Economy of the ECAL
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Revision as of 17:21, 31 May 2008
The Confederate States of Latin America is in overall terms the third richest country in the world. In per capita terms, the ECAL is the richest country on earth.
The ECAL combines a large, highly educated labour force; good agrucultural land; large amounts of natural resources; a sound currency; small non-interventionist government; and a free market. As a result, Latin America has been able to achieve great wealth. Growth rates have exceeded 6% per year since 1991.
Latin America's currency is called the Peso, although it is in fact simply gold. Peso simply means 1/400 of a Troy Ounce of Gold or 1/13 of a Troy Ounce of Silver. Both metals are commonly used in Latin America, though the Federal Government operates in Gold.
The Gold Standard was reintroduced in 1984 by President Pinochet.
The ECAL has almost complete free trade, with no import or export tariffs, and no quotas. Restrictions exist on the following:
Import Restrictions:
- Foreign flora (excepting food imported as such)
- Foreign fauna
- Proscribed weapons
Export Restrictions:
- Proscribed weapons (see Justice and Law in the ECAL)
- Nuclear materials
- Nuclear technology
Restricted items require a license from the Department of Transport.
The result of these policies has been an exceptionally high volume of trade. Latin America's trading problems generally rise from protections imposed by foreign governments, such as the United States which restricts the entry of Latin American agricultural products. Low volumes of trade with such countries as Zaire, and Venezuela stem from their own socialistic policies (the result of which is that they have little that Latin Americans want to buy, and no money with which to buy Latin American goods and services).
Labour relations are generally good, with a rising real standard of living, and rising real wages. A lack of government restrictions on payrolls means low unemployment, and only 1.3% of the work force in unionised. That 1.3% resides almost entirely in the public sector.
Taxation is on a low, flat rate of 15% on personal income, corporate income, and capital gains, and inheritance is untaxed. The latter has resulted in great growth in the aged care industry, older people from all over Europe and the Americas frequently bring all of their assets to Latin America to aviod tax.
Latin America's tax policies have led to international criticism. Foreign governments have asserted that the whole country is basically an enourmous tax haven. The refusal to tax US citizens working in Latin America has drawn particular criticism. President Bachelet has responded to such criticism by saying "the fact that other countries fleece their citizens does not mean we should do the same. On the contrary, it is good reason to leave them alone. We invite to Latin America all people who believe their present taxes are too high. Our taxes are the lowest in the world."
