Anantonese Journal of Economics and Theory

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Anantonese Regional Economy:  The Political Economy of Proximity
Nadia K. Lowell, Ph. D. Kalistan Imperial University

November 5626

Synopsis

The Anantonese Empire represents many things for the Empire of Ananto and Kalistan.  It is the geographical righting of an historic wrong by Artanian and Majatran states from centuries ago.  It allows Kalistan the ability to project further than its own bases would to give not only Kalistan but the whole Anantonese Region peace, security and stability.  But most importantly, for the region, it presents an opportunity to establish and deepen one of the world's largest free commerce blocs that provides the nations in the region the potential for both unlimited growth, if that is what they choose for themselves, or a very high standard of living that allows nations to both take care of their people and live up to their values at the same time.  The Organization of the Anantonese Empire, and the diplomatic steps that Kaliburg has taken in recent decades to tie the region together internally, while still leaving them free to face outward, have led to prosperity and peace regionally, and it is believed that Kaliburg will do what they can to strengthen those ties.

Introduction
The Anantonese Empire was officially born on the morning of February 1, 5575, when The Kingdom of Gaduridos officially signed the Articles of Empire, uniting in a political union with the Empire of Ananto and Kalistan.  Lodamun would join 9 years later, and this political arrangement would hold through periods of development, prosperity, but mostly high tension coming from the west.  This agreement augments the economic integration accord from 5071 known as the Anantonese Economic Standardization Accord, which creates a regional customs union to eliminate all barriers to trade, free movement of people, including workers, and the treatment of all nations' goods and services as if they were locally produced.  It was additionally augmented by the Anantonese Security Community Treaty, that commits all parties to cooperate for regional security interests.

These agreements include all three Constituent Nations of the Anantonese Empire.  The AESA also includes what many argue still is the world's largest and most diverse economy in Lourenne, and the ASC treaty includes The Kingdom of Egelion.  All member states of these treaties are modern, diverse economies of scale, and between them all there is a diversity of production that ensures the entire region is largely self sufficient in all modern economic sectors.  Internal trade and commerce between regional nations is very high, and shipping costs are excessively low, ensuring that each has the potential to be the others' largest trading pattern.

This regional arrangement not only ensures that each nation has what it needs to provide its citizens a very high standard of living at a very inexpensive price, but also leaves those nations who are so inclined free to also increase their trade connections outside the region.  Egelion, while remaining outside the AESA, trades heavily with Kalistan and Lourenne, and serves as a major conduit for expansive trade networks into the region.  Lodamun is deeply linked in both Artania, Keris, Makon, and Majatra.  Gaduridos, the gateway to the Northern Anantonese, has connections with Aldegar, Southern Seleya and Majatra, trade from which must pass by Gaduridos on its way north.  And Kalistan serves not only as a great commerce hub in Sulari and Kaliburg, but also a shipping giant in the region, producing container ships that fill fleets.

These regional arrangements can provide a model for other regional arrangements as well, to generally lift the standards of living for the people of nations involved in them, while allowing nations which are so inclined, to trade far and abroad.  The ties that bind the region are internal, and are objective, rather than subjective:  In other words, they would likely remain regardless of who was in power in the Anantonese States, because of things like geography and historical patterns of investment that have led the nations of the region to be both economically compatible with one another, and reduce the pressure for rivalry or destructive competition.  

There is everything to gain through cooperation and nothing to gain through competition.  The Anantonese Empire can provide the Kerisian and Dovanian nations with things they need cheaper than they can get them from foreign producers.  They can provide them far quicker, and at a much lower (if any at all) cost for shipping, and they generally prefer to buy locally than abroad.  It creates a regional self-sufficiency that other regions of the world would do well to emulate.  It also adds to comity and cooperation, and therefore stability and security in the region.

Focus is at Home
The economic integration in the Anantonese Region varies from "close trading partner" to "full economic integration."  The only three Northern Anantonese Nations that stand outside of the integration are Baltusia, Kizenia and Statrica.  The Region is otherwise deeply tied together internally.  Each of the six nations we are referring to here are modern, differentiated, economies of scale, which have some specialization and some overlap in sectors.  Of the six nations we are considering here, Gaduridos happens to focus most on primary economic activity (farming, mining, refining, etc), and the others are some mix between primary and secondary (Kalistan, for example, which specializes more in construction, manufacturing and commerce) and tertiary (Lourenne for example, which is known for its luxury items, such as fashion and fine wines.)  

Between all six of these nations, there is a general consonance of production to ensure that the people of the region have what they need and want, even while extra regional imports are generally unnecessary.  It is true that each nation maintains its own trade network abroad.  The Kerisians tend to be more active looking for trade contacts far abroad, while the Seleyan Nations primarily focus on improving themselves.  Lourenne serves as a central trade hub for much of Northern and Western Dovani and it is via Lourenne that the region can easily trade with such far away places as Xsampa.  There has developed over the centuries, an attitude in Kalistan, for example, that we will seek to produce an item we do not have at home first, but if we can get it from Lodamun or Gaduridos as easily, we will get it from them, or if not we will look to Lourenne, Egelion or Dolgava.  Only if none of them produce it or can acquire it, then we will look abroad.  The Trans Seleyan Railroad greatly contributes to this proximity-mindedness.

The focus closer to home allows each of these states to meet demand of their own citizens, as well as count on closer markets for their products.  The default knowledge that if Kalistan, for example, needs something it can get it from its neighbors usually allows businesses to better plan production schedules.  The general understanding of regional demand helps businesses avoid over production, and thus price and wage fluctuations common to more uncertain market situations.  Keeping purchases close, especially in arrangements like the AESA, allows nations to minimize, or even erase, the cost of doing business, allowing capitalists to keep more of their money as profit, and allowing less liberal states like Kalistan, to ensure that items are sold as close to cost as they possibly can be, because they don't have a bunch of extra shipping costs added to them.

Externally-facing Economies
Nearly every nation in the region faces externally with is comes to trade.  Gaduridos assiduously cultivated trade networks abroad to facilitate its domestic development, and most of those contacts still remain.  Lodamun has trade deals in Artania and Majatra that allow it to expand the list of people it works with.  Both Kerisian states have expanded their trade networks abroad recently, into Artania and Majatra, where there are very eager nations looking to crack into the Anantonese Market, and Lourenne still faces east to Dovani and West and South, especially toward its own imperial partners in Southern Seleya.  Kalistan is the only nation that relies almost exclusively on its Anantonese partners for its trade, which is fine because it serves more as a trans-shipment point for trade than a major importer or exporter for foreign goods.  It also happens to be the only internal nations of the group.

The regional arrangements written about above do not hinder this external view on the part of the nations in the region.  In fact, they do not come with any obligations, even in the Imperial Constituent Nations, except what are specifically mentioned in the AESA and the Articles of Empire.  Those provisions mostly involve nations treating foreign nationals like domestic workers, and treating foreign goods as if they were domestically made.  They do not say who each state can trade with otherwise, or put any kind of hindrance on those states.

The result is, a wide variety of the world's commerce flowing into the region.  The Anantonese region has become Terra's Great Emporium, because the internal relationships, both formalized and not, have taken scarcity off the table, and created a situation where people are both able (in terms of having the resources, as well as having the options) to satisfy their tastes, and to do so at a relatively low cost to consumers while still ensuring profitability to producers and distributors.  You are likely to see Artanian cars on Kalistan roads, Dovani textiles on Lodamese workers, Majatran consumer electronics in the homes of Dolgavans, and Seleyan products in the hands of foreigners from all of these nations due to this reinforcing external face of nations in the Anantonese Region.  It is to the benefit of all those who live in the region that there is this dual action in play throughout the region.

Next Steps
We think that the next steps are clearly to increase economic integration.  There are reports that the Emperor of Ananto and Kalistan will invite both Egelion and Dolgava to join the AESA in the near future.  It is a fact that both would be welcomed to the accord:  there are many new forming ties between the Anantonese Empire and the two Kerisian states outside that agreement, and it would make perfect sense for these two Anantonese Nations to join at least that treaty, as there is almost no cost to doing so in terms of what these Kerisian Nations are already doing, and a general benefit for all.  Doing so will increase the action of the above for the Kerisian states, and will also further benefit from Seleyan and Dovani Nations.

The Economic accord can even be extended beyond Gaduridos and Lourenne to Seko and Indrala or theoretically Aldegar.  The Anantonese Region is already one of the largest trading blocs, and the addition of other states to the agreement would more greatly diversify the economic options within the region.

It is doubtful that there will be a currency Union.  Kalistan is far too jealous of the monetary controls it exerts over the Imperial Ruble to ever consider giving it up in favor of another currency, and several other nations in the region are as married to their local currencies to ever adopt the Ruble.  There is not even a requirement in the Articles of Empire that Constituent Nations adopt the Imperial Ruble as the sole currency of their nation.  Though there are some advantages of possessing a currency which neither inflates nor deflates, liberal economic beliefs of several regional nations consider a stable currency like Kalistan's to cause economic actors to miss out on economic opportunities, such as they are.  Consequently, prospects for a currency union are nil.

However, there are multitudes of prospects for technology sharing, construction sharing, cross investment, and development in the region.  Kalistan has put billions into Gaduridos that have greatly expanded several sectors during their period of rapid development, with the aim not only of helping the nation develop its own resources and expand its own infrastructure, but also to increase political relationships between the two constituent Nations.  There is ample opportunities for all nations in the region to invest in and develop various sectors for everyone's benefit.  Lowering barriers to capital movements facilitates this and leads to a general growth in the standard of living, and therefore deeper stabilization for the region than bi lateral trade arrangements with nations on the other side of the world may provide.

Conclusion
The Regional Economy does not compete ideologically with the liberal mindset preferred by Kerisian, or even Lodamese thinkers.  We have demonstrated here how it actually serves to enhance it, by not only protecting the basic necessities and standards of living of the people, but therefore also opening doors to new opportunities abroad.  The regional economy in the Anantonese Basin essentially serves to prevent a two front warfare on those who would like to promote good economic, and political, outcomes for their nations and their people.  It prevents a country from having to worry about how to feed their people while they seek to participate in overseas markets, and therefore solves the problem inherent in liberalism of "Who benefits?" and "Are some benefits for some worth the political tradeoffs for others."

If the goal is to be as self sufficient as possible, as it is in places like Kalistan, this sort of arrangement serves that goal by bringing the world's goods to Kalistan's doorstep, and making it as easy as possible to acquire them.  If the goal is to be as exposed to international trade as possible, as it may be in a nation like Dolgava or Lodamun, this type of arrangement ensures that they can focus on getting the best deals for their nation and penetrate global markets to their content, without exposing their people to suffering, starvation, and lack of care that you will find in any normal, "you're on your own" liberal nation.  It provides both security and opportunity.  And in this the Anantonese Regional Economy, such as it is, should be seen as a model for other nations globally to adopt as well.

Footnotes available upon request.