Economy of the Khanid Kingdom

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All this data is potentially out of date, and should be taken with a truckload of salt

Template:Fiction The economic system of the Khanid Kingdom can best be described as capitalistic-mercantilistic hybrid; which extensively utilizes slave labor. The economic sectors like mining, agriculture, manufacturing, services and trade, are with few exceptions controlled by private owners; mainly holders, powerful magnates and industrialists. There are also few wealthy Khanid entrepreneurs which own prosperous businesses outside of the Kingdom.<ref name=missionTKN> Mission Description: The Khanid Nobleman</ref>

The Khanid Kingdom isn’t rigid and stale in their governing of inter-stellar trade, for the very simple reason that the Kingdom absolutely needs outside trade to survive. Trade goods that can’t be directly transported into or out of the Empire are carried through Kingdom because of the much more lenient trade policies the Empire has for them. Many Dark Amarrians have grown fat acting as intermediaries for Amarr traders and outsiders.<ref name=kingdom>Chronicle: The Khanid Kingdom: http://community.eveonline.com/backstory/chronicles/the-khanid-kingdom/</ref> Even if small in size; the economy is highly connected, with high rates of imports and exports per capita; even higher as that of the major empires of New Eden, but in contrast the Kingdom is unlike the four major nations currently not at war. Thereby, the numbers of trade partners aren’t limited. The Kingdom’s largest trade partner in many lucrative industries, including the technology sector is the Caldari State. The interconnectedness of caldari and Khanid companies is very high, and the past has clearly displayed that both parties are in a high rate of interdependence.<ref name=NKT>News: Khanid Transport submits Investigation into Kingdom Economic Woes: http://community.eveonline.com/news/news-channels/eve-online-news/khanid-transport-submits-investigation-into-kingdom-economic-woes/</ref> Several caldari megacorporations have stakes in Khanid companies: Lai Dai has stakes in Khanid Innovation, the Ishukone in Khanid Transport, Modern Finances bought stakes in Samarkand Financial<ref name=newsSF>Khanid Innovation, Modern Finances buy stake in Samarkand Financial: http://community.eveonline.com/news/news-channels/eve-online-news/khanid-innovation-modern-finances-buy-stake-in-samarkand-financial-1/also</ref> there are many other companies which have invested inside the Kingdom.


History[edit]

Transformation Era[edit]

Even if, the Empire took a fairly heavy hit to its economy following the Khanid Rebellion in 23041 AD, as good portion of the Empire seceded, costing the Empire a fair number of people, territory, resources, and military;<ref>Economy of the Amarr Empire. History. First Contact: http://wiki.eveonline.com/en/wiki/Economy_of_the_Amarr_Empire#First_Contact</ref> the Dakos Rebellion and the time of open warfare meant a complete mobilization of all available resources and the full population. The Kingdom expanded its governmental powers by creating conglomerates such as the Khanid Works<ref>NPC Corporations Description: Khanid Works: http://wiki.eveonline.com/en/wiki/Khanid_Works</ref> and Royal Amalgamated to help with the military production. The effects of the war economy were tempered by the confiscation and secularisation of Theology Council assets and property. The latter helped the Kingdom recovery after the war, because it washed large amounts of capital in the public funds, and for the economy it released resources for a more effective use.

As the Amarr-Khanid conflict cooled off, the rationing — introduced by the government during the war — was abolished, which meant food rations and substitutions to the agricultural sector got rapidly lower or the free market forces got put in place again. This led to a crash of the primary economic sector and to an upswing of other sectors. Some Khanid scholars explain this development thereby, that the royal agricultural sector had maybe an absolute advantage, but that imperial agricultural sector had — and still has — a comparative advantage. As cheap food from the Empire were available again,<ref name=kingdom/> the Kingdom could release resources which were previously trapped in the agriculture, as well as use its absolute advantage in other sectors (manufacturing, services) as international trade increased. A long-term transformation started, which changed the face of the Kingdom forever.


Empyrean Era[edit]

In YC 108, the Empire had canceled a number of trade agreements with the Khanid Kingdom as it turned its eyes more toward the Caldari and peaceful Federation and Republic,<ref>Economy of the Amarr Empire. History. CONCORD Era: http://wiki.eveonline.com/en/wiki/Economy_of_the_Amarr_Empire#CONCORD_Era</ref> as well as a recession was experienced within the Caldari State, the Kingdom's largest trade partner. Which lead to a recession, Khanid Innovation and Khanid Works have suffered a ten percent drop in revenue, and Khanid Transport posted the first loss since the corporation's inception. As a result of this downturn in profits, unemployment within the Kingdom has risen markedly, reaching new record levels, and in turn fuelling civil unrest and disobedience on worlds and installations across the Kingdom.<ref name=NKT/> Shortly after, in June 10th YC110, a Minmatar-Thukker Armada appeared inside imperial space. After briefly expecting the worst as the Elder task force reached towards their space, the Khanid came through the disturbances largely unrattled and entirely unscathed.<ref name=OF/> The Military mobilization in the Khanid Kingdom was suspended as it became clear that no incursions had taken place in its territory.<ref>Year YC110. The Aftermath: http://wiki.eveonline.com/en/wiki/Year_YC110#The_Aftermath</ref>

With their two major trading partners — the Amarr Empire and the Caldari State — seemingly reinvigorated things are looked rosy, and Khanid companies were at the forefront of bidding for repair and salvage operations throughout Kor-Azor and even into Domain. Jamyl Sarum's return has also turned more than a few heads — they were unsure as to what exactly her policy towards the Kingdom would be if she was coronated, but they were keenly interested in the precedent it will set. Following their King's lead, they were sitting back to see how things pan out.<ref name=OF>Other Factions, 100.06.11. Khanid Kingdom: http://wiki.eveonline.com/en/wiki/Other_Factions,_110.06.11#Khanid_Kingdom</ref> As one of the few empire factions which isn't in any war, a boom started in the Kingdom; which brought it back on track after its previous depression.


Astrography[edit]

The Kingdom has a very high income inequality among its residents. Which means, that a small group holds the Kingdom's wealth. But, there isn’t only a the distinctive inequality among individuals and groups within the society; there is also a strong distinctive inequality astrographically. If someone takes a look at a map, presenting the overall performance and poverty, nobody would fail to notice a clear-cut east-west divide. Those "western" regions are distinguished from the rest of the Kingdom by their low economic vitality, low population density and lower CONCORD security status. Similarities inside those "western" quarter are: First, that they are characterized by large agricultural enterprises and livestock farmings, which are controlled by powerful landowners. Second, that the vast majority of the Yangman nobility and the normal population are political and economical conservative. The "central" and the "east" are counted as core worlds; they are and more dynamic and metropolitan.

The Kingdom is more a polycentric state as for example the Caldari State, that's why the central and eastern part doesn't have a single economic center (like Jita). Visitors and traders will also find a monopolization of markets with staple rights and market towns. Those mercantilistic restrictions varying from market-type and location. A prime example is that non-Khanid companies aren't allowed to run stations inside the Kingdom (location), but they are allowed to trade in the Khanid stations (market-type: All, with the exception of slave-markets, and some financial markets). With one notable exception: CONCORD, which is permitted to operate stations inside the Kingdom.


Economic Sectors[edit]

In general the Khanid economy is quite competitive. As the Kingdom embrace technology, including cloning, much more willingly than their Amarr brethrens and even if most Amarrian traditions and customs still exist within the Kingdom, they’ve been modified so that Khanid society and economy is much more dynamic and robust than that of the Amarr Empire.<ref name=kingdom/>


Agriculture[edit]

During the Age of Expansion was agriculture the prime economic sector. Today, agriculture and forestry accounts only for a tiny amount of the Kingdom’s gross domestic product and employs only a small part of the population, as most of hard work is done by slaves. The Kingdom, like the Empire, utilizes minimal automation in harvesting, which makes it less efficient than the other empires.<ref>Economy of the Amarr Empire: Agriculture: http://wiki.eveonline.com/en/wiki/Economy_of_the_Amarr_Empire#Agriculture</ref> Which means, combine with its over small size, that the Kingdom needs to import food from the other empires.


Mining[edit]

Mining is a significant primary industry; but only a small contributor to the economy. As most of the mining services, equipment, technology and minerals are being imported. The Khanid Kingdom is one of the main customer of Amarr minerals.<ref>Economy of the Amarr Empire. Mining: http://wiki.eveonline.com/en/wiki/Economy_of_the_Amarr_Empire#Mining</ref>


Manufacturing[edit]

Industry and construction accounted for one third of the gross domestic product; and employed quarter of the workforce, as well as small quantities of slaves. The Kingdom excels in the production of ships, machinery, electrical equipment,<ref>Amarr Subsystem Description: Legion Offensive - Assault Optimization: http://wiki.eveonline.com/en/wiki/Legion_Offensive_-_Assault_Optimization</ref> microchips and chemicals. The small- to medium-sized manufacturing firms which specialize in technologically advanced niche products are often family-owned and form a major part of the Khanid economy.

A example of small- to medium-sized manufacturing firms are the Khanid weapons and ship manufactures. Which are counted as small- to medium-sized as they haven't a wide distribution, as for example the Ishukone, CreoDron or Core Complexion. That's why, the Khanid weapons and ship manufactures — like Khanid Innovation and Khanid Works — constantly striving to combine the best of two worlds (Amarr and Caldari). For example: Khanid Innovation has utilized their Caldari connections to such an extent that the Kingdom's ships now possess the most advanced missile systems outside Caldari space, as well as fairly robust electronics systems.<ref>Ship Description: Vengeance: http://wiki.eveonline.com/en/wiki/Vengeance</ref> In addition to robust electronics systems, the Khanid Kingdom's ships possess advanced armor alloys capable of withstanding a great deal of punishment. Generally eschewing the use of turrets, they tend to gear their vessels more towards close-range missile combat.<ref>Ship Description: Malediction: http://wiki.eveonline.com/en/wiki/Malediction</ref> Those niche products are one of the few opportunities were Khanid firms can stand out.


Services[edit]

In New Eden services generally involve the provision of services to other businesses as well as final consumers. Services may involve the transport, distribution (Khanid Transport) and sale of goods from producer to a consumer, or may involve the provision of a service, such as in slave control or entertainment. Notable is, that in the Kingdom the services of slave control and trade are measured separately and often categorize separately. But even without them, the service sector is the largest sector of the economy, accounting for almost half of the gross domestic product. The Khanid service industry, unlike the manufacturing sector, has little presence outside the Kingdom; with one exception: The financial sector. The finance industry, more precisely Samarkand Financial, has progressively grown strong ties with the Caldari financial system.<ref name=newsSF/>


Slavery[edit]

Not only a source of labor, slavery is an industry in itself within the Empire as well as in the Kingdom. Trillions of ISK change hands every year in direct relation to the slave industry.<ref>Economy of the Amarr Empire. Slavery: http://wiki.eveonline.com/en/wiki/Economy_of_the_Amarr_Empire#Slavery</ref> The Kingdom has always been a strange mismatch of old amarrian traditions coupled with brand new theories in technology and economics, creating a society that may seem decidedly schizophrenic to the untrained eye.<ref name=NKK/> For Example: Due to the somewhat more secular attitude in the Kingdom, the idea of slaves as lost children needing to be taught the ways of God holds less traction. Instead, slaves tend to be viewed as servants and free labor first, potential future members of society second.<ref>Slavery. Khanid Kingdom. Societal View: http://wiki.eveonline.com/en/wiki/Slavery#Societal_View_2</ref> As in the Amarr Empire, slavery has always played a large role in the economical and social life of the Kingdom. Yet since the Empyrean Age the Dark Amarrians have become increasingly frustrated by the lack of economical benefits provided by slavery in a modern world. That's why a change towards Transcranial Microcontrollers took place in recent years, as studies by economists indicate that the productivity of slaves with the implant is up to hundred twenty percent greater than of other slaves.<ref name=NKK>Khanid Kingdom strenuously denies ill treatment of slaves: http://community.eveonline.com/news/news-channels/world-news/khanid-kingdom-strenuously-denies-ill-treatment-of-slaves/</ref>


Trade[edit]

As one of the greater services has trade a important role in the Kingdom society. As the Khanid economic sectors are more or less: Either ’Jack of all trades, master of none’, to small in size or even to specialise in few cases; which means the Kingdom needs outside trade. They have agriculture, but not in the big scale; and occupying or self-sufficiency as the Amarr. They have manufacturing, but not as technological advance as the Caldari.<ref>Which means, that the Kingdom generally imports normal (positive income elasticity of demand) and inferior goods (negative income elasticity of demand) out of the Empire and superior goods (very positive income elasticity of demand) out of the State. The latter is increasing steadily, as the last centuries saw a growth of income and spending power, and with it a shift towards the State. That's why today, the largest trade partner is the State.</ref> To give a very simplified example for the capitalistic-mercantilistic trade policy: The Kingdom imports from the Amarr: Corn, virgin roe and basic tech I ship technology; from the Caldari: Weapon technologies like missiles, as well as transcranial microcontrollers<ref>News: Ishukone and Khanid Kingdom sign multitrillion trade deal on Transcranial Microcontrollers: http://community.eveonline.com/news/news-channels/eve-online-news/ishukone-and-khanid-kingdom-sign-multitrillion-trade-deal-on-transcranial-microcontrollers/</ref> and services<ref>News: Caldari Trade Mission Visits Khanid Kingdom, Meets With Tash-Murkon: http://community.eveonline.com/news/news-channels/eve-online-news/caldari-trade-mission-visits-khanid-kingdom-meets-with-tash-murkon-1/</ref> <ref>News: Wiyrkomi announce new Khanid contract: http://community.eveonline.com/news/news-channels/eve-online-news/wiyrkomi-announce-new-khanid-contract-1/</ref>.

The Dark Amarr mainly export to the Empire advance tech II ship technology, and shockingly to the Caldari too; as well as some niche products. Where a competitive advantage — like a monopolistic competition or subsidies — gives them a dominant position within the market.


Criticism[edit]

The capitalistic-mercantilistic regulations are under critique from many sides and factions, as well as those sectors and industries with government-granted monopolies. In the recent years a new subject had become of greater significance, namely that the Kingdom's exports exceeds its imports. Since the empyrean wars have started the government had pushed macroeconomic policies in favour of exporting industries, which led in the past years to a huge trade surplus. Those 'assistance for allies and partners', so called by official entities, isn't the problem, rather flood of foreign currencies that has accumulated in the Royal Finances vault over time.<ref>A very simplified explanation: All goods and services are bought in domestic currency, and the domestic currency most be bought over the central bank. The foreign exchange market determines the relative values of different currencies, but not the quantities. The latter is done by monetary policy of the central bank.</ref> Analysts don't expect that the Kingdom will implement any foreign investment packages; they rather predict that the Kingdom keeps hold on those reserves, to ensure their interest and alliances.<ref>Those reserves can't be spent domestically as the money is already spent (inflation risk).</ref>

Some scholars accuse the Kingdom of currency manipulation. It would keep its currency artificially weak, so that domestic demand for foreign goods are as low as possible. Which would then help generate a trade surplus. On cost of the broad population, which got the access to a 'high mass consumption' denied; all that just so the Royal Finances has a large foreign-exchange reserve.<ref>A low or undervalued exchange rate lowers the price of a country's goods for consumers in other countries but raises the price of goods, especially imported goods, for consumers in the manipulating country.</ref> A famous gallente right wing pundit stated in harsh words: "I think for plenty of people is the fact unknown, that those Khanid bankers already influence parts of our highly respected member states and caldari megacorporations."


See Also[edit]


References[edit]

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