Brazulian Media Conglomerate

[Brazul]

Telebraz News Online

War in Jizhou strengthens export -According to analysts of the Brazulian Economic Forum, the crisis in the far east has improved Brasilia Azuls position as industrial location and export nation. Brazulian companies profit from the weakened competition and higher prices for consumer goods.

President Serra congratulates Sarmatian forces on victory - Brazulian President João Serra has sent his congratulations to the victorious Sarmatian forces after their swift liberation campaign in the nation of Barazi. Brazulian business has expressed hopes for a quick democratization of the Barazi economy.

Brazulian fast food chain seeks foreign markets - Brasilia Azuls biggest fast food chain, Frango Tavares, seeks to expand into foreign markets. The company announced its intention to open stores abroad without specifying which nations it targets for its expansion.

Police arrests immigrant farmers in rainforest areas - Brazulian police has announced a succesful operation, resulting in the arrest of nearly a hundred illegal immigrants who had burned rainforest areas to claim the land as their own. The immigrants will now be facing trials for violation of property rights, as the rainforest area was property of the Liberdade Rainforest Foundation, as well as trials for violation of immigration law.

 

[Brazul]

O Observador

Loans weighing down Batavie

The northern country of Batavie is well on its way to economic liberalization and, unsurprisingly, can report admirable growth rates as a consequence of its abandonment of command economics. But, as analysts have already pointed out right after the transition began, Batavies developement remains crippled by its initial problems: lack of infrastructure, powerful and well established competition on the global market, a populace that is unwilling to let go of its privileges from a time of irrational socialist management. And, of course, the continued threat of groups from the radical political fringe, which may endanger the profits of private investors and, consequently, scare them off.

Batavies government reacted to this dangers with a close partnership with the European Defence Forces. The EDF was more than willing to expand its sphere of influence into what has to that day been a massive thorn in the side of its main memberstates. And it managed to do so relatively unopposed, as AGE had already been crumbling in its foundations, the transition of Batavie was the catalyst for the end of the communist IRB and the beuraucratic Oikawan Behemoth reacted as slowly and cumbersome as usual. EDF peacekeepers meant a massive loss of sovereignity for Batavie and they meant the country would be tied to this particular alliance for the time being: but economically they promised stability.

However, this was a solution to but one of the fundamental problems of Batavie and it would prove itself that the other problems were not as easy to solve as the security issue. Batavie needed to invest in its infrastructure if it were ever to compete with its neighbours and it needed massive sums for that. Sums which, once again, the EDF was more than willing to provide. Up to this day, new loans get approved constantly. Just yesterday, the country of Belmont approved a loan of ƒ150 million "aimed primarily at healthcare infrastructure". An almost identical loan had been granted to Batavie by Belmont once before already. In June, Eiffelland approved a staggering 5 billion Mark "Aid package" - a loan against a small interest rate, not a present. Just a few days earlier than Eiffelland, Wieserreich had given Batavie an overwhelming RM24,5 billion (€7 billion) in loans. For some states, it seems, offering loans to Batavie is a way to display their own perceived economic power status.

Of course, the sums, taken for themselves, are not unreasonable. But put in the context of Batavies economic conditions and considering how they are spent, these loans may bring Batavie into trouble. The country has to build many parts of its infrastructure from scratch, to become attractive for investment. Railroads seem to be an investment the Batavien government is particularily fond of. But large sums also go into social programs, which have no economic net revenue other than ensuring continued political stability. And no one can tell what sums have disappeared for extraordinary tax breaks, subsidies and special gifts to lure companies to Batavie. At least, Batavies strategy is clear: spend now and hope the economy grows enough to pay off the investments later.

With social problems and a lack of infrastructure coming together, many of these investments will not yeild profit from themselves. They have to rake in the billions spent on them through attracting investors, and this is where the trouble begins. Batavie has little to offer but ressources. Its industrial base has been ruined by decades of socialist miscalculations and factories and workers are unable to compete with foreign markets. With political moves towards unifying the northern countries in a free trade zone, Batavie will more so than before become a victim of cheap, high quality imports. A competition so overwhelmingly strong that it endangers Batavies trade bilance. Cheap ressource exports may not be able to even this out, even with rising market prices in the wake of the Jizhou-crisis - even the socialist Carentania was so clever as to have its ressource purchases guarantueed at a fixed price after its investment in Batavie, which now lies below market value.

Batavies only hope lies in cheap labor - a fact that may cause some discomfort with its domestic workforce. If it wants to prevent imports dictating its economic position, it will have to convince foreign companies that these very same products can be produced in Batavie even cheaper. A population used to guarantueed wages and employment during its socialist era will, however, not be very willing to accept precarious positions on the labor market. Labor Unions, strikes and social democracy are the enemies of Batavies growth and it remains to be seen how willing its political caste is to root out these threats. The currently skyrocketing unemployment rates may provide an easy way to convince Batavies workers that a badly-paid job is better than no job at all.
If this growing army of unemployed does not gain political momentum before they can be capitalized as source of cheap labor.