-owned Torbia National Oil Corporation is responsible for extraction and transportation of natural gas from these fields via a pipeline network that crosses to the Manila metropolitan area.

South Torbia’s limited domestic natural gas reserves are concentrated primarily along the country’s western coastline. These small fields clustered near the Lubang Islands supply less than 3 percent of the country's demand. Exploration efforts are complicated by territorial water disputes with North Torbia. South Torbia is prepared to launch a $27.5 million project using sonic waves and other methods to research the subsea floor structure along 19 miles of the sea border between North and South Torbia.

Mining

The operation of mines and employment in the mining industry has been in decline for many years because of depleted ore reserves, high mining costs, and the availability of cheaper imports. The country continues to operate some nickel mines in the northern mountains, along with copper, iron, gold, and manganese. Generally, the existing mining industry consists of small-scale, low-tonnage mining operations with high-value-added processing activities. The country has an excellent metallurgical industry for nonferrous metals, and the reliance on raw material importation led many major metal processing corporations to invest in mining projects abroad. Additionally, exploration efforts discovered deposits of rare earth metals off the coast, in fields that intermittently stretch into the North Torbian mainland. Overall, mining is the smallest sector of the industrial-based economy, accounting for less than 0.2% of GDP. However, the mineral-processing industry is among the world's largest and most technologically advanced, accounting for 5.2% of GDP, and playing a key role in supplying steel, nonferrous metals and chemicals for the country's manufacturing sector, as well as to those of the region. South Torbia is a leading global producer of chromium, cadmium, slab zinc, and steel, and a leading regional producer of refined copper, pyrophyllite, cement, zeolites, and talc.

Manufacturing and Industry Sector

Manufacturing—a critical piece of South Torbia’s post-war growth strategy—remains a significant part of the overall economy, even as the country transitions to a more service-oriented base. South Torbia ranks third in the world in steel production, much of which transitions to the world’s largest shipbuilding industry and fourth largest automotive industry, producing cars, construction vehicles, motorcycles, ATVs, and engines. South Torbian manufacturing is heavily dependent on imported raw materials and fuel. With increasing competition from Olvana, manufacturing in South Torbia now focuses on high-tech and precision goods such as optical instruments and robotics, as well as smart phones and consumer electronics. South Torbia ranks as one of the most innovative countries in the world, leading global patent filings in several industries. Driven by talent and innovation mixed with low-cost manufacturing, four-fifths of manufacturing exports are in high skill and technology intensive sectors. South Torbia is a world leader in automation, with over 50% of the global market in factory robots, and best practice implementation in manufacturing operations.

Despite the need to import the raw materials necessary for refining, South Torbia remains one of the five largest steel exporters, maintained a persistent trade surplus in steel products. Last year, South Torbia exported over 40 million metric tons of steel, representing 9% of all steel exports worldwide and 3.9% of overall South Torbian exports by value. Auto production has steadily risen over the last five years due to a weaker currency and a stronger global market for motor vehicles. This in turn led to extended export expansion and a smaller focus on domestic sales. The increased complexity of modern vehicles evolved the auto industry into an integrated supply chain of companies, with parts from hundreds of suppliers applied into each vehicle that comes off the assembly line. As a result, an expansive network of auto parts suppliers grew into substantial part of the South Torbian economy, spanning across multiple industries such as chemicals and rubber.

Manufacturing in the defense sector is a potential growth area, but also a presents a regional risk with Olvana. The government has introduced new polices that relax many restrictions and allows South Torbia to export arms to a wider array of nations as well as participate in joint weapons development and production. The focus of these exports will be non-lethal, defense-oriented equipment, but there is also work on joint development of strike aircraft.

Energy Industry

With limited domestic natural resources, South Torbia relies on importation of fossil fuels for generation of electricity. The government monitors the energy sector very closely in comparison with other sectors of the economy, as South Torbia must import 93% of its natural gas, oil and other fuels to produce energy. The government is making efforts to push for greater use of renewable energy and over the last decade the amount of renewable energy consumed has increased from 6.1% of the total to 23.0%. Total energy consumption mainly comes from natural gas (43%), petroleum (27%), and coal (24%). South Torbia possesses an adequate if somewhat dated refining capability. Last year, South Torbian oil refineries produced 3,816,700 barrels per day (bbl/d), making the country the fourth largest refiner in the world. The government is seeking to promote operational efficiency in the refining sector, including increasing refinery competitiveness, which may lead to refinery closures in the future. As a result, South Torbian refineries have scaled back on refining capacity from about 4.7 million bbl/d less than a decade ago.

The MITI interfaces directly with the energy industry, providing subsidies to influence research and development as well as exploration. South Torbia has a very modern, stare-of-the art energy sector with no real inhibitors to progress. However, the sheer volume of imports could cause problems if OPEC or individual countries default on agreements with South Torbia. The MITI recently published a white paper that established a framework for action, presenting three strategic goals to drive growth in the energy sector. These goals were to strengthen and grow upstream and downstream oil and gas activities; to ensure safe, secure, reliable, and efficient supply of energy to the populace and industry; and to maximize economic spin-off from the energy industry, securing high participation of the local workforce.

The largely state-owned Torbian Electric Power Company (TEPCO) provides 87% of South Torbia’s power supply, primarily from thermal plants. Industrial demand accounts for over half of the annual output. The South Torbian government controls 51% of TEPCO. In response to deregulation, which requires TEPCO to spin off all of its fossil-fueled power generation operations, the company plans to divest half of its domestic-based generation assets while building an extensive power plant portfolio in other countries. However, the efforts to privatize the industry display some of the problems South Torbia faces in its labor reform. The privatization process has taken over thirty years and met strong opposition from workers, labor unions, management, nationalists, and those who profit from rent seeking.

Following a major storm over a decade ago, South Torbia shut down its sole nuclear reactor, located in Morong. This made the industrial sector even more dependent on fossil fuels and increased in overall CO² emissions. The government sought to restart the nuclear plant with strict revised safety standards, while emphasizing nuclear energy’s importance as a base-load electricity source. However, opposition from local governments and the populace placed the restart on indefinite hold. In part, concerns were based on the plant's location near a major fault line and a dormant volcano. While the plant is still maintained and could be recommissioned, the government has chosen to place greater emphasis on future sources of renewable energy.

Chemical Industry

The South Torbian chemical industry is the country’s second largest manufacturing sector behind transportation machinery. In its broader definition—including plastic and rubber products—it makes up over 14% of all output value, at over $300 billion, and 12% of the manufacturing workforce.

Services Sector

South Torbia’s service sector accounts for just over half (59.7%) of its total economic output. Banking, insurance, real estate, retail, transportation, and telecommunications are all major industries. South Torbian conglomerates rank as some of the largest in the world in each of their respective sectors. One of the five most-circulated newspapers in the world is South Torbian, and the country is home to 250 companies from the Forbes Global 2000 list. However, many service sectors remain closed to foreign investment.

Banking/Finance

As an ever-increasing power in the global economic system, South Torbia’s banking and financial system continues to rise. The South Torbia stock market consistently shows that South Torbians want to invest in their own country as they see a future with untapped potential for economic growth. The South Torbian banks are also taking advantage of the growing economy as they provide loans or participate in what appears to be lucrative investments. South Torbia has not lived up to its promise as a destination point for foreign banking investment. This is due, in large measure to the cost of adhering to the strict and bureaucratic guidelines of South Torbian financial regulators. The opportunities to enhance returns from fee-based financial services rather than traditional lending are very limited.

Information Communications Technology

South Torbia is a major player in Information Technology (IT) and continues to grow this industry at a steadily increasing rate. IT comprises about 13% of all output value at about $250 billion and over 10% of the manufacturing workforce. These numbers are only expected to increase in the future as the demand for communication devices continues to increase as new and more innovative products are developed. In recent years, smugglers have found a lucrative market for South Torbian phones and other communication devices in North Torbia. North Torbian residents living near the border with South Torbia, are taking advantage of cellular towers located in the 50 miles closest to the border.

While many older South Torbians still read the paper, younger people are now accessing the Internet for their news—either from local newspaper websites or from foreign countries. Social media is taking over the country as in most of the rest of the world.  The cell phone, for those under 40 years of age, is the means South Torbians use to connect to the world. As with other developing countries, South Torbia did not have the same technological evolution as many developed countries. Developing countries had heavy investments in infrastructure, such as phone lines. South Torbia, coming out of decades of war and insecurity, invested in cell phone and other digital technology, rather than step back into technology that slowed developing countries from fully embracing new technology.

Professional Services

Professional services is an evolving industry. As the standard of living for South Torbians has increased, so has their disposable income. The services industry is expanding as South Torbians find they have both more free time and increased income. Entrepreneurs are finding opportunities to provide a variety of services ranging from those that make life easier for busy professionals to enhancing family life.

Tourism

The largest segment of the services sector is tourism. Last year, South Torbia was the fifth most visited country in Asia and the Pacific, with over 8.3 million tourists, in part due to weaker currency and easier visa requirements. The government hopes to double the annual tourist numbers by hosting an upcoming Summer Olympics. Some of the most popular tourist sites include the shopping centers of Manila, the historical and cultural sites around Luzon, the white sand coastlines of Lubang and the reefs popular for diving off the coast of Mindoro. The latter two islands have seen an increase in luxury hotel construction. Outbound tourism is also a component of the services sector, as South Torbia is one of the largest sources of overseas travel and tourism to the United States.

Government Services

For the most part, most South Torbians are satisfied with the services provided by the government. Those in the upper-middle class and above are the most satisfied as most government policies support their quest to increase their wealth. For the poor and disabled, the country is investing in social services that provide nominal support. The level of support is an ever-present discussion as activists lobby for more spending on social programs and less on the military. Public education through high school is compulsory and considered a right to be paid for through taxes. University education is paid for by those who qualify. Additionally, roads, utilities, and other infrastructure, while never perfect, are acceptable to most South Torbians. The amount and distribution of tax dollars to discrete government services is debated passionately in the NA as it allocates finite resources to various needs.

Participation in the Global Financial System

The economy of South Torbia is one of the largest in the world by nominal GDP and purchasing power parity and in the top 25% of GDP per capita. Due to a volatile currency exchange rate, South Torbia’s GDP, as measured in dollars, fluctuates widely. One of the most advanced and developed economies in the world, South Torbia tends to split its investments into both Eastern and Western markets. The volume of trade that drives the South Torbian economy can also have political ramifications, as countries like Olvana can threaten reduced trade in retaliation for economic exclusion zone enforcement. South Torbia must also deal with piracy along the sea lines of communication, enforcing navigable law-abiding use of the sea away from Torbia. Like Olvana, South Torbia seeks to strengthen economic and diplomatic ties with Africa, especially Amari and Kujenga, through infrastructure development. While Olvana seeks improvement of the transportation infrastructure, South Torbia has sought to improve digital connectivity.

World Economic Organizations

As a member of the G20, South Torbia participates in most international economic organizations. These include the following:

International Monetary Fund (IMF)

South Torbia is one of the 195 countries belonging to the IMF who work together to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world. The IMF uses the World Bank to support these goals.

World Bank

The World Bank consists of five institutions including the International Bank for Reconstruction and Development (IBRD); the International Development Association (IDA); the International Finance Corporation (IFC); the Multilateral Investment Guarantee Agency (MIGA); and the International Centre for Settlement of Investment Disputes (ICSID). South Torbia, like most economically developed nations, is a creditor for the International Bank for Reconstruction. In the 1950s and 1960s, South Torbia borrowed 31 times for a total of $863 million, primarily directed at urban infrastructure projects. South Torbia made its final repayment over 30 years ago. South Torbia is now a creditor to the World Bank, receiving its last distribution in 1971. Since 1984, it has been one of the largest suppliers of capital, gaining a greater voice as one of the most important partners. The World Bank maintains active portfolios for South Torbia, focusing on supporting climate mitigation and adaption activities to other nations.

International Development Aid

While South Torbia does participate in Official Development Assistance (ODA), it is not a major ODA member. Instead, it tends to focus inward on its own people helping themselves before helping others. Charity is marginally important in South Torbia. The country lacks a tradition of private philanthropy and the expectation is that the family will provide support for the needy within the family. Governmental unease towards non-profit organizations (NPOs) reflects this. Qualifying for favorable tax treatment, which Western governments provide to charities, is nearly impossible in South Torbia. Of 90,000 NPOs in South Torbia, only 223 have a special tax status. That compares with 160,000 in Britain and 1.8 million in the United States. Officials tend to regard NPOs as meddlesome amateurs, and even though public attitudes are changing, the law and formal attitudes tend to lag.

Until 20 years ago, centralized government planning and controls limited what private and not-for-profit corporate organizations could do. Because of inflation and social needs, the government altered the law, allowing NPOs to make up the difference between what the government used to subsidize and what people needed but could not afford, such as healthcare. However, roadblocks still exist. Following Super Typhoon Haima in 2016, volunteers flooded to the most stricken areas. One group from Manila struggled to find an evacuation center willing to accept its offer of food because they came from out of town, and therefore lacked the local government's blessing. Another complained that centers turned them away because they did not have enough food for everyone. Local police refused to recognize special passes meant to let aid groups use the deserted expressway, forcing them on to congested side-roads.

Other Major World or Regional Economic Organizations

• World Trade Organization (WTO)
• Organization for Economic Co-operation-Development Assistance Committee (OECD/DAC)
• ASEAN Plus Three
• East Asia Summit (EAS)
• Asia-Pacific Economic Cooperation (APEC)
• East Asia Summit      

Foreign Direct Investment (FDI)

Early in its economic reform, the South Torbian government recognized that foreign direct investment was critical to its restructuring and growth efforts. It therefore focused on removing some of the business-related information asymmetry regarding social, cultural, and language barriers. By abiding by norms and laws both locally and internationally as well as adopting traditional cost saving policies, South Torbia has been able to attract knowledge-based investments that raised FDI inflow from 0.4% of GDP to 4.0%. The President stated that the government would like to double that figure to 8% by maintaining a large and healthy national economy, an excellent technology sector, an outstanding workforce, and a democratic and relatively stable political environment. There are, however, some limits to the inflow of foreign ownership in South Torbia. For example, for traditionally Torbian agriculture, such as sugar and rice, regulations ban foreign ownership, enforced with extremely high tariffs. Additionally, a high level of corporate bureaucracy as compared to other developed nations stifles some of the desire for FDI in South Torbia.

Economic Sanctions          

There are no economic sanctions against South Torbia. South Torbia has developed trading partners who are often adversaries of each other, for example the US and Olvana. The complexity of these trading partnerships is most acutely felt when one trading partner expects South Torbia to participate in sanctions against the interests of another trading partner. South Torbia normally supports the UN and other sanctions against North Torbia. Since the two Torbias often have family ties that cross their mutual border, South Torbia often has local organizations that wish to provide food, medicine, and other essential goods to their cousins in North Torbia. As long as these groups confine themselves to humanitarian aid and request permission for their charity work, the South Torbian government generally acquiesces to their wishes.

Finance and Banking

Most South Torbians operate within the standard finance and banking laws. Any remnants of pre-modern banking procedures are only found in the most extreme rural areas of the country. South Torbia’s highly restrictive and regulated banking system has discouraged foreign investment in this industry. While there are a few foreign banking companies operating in South Torbia, most have felt the costs of doing business and complying with regulators are too great.

Private Banking

State-owned enterprise banks and private (corporate) banks share in South Torbia’s financial sector, although this was not always the case. In the 1970s, the combination of a global oil crisis and recent membership in the World Trade Organization convinced the legislature to shift regulations allowing for expansion of banking, and opening the commercial banking industry to the populace at large.

Banking System

Established in 1882, the Bank of Torbia (BoT) is the central bank of South Torbia. The BoT implements monetary policy through control of the money supply and acts as the lender of last resort to the banking system. It controls the money supply primarily through its control of the discount rate, the interest rate for loans from the BoT to commercial banks. The government owns 55% of the BoT and private investors own the rest. There is an uneasy relationship between the Bank of Torbia and the Ministry of Finance.

The relationship between the central and commercial banks is both modern and harmonious. The banking system encourages foreign trade and FDI, which South Torbia recognizes as critical to greater diversification and continued movement from an industrial to a service-centric economy. Lending rates vary based on location, but the central bank keeps them even and fair. Despite this regulation, there is little overall impact on private loans, and lending rate caps do not cause undue stress on the financial system. Certain state-owned enterprises and government-sanctioned agencies receive special privileges in the form of low-interest loans, which has the added effect of making commercial banks more competitive. Both the government and commercial banks are equally effective, except that the Bank of Torbia charges more interest or fees to non-state owned enterprises. The largest commercial banking operation in South Torbia, and 75th largest in the world, is an independent conglomerate with assets exceeding $368 billion.

Stock/Capital

South Torbia’s national stock market, The Torbia Exchange, is located in Olangapo and has 3,559 members. While the majority of economic sectors are represented on the Torbian Exchange, some are not as they are completely privately held, or, like the Torbia National Oil Company, are state-owned enterprises. The Torbia Exchange is a leading global market, with the seventh-most liquid stock market in the world. There is some volatility in non-government stocks, especially in tech-based companies. Overall volatility has been downward trending since about for the last decade, dropping from a high of 51% down to an eventual 2.3%. Torbian stocks are mainly undervalued on the global market, with a price-to-earnings ratio half that of US stocks. A prevailing attitude in the Torbian business world is that foreign gains equate to Torbian losses, undermining the country’s image among investors. Additionally, there are occasional anti-foreign business backlashes—reflective of mood rather than policies—that persist in keeping stock prices low.

Informal Finance

Informal relationships based on familial, school or communal ties play a major role in job search and career advancement. This directly affects the personalities of both government agencies responsible for making economic policy decisions and the ruling boards of conglomerates. The strength of these relationships and the role they play in business and government is unique, since in most economically advanced nations these types of ties have a decreasing role in economics as the nation advances.

In South Torbia, however, informal ties strengthened as the economy advanced. In addition to economic policy, the government also tends to grant privileges to special interest groups based on personal connections. These special interest groups often merge within political parties that represent the diverse concerns of all citizens. Many groups identify so closely with the ruling political party that it is often difficult to discern the boundaries between the party and the various groups. The ruling party pushes for the election of officers of agricultural, business, and professional groups to the national legislature, which enables the formation of specific factions.

Public Finance

South Torbia generally promotes global economic liberalism and free market economies. That said, the nation’s agricultural rice subsidies/ tariffs are the highest in the world, but nearly every other area of the economy is left to the free markets. Wages fell steadily during the country’s long battle with deflation following both Asian and Global financial crises. Raising wages is a focus of the President’s growth program, which seeks to reflate the economy through a cycle of higher corporate profits, worker pay, and consumer spending. One key component of policy is research and development. Using tax incentives, South Torbia is in the top five worldwide of direct R&D funding, spending 3.8% of GDP, and is second only to the US in post-secondary education and patents.

Public Policy

Inflation in South Torbia was 3.4% last year. Inflation has remained low since the global financial crisis, increasing only 9% over the past decade, but recently rates have increased. Multiple factors generate the inflation effects including imports, especially costs of fuel, economic policy including efforts to manage the exchange rate, and trade imbalances with Olvana and the US. While inflation has not had a major impact on corporate investment decisions, citizens believe the government could do more to keep inflation low while also increasing pay. Rising costs without corresponding increases in interest rates caused some not to invest beyond personal savings, forced others to subsistence farm in community or personal plots because of rising food costs, or sent families to seek assistance from private and not-for-profit organizations.

The South Torbian government faces a steadily increasing level of public debt. In addition, South Torbia now has its highest household debt level in recorded history. The office of the President has claimed that ongoing expansionary fiscal policy is not problematic despite the debt size because the level is still less than the average for developed nations. However, parliament is doubtful that the government will be able to endure the debt surge and fiscal deficit, given the gaining of the South Torbian populace.

Like many developed nations, South Torbia uses subsidies to keep critical industry solvent despite market losses. In an effort to boost wages and lower to middle class income levels, the country raised the minimum wage by 16% last year, affecting nearly 25% of South Torbian workers. Due to concerns about these wage hikes generating closures in small businesses, the government also authorized direct subsidies to fund small businesses and keep them at currently existing employment levels. This subsidization will cost the South Torbian government approximately $2.7 billion. The South Torbian fiscal year runs from January through December. While in the past, the fiscal year began after Buddhist New Year, the government changed to January 1 to fall in line with international calendars as more globalization occurred.

Taxation

South Torbia applies its taxation fairly and equitably, with tax credits focused mainly on new business growth, such as investing in R&D, foreign direct investments, and production/manufacturing. Older businesses such as agriculture and heavy industry production see less fair or equitable tax applications and adjustments over time. Corporate taxes are assessed on worldwide income for resident companies (those with corporate headquarters in South Torbia), but only on Torbian-sourced income for non-resident companies. The national corporate tax rate is either 15% or 25.5% depending on company size. Small to medium enterprises—valued at 100 million yog or less—pay the smaller rate. However, companies must also pay local corporate taxes, which in some locations can make the total tax rate 31.3%, one of the world’s highest.

The South Torbian government is working to bring tax rates down, as important trading partners in Africa, South America, Europe, will not invest until the taxes come down further and inflation goes up. The sales tax rate in South Torbia stands at a maximum of 8%, with lower rates on certain products and services. Personal income taxes are a progressive rate ranging from a low of 0% to a high of 38.0%. The country also imposes a flat VAT of 10%, not counting the various applied tariffs, especially on agricultural products.

Currency Reserves

The legal tender South Torbian currency is the yog. The subunit of the yog is the yon. The country no longer uses the yon for everyday transactions, and the denomination only appears in foreign exchange rates. There is not any significant alternative currency or credit system in the country. Both major businesses and individuals conduct credit applications verbally, and approval is often tied to facilitating through the informal network, policy adjustments, conflict resolution, and consensus building.

South Torbia has steadily increased its foreign exchange reserves. Starting at a low point in 1957 with US dollar equivalence of $455 million, total reserves reached a high a decade ago at $1.306 trillion. Although total reserves dropped during the global financial crisis, over the course of last year, total reserves climbed from $1.242 trillion to $1.251 trillion.

Employment Status

South Torbia’s economy has held steady over the past several years. The economic figures including the labor market are some of the best in the world. It is anticipated that the South Torbian economy will continue to maintain a 3%-4% unemployment rate for the foreseeable future.  

Labor Market

South Torbia fueled four decades of economic growth by combining improvements in the size and quality of the workforce with rapid accumulation of capital through exports and growth in total factor productivity. The country enjoys a labor force participation rate (LFPR) of 62.8% (50% for females and 71% for males), with 4.5% of all workers in the agricultural sector, 26.2% in industry, and 69.3% in services. This equates to a total labor force of nearly 66 million workers, 40% of whom are women. The vast majority (90%) work in urban settings. South Torbian workers rarely change companies during their careers, frustrating policy makers’ efforts to drive wages up. The President recently said that changing the way South Torbia works on a fundamental level is the biggest challenge in reviving the economy, and a lack of worker mobility is one reason economists say South Torbia badly needs labor-market reform. Part of the problem is a lack of mid-career opportunities, as companies continue the longstanding practice of hiring mostly new graduates and employing them until they retire. When workers quit their jobs, it is usually for reasons other than money. Most leave to escape unsatisfactory conditions—such as personnel problems or excessive working hours—rather than to seek better opportunities. While wages overall are stagnant or declining, wage growth at the minimum wage level, which directly affects 2.6 million workers, has outpaced inflation, reversing the trends of the previous decade.

The South Torbian workforce faces age issues. The LFPR, that segment of the populace working or actively seeking employment, among those over 65 is 31.5% compared to 80.7% for 25-49 years old. In conjunction with the aging workforce, is a shrinking population with an annual growth rate of -0.1%. Within 40 years, more than 40% of the population will be over 65 years old, according to the Ministry of Health, Labor, and Welfare. This sweeping shift in South Torbia’s demographic outlook brings with it a range of new challenges, with broad implications for its economic outlook, health and welfare systems, and relationships in the Asia-Pacific region. At the same time, the unemployment rate of 20-29 year olds is three times that of the national average. The government is struggling to conduct reform to resolve issues of youth joblessness, female underemployment, and a division between overprotected full-time workers and under protected irregular and part-time workers who now make up 90% of new hires.

Like many developed nations, women are underpaid relative to men in the workplace, with an unadjusted gender pay gap around 30%. Men are still generally the breadwinners of a family and are in charge of household finances, while women stay at home and take care of the children. Despite the fact that gender roles have been progressively evolving throughout the last century, South Torbia is still behind other leading countries concerning gender equality. This is a combination of cultural discrepancies, where women are likely to work part time due to childcare duties, as well as discrimination in the labor market. Additionally, there is a significant amount of sexual harassment in the workplace. In a one-year online survey conducted by the Women Graduates Association of the University of Manila, research found that 54.5% of respondents had been asked inappropriate questions of a sexual nature at work, while 62.5% said that the inappropriate questions were addressed to them more than twice. A staggering 65.5% said that they received comments of a sexual nature based on their appearances and body shape, while 12.5% admitted to receiving gifts in exchange for an intimate relationship. Forty-nine percent acknowledged that they received text messages in the form of sexually inappropriate jokes or emails at work, while 70.1% said that the frequency of the inappropriate texts or messages occurred more than twice. A majority of those who took part also said that they had declined to file reports because they were embarrassed and uncertain about where to turn to for help and said that the experience left them with intense feelings of anger and humiliation.

Despite these challenges, the number of working women is growing. Many are part-timers who support their family budget while the majority of men remain the chief breadwinners. Women typically leave the workforce after marriage or during pregnancy. With the labor supply shortages in certain segments, especially low-paying and unskilled jobs, increasing female employment will be necessity. The situation is gradually improving, as roughly 50% of South Torbian women are now working, up from around 30% a decade ago. That is a record high for the country, but still far below the 80% figure for men. It is also lower than the average of many other developed countries.

Employment and Unemployment

Areas where the South Torbian labor market shows growth can be misleading regarding the overall labor situation. In the last quarter of the previous year, the jobs-to-applicants ratio reached its highest point in the last 50 years. Employment that quarter increased by 30,000, but there was a significant slowing in growth from the seasonally adjusted 260,000-worker increase in the preceding quarter. Most significantly, the preponderance of new entries in the labor force came from previously detached workers reentering the labor force, not from initial entries of secondary school graduates.

The unemployment rate in South Torbia rose to 3.1% at the end of the last quarter, up from 2.8% in the previous 3 months, and expected to climb to 3.8% within a year. Among people aged 15 to 24 years old, the jobless rate rose to 5.2 percent from 5 percent last month. Even more concerning, the jobless rate climbed to 8.2% for people aged 25-29, the most active job seekers, resulting in rare political protests in front of capital buildings. Although the overall number of available jobs is increasing, a lack of turnover at the more senior levels is creating a ripple effect. Upward mobility has been stifled, and entry level hiring in the more technologically advanced or education dependent skillsets is down. Recent college graduates are finding little opportunity in their chosen fields and are unwilling to settle for unskilled labor without promotion potential.

Illegal Economic Activity

Most crimes that occur in South Torbia are non-violent and crimes of opportunity, including residential burglaries and vehicle break-ins.

Government Sponsored

Government involvement in criminal activities can be described as corruption in varying degrees of culpability and entanglement.

Non-government Sponsored

Apart from this level of petty crime, the vast majority of illegal activity within South Torbia falls under the purview of a transnational organized crime syndicate, the Tantoco Cartel. Despite their criminal activities, the South Torbian syndicate styles themselves as an apolitical, beneficent, loose business conglomerate. While their methods are often questionable, they do perform charitable acts, such as donating and delivering supplies to homeless victims. Over time, crime has shifted toward the white-collar variety, relying more and more on bribery in lieu of violence, and over the last two decades South Torbia has had one of the lowest murder rates in the world. These activities make the relationship between organized crime and police a complicated one. Membership itself is not illegal, and criminally owned businesses and headquarters are often clearly marked. Police often know member whereabouts and activities without taking any action. Some South Torbians view the criminals as a necessary evil, in light of their chivalrous facade, and see the organizational nature of their crime as a deterrent to impulsive individual street crime. To counteract this romanticized version, the police refer to the group as essentially thugs or scum to reinforce their criminal nature corresponding with the government imposing stricter laws against criminal organizations. Four years ago, the Minister of Justice resigned his post when the press revealed his links to organized crime. Yet having these links has not always been so damaging for South Torbian politicians. The main opposition party that controlled the parliament for most of the last fifty years had extensively documented links to transnational crime.

One of the main criminal activities in South Torbia is large-scale bribery and blackmail. Fifteen years ago, this had reached such endemic proportions that South Torbia introduced laws making it illegal for corporations to pay blackmailers. Unfortunately, the law did little to curb this criminal activity and led to criminals creating more sophisticated methods of hiding the schemes. The most effective tactic to counter blackmailers has been to align shareholder meetings, as the criminals can only be in so many places at once. Up to 90 percent of corporations on the Olangapo Stock Exchange hold their annual shareholder meetings on the same day.

Another major activity is theft and smuggling. According to the International Union of Maritime Insurance, last year the total loss (shrinkage) through the Port of Manila equated to 240,000 twenty-foot equivalent units, with an estimated value of $6.3 billion, with an estimated annual increase of 2.0% by shipping volume and almost 24.98% by value. With over three-fourths of this loss attributed to theft, industry analysts credit criminal organizations with shifting to higher-value items, often of military origin, rather than the more pedestrian civilian black market items. Smugglers avoid paying transaction taxes on gold by using travelling retirees as mules. This crime is appealing since this typically has no victims except state coffers, and does not call for violence or weapons. People see it as an easy way to earn extra cash, almost like a part-time job. Prior to a tax increase a decade ago, police arrested about 10 people on suspicion of gold smuggling-related tax evasion in a typical year, while last year there 294 arrests. Furthermore, organized crime is involved with smuggling MDMA and cannabis from North America into the country, or, in coordination with African drug smuggling cartels, methamphetamines from Latin America, Olvana, and Africa. Contrary to most countries, South Torbia imports the majority of its cannabis rather than local sourcing; this creates unusually high retail prices for the drug. Additionally, South Torbia faces a prescription medication problem, with over 50% of all drug-related treatment in the nation relating to amphetamine-type substance abuse.

South Torbia is a destination and, to a lesser extent, a source and transit country for men and women subjected to trafficking in persons. Most victims are subject to forced labor and forced prostitution, while children are subjected to sex trafficking. Traffickers use fraudulent marriages between foreign women and Torbian men to facilitate the entry of women into South Torbia for forced prostitution in bars, clubs, brothels, and massage parlors. Traffickers strictly control the movement of victims using debt bondage, threats of violence or deportation, blackmail, and other coercive psychological methods. Trafficking victims also transit South Torbia between East Asia and North America. Traffickers subject male and female migrant workers from across Asia—especially Belesia—to conditions of forced labor, including through the Trainee and Technical Internship Program (TITP). The TITP is a government-run program originally designed to foster basic industrial skills and techniques among foreign workers, but has instead become a guest worker program. During the “internship,” many migrant workers are placed in jobs that do not teach or develop technical skills—the original intention of the TITP. Some of these workers then become victims of forced labor. The Government of South Torbia does not fully comply with the minimum international standards for the elimination of trafficking; however, it is making significant efforts to do so. The government conducted a comprehensive review of TITP and submitted a reform bill to the legislature that establishes a third-party management audit body, with the capacity to punish perpetrators of forced labor and improves redress mechanisms for migrant workers. It also issued a revised national plan of action and established a minister-level committee to implement the plan. The government, however, did not develop or enact legislation that would fill key gaps in the law and thereby facilitate prosecutions of trafficking crimes, nor did they implement measures for trafficking victims, such as establishing a nationwide network of shelters exclusively for trafficking. The government did not accede to the United Nations Trafficking in Persons Protocol.

Table of Economic Activity

Sources of GDP are 46.3% consumer spending, 18.2% government spending, 28.7% investment, and 6.8% net exports. While growth has been consistently slow over the last five years, the most recent quarter showed an improvement, perhaps indicating that South Torbia’s changes to economic policy may be taking hold. Inflation remains low, with the exception of the volatile food sector, which trends at a much higher level.

 

Measure	Data	Remarks
GDP (Official Exchange Rate)	$27 Billion	Estimated
GDP – Real Growth Rate	1.2%	Estimated
GDP – Per Capita (PPP)	$43,000	Estimated
Gross National Saving	34.81%	Estimated as a percent of GDP
GDP – Household Consumption	48.78%	Estimated as a percent of GDP
GDP – Government Consumption	16.09%	Estimated as a percent of GDP
GDP – Investment in Fixed Capital	31.7%	Estimated as a percent of GDP
GDP – Investment in Inventories	31.1%	Estimated as a percent of GDP
GDP – Exports of Goods & Services	44.01%	Estimated as a percent of GDP
GDP – Imports of Goods & Services	38.99%	Estimated as a percent of GDP
GDP – Agriculture Sector	621 million	Estimated
GDP – Industry Sector	10.26 billion	Estimated
GDP – Services Sector	18.711 billion	Estimated
Labor Force	26.6 million	Estimated
Labor Force – Agriculture	1.197 million	Estimated
Labor Force – Industry	6.969 million	Estimated
Labor Force – Services	18.434 million	Estimated
Unemployment Rate	3.4%	Estimated
Poverty Rate	14.6%	Percent of the population living below the international poverty line (Estimated)
Net Foreign Direct Investment	-$22.60 Billion	Estimated
Budget – Revenues	$304.28 Billion	Estimated
Budget - Expenditures	$321.38 Billion	Estimated
Public Debt	197.2%	% of GDP (Estimated)
Inflation Rate – Consumer Prices	0.8%	Estimated (5-year average = 2.4%
Economic Equality/Inequality	0.38	Gini Coefficient (0 = Perfect with everyone in the country has the same amount of wealth; 1 = all income/wealth is in the possession of a single person)