Economy of Knootoss
| Economic indicators | |
|---|---|
| GDP (PPP) | $ 750,5 trillion |
| GDP (Nominal) | € 368,3 trillion |
| GDP per capita |
$ 47,879.81 (PPP) € 23,508.52 (nominal) |
| Unemployment rate | 2.79 percent (October 2010) |
| GDP growth |
 1.8 percent (Q3 FY2010-11) 2.1 percent (FY2009-10)
|
| CPI inflation | 1.19 percent (FY2009-10) |
| Public debt | 23.3 percent of GDP (October 2010) |
| Poverty | 0.97 percent (2010) |
| Household net worth | $663 trillion NSD (October 2010) |
Knootoss has a capitalist, post industrial mixed economy, organised along free market principles. The national economy is wealthy, open, and driven by the need for constant expansion. Macro-economic indicators are stable, with low unemployment, steady growth rates, low inflation, and relatively low levels of public debt. Economic activity is dominated by knowledge-based industries, such as ICT, the cultural industry and financial services. The industrial heart of the nation is in the city of Rotterdam, whereas most corporate headquarters are situated in Amsterdam.
Contents |
Monetary policy
The Knootian Central Bank in Utrecht is responsible for monetary policy. Knootoss uses the Euro, which is also the single currency of the Knootian Federation. The currency floats freely, though it generally remains within a bandwidth of $1.96 - $2.05 Universal Standard Dollars.
Taxation
Main article: Knootian taxation system
The main principle of the taxation system is that it should not hinder the international expansion of business. Consequently, the Knootian tax system has many features that make Knootoss an attractive location for businesses operating on an international scale. A progressive income tax has rates between 22% and 42%, but special allowances are granted to certain foreign employees who are assigned to a post with a domestic employer. There is a 10% Value Added Tax, and a 19% flat corporate tax.
Upon taking office, the government announces its plans for the next four years, including budgetary policy, in a coalition agreement. Budgetary policy encompasses all arrangements relating to public finance. The Minister of Economic Affairs is primarily responsible for this policy. Every year on the third Tuesday in September the Prime Minister delivers his Speech from the Binnenhof in which he outlines the government's plans for the years ahead. After this speech, the Minister of Economic Affairs presents the national budget to the Staten-Generaal. It is made up of the individual budgets of each ministry. Central government spending is funded mainly through taxation. Other sources of revenue include the sale of natural gas.
Government Spending
| Division | Spending (in trln € ) | % of total budget |
|---|---|---|
| Education | 47,95 | 55% |
| Commerce | 12,2 | 14% |
| Defence | 7,85 | 9% |
| Social Welfare | 6,10 | 7% |
| Social Equality | 6,10 | 7% |
| Public Healthcare | 4,36 | 5% |
| Public transport | 1,74 | 2% |
| Law & Order |
Education
Main article: Education in Knootoss
"Education" spending in Knootoss encompasses all public spending for the purpose of primary and secondary education, university and college education, science policy, innovation policy, culture and the arts. The Ministry of Education, Culture and Science (Onderwijs, Cultuur & Wetenschap) has a broad mandate to help all Knootian citizens improve themselves. OC&W is generally regarded as a vast, sprawling, liberal bureaucracy. It's tentacles extend to include many aspects of domestic policy. For example, the ministry runs programmes to improve prison education, provides counsellors that promote employee career re-orientation in shrinking economic sectors and trains teachers to improve the self-confidence of teenagers. OC&W also provides the funding for non-government public awareness campaigns that support government policy, most recently on teenage pregnancy, responsible drinking and the dangers of untested drug use. It also provides targeted subsidies for Knootian news media, as well as being in charge of cultural exchange programmes.
Commerce
The Ministry of Economic Affairs (Economische Zaken) is the second-largest ministry in Knootoss. EZ is responsible for government finance, domestic economic policy, industrial relations, foreign economic policy, social affairs, employment, spatial planning and infrastructure. The World Assembly regards nearly all EZ expenses as "commerce" spending, the state-secretariat of social affairs and employment being the sole exception. The sprawling bureaucracy is generally seen as corrupt, pro-business, and sympathetic to the Order of the Invisible Hand. Foreign Economic Policy is an especially important department, as the ministry bureaucracy has set up a sort of "mirror foreign policy" for Knootoss. The ministry controls the disbursal of all Knootian development aid, runs a programme to compensate Knootian businesses for the adverse effects of foreign subsidies, and has its own intelligence agency, the EIVD, which reports directly to the minister. EZ also establishes consulates abroad, to rival the embassies set up by the ministry of Foreign Affairs.
Defence
Main article: Knootian Defence Force
The Ministry of Foreign Affairs and Defence (Buitenlandse Zaken en Defensie) is responsible for foreign policy, the administration of the Knootian Federation, and defence. Although it's budget has grown rapidly in the recent decade, it remains a relatively small and efficient bureaucracy. Funding tends to favour the Marine and the Luchtmacht, limiting the size of the Landmacht (Army). The ministry has successfully resisted the urge to initiate many "prestige" programmes, focussing instead on gradual expansion while maintaining the quality of all branches of the military. Public development of armaments is extremely limited, and the government relies on competitive public procurement, mostly from private military developers.
Social Welfare and Equality
The bureaucracy of the State-Secretariat of Social Affairs and Employment is a progressive-liberal hold-out in the Ministry of Economic Affairs. It is responsible for maintaining a welfare state with a pro-active labour market policy, that can be described as flexicurity. The government promotes labour market flexibility and a dynamic economy, while still providing security for workers, with rights and obligations for the unemployed. An emphasis is placed on flexible and reliable contractual arrangements, comprehensive lifelong learning strategies, effective active labour market policies and modern social security systems to provide adequate income support during employment transitions. There is a compulsory pension system for employees that is managed by private parties.
Public Healthcare
Main article: Public health in Knootoss
The State-Secretariat of Health, Welfare and Sport used to be housed in a damp and leaky basement under the Ministry of Domestic Affairs & Justice. As a result, it's bureaucrats have developed a huge inferiority complex. In truth, healthcare policy is decided upon by the major private insurers, and rubber-stamped by the State-Secretariat. While the insurance companies administer a profitable, efficient system of compulsory private health insurance, the State-Secretariat is stuck running programmes of long term care for the elderly, the dying, and the mentally ill on a shoe-string budget. The earmarked taxation is lamented as being clearly insufficient, leading to a relatively poor quality of care. Private health insurers have used these poor results to attack the State-Secretariat further, undermining it's effectiveness.
Public transport
The State-Secretariat of Public Works and Water management is part of the Ministry of Domestic Affairs & Justice. It is primarily responsible for the regulation and management of transport. It competitively disburses contracts to private transportation companies, supporting an extremely dense network of rail and monorail to connect the major cities. It is also responsible for maintaining the waterways, which are vital for hauling cargo over long distances. Finally, it is responsible for an agency that concerns itself with water management by water works, such as dikes, polders and channels. The small, efficient bureaucracy is dominated by those who hail from engineering professions.
Law & Order
Main article: Law of Knootoss
The State-Secretariat of Justice and the State-Secretariat of Immigration and asylum are part of the Ministry of Domestic Affairs & Justice. It is fortunate that progressive social policies limit the amount of naturally occurring crime, because the Knootian police is relatively poorly funded.
Private sector
ICT
| Sector | World Assembly sector | Market leaders | Region # | World # |
|---|---|---|---|---|
| ICT |
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The Information and Communications Technology (ICT) industry is the leading sector of the Knootian economy. While the foreign corporation Microcosm, Inc dominates the market for computer operating systems, Knootian businesses are making advances into other markets. Caesar SuperComputer Inc specialises in the development of supercomputers for both military and civilian use, and it is only one of many Knootian businesses involved in the development of artificial intelligence. This has led to a number of AI being declared sentient, and granted rights under the law. The vast majority of the hardware and software industries concern themselves with more mundane projects, however, aiming to make the lives of billions of people a little easier every day. Companies such as Backbone Office Software develop tailor-made office management systems for every type of business.
Years ago, the government sponsored the establishment of a nation-wide broadband network, using fibre optic cable. This has allowed for near-total convergence between data streams, permitting for a wide range of new business opportunities. Knootian businesses provide remote hosting services for Knootoss and other nations connected to the Internet, often expanding into adjoining activities such as network administration and network security. Companies such as ABC eXperience have cornered the market for reliable VOIP telephony, branching out into the development and resale of communications equipment and services. A number of private military contractors specialise in cyber warfare, offering their services to the Knootian Defence Force and to selected foreign clients. CyberDefence BV is one of the more well-known examples of such businesses.
The gaming industry benefits from a strong domestic market. Universal broadband internet access (enshrined as a right in the Knootian constitution), near-total convergence between data streams and relatively high disposable incomes allow developers to test new ideas at home, before marketing them abroad. There is a diverse market for Massively multiplayer online games, which use different models to generate earnings. A popular Friendsbook social networking application developed by Weddenschap Technologie BV allows friends to bet on real life events, with the company taking a small percentage of the earnings. An MMO developed by the same company turned derivative trading into a highly addictive game, where earnings can be spent on in-game status items or withdrawn for use in real life.
Mass Media
| Sector | World Assembly sector | Market leaders | Region # | World # |
|---|---|---|---|---|
| Mass media | Book publishing |
Main article: Knootian media
The mass media, also known as the 'cultural industry', are a vital pillar of the Knootian economy. The Knootian news media have a high profile, and television makers take pride in being opinionated, controversial, and at times insulting. The Knootian media are relatively concentrated, with most television networks and all newspapers being at least partially owned by the Knootoss News Network. Newspapers cater to different focus groups, and thus artificially maintain political and intellectual diversity. Lax libel laws and extensive freedom of speech prevent these media from being seriously challenged in court, making it important for political parties to stay on their good side. Spin-offs from the news media include public relations' firms, internet marketeers, professional bloggers, and branding consultants. In the Knootian sociolect, such workers are known derisively as "paarse broeken" or "purple pants": college-educated, glassed people in purple pants, who subscribe to online newspapers and think up products such as orange yoghurt, peach beer, oregano coffee or blueberry fried chips for the Knootian food processing industry.
The music industry is both highly commercialised and open, benefiting from popular online distribution mechanisms such as Musicbay.kn and highly profitable live events. Many top trance DJs are Knootian, and many foreign DJs live in and operate from the nation. Knootoss is home to some of the largest trance events in the region. Gabber music was developed in reaction to the commercialization of house music. The DJs stripped the music of what they perceived as excess sounds, reducing songs to a high-speed monotonous beat. Knootoss has spawned many eurodance acts, and has several well-regarded symphonic metal bands.
The film industry is relatively small. Big budget releases are produced for the international market, and often released in the English language. The industry has long been renowned for its documentaries, with many prominent Knootian directors coming from a documentary background. Since the early 1970s, however, documentary production aimed at a theatrical release has declined due to a shift towards television documentary. The government has established several tax shelters for private investments in Dutch and Frisian-language films.
Financial services
| Sector | World Assembly sector | Market leaders | Region # | World # |
|---|---|---|---|---|
| Financial services | Insurance Industry | 1st | 491st |
Knootoss has an open financial system, with relatively few regulations and capital controls. Foreign banks have established a firm foothold, and Pacitalian banks such as ABN, Postbank and Fortis are often confused for domestic brands. The financial system is dominated by a few internationally active, large complex financial institutions, a situation bringing both stability benefits and several potential risks and policy challenges. Such institutions have substantial risk diversification. But, coupled with the very open nature of the Knootian economy, they make the domestic system more sensitive to global economic and financial trends. The stock market ("Beurs") is home to a wide variety of financial products, including derivative trading.
Transport
| Sector | World Assembly sector | Market leaders | Region # | World # |
|---|---|---|---|---|
| Transport | Pizza Delivery |
Knootoss has an extremely dense highway network, with public roads ("autosnelwegen") and private toll roads existing side by side. Road construction has not kept up with population growth, creating significant pressure on the motorway network. To cope with these pressures, traffic control centres utilise dynamic road signalization across most of the network. Electronic signs can show a lower speed limit, warn drivers for upcoming traffic jams and accidents and inform motorists about the driving times or traffic jam length to a certain point. It can also shows the length of various traffic jams near large interchanges, so drivers can choose an alternative route. A special feature of the motorways is the use of Porous Asphalt Concrete, which allows water to be drained efficiently.
Public transport is a popular alternative to the car. All modalities of public transport are operated by private contractors, who compete for local monopolies, and funded by local and national governments. The rail network is one of the busiest in the region, and high-speed monorail connects major population centres. Metros and trams usually run from around 06:00 until midnight, but there are night buses in a number of cities. National ports and waterways are used to ship bulk goods over long distances. Knootoss prides itself in being a shipping hub, maintaining a large merchant marine and an active shipbuilding industry. It markets itself as the gateway to Europe or the gateway to the Western Atlantic, in these respective regions. Rotterdam has a large and ever-expanding harbour for container shipping, with well-maintained waterways leading into the hinterlands. The high population density makes air travel subject to NIMBY reactions. While there is a high volume of air travel going in and out of Knootoss, most of it is settled around the airport at Schiphol. There are plans to build a new national airport at sea, far away from any citizens who might complain about the noise.
Retail
| Sector | World Assembly sectors | Market leaders | Region # | World # |
|---|---|---|---|---|
| Retail |
The Knootian retail market is dominated by an oligopoly of large supermarkets and department stores. Supermarkets often target different demographics: Idal is a no-frills supermarket, where cheap products can be pulled from boxes, whereas Heintje Bral is a high-end supermarket that targets affluent consumers. Small mom-and-pop stores have been driven out of business, for the most part, though they may still be encountered in tourist-rich areas such as the inner cities of Amsterdam and Utrecht.
Knootoss has a number of prominent and recognisable brands in retail. Pink Bunny Cola is probably the most well-known of these. The carbonated beverage has proven to be extremely popular with Knootians, partially supplanting the consumption of coffee and even alcohol. The drink has proven to be controversial abroad, with some nations restricting it's distribution or banning it outright. Nevertheless, it remains an important product for export.
Tourism
| Sector | World Assembly sector | Region # | World # |
|---|---|---|---|
| Tourism | Tourism |
Tourism is an important economic sector in the Knootoss, even though the World Assembly consistently rates Knootoss as being one of the least tourist-friendly countries in the region, with the worst weather. The legality of prostitution and recreational drugs has led to a large number of sex- and drug tourists from abroad, to visit the red light districts and cannabis coffee shops. However, there are also more high-minded reasons for visiting. Cities like Amsterdam are known for their canals and their historic buildings. Knootoss also has a rich culture and history, with popular museums and famous works of art. Typically Knootian icons, such as tulips and windmills, can be admired as well, though only in carefully cultivated areas. Flower bulbs and wooden shoes are popular souvenirs.
Manufacturing
| Sector | World Assembly sector | Market leaders | Region # | World # |
|---|---|---|---|---|
| Manufacturing |
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Knootian heavy industries include metalworking, chemical processing, petroleum refining. Heavy industries are concentrated around the city of Rotterdam and the Hoogovens of IJmuiden. It's semi-manufactured products are either re-exported to other nations or distributed to local factories. While the number of heavy industries on the mainland is limited, the sector contributes disproportionally to environmental pollution. Environmentalists have argued that maintaining a heavy industrial base in such a densely populated country makes very little sense. The KGP is especially eager to regulate industrial emissions, and the government has discouraged new industrial developments that would cause the environment to deteriorate further. Shipbuilding is viewed more positively, and a large number of skilled workers is employed by shipyards and supporting industries. Such shipyards are often used for both civilian and military purposes.
The focus of the manufacturing sector is on light industries, such as electrical equipment and consumer electronics. Umbrella companies such as Polichinel Electronica NV produce nearly everything, from electrical toothbrushes to high definition televisions to personal hovercraft. The sector is always looking for export opportunities, especially to communist countries and dictatorships which have neglected their light industries.
The automobile industry is relatively small, as it's small electrical vehicles have proven to be unpopular outside of Knootoss. Knootian cars are usually electric hybrids, though new generations use hydrogen power. Cars using traditional fuels are being taxed exorbitantly, in an effort to reduce emissions and generate government revenue. Large cars also face a surcharge, and parking spaces laid down after the turn of the century may be too small to fit them. These policies are the subject of fierce controversy, and the RCPK has their abolishment in it's platform. Foreign carmakers have found it hard to penetrate the market, which can only be serviced if cars are especially designed for being used in Knootian conditions.
Light industries also manufacture a selection of highly advanced recreational drugs. MDMA (Ecstasy) is a mass-marketed product, but companies such as Bonifatius Recreational Drugs Incorporated also offer a wide variety of hallucinogens and psychostimulants. The Knootian government does not take serious action to prevent major corporations from illegal drug trafficking to nations with whom it has not signed a Free Trade Agreement, and its diplomats have, on occasion, pressured smaller foreign nations to promote the import of recreational drugs from Knootoss, though this is not official government policy. These actions have caused some compliance issues with the World Assembly's Drug Trafficking Act. The government has conducted bilateral treaties that restrict cross-border trafficking with nations such as Menelmacar, and such agreements are generally enforced.
Defence industry
| Sector | World Assembly sector | Market leaders | Region # | World # |
|---|---|---|---|---|
| Defence industry | Arms Manufacturing |
The defence industry supplies the majority of defence items to Knootoss, Ale-Yarok and Knootian Colombia. The defence industrial base is best described as one that supports major projects. This means that while the Knootians may lack the wide variety of industrial resources necessary to develop and produce major programs for foreign nations, they have all the skills and expertise to be major participants in such programs. The industry produces many excellent subsystems, components, and parts. The industry is also involved in the final assembly and testing of major defence products.
The links between the arms industry and government are apparent in research institutes and laboratories. Intellectual support for the industry is provided by the excellent technical universities at Delft, Twente and Leiden. These institutes and laboratories are supported directly and indirectly by the Ministries of Education and Economic Affairs, as well as by industrial associations and revenues from contract research and development efforts. The government is politically motivated to insist on industrial offsets when purchasing major weapons systems abroad. While this policy may not be totally palatable to all concerned, the political and economic situation simply will not tolerate massive, one-way expenditures outside the borders. This serves as a strong motivator for defence industrial cooperation.
The drone manufacturing industry is relatively mature, developing a wide range of teleoperated and autonomous vehicles, for all branches of the Knootian Defence Force and foreign buyers. Unmanned aerial vehicles such as the OLV2 Valk Drone are being widely used, but other aerial drones have been developed to provide enhanced targeting, to serve as decoys, or to support reconnaissance, combat and logistical operations. Remotely operated drones can assist navies with demining operations. The industry also offers a wide range of unmanned ground vehicles for similar purposes. Most of these companies also offer drones with civilian applications, such as aerial mapping and maritime exploration.
Private military companies (Dutch: "Particuliere militaire uitvoerders") are another asset of the defence industry. Companies such as Zwartwater provide security and military services to private, corporate and governmental clients at home and abroad. Private security contractors operate independently from the government, and their are few restrictions on their business operations. However, individual employees may be persecuted in Knootoss for illegal actions abroad. While the government has so far resisted the temptation to outsource it's military operations, private security contractors are used extensively by wealthy individuals and by corporations. Companies such as the Knootoss News Network and Bonifatius Recreational Drugs Incorporated rely on military security for operations abroad. Smaller, less reputable companies offer their services as mercenaries to anyone willing to pay for them. Such mercenaries are armed with the latest high-tech equipment, and they are often experienced, having fought in Tanah Burung, Knootian Colombia or other low-intensity conflicts abroad.
Agriculture
| Sector | World Assembly sector | Market leaders | Region # | World # |
|---|---|---|---|---|
| Agriculture |
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The high population density of Knootoss limits the amount of space that is available to agriculture, forcing Knootoss to import staple foods. 6,53% of the total land area is under seasonal crop production and 11,5% of land use is devoted to permanent crops. Most farms are effectively managed and worked intensively with mechanical equipment, and the use of genetic modification is legal and widespread. Although agricultural production is declining, labour productivity has risen sharply, with farming cooperatives adding to the efficiency of production and distribution. Much of the soil in the east and southeast is poor, and large regions are so moist because of their low altitude that only grass can be grown profitably. This condition that has led to the enormous development of the dairy industry. The best land is found in reclaimed polders. The principal crops grown there are sugar beets, potatoes, wheat and barley. Greenhouses tend to focus on the growth of cash crops, cannabis and niche foods.
An elaborate food processing industry adds value by transforming raw ingredients into more valuable consumer products. The quality of GM foods is further improved by industrial processes that remove toxins, increase preservation and ease marketing and distribution of the product. The use of flavour enhancers is ubiquitous, and Knootians often experience foreign foods as being relatively bland. FlavourSaviour NV (known locally as "De Smaakversterker NV") has a stake in different parts of the supply chain, specialising in genetic modification, flavour enhancement and global distribution.
The production and distribution of cut flowers and potted plants is a booming industry, that remains one of enduring importance. Knootian growers produce billions of blooms, and the flower auctions trade cut flowers and potted plants from all over the world, contributing greatly to the balance of trade. The bulbs grown for export are principally of the tulip, hyacinth, daffodil, narcissus, and crocus species, although there is also a niche market for genetically engineered flowers. Knootian flower auctions strive to be key institutions in the world flower industry. Buyers for various wholesalers and retailers participate daily in the flower auctions to purchase flowers, which are then repackaged and resold to end-consumers or retail stores. These auctions use the Dutch auction method. Flowers are grown in greenhouses and peripheral regions of Knootoss. As the price of land increases, the industry is shifting it's attention from flower production to flower trading, though it still plays an important role still in the development of floricultural genetics.
Fishing
| Sector | World Assembly sector | Market leader[s] | Region # | World # |
|---|---|---|---|---|
| Fishing | Trout Farming | None |
Knootoss has large-scale commercial fishing operations, harvesting wide variety of animals. Commercial fishing methods have become very efficient using large nets and factory ships. Controversial fishing methods, such as bottom trawling, are permitted. With fishing stocks depleting rapidly, the ministry of Economic Affairs has supported a transition to intensive aquaculture. After the privatisation of water treatment facilities, "fishing farms" and water treatment are often being combined. An elaborate fish processing industry develops value added products, such as minced meat from low priced fishes and frozen “ready to eat” and “ready to cook” convenience products.
Resource extraction
| Sector | World Assembly sectors | Market leader | Region # | World # |
|---|---|---|---|---|
| Resource extraction | Global Hell Group |
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Knootoss has very few natural resources, and so the economy must get it's raw materials elsewhere. A large and sizeable resource extraction industry specialises in keeping the mainland supplied with energy and mineral resources. With most nearby sources already exploited, companies like the Global Hell Group focus on developing deep-water drilling techniques in the search for oil and natural gas. The industry sponsors trial drilling in Ale-Yarok, Knootian Colombia and developing nations outside the region. However, most of the petroleum refining and chemicals processing takes place around the city of Rotterdam. Knootian companies abroad have an excellent safety record, but do relatively little to promote workers' rights. The Global Hell Group, in particular, has been accused of human rights' violations abroad. There is a vibrant market for alternative energy, and the government has subsidised the development of proven technologies, including reasonably efficient wind farms and hydro-electric cars.
Trade
| Exports | $84,3 trillion (2010 est.) |
| Export goods | Software, cultural services, financial services, shipping services, carbonated beverages, consumer electronics, recreational drugs, |
| Main export partners | |
| Imports | $85,4 trillion (2010 est.) |
| Import goods | Chemicals, fuels, foodstuffs, clothing, financial services, weapons systems. |
| Main import partners |
The promotion of free trade is an important objective of Knootian foreign policy, and Knootoss continues to attract foreign direct investment.
