OOC Source: PinterestCahtice: In a highly publicized event the First Minister Nora Nováková and her cabinet revealed a new Grand Economic Plan also known by the name of the Grand Transformation Act to the public. The new act, designed to lift the Deltarian economy out of its recession, consists of a series of reforms and investments designed to restructure the Deltarian economy in such a way that it will start to grow again. Not only newfound growth and prosperity is the goal of the plan however. Another large aspect of the plan is speeding up the Deltarian economic transformation with the goal of focussing more on information based sectors and less on manufacturing based ones. The new plan and subsequently the new government policy is one of a diversified and well structured economy. The plan describes the new information based sectors and reserves over 200 billion to invest in these sectors in cooperation with both Hutorian and Deltarian private partners. Besides information based sectors the government wont forget the manufacturing sector. While in the plan the government recognizes the slow dissapearance of civilian manufacturing it underlines the governments desire to maintain a strong military-industrial complex and thus military manufacturing industry. This MI-Complex currently gives over a million Deltarians a job and the government sees it as a new vital aspect of the Deltarian culture and economy. The main focus of the new plan is however clearly on individual bussinesses and the information sector. The total "Grand Transformation Act" will reserve over 1 trillion in funds to kickstart the Deltarian economy and make it more resilient for the future. Companies both small to large sized will be able to apply for a grant or loan at the newly established Commission for Financial Management and Distribution or CFMD allowing these companies to either save themselves from bancruptcy during the crisis or use the opportunity to evolve themselves for the period ahead. 100 billion within the reserved funds will be directly invested by the government in job, shelter and food programs to support the struggling portions of the Deltarian population, making sure that no Deltarian sleeps without food or shelter at night.
InvestmentsMost of the remaining budget, amounting to more then 700 billion, is going to be directly invested by the government itself. These investments will be distributed by the Ministry of Finance and spread accross the entire Deltarian economy. The funds will be used to keep vital infrastructure well maintained, such as airfields and major roads, but will also be used to heavily invest in sectors themselves. These investments could include the government fascilitating the creation of bussinesses by using tax incentives and direct investments into certain areas, making these cheaper, but could also include the strengthening of internet infrastructure for information based companies. The manufacturing sector will also be aided to preserve as many jobs as possible during the transition. Investments into this sector include direct subsidies to factories in order to keep them open or the quicker designation of industrial zones to ensure factories can open quicker if desired. The Military-Industrial complex will also receive direct investments as the state owned DDS will receive a total of 5 billion extra in state aid to keep it running. Remaining funds will all be used in the effort to further regulate and organize the economy. New regulations introduced in the Grand Transformation Act will initially cost the Deltarian economy a estimated 100 billion but will in the long term bring more revenue and a more stable economic situation to Deltaria. Taxes on corporations have also been slightly increased to partially make up for the massive investments into the Deltarian economy.
The Deltarian government has encouraged Hutorian companies to aid information based companies in Deltaria to get through the crisis, resulting in over 30 billion worth of investments pouring into a diverse range of Deltarian companies such as Echo Games and MicroWeb allowing these companies to keep running and surviving the crisis. The national airline of Deltaria, Deltarian Airways, has also received the requested 4 billion in funds to get through the crisis and make up for losses. This has however caused some trade unions to strike on several occassions in the last month.
Restructuring and PreparationAll these investments and regulations are meant to revive the Deltarian economy and break it out of its recession within a year while trying to achieve great economic growth within 6 years. To prevent a major crisis like this in the future the new plan also lays out a guideline for the government to work with in the coming years. Going with the GTA reforms is a set of restructuring actions mandated by the government in an effort to make it easier for the government to intervene in the private sector in case of a recession but also allowing the government to put in place certain countermeasures that automatically kick in when a crisis appears. The most important one of these countermeasures is the new "emergency budget" allowing the government to draft a scaled down version of their regular budget every year which would kick in in case of a crisis without senate approval. This would allow the government to cut spending efficiently without the stalemate that occured in the beginning of the great recession. Furthermore the GTA reform pressures the government to come up with additional measures and reforms in the coming years that both limit the chance for another crisis to occur or allows the government to weather such a crisis more easily and with less chaos then the current crisis was handled.
All these reforms, investments and restructuring measures will take effect next month when the Grand Transformation Act will officially become law. Today was the signing ceremony with several ministers, the First Minister and private partners. First Minister Nováková explained the new act in detail and stated that, "with this bill. We will lift the Deltarian economy out of this recession and allow it to flourish once more. We have learned from our mistakes. Now lets fix them."
The growthrate still indicates the recession is ongoing, with it sitting at -2.2%. This new act however combined with renewed market confidence is expected to quickly bring Deltaria out of the recession. Unemployment will remain a problem for the coming years with early projections expecting the current unemployment rate of 16% to only drop to 12% within the next 2 years, still a large unemployment number for a developed economy. With the economic transition finishing in a estimated 4 years however the government is confident the unemployment rate will continue to drop as the Deltarian economy grows again. One critical point of this plan is however its tremendous costs. With over 1 trillion invested over just 6 years early estimates state that the Deltarian debt to GDP rate will rise more to a total of 101% in 4 years time. This increase in debt is unnaceptable to some of the more hawkish and fiscally conservative members of the KDU ruling party but these voices are not being heard as the task of dragging the Deltarian economy out of its recession is deemed more important then keeping the state debt in check.