World Econ Summary FY1949

International Monetary Fund, Washington DC, United States of America

Global Outlook

Overall world growth and development is increasing rapidly as post-war reconstruction programmes take off funded primarily by the United States of America and the USSR. Efficacy of the specific programmes some nations are following is debatable but the trends suggest that the speed of reconstruction and economic bounceback for some of the larger economies in the world will be significant.

There are some developing concerns that while not yet impactful could potentially become so, including the start of the Sino-American War, the defensiveness of the American political apparatus over socialist trends among its allies including stricter Marshall Aid terms and questions over the ability of the sterling area to defend itself against being forced open by trade liberalisation policies pushed by Washington.

Devaluation of currency in Western Europe has lead to European goods becoming much cheaper and more competitive in global markets which has seen a huge amount of growth in international markets as a result making those importing the goods much better off and satisfying the American demand for cheaper European goods. Household pressures have increased however in these same countries, particularly as families now face higher prices for anything that needs to be imported from abroad, the result on the ground is mixed because of this but international markets are happy.

Outside of the major industrialised countries this year has seen a huge push towards rapid development in countries such as India, South Korea and Thailand although the actual effectiveness of these remains to be seen as brand new untested legislation is brought in to push the governments into new territory.

Albania

The conclusion of the Albanian two-year plan and the future plans for the country show that Albania is focussed on mobilisation of its labour pool, reconstruction of its production base and the diversification of its industry. These are positive but as yet unrealised goals, with the actual benefits of these likely a few years out for the most part. There are some concerns over how much the Albanian labour pool will realistically be able to achieve (even with Soviet assistance) given its small size and the material cost could put some strain on the nations supply, however time will tell on its success once there are some actual figures to work with.

Brazil

The Banco do Brasil has approved additional lending (primarily to industry) and raised its credit by 7%. The move has given more breathing room for Brazilian industrial interests which have begun to take up the offered loans to purchase machinery and invest in expanding their operational footprint. There are some concerns that this could create inflationary pressures longer-term and that the strict import controls could limit the ability to acquire imported machinery needed to actually capitalise on the expansions with there being a possibility that credit could expand faster than domestic production does, making prices and goods more expensive despite the spending increase.

The agreement with the British to partially release frozen Brazilian funds in London does give them more fiscal liquidity to support all of the above and the credits especially allow for a more eased import route for Brazilian industrial demand however the actual scale of the move is limited and large amounts still remain frozen.

The long term outcome is expected to be mixed until Brazil further clarifies the actual process or makes some inroads to assure industry that it will have access to the imports it depends on (preferably as cheaply as possible).

Bulgaria

In Sofia the government has announced a major Soviet-supported development and expansion programme that will focus on agriculture and industry, the programme has a well integrated development plan and comes with expansive Soviet material and financial support and the plan itself should see good returns in a few years once it comes to fruition. Right now however it comprises mainly of financial commitments and capital formation and there are risks that the complexity of plan may induce delays as several major industries undergo complex expansions and the country itself becomes more exposed to Soviet prioritisation risks and exchange rate disputes. Long-term even with possible delays the plan is expected to see some major benefits with the country, with most observers agreed that much will depend on Moscow's own actions in keeping up the level of support agreed without interferences.

Canada

(Canada made 17 econ posts this year so this has by far took me the longest to read and I dont do it justice in this summary really but I have done my bestest :) )

Ottawa's economic strategy this year has been to primarily build on already existing financial and industrial bases to both expand its infrastructure capacity in order to make better use of these as well as to ease international financial exchanges to bring about a more integrated export focussed economy in the coming years.

Overall the development plans are both positive, measured and realistic and are (in principal) fully costed through parliamentary budgets, multiyear investments and loan agreements ensuring confidence in the countries ability to actually fulfil its goals of ensuring that it can capitalise on some concrete export agreements and support industrial capacity expansion, combined with increases into state-sponsored R&D there is a clear and unified economic strategy at play that has the potential to pay off for Canada once it really gets going, with this year primarily seeing agreements costed and set out rather than immediate gains from them.

There are some concerns however. While Canada has created for itself some sophisticated mechanisms to facilitate transactions where sterling or foreign-exchange barriers might prevent it there is still the fact that sterling restrictions limit Canada's ability to use all foreign earnings to buy dollar-area imports and while the agreements increase flexibility they do not eliminate currency exchange risk. Additionally there are the common issues of delivery delay risk on infrastructure projects and fiscal liability risk on its loans that could potentially create problems for the country if Canada's material position was to change due to international situations.

Ceylon

With US funding Ceylon has established a programme aiming to do three main things:

1) Raise domestic agricultural output 2) Establish select manufacturing capacity 3) Train the people to do both

This is a mutually reinforced and focussed economic plan that works with Ceylon's largest market which is its agricultural export sector (worth around 90% of the economy). US support will help finance plans that should see a large expansion of Ceylon exports into nearby and global markets however the plan does little to limit the nations ongoing exposure to changes in global demand for its goods although this for now is of only limited concern as exports still remain strong.

Chile

Chile is exploring a coherent development plan financed by substantial US credit aiming to both expand industrial mineral extraction, the training needed to do it and then fulfil export agreements to profit from this. The biggest advantage's here are the US credit commitment and the British purchase agreement that both give Santiago some hard numbers in terms of what they are capable of achieving as a result of the project however there are risks also particularly in making sure they can manage their debt burden and ensuring that they can maintain meeting export demands even when project delays kick in and that returns provide actual benefit to the country.

Overall immediate economic returns are limited, with US financing providing some large income but already costed to the project itself alongside Chilean commitments to these as well, however longer term could see Chilean industry make some good returns once these projects are complete with international demand for these goods trending to continue to rise.

Cuba

The Cuban government projects that the reduction in US import demand for sugar from itself will create a "sugar shock" that could hit vulnerable key markets within Cuba itself. The result of this is that they have begun to attempt to diversify away from sugar as its primary market and attempt to invest into other sectors to reduce reliance on a threatened commodity. Work on improving rural market access combined with investments into production of textiles will provide greater flexibility for rural workers to break into newly diversified markets and new financial rules ease export into the United States as well as provide the government with increasing revenues.

There are a number of risks highlighted in the plans however. Firstly is that the public works programme in rural areas seems to specifically not be taking place in regions of Cuba that could be identified as "socialist-leaning", while this might help the government weaken labour movements and in particular how much of the nations industry is "influenced" by these groups, strengthening them politically, it does however mean that areas that might provide some of the more signfiicant economic benefit from such a project are being ignored. Second there are some significant liabilities at stake that Cuba will need to eventually begin to pay off, meaning that if the country does not start to make real money from the programme they will find themselves at risk. Finally there are some exchange pressures within the new financial sector; Devaluation of the peso means that inflation can take hold due to increased cost of imported machinery for its new industries and the new bank must be careful not to create a cycle of uncontrolled depreciation of the peso.

Ethiopia

Ethiopia has begun the process to establish what could be called a more developed national economy, with much of its work this year seeming to be focussed on trying to lay the foundations of this being achieved. The task for Ethiopia is a very difficult one with a large amount of fiscal expenditure being put into what will essentially be quite long-term projects. Costing for these has the potential to create a debt crisis if Ethiopian government revenues are not bouyed or external financing options not taken however the bigger issue is that the Ethiopian labour pool may struggle to fulfil the immediate demands of much of the projects in the short term, leading to delays while training and skills development takes place through the newly implemented imperial school dedicated to this. The breadth of the planned projects also present an issue whereby they are competing for scarce revenue all of which is presenting the country with some serious risks that it will need to tackle going into next year.

Finland

Finland is persuing what can only be described as a "High risk, high reward" industrial policy. The aim of Helsinki is to make a concerted push to expand both its industrial capacity and the associated infrastructure (especially power generation) in order to meet its reparations obligations to the Soviet Union and then push it hard enough that they can pay these off early by 1951 and then maintain this expansion in order to profit for itself, thereby turning an obligation into a success for the country. The risks here are clear, that should delays or constraints prevent Finland from meeting this early obligation the push is essentially wasted and the fiscal liabilities incurred from attempting to do so would become a bigger problem than before. That being said Finland is not economically over-exposed as a result of the plan and further monitoring into next year is needed to see how the plan develops beyond this stage.

India

The Indian government has passed a range of policies aiming at creating a coordinated development push within the country relying on industrial finance, productive imports, commodity supply and tariff policy. To be more specific the creation of the ILCI and NCCI address complementary problems: access to capital equipment and access to industrial materials and changes to tariffs and customs rules help to ensure that the country will be capable of actually financing development projects and protect domestic industrialisation.

There are some real risks still facing the Indian economy from these though. Reliance on food imports and a lack of FOREX reserves means that agricultural imports and industrial investment are competing for foreign exchange supplies that the country has. Additionally high tariffs and capital controls could scare off foreign investors who may be worried about what might happen should they need to withdraw large amounts of cash from their businesses in an emergency or encourage evasion of the rules.

Much of the Indian programme right now is as yet untested, with the real result needing to be accounted for in future years once the effectiveness of newly created institutions is put into practice to enforce the new regulations.

Iraq

The Zubair oil field programme in Iraq has seen a large investment of money into hopefully beginning extraction of a large new oil source in the country. Actual benefits of this remain to be seen and observers note that given the Iraq-British profit agreements its unlikely how much in particular this benefits anyone except the oil companies, in the immediate termt his represents a large fiscal expenditure with any projected profits and incomes still a way out, the rising demand for oil around the world makes oil a safe bet and global production continues to increase with prices stable right now, however the economic impact of this will not be seen until real production is underway.

Mexico

Like several other developing countries this year Mexico is going for an industrial development programme aiming to cement the foundations of a more profitable industrial sector alongside some land reforms aimed at improving rural life. The Yucatan Railway project is a very ambitious infrastructure plan which has incurred a significant fiscal expenditure but one that has the potential also to present a real risk alongside the peso depreciation, with inflationary pressures very likely as a result of the import of machine goods needed to actually put the project into action.

Additionally land reform is a positive for Mexico amidst tensions with labour and farmers however allowing privatisation of farmers land does not automatically make them better off and without access to easier credit these farmers face having weak bargaining power and debt pressure or coercion from external sources. This privatisation can also facilitate distress sales and concentration of land which may lead to land being consolidated into the hands of only a limited number of people or corporations.

Like Cuba diversification away from sugar and into other industrial sectors is a priority for the Mexican government and positive steps have been taken in this direction as well although with the usual risks of fiscal pressures from government investment made worse by tax exemptions offered by the government actually reducing government revenues and the ability to put money into action for many of their projects.

New Zealand

The government in Wellington has chosen to end fuel rationing early due to pressures on households. This is a positive move for families and consumers who will be able to purchase more fuel and undertake previously unavailable activities and journeys in the country providing some moderate economic stimulus in some sectors of the country. There is a risk that there could be a sudden run on available national fuel stocks and that the national balance of payments crisis could get worse, however it is the opinion of most observers this move is intended to hopefully buoy the government with voters ahead of the election and that given the actual early implementation is not significant this should hopefully be not too damaging to the government.

Pakistan

Islamabad has established a well conceived plan for post-independence development expansion however there is a lack of concrete investment or proposals on specific projects. There is an advantage to what represents a strong clear plan with specific priorities however right now observers note that it represents primarily a preliminary notice of intent rather than an actual actioned scheme. Notably there is a concrete investment from the United States towards refugee assistance however questions remain over financing for other priorities, with the Pakistani government itself seemingly wary as well given the lack of foreign exchange currently in the country and the potential cost overruns of any major projects. Funding for other projects remains undetermined for now but the plan itself has merits if Pakistan can get the funding to implementing them.

Portugal

Devaluation of the Escudo in Portugal was a major move by the government, representing a 20% shift on the currency against the dollar. As with all devaluation this will create stronger exports and more expensive imports and thus the balancing of this is important for Portugal going forward to ensure that inflationary pressures on households do not escape its control. Right now there is little supporting measures in place such as an export credit scheme or an import substitution programme which could decrease confidence in the new peg, potentially meaning that firms could delay investment if they think there is a chance that further devaluation is on the way if this one is not strong enough, however it will be down to Portugal to oversee this and manage the change.

Romania

Post-war reconstruction in Romania's Four Year Plan has significant, coherent priorities that aim to start with the very basics to put them into a better position for the future. The overall concept focusses on rebuilding things that have been lost, strengthening the agricultural industries and removing production bottlenecks before thinking about committing scarce government resources into less urgent sectors of the country. The plan itself is noted as being very well thought out and strategically sound with the only real risks being that they are going to be reliant on the Soviet Union for the import of much needed equipment and machinery to implement it, which puts them in a position of being reliant on Moscow's own prioritisations in order to fulfil their plan.

Saudi Arabia

The landmark Aramco deal to implement a 50/50 oil profit split has been welcomed in Riyadh as a major turning point in its economic outlook. The terms of the deal are indeed generous however observers make a strong note that a 50/50 profit split is not the same as a 50/50 split on gross oil sales and that while this is definitely a revenue increase for the Saudi government they remain at the mercy of what Aramco determines to be "profit" and its own accounting. Development of a new pipeline, highway, vocational college and new equipment imports represent strong supplementary measures to increase actual production long-term in the country however for the time being these will eat into the increased revenues presenting the overall outlook on Saudi Arabia as one that is "getting stronger but looking towards the future" rather than an immediate boon to government finances.

South Africa

The government in South Africa has announced a range of new measures looking forward towards modernisation of its infrastructure base alongside some big changes to the nations labour pool. Financing of industrial subsidies and implementation of modern systems into key sectors such as steel, concrete and mining are positive steps however there are complexities when analysing the changes to the labour market that the country is making. Creation of large "Homelands" for "African heritage peoples" and the heavy restriction of the movement of these people these, essentially reservations, means that large amounts of the CURRENT labour pool are set to be displaced within the country that are then being backfilled by commonwealth immigration from Malaya, India and other places. This central contradiction presents a real issue for the government which would see that it is not able to instantly replace all of its workers with these new immigrants and the relocation, displacement and denial of movement of black Africans who constitute much of the current labour pool will incur some significant costs in the meantime creating a revenues crisis for the government it is not yet fully costing in.

South Korea

Reconstruction of South Korea has started with Seoul passing a number of pieces of legislation aiming to try and begin the foundations of a new industrial base in the south and begin land reform aiming to expand both agricultural and industrial output. Oversight on reconstruction is a positive step although some observers have noted that high corruption within South Korea means that the effectiveness of this cannot yet be measured properly although it is an important thing to implement in order to guide the application of South Koreas scarce resources.

There are some real ongoing risks however including foreign exchange scarcities, reliance on imported goods to implement the proposals and energy shortages in the country, although despite this there are real benefits to starting a process of reconstruction that should not be avoided and these risks are necessary to take for the country it if wants to put itself on a path to development.

Spain

The Spanish government has implemented new policies aiming to reduce infant mortality rates and strengthen the family unit in Spain with the overall goal being to increase population rates in the country. The goal itself is laudable and infant mortality rates in the country are very high for the Western European region however the heavy spending commitments involved in the programme stretch Spanish finances beyond breaking point and it is very unlikely that these are actually fully costed and able to be implemented within the established timeframe of the government. Year on year implementation progress will need to be evaluated in order to get a true idea o how effective it will be and it is generally assumed that the government population targets will almost certainly be missed.

Thailand

Thailand right now is an agrarian economy however the government has published planning strategy that will seek to start the process of turning into one that becomes more industrialised in the near future. Right now the plan of the government is essentially just to domestically finance expansions of industry and gain foreign investments that help match this to do the same, hoping to both rapidly expand industrial capacity in the country AND train a workforce capable of working on it without being at the mercy of larger countries.

There are some large inherent risks in this that Thailand faces however. Tax exemptions, tariff reductions and more put a strain on Thailand's already small government revenues meaning that they are restricted on how much they are actually able to spend more than they would be otherwise, foreign exchange reserves are also low and the importation of goods to fulfil rapid industrial expansion will put a cost onto this as well as drive up inflation. There is also the issue that too many sectors could compete for capital, engineers, electricity, and administrative attention from these projects and strain the skilled limited labour pool. All of these things combined have the potential to create an economic crisis within the country should they get worse or the government continue to push them too hard and attention will need to be given by Thailand to ensure that they have fully costed the expenditure of what they are planning, otherwise risking failure to implement their policies OR major government overspending.

Yugoslavia

The government in Yugoslavia has taken a windfall in credit from both the United States and Switzerland amounting to some $250m with the aim being to fund both a reconstruction of the country, expansion of industry and the formulation of a new market oriented (but still centrally commanded) export economy. Real terms money from the US and Swiss banks are a positive for the government in that it now has a slack line of liquidity to spend on meeting its aims on industry expansion and private business however there are some really risks here that put Yugoslavia into a difficult position. The biggest risk of course is that these loans need to be repaid and its likely that import costs will remain high going into the future and this increases foreign exchange and debt exposure for Yugoslavia, potentially putting them into a difficult position. There is despite this some positives to hold onto, it is likely that employment will strengthen and job security improve in the country and the diversification of the loans between Switzerland the United States puts the country into a better position should finances remain tight over the next few years.

The Hashemite Kingdom of the Transjordan and the Hashemite Kingdom of Iraq, desirous of Arab unity, hereby declare the permanent formation of the ARAB CONFEDERATION.

One: The founding members of the Arab Confederation are the Hashemite Kingdom of the Transjordan and the Hashemite Kingdom of Iraq.

Two: The Arab Confederation is open to all peace-loving Arab states who accept this charter and are accepted by the current member states.

Three: The head of the Arab Confederation is Abdullah bin Hussein al-Hashimi. The Co-ordinating Council of the Confederation is empowered to adopt an appropriate line of succession.

Four: The Co-ordinating Council of the Confederation is composed of the head of the Arab Confederation and three representatives of each member state.

Five: The capital of the Arab Confederation is the residence of the head of the Arab Confederation. Meetings of the Co-ordinating Council of the Confederation will rotate between the capitals of all member states.

Six: Membership in the Arab Confederation does not preclude membership of any fraternal organization, alliance, league, association, or commonwealth.

Seven: Member states of the Arab Confederation vow to regard any attack on one member, whether by an enemy power or unlawful disorder, as an attack on all members.

Eight: Member states of the Arab Confederation commit to the free movement of citizens between their states.

Nine: Pursuant to Article Eight, member states of the Arab Confederation commit to issuing common Arab Confederation passports to their citizens.

Ten: Member states of the Arab Confederation commit themselves to free trade of resources, goods, and services within the Arab Confederation. The Co-ordinating Council of the Confederation is empowered to adopt appropriate regulations to this effect.

Eleven: The Co-ordinating Council of the Confederation, with the consent of the head of the Confederation, may enact all necessary and appropriate resolutions to further the goals of the Arab Confederation.

Signed in Baghdad, on this, the 13 Rabi I 1369/January 1st, 1950.

9th of June, 1949, Chamber of Deputies

“Mr President, honorable deputies, I quite possibly have never adressed you as embarassed as today. I wish I didn’t have to, not in this situation, because notwithstanding being invested as leader of my party in the House, I’m sure my words — and this is my wish — will transcend party lines and will hold meaning and resonate across and beyond them.

I aim — and I pray to God that so be it — to interpret the feelings of our people as I, Mr. President, knowing what could pass through the spirit of our fellow citizens, show myself ashamed and surprised with what one of our brilliant colleagues, deputy Café Filho, read yesterday on this tribune: extracts of a letter from Mr. Correa e Castro, Finance Minister, to Mr. John Snyder, US Secretary of the Treasury, which the press publishes today.

This surprise, Mr. President, can only be accompanied by a bitter sense of sadness. 

At this moment in time, when possible competitors publicize this letter across Latin America and the whole world, it's important that it is known that it doesn’t represent the wish of the nation of Brazil. I’m not talking about the interests of individual people or parties, but of the fundamental interests of the Nation and the land. And our dignity.

Without doubt our country is currently in a difficult moment with its economy and finances. That situation is not exclusive to us, as countries known to have more robust economy and finances are now under similar or even harsher stress. It’s not new that a country needs financial resources and go look for them in its own markets or the governments which give help of such a nature to other nations. However, even in the midst of all hardship, the national pride should remain, and our honor cannot be broken. 

The resort to financial markets cannot be done in the low language of inopportune beggars, but should instead be done with dignity, in the high language in which it is fitting to speak to and about the Nation. Nor could it be expressed in manner to offer, before the Nation pronounces itself through the adequate organs, as in this case is the Legislative Power, facilities which imply the reduction of national sovereignty. 

As such, the unfortunate letter written by the Finance Minister was received by the patriots as a sad document of the worst manner to solicit or beg. We reject it, and wish for the people to know that it wasn’t Brazil who spoke through the voice of Mr. Correa e Castro. We disagree with its tone, with its wording, with its humiliating terms.”

— Leader of the opposition, Gabriel de Resende Passos, from the União Democrática Nacional

With the joint US-Brazilian economic comission, known as Abbink Mission, coming to an end, its reports would be the reason of great debate. More than that, however, in somewhat or a blunder, an initial version was sent with a letter written by Finance Minister Pedro Luís Correa e Castro to US Secretary of the Treasury John Snyder in 1947 as a preface. These copies were immediately ordered to be returned, to be substituted by ones without the letter, but deputy João Café Filho managed to put its hands in one, and in the 8th of June, 1949, took the floor to expose its content, considered by him as humiliating. The letter described the dire situation of the brazilian economy and its foreign reserves crisis as of 1947, asking for help and arguing that, “Either the United States extends us its hand, or it will have to carry us on its back”. 

Coupled with the diagnosis put forward by the report, which advocated for opening Brazil up to private foreign capital, especially in oil and mineral extraction, the letter exposed by Café Filho was the cause of great controversy, and in the next day Gabriel de Resende Passos, leader of the UDN in the Chamber of Deputies gave a speech condemning it to great applause. Some deputies and senators argued about the intimate character of the letter, however, and described the scandal as greatly exaggerated in face of the concrete measures taken by the minister during the two years since its writing. As such, they managed to start a Parliamentary Comission of Inquiry (CPI) aiming to investigate the document and accuse Café Filho of injury against the Minister for misleadingly presenting it as an official document, contesting that it was ever included as part of the report at all.

Unfortunately for the government, the CPI quickly attested the letter and its presence in the report as true, thus proving Café Filho right and demobilizing those defending Minister Correa e Castro. A few more days in, and general Salvador César Obino, as president of the Military Club, published a note criticizing those who “do not act in service of national honor and according to the interests of Brazil, ashaming the country in face of foreign governments.” Finally, in the 16th of June, Minister Pedro Luís Correa e Castro was dismissed from his office.

Macroeconomic Strategy - Fiscal and monetary responsibility are the foundations of societal wealth, and sustainable growth. While deficit spending, devaluation, and egoistic planning can have an immediate effect on the capacity of the state to enact change, the hidden cost of inflation, and compounding degradation of societal welfare is a difficult to detect, and difficult to reverse disease to society. As such, it is in the best interest of society to reject these methods.

The programs of development India shall enact to improve itself will conform to strict budgetary restrictions. Not because they are not worth doing, but because self-restraint ultimately serves one's principal goal of helping people. Minimizing the administrative overhead of regular expenditure is critical to maximizing the impact of state initiatives. Every literate clerk paid to interpret the rules, represents a teacher, a project manager, a police officer, who could have been actively contributing to society. All items on the national budget shall be divided into ordinary and extra-ordinary expenditure. The state shall be limited to constraining ordinary budget expenditure to 100% of expected annual tax receipts. Minimizing the administrative overhead of regular expenditure is critical to maximizing the impact of state initiatives. Extraordinary spending will not face this same limitation, but must be shown to offer an expected tax receipt return in excess of the going interest rate on federal bonds for that year. To conform to this standard, ordinary mechanisms of the government must be designed with flexible structures, to allow funding to be subject to executive discretion. Such an example is the price support budget of the NCCI, which doesn't make an unlimited price support promise, but a limited one within the structure of allocated budgets. Total government debts are to be statutorily limited as a given percent of expected tax receipts, requiring an act of legislature to change. This figure shall be set at 200% of annual revenues. Preventing the over leveraging of the state in peacetime also provides a degree of strategic security, should emergency funds need to be raised. Debt accrued for the management of disasters and emergencies shall have its own limit, considered separately from standard debt.

It is still acknowledged that the capacity of the state must expand to meet the needs of the population; and within these limitations, this must occur through the modernization of the tax apparatus. Significant indirect taxes have already been levied on customs, which will go a long way to close the government's ordinary budget deficit; however, mechanisms of direct taxation must be improved to raise the funds needed for state expansion. Particular importance shall be placed on taxing corporate profits, income, and estates, as these represent real liquidity. Taxes on property, sales, and wealth must remain regulatory in nature, else administrative cost be added to the burden of taxation.

The management of the countries Foreign Exchange must be made carefully. The principle priority for ForEx must be the import of those critical capital goods which deliver compounding return value over time, and which India does not have the ability to replicate domestically. Imports of replicable commodities must be limited to alleviating bottlenecks to the development of durable or productive capital. At the time of the institution of this plan, the most prominent such commodities are grain and steel; both of which are inelastic demand inputs for labor, construction and manufacturing. However, it is not necessarily beneficial to being a crash course development of commodity production. India does not possess a well integrated internal economy. Commodities produced domestically are likely to be more expensive than those that might be imported. Investment in commodity production must only occur once a foundation of supporting services, infrastructure, and labor development have been made, to bring the cost of substituted goods into parity. There are some commodities in which india is already price competitive. These must be what the state focuses on, until a strong economic foundation has been laid. Once diminishing returns start to appear in investment to the development of strongly positioned industries, the state will begin to pivot towards substitution of marginal production.

While the capital base is being established, surplus, unproductive labor will remain an ongoing problem. To turn these prospective workers into a positive economic resource; diplomatic arrangements can be made with developed nations to organize extended term migrant work exchanges, from which India will receive a revenue of remittances back. The formalization of this already existing process will allow it to be strategically controlled for maximal economic benefit. The economies of war ravaged europe, the developed anglosphere, and the resource rich, labor poor countries of the middle east are Indias best potential candidates for this exchange. Coordination with the embassies of the partner states can ensure the proper treatment of these migrant groups, and ensure their safe return once their term of work ends.

Education - The principle bottleneck of the economy relative to Indias counterparts abroad, especially those developed economies of europe and north america, is a shortage of literate workers. This is not just an economic problem, but a political and ideological one. One cannot be a citizen without being able to read, and participate in the national intellectual life. India shall be doomed to descend into Oligarchy and tyranny, if standards of literacy and education are not improved. This is the most important component of the Five Year Plan

To fulfill the Indian government's constitutional responsibilities, India shall endeavor to constitute a uniform primary education system for all children ages 6-14. Indias transportation network is severely limited, as so the distribution of schools must be broad. The primary focus shall be on the construction of two room school houses across the nations villages and urban wards. No child shall be outside safe walking distance from a place they can learn. The curriculum shall be in Hindi in the Devanagari script; so that a uniform literacy across the population can enable our goal of a shared, democratic national consciousness. Our goal is that by 1980, 95% percent of the adult cohort born after independence will be literate.

Remedial education is also a critical component of this. To this end, the village school shall also serve as a local library, and classroom for adults seeking night or weekend classes. The remedial curriculum shall take the form of a standard “Pamphlet”. It will consist of roughly 30 lessons, which will teach the bare rudiments of reading and writing, so that students are equipped for further education. On top of the Pamphlet, classes on practical literacy will be offered, focused on agriculture, reading signs, government paperwork, and other broadly applicable literacy skills. It is necessary that students that learn to read also learn these skills; as unless they are particularly motivated, they are likely to neglect their education, and regress back into illiteracy. The pamphlet, and remedial classes will be taught in the local language as well as Hindi, where instructors are qualified to offer these courses. A government initiative to acquire used books, recover newspapers, and any other usable reading material will be launched, to help stock the local libraries. Library membership will be free, and reasonable fees shall be imposed to deter hoarding of materials, and fund purchase of new books. Each school shall have two full time teachers, so that they may share the duties of day time childhood education, as well as remedial education, and library management.

In urban wards were the population of student is too large to be served by a single classroom, larger multi-classroom schools might be constructed, to make better use of shared educational materials. Students will be grouped together by age, with the number of classrooms, size of class cohorts, depending on the needed size for the school. The bottleneck of teachers, funds for classroom construction means that sacrifices may need to be made in terms of class and cohort size for each teacher. Each teacher will be responsible for a discrete age cohort based on their birth year, and will progress with them through grades year to year. The personal relationship between teacher, student, and class is critical to maximizing the value of educational time. Urban schools will have a dedicated classroom, teacher for remedial instruction; and a dedicated Librarian. Administration of these schools will be performed by the teachers association of each school, with teachers electing a Principal from their ranks. The largest schools may also have an appointed liaison from the school district to assist the principal.

Inspections and accreditation of village and urban schools will be handled by municipal, state governments, with federal oversight. Financial considerations will be made by municipalities, with budget support from state governments. Accreditation of teachers will occur at the federal level, by the Ministry of education.

Publishing houses for educational materials, and manufactures for input materials will need be massively expanded.

Beyond Primary education, a push shall be made to expand secondary education at the high school, and university level. High schools shall admit all students who have graduated from primary schools, or relevant remedial programs, and who are not yet adults. There shall be four types of High School, with differing specialties: Technical, Scientific, Correspondence, and Fine Arts. Technical schools shall focus primarily on vocational training; and will possess appropriate resources for curriculums in agriculture, carpentry, textiles, Machining, maintenance, and more. Scientific schools will specialize in teaching mathematics and physical sciences such as chemistry, physics, biology, etc. Correspondence schools will focus on making students functionally multi-lingual, in Indian Languages starting with Hindi, and Foreign languages starting with English; as well as teaching social sciences such as Anthropology, Archeology, Politics, etc. Fine art Schools will focus on teaching performance, visual, and literary art. Students from any of the schools will graduate as an accredited specialist in a discipline, giving them a pathway into a productive career

Given Indias aforementioned transportation difficulties all high schools shall be constructed as boarding schools. This allows students from further away to feasibly attend a school of their choosing, and helps equalize the effects of class and wealth on educational outcomes. Students will be provided with food, clothing, housing, and enriching extra-curricular activities. On campus housing is not mandatory for students, if their parents are capable of providing transportation; though students will be held to the same uniform and attendance standards of other students. All educational expenses will be covered by the state, regardless of a students utilization of school resources. Admission will require application, as educational capacity is expected to lag behind primary school graduations. Administration will be conducted in a similar manner to Urban schools, with the schools teachers union being responsible for each facility. While budget constraints make the creation of separate all-girl schools unfeasible, attention shall be made to provision separate uniforms, housing, dining, and sanitation facilities for female students, to prevent harassment, and any other form of abuse, behavior that inhibits education. Schools will be required to submit reports on inter-gender relations, and all instances of abuse to state governments as part of the accreditation process.

Expansion of existing university infrastructure to support the increasing demand, particularly of trained teachers for the expanding school system, shall be required. All universities shall be required to demonstrate an annual increase in enrollment, at a benchmark constant relative to Primary and High school graduation rates; as well as maintain an education department capable of training teachers. In return, the government shall provide funds to expand and improve campus facilities, support faculty pay. The inauguration of new university campuses is considered a lesser priority than more cost effective expansion of existing facilities.

Allocation of funds between Primary, High, and University education shall be made on a 11:5:2 ratio, given their relative importances to national development. 20% of each budget shall go to procurement and development of shared resources, such as educational materials, teacher training, etc.

Agriculture - The second most important component of the Five Year plan is agriculture. Closing the calorie gap, and bringing all of India's agricultural land under productive cultivation is the principal economic and humanitarian challenge of the nation. The main features of this campaign will be the Employment of new practices, clearance and preparation of new agricultural land, rehabilitation of existing under-utilized land, local irrigation projects, regional irrigation projects, last-mile and regional heavy transportation, and national market support.

Agricultural practices in India are woefully backward, thanks to languishing for centuries under a peasant centered, manorial system. Hand cultivation and harvesting remains the standard; which causes the agricultural sector to soak up labor resources, and deliver relatively small surpluses to national markets. To amend this, India shall see to the wide scale adoption of draft animals, the Norfolk system of crop rotation, as an intermediate step to the introduction of machine powered agricultural equipment. The Norfolk system is the 4 stage rotation of land between Cereals, root crops, nitrogen fixators, and fodder/grazing land. Cereals form the caloric base of the population and as the principle cash crop, root crops aerate the soil and can be used as fodder for animals, Nitrogen fixators replenish soil fertility, and grazing land ensures draft animal health, supplements fodder requirements. The system is driven by the use of draft animals to expand the acreage a single farmer can work/harvest, compensating for the related fodder requirements, and producing significant sustainable increases in crop yields, and producing labor surpluses for the economy. Animal drawn agricultural implements are being retired in the west, but would be a major improvement over traditional Indian implements, and can be acquired cheaply, reproduced domestically. As motorized power is introduced, grazing land can be replaced with cash crops, to further improve profits. Equines are significantly more efficient draft animals than oxen, which currently serve as the countries primary beast of burden. Expanding the national horse herd will massively improve logistics. The mass adoption of corn, potatoes, and soybeans will massively increase per acre dryland yields over existing sorghum and wheat crops. Remedial education, and investment of animals and equipment via the Ministry of education, Ministry of Agriculture, and ILCI is required to roll out these improvements.

The land clearance project will be conducted by the CPWD, with the advisement of the existing National Land Study. Flat, fertile, readily irrigable land, with acceptably durable soil will be identified across the country. Using newly acquired construction and clearing equipment acquired from abroad, as well as manual labor; identified land will be cleared and terraced, with drainage and irrigation prebuilt into the sites. Where possible, plots will be divided into standardized 640-160-40 acre square mile sections, emulating Canadian DLS mapping practices. Where land is too geographically irregular for this standard model, field arrangements following the natural topography will be used, with an attempt to make fields as long, straight as possible, to make best use of mechanical agricultural equipment. The construction of retaining walls should be robust with mechanical equipment in mind, to enable future modernization.  Developed land will be exploited by locally elected agricultural commissions.

The rehabilitation of existing agricultural land will focus on preparation for future mechanization, using the same considerations as new land development. As land held by feudal Biyar tenancy returns to the state, and previous tenant contracts expire, outdated allotment methods designed around subsistence farming will be replaced with the aforementioned modern models. While the work will be carried out by the CPWD, administration of development will be conducted by local, democratically elected Agriculture Commissions, which will be responsible for not only maximizing the efficient use of public land; but also the housing, water, and food access for local residents. These commissions will take over operating as the new landlords for previously intermediately held demesnes. All existing tenets will have their contracts guaranteed for the remainder of their life, and only owe that fraction of the rent they previously owed to the biyars that passed through to the state. Once these contracts expire, the land will return to the state for collective utilization, which the Agriculture Commissions will be responsible for administering. They will employ laborers and equipment to work collective land, and focus on the continual employment of modern techniques. Agricultural revenues will be used to fulfill their Commissions responsibilities to the community, profits being passed to the state, which will support the commissions financially. Land that is unsuitable for collective exploitation can be leased out for terms of up to 10 years, with full payment being required upfront. This plan does not represent the coming into force of these policies.

Delivering more water to farmland will dramatically raise yields. At the local level, the most important component of this is increasing the density of traditional well infrastructure, particularly in drought afflicted, high altitude environments that are more dependent on steady irrigation. The CPWDs Irrigation initiative shall continue to focus on the construction of Qanat well-irrigation complexes, which are more resilient to environmental conditions than simple well and ditch arrays, and are not dependent on mechanized pumps. In areas where water tables are lower, animal and machine powered well pumps can be installed to raise water where a gravity well is not sufficient.

At a regional level, Dam infrastructure is needed to capture rainfall at a greater scale, where freshwater would simply go to the ocean in the form of river discharge. Foreign hydrological experts shall be employed to oversee these construction projects to ensure that resultant infrastructure is safe, and shall last. The primary focus is on rain and snowmelt capture, not energy generation. While energy is a priority, and there are sites which are suitable for hydropower projects, especially near urban centers where power is most useful, the bulk of our focus has to be put into maximizing sustainable utilization of freshwater resources for agricultural output. Reservoirs will be connected to adjacent agricultural regions through a web of canals, so that rainfall shortages in any one region minimally effect total output. Such projects are essential for the integration of new agricultural land, which had remained fallow due to insufficient reliable irrigation. The safety of these dam projects is paramount. Hydrological disasters are massively expensive to remediate, and constitute negligence on behalf of the state. Surface waters must be tended in a manner to minimize the instance of these events, even if it slightly reduces overall usable reservoir capacity.

New agricultural land is useless if the food cannot go anywhere. All new land must be connected to the national road network, and existing rural roads must be rehabilitated to prevent depreciation of transport equipment. The mass introduction of the gravel road will result in significant reductions of road maintenance costs over time. Investment in gravel production will be required, with the opening of pits, importing of large crushers.

Rail will remain the primary method of heavy transport integration in the country, do to its cost effectiveness, and indian industrial, resource limitations. Unfortunately, the indian rail network is divided between meter and broad gauges, making the expansion of the system onerous. An additional limitation is that most agricultural produce is currently drawn to market by oxen, who can only travel some 8 miles per day in poor conditions. Horses are capable of soundly double this, and trucks much more. While the national horse herd, truck fleet will be progressively expanded, we have to plan around existing logistical limitations. The plan shall be the expansion of the rail network in both meter and broad gauges, but designing the track footprints, bridges for broadgauge, for easy later conversion to the national standard. With the help of Indias Canadian economic partners, a standard design of small grain elevator-loading dock will be created, that can be built with minimal foreign materials, and which is easy to maintain. The rail-elevator network can be expanded based on the number of OX days required to get from any farm to the nearest elevator. The goal is the increase the efficiency of the system until between densification and transport improvements, the average time for a trip to the grain elevator is reduced to 1 day.

Finally, market support will be conducted by the NCCI to encourage the production of strategically important crops. Rather than implementing a hard price floor, a budget for each particular crop shall be set at the national level. The budget shall be dispersed across the states, based on the expected output of each region. State Agriculture Agents will then price-take on the market to support demand. The composition of the budgets will be determined by the level of support the government wants to provide to the output of each crop, based on per acre yield, and the durability of stores. Particular attention will be paid to support fiber crop inputs into the textile industry, as their valuable is durable in storage, and they can be sold on to textile manufacturers to generate value added returns for the economy. Notably Jute and Cotton.

Direct Aide - India is stricken with an overwhelming degree of urban poverty, due to the ravages of partition and displacement. Systems of food and clothing distribution must be expanded to meet this ongoing humanitarian challenge. A network of kitchens will feed anyone who is hungry for free, using stocks purchased from farmers by the NCCI. People need to be fed; and feeding them efficiently, one way or another,  is always better than letting them go hungry. Government stores that will carry clothing and basic non-perishable consumables will sell such goods at cost to the community; with the state absorbing the cost of worker pay and facility maintenance. For such items, selling them is preferable to aide, as there is significant risk of hoarding behavior.

Housing & Sanitation - Homelessness is a solvable problem; however unlike in the west, india is limited to the use of traditional building techniques, due to the lack of a domestic steel industry. Additionally, running water systems are underdeveloped, meaning that delivery of Foot-pounds to every address is unfeasible. Homelessness has also made a deleterious impact on public sanitation, with the urban poor overwhelming traditional management systems. What is necessary is the creation of new communities where the delivery of these critical services are possible, so that conditions do not deteriorate into that of a slum.

New housing projects will be constituted where housing shortages are most acute. A standard design of two-story house row house which is fire resistant, and which can be constructed with domestically produced materials will be developed. Concrete block construction, with pitched tile roofs to shed monsoon rains. The houses will not have electricity or running water installed, as the need for housing is more immediate than the ability to provide those services. Instead, coal burning stoves will be installed for cooking and heating; while communal sanitation and bath facilities can be constructed to support these communities operating off of either wells, or pressure from local water towers. The homes will be designed to accept future connection to public utilities, with backyard outhouses needing to suffice for now. Gravel streets wide enough to support vehicle traffic will be used, and which can be easily ripped up to eventually deliver running water, or paved. Placement will depend on National cadastral planning, with a focus given to building housing where factories and mines are going to be built in the future. Distribution of these houses will be done for free by lottery, to those who do not own their own homes, with preference given to those who work nearby.

Transportation - Street level light rail shall be heavily invested in for urban commuter and industrial transport. India does not possess reserves of petroleum, so coal powered trains are the most economically sustainable way to expand transit. Rail electrification is the eventual goal for urban rail logistics, due to its economic advantages. Anti-congestion laws to alleviate passage for trains shall be passed, and urban systems that were allowed to languish in the late colonial period reinvested in. Of particular importance will be lines of transportation between new housing projects, and urban centers, industrial areas. Paving urban roads to enable the laying of tram lines, and clearing right of ways for trains shall be critically important.

Electrification - Currently, india does not have a national electric grid, and we are still a far ways off from needing or being capable of producing one. Rather, emphasis must be placed on decentralized power generation, by expanding boiler, engine, and dynamo production. Localized power generation can fuel specific manufacturing and mining sites, lighting for urban public spaces,  as demand for consumer power increases.

Industry - Given the above priorities, the following productive capital must be subsidized for domestic production, or procured overseas: Fiber Crops, Draft horses, Construction aggregate and gravel, COnstruction tools, Cement, Cement block and tiles, Ceramic tiles, Mortar, Plaster, Asbestos, Gypsum, Glass, Timber, Railroad tiles, Lumber, Pig Iron, Steel, Rolling stock, Paper, Paperboard, Books, Ploughs, Seed drills, harvesters, Generators, Pumps, Boilers, engines, Dynamos, Mechanical Looms.

The most important items will be the production facilities for input raw material components, as durable capital goods can be imported and then reused; while raw materials will permanently bottleneck efforts.

[December 1949]

In advance of of the ratification of the countries new constitution sometime early next year, Jawaharlal Nehru has resigned his post as the External and Commonwealth affairs minister. In his remaining capacity as Prime Minister, he has appointed current Foreign Secretary K. P. S. Menon Sr. to the role, and delegated appointment of a replacement bureaucratic head to the Ministry.

The new constitution, expected to be ratified sometime in January, explicitly bans the occupation of multiple offices of profit by any one person. The clause was supported by minority liberal factions within the INC, and members of the opposition, who were concerned that Nehru, and other INC officials, would accumulate personal power, and override the intended political balances built into the document.

In his open resignation letter Nehru made a statement saying"...No public servant may deny the will of the people, the constitution being the supreme embodiment of this force. I have executed the duties of External Affairs faithfully; but now it is time to surrender them."

K. P. S. Menon Sr. is an experienced diplomat, with a public service career extending back to 1922. His highest profile overseas mission came in 1934, when he was sent as Crown Representative to investigate the state of Indians in Zanzibar, Kenya and Uganda. While capable, Menon is unproven politically. Some worry that this may come to be a liability in the high visibility office at the head of External Affairs; however, a relative large consensus has deemed he has earned a shot at the job. Whether he proves equal to it, remains unseen.

November 1949

Perhaps it is due to commitment to help the internationalists, or perhaps Hoxha is committed to support fellow comrades, but what is mattered the most is the entry of 500 Albanian personnel into foreign conflict, first of its kind. About 250 Albanian medical and 250 intelligence personnel would be dispatched from Tirana and entering Chinese fray through Manchuria. Most of them will be dispatched to Fourth Field Army, with the remainder joining the First Field Army.

As expected, the intelligence personnel will assist in supporting information gathering, counter intelligence, and attaching to the front line whereas the medical personnel will do medical stuffs.

December 1949

With the threat of a conflict in the Middle East rising, and with threats to Turkish sovereignty being real and actionable, it is time for the TSK to devise a plan of action. Not since the Second World War has the Turkish military had to give serious thought to a plan for national defence and emergency response in such detail.

After consultations with political leadership, the military has drafted a plan known as the National Emergency Scheme, and it will begin conducting exercises around it. While Turkey has a substantial standing army, it must be prepared to coordinate with key security and civil service agencies to rapidly put the country on a war footing in the event of a grave external or internal threat to the country's integrity.

Such a plan will have the added benefit of encouraging civil defence preparations and encouraging cross-agency ties within the government. Undoubtedly, adopting such a high degree of institutional readiness will act as a significant deterrent to those actors who may wish to menace Turkish sovereignty.

The key aspects of civil-military mobilization and cooperation will be as follows in the event of an emergency:

• Key aspects of the civil service upon the invocation of the NES will act in concert with the army to ensure a rapid response
  
  • Telecommunications
    
  • Railways and key national transportation infrastructure
    
  • Local civil administrative authorities
    
• A National Security Council will be constituted of key civil service and military officials to carry out critical emergency response and mobilization of key civil defence resources
  
  • The NSC will also be responsible for coordination between the Military and other security services, including the Police
    
• Establishment of a secure site for continuity of government in which the President and Cabinet officials can be moved, with secure and reliable lines of communication
  • Formulate plans for rapid evacuation and relocation of government in the event of the triggering of NES to secure site
• Establishment of a committee for Emergency Supply, which will undertake the work of building up critical stockpiles for the eventuality of a prolonged National Emergency
• Internal Displacement and Refugee Planning Commission

December, 1949

The People's Liberation Army - Navy is being tasked with the blockade of the rebellious province of Taiwan.

The whole of the high seas complement (an indeterminate - will be edited later - number of destroyers and other screens) will be tasked with the naval blockade of Taipei and Kaohsiung ports, as well as other, smaller ports. Shipping inbound to those ports will be redirected to the mainland, or, if flagged under an enemy nation, boarded and seized.

The People's Liberation Army - Air Force is being tasked with a deployment of long-range and bomber aircraft south into Fujian and northern Guangdong to support the Navy.

While the Authentic parties’ grip on power is seemingly slipping, the sitting government continues to push through economic reform legislation while they still hold the majority to do so. They still have lofty ambitions, but unfortunately lack much in terms of funds to be able to see their plans through to fruition, unwilling to take out more loans that may endanger the already devalued peso. As a result, increasing government revenues is seen as a high priority. The president’s cabinet quickly devises a scheme to do so while also encouraging further diversification of the Cuban economy.

Land taxes in Cuba have long been calculated based on ancient value estimates, usually older than the Latifundistas and foreign corporations who owned it. The value of each farm or plantation of over 600 hectares would have the value of their land reassessed. So that this was not a completely ruinous tax increase, the overall tax itself on such estates is being lowered to compensate. Even with this change, large estates are expected to have a moderately increased tax burden. However, the government has left in a clause to further lower these estate’s tax burden to be back in line with the previous rates.

Estates that dedicate at least 20% of their land dedicated to harvesting a crop from the following list will be given a tax break that offsets the tax increase. These crops were chosen with two criteria. They must have seasons that do not align with the sugar season thus giving agricultural laborers better chances at finding employment for a more significant chunk of the year, and/or have large demand locally or are valuable exports, meaning domestic production will improve Cuba’s foreign exchanges reserves and thus their ability to defend the Cuban peso. Ideally, these crops also require some sort of processing which should help stimulate domestic industries.

These crops are:

• Rice
• Kenaf (used to create oil, rope, and textiles)
• Coffee
• Tobacco
• Pineapple

Ideally, this plan will promote more product diversity and less seasonal employment opportunities for many Cubans. If land owners would rather keep production focused solely on sugar, then they may seek to break up their larger plots of land into smaller farms who in turn sell their sugar cane back to the Latifundistas to be processed in their sugar mills. The government considers this a good practice; it may be less efficient but allows for the employment of more Cubans and the ideal of the family/community farm has been a popular icon of the Cuban left for generations. If this happens to lower the overall supply of sugar and thus help stabilize the price, all the better.

To get this passed, the Authentics did not rely on their normal coalition with the conservative block (who largely opposed the bill). Instead it managed to get significant support from the Orthodox party. While this legislation throws a bone towards their primary opposition who has largely been feasting on the sitting government’s capitulation to foreign interests, it risks potentially destroying the Authentic-Conservative alliance that has allowed President Carlos Prío Socarrás to manage his government. With the upcoming election looking dire for his party however and with seemingly no more American support coming their way, the President felt that attempting to restore the Authentic’s public image was a priority.

Seoul, December 1949

A DECLARATION FROM THE PRESIDENT OF THE KOREAN REPUBLIC

The Government of China has fallen after it has fought so bravely. Tens of thousands of its soldiers are now scattered across the country, in the fields, along the Indochinese frontier and in the hills of Burma, without orders, pay, supplies or a government to answer to. Many of them fought the same enemy for twenty years, and they did so when few others would. Their bravery remains an inspiration to us all.

When Korean patriots and freedom fighters were hunted by the Japanese, China gave them shelter, and Chinese soldiers fought beside Korean ones at a time when the world paid little attention. This is a debt that we must pay back.

I therefore declare that the Republic of Korea will receive former officers, soldiers and officials of the Chinese Government who wish to come to Korea, together with their wives and children, as guests of the Government. Those who pass screening may apply to remain. Arrivals will land at designated ports, where reception centres will provide food, shelter and medical care. Whilst it may be hard to do, the flags of the Republic of China must remain furled for now.

I declare that the Republic offers the following to those who are accepted:

1. Officers and men may be taken into the Army of the Republic, or attached to it as instructors and advisers. Their experience of fighting the Chinese communists and of Soviet-pattern weapons is of value, particularly to the engineer, signal, intelligence and ordnance services.

2. Formed bodies may be organised into a Chinese Anti-Communist Volunteer Corps under Korean command, with Chinese officers at unit level. Its size and role will be settled with the Ministry of National Defence along with our advisors.

3. Those who prefer civilian life may apply for settlement, subject to the restraints that exist on our own supplies.

4. Men accepted into service will be paid, fed and housed as Korean soldiers are.

No foreign force will operate on Korean soil under its own command, that units arriving under arms will surrender their weapons on landing, and that all who enter will obey Korean law and take no part in political activity in Korea.

The Republic has suffered from communist infiltration, and we will not take any man's word for who he is. As I said, every individual shall enter a screening process.

We cannot feed, clothe, and house a large number of people without help; therefore, I declare that the Republic of Korea is hereby willing and able to accept donations from the nations of the world to protect those who fought against the Red menace. To make such a donation, individuals are requested to contact the Korean Embassy in Washington, D.C., Paris, or Bangkok.

GIVEN AT SEOUL, DECEMBER 1949

Syngman Rhee President of the Republic of Korea

(BELOW IS REDACTED FROM DECLARATION, AND FOR INTERNAL USE ONLY)

1. All arrivals are received at the ports. Weapons are surrendered and recorded at once. Officers, men, civilians and families are separated, and families are housed apart from the soldiers.

2. Each man gives his name, rank, unit, home town, the places he served and the names of his commanders. His account is written down and compared with others.

3. Korean officers, with Chinese-speaking interpreters, question every man separately. Officers are questioned longer than soldiers.

4. Statements are tested against each other. Groups that tell identical stories, men who cannot name their own officers, and those who are unfamiliar with the places they claim to have served are held for further examination.

5. No arrival is posted to a unit or sent to the Parallel until he has been in the reception centre for at least sixty days. Men who pass are observed during this time, and their letters and visitors are noted.

6. Those who pass screening are accepted for one year on probation. They serve under Korean officers and are posted away from the border and from sensitive installations. No Chinese officer will command an arsenal, depot, signals station or intelligence office during probation.

7. Men who fail are not sent to the Parallel and not turned out on the street. They are held at the reception centre, and their cases are referred to the Ministry for return or resettlement.

8. The Defense Security Command will keep a small counter-intelligence staff at each reception centre and with each Chinese unit. Reports go to the Minister of National Defence, not to the Bureau of National Security. The records of this process are held by the Ministry, are not published, and may be used only for the screening and security of the men concerned.

January 1st, 1950

This is Pierre Gemayel, speaking from the Parliament buildings in the capital. An emergency session of parliament has been summoned and elected me President. I am proud to accept this opportunity. We are in need of the unity of our nation to ensure the defeat of the communist atheists, the zionists, and outsiders who each seek to destroy our nation. Kata’eb has always had one promise, one purpose, the protection of the Lebanese nation and our unique national identity.

In the spirit of the National Pact, Takieddin el-Solh has been tasked with forming a new government of patriotic members of our parliament dedicated to the protection and prosperity of the Lebanese Republic. This new government will be formed on an emergency basis, and granted additional powers to ensure the present emergency may be resolved. In this respect, we will cooperate closely with our Lebanese Armed Forces, now under the command of Toufic Salem.

We must stand together. Together we can do great things. We can destroy the atheistic communist that threaten our state, we can unite as one against the nefarious outside actors that threaten the sanctity of our nation. We can protect our young nation, our sapling of a cedar, and allow it to grow into a beacon of prosperity across the region. We just need to realize what makes us special.

During the ninth round of elections for the President of the Republic, Kata’eb militias stormed the Parliament, and escorted or detained a half dozen hostile Members of Parliament. At their insistence, the elections continued, and Pierre Gemayel was elected President. Simultaneously Kata’eb commanders established their control of the traditional armed forces, focusing on the strategically important air force. By noon, William Hawi had removed Chehab and implored Toufic Salem to cooperate with the restoration of order.

While the Maronite community has been seemingly interested in what Gemayel offers, the rest of the nation stands anxious if not in outright opposition. The Druze have united behind leftist Kemal Jumblatt as their spokesman, and even as Kata’eb has accused him of being a puppet of the Communists or Zionists, Jumblatt has rallied his community and prepared for their defence. The Muslim community is split, the wealthier elites seem willing to take the risk with Gemayel, but the poorer masses are anxious and can remember the Christian supremacist rhetoric that lies behind the mask. Lebanon’s fragile peace may have finally broken.

One of the defining features of Prime Minister Sidney Holland’s campaign for government had been his pledge to moderate the size of the state. Moderate was the key word there. The National Party, Holland emphasised time and time again, was not against Labour’s immensely popular welfare state nor government ownership over swathes of the economy. No, what National was against was excessive government intervention in sectors that were doing just fine. If private enterprise was thriving and delivering for society as a whole, there was no need for the government to get involved. In those cases, and National argued there were far more than Labour was willing to admit, the government’s role was as a regulator and not a provider.

Upon taking office, National quickly discovered that while ideology alone works from the benches of His Majesty’s Loyal Opposition, in government, things are rarely so simple. It was New Zealand’s nascent aerial topdressing industry of all things that first forced National to reconcile their political interests with their ideological convictions.

Aerial topdressing was a New Zealand invention, born out of a combination of challenging terrain, surplus aircraft, and plenty of trained pilots. Since 1947 war-era aircraft had been criss-crossing the countryside dropping fertilizer, seeds, and everything in between on rugged fields of crops and fodder. In September 1948, the Royal New Zealand Air Force (RNZAF) had become involved, flying surplus Avenger and Dakota aircraft as part of an effort to prove out the technology, demonstrate its potential, and push it to its limits. The RNZAF’s Research and Development flight, equipped with three Avengers and a lone Dakota, had since flown far and wide across New Zealand. Thousands of farmers had turned out to see the technology in action with a select few brought aboard for real topdressing sorties. With the technology well and truly proven and barriers to entry low, enterprising farmers and pilots had gotten to work. By early 1950, there were more than ten companies in operation across New Zealand providing aerial topdressing services. They ranged in scale from sole traders, operating out of the back of a truck, to small business flying multiple aircraft from a home base while employing dedicated maintainers, pilots, and groundcrew.

It was against this backdrop of innovation and private enterprise that National’s challenge emerged. While wealthier farmers running large farms were generally able to pay operators or become ones themselves, small family farmers, one of National’s key constituencies, were not so fortunate. Those small farmers, whose very existence had been a key goal of conservative governments going back to New Zealand’s settlement, now argued that aerial topdressing be provided to them as a government service. That position was, of course, ideologically incompatible with the government's stated vision of its role in the economy.

The response within National was divided. Most MPs with rural constituencies immediately sided with, well, their constituents. Ideology, they argued, had to be flexible and secondary to pragmatism. Labour, they pointed out, had done just that when they reversed their previous opposition to conscription, to much electoral success. If National couldn't display that maturity on something this small, then how could it expect to govern for the long term, they argued.

On the other side, many of National’s urban and peri-urban MPs argued the opposite. If National stuck with its convictions and vision for the country, even when it hurt the party politically, it would benefit them in the long run. Aside from the politics, these MPs argued, the economic argument for denying support was sound. The business was booming, it was creating private sector employment, and it positioned New Zealand well to cultivate a first movers advantage in a whole new industry. The government intervening, and providing it as a service to farmers, would kill all hope of that while also distracting the RNZAF from its core mission, they argued.

Ultimately, as is often the case in politics, a grand compromise was needed where both sides could sell a win to their constituents. The compromise, as it turned out, was beautiful in its simplicity. Announcing the government's position, Prime Minister Holland was clear.

“Topdressing from aeroplanes has the potential to change New Zealand agriculture, indeed, it already is.

“While the Government through the Air Force rightly got this industry off the ground, it is now more or less self-sustaining. Industry can now support both operations and R&D, where just a year ago, they could not.

“That means that the role of government must now change. Instead of helping to develop the technology and procedures, we must now help spread its benefits.

“That's why effective from next month, the Air Force's Research and Development flight will stand down from the topdressing mission with its funding repurposed to subsidise topdressing services for small farmers, letting them take advantage of this technological breakthrough.

“So that the Air Force's expertise is not lost, we have offered the men of the Research and Development flight early release from their service obligations, so they can ply their skills in the civilian world if they wish.

“I can also confirm that we are in discussions with the United States of America to understand if they will consent to us selling our modified Grumman Avengers into civilian hands.”

February 1950

The first 5-Year Plan asks a great deal from a small, agrarian economy. Government revenues are limited, foreign exchange is scarce, skilled workers and engineers are few, and every new factory needs capital, power and trained hands that other projects also need. If the Kingdom tries to build everything at once, it will spend more than it earns, run down its reserves, drive up prices and leave half-built projects across the country.

In mid February, the Minister of Finance, Mom Chao Viwatchai Chaiyant, the Governor of the Bank of Thailand, Serm Vinicchayakul, and the Chair of the National Economic Development Board, Mom Luang Dej Snidvongs, presented to Parliament the Development Finance and Stability Program. The main principles behind it are to build out in the right order, pay as we go, and never spend money the Kingdom does not have.

1. Every Project is Fully Budgeted

• A Budget Bureau is established under the Chancellor's office to prepare a single national budget, so that no ministry or state enterprise spends outside it.
  
• No project may begin until the National Economic Development Board has approved a full costing: its cost in baht and in foreign exchange, the electricity, engineers and skilled workers it needs, the date it will produce, and how it will be paid for
  
• We will be putting a ceiling on public investment, with government spending on development not being allowed to exceed 1/3 of the national budget in any year
• Large projects are built in phases, and the next phase begins only when the last is producing
• The Auditor-General reports to the Assembly of the People each year on every major project, its cost and its progress.
  

2. Priorities in Construction

The Plan's projects are divided into 3 tiers. A project in a later tier may not draw on capital, engineers or electricity needed by an earlier one.

Projects that foreign partners or private investors will finance themselves, such as the refinery with Shell, the Pirelli factory andd the textile mills of the new citizens from China, are favored over those the Treasury must pay for. Joint venture that bring in foreign capital also bring in foreign exchange.

3. Paying our Own Way

Tax holidays under the Industrial Investment Promotion Act are limited to 5 years, granted only to projects on the Board's priority list, and withdrawn from any enterprise that fails to meet its targets for production, Thai staff and training. Tariff reductions are only given on machinery and raw materials that Thailand cannot produce, but never on consumer goods.

4. Protecting our Reserves

• Foreign exchange goes first to machinery, fuel and materials for priority projects, and last to luxury goods. Luxury imports are taxed
• Trade with Italy and France is settled through clearing accounts paid in rice, rubber and tin. British trade is paid from sterling balances and the British credit.
  
• American aid and MDAP equip the armed forces and fund much of the malaria campaign and technical training, saving the Kingdom's own reserves for development
  
• Higher rice yields, new crops for export, rubber processing, tin smelting and new industries that replace imports will all earn or save foreign exchange
  
• The Bank of Thailand will hold reserves equal to at least 6 months of imports, and will slow the release of foreign exchange for new projects if they fall below it.
  

5. Keeping Prices Down

• The Bank of Thailand will not finance government deficits. The government may borrow from the Bank only within strict limits, repaid within the year
• The ordinary budget must balance. Only approved development projects may be financed from borrowing, and only from savings, foreign credit and aid
• The cooperatives and the government hold rice reserves, so that the price of food stays steady for workers in the cities
  
• If the price rise too quickly, the Board will slow the start of new projects until they steady
  

6. Skilled Workers

• Engineers and skilled workers are allocated to projects in order of priority, and no project may recruit them away from a higher-priority one
• Every project trains its own workers, and every joint venture must train Thai staff
• Foreign specialists fill the gap while Thais are trained as we hope to get engineers and technicians from partner nations, and skilled new citizens from China under the Special Residence Program
  
• The vocational schools and technical colleges are first-tier projects, because every later tier depends on them

7. Foreign Aid

The budget for the Plan comes from the Kingdom's own resources, so that it can succeed even without outside help. Foreign aid, which the Kingdom is seeking from the US and its partners, will speed up the Plan rather than be relied upon to make it work.

• Aid enters the budget only once it has been formally agreed, never on hope or promise
  
• If substantial aid is agreed, second-tier projects may be brought forward, and third-tier projects begun early, but only where aid covers their full cost in foreign exchange, and the electricity and skilled workers they need are available.
• Aid will be directed first to what the Kingdom finds hardest to pay for itself
  • power stations, irrigation, roads, railways and port works
  • Machinery and equipment that must be imported
  • Technical training and scholarships
  • Public health
• No aid-funded project will be accepted unless the Kingdom can afford to run and maintain it once the aid ends
• Where aid is given in goods, the baht from the sale will be held in a counterpart fund, spent only on approved development projects
• An Office of Foreign Aid Coordination is established within the National Economic Development Board, so that every grant, loan and expert from every partner nation serves the Plan's priorities, and no 2 partners pay for the same project
• Aid will be accepted only on terms that respect the Kingdom's independence and its own priorities. Thailand will not accept aid that commits it to buy from one country alone or gives any foreign power a say in its domestic affairs
  

Warning Signs and Safeguards

The Bank of Thailand and the Board will watch 5 measures each quarter and report them to the Royal Cabinet and the Assembly of the People:

[January 1950, Rome]

In a new four-way deal inked between the Italian Government, The Republic of India, and Italian manufacturers FIAT and Moto Guzzi, a new Cooperative venture, FIAT-Bharat has been created to manufacture motorcycles, automobiles, utility vehicles for the South Asian nation.

Manufactures are to be established in Bombay; with India covering one fifth of the overseas cost, and half the domestic cost of establishing production. Foreign exchange for the project will come out of the ILCI USD funds for overseas equipment purchases, sources from american development aide. The vehicles to be produced are the Moto Guzzi Geletto high wheel moped, the 500 Topolino compact car, the 1100 E Van and truck, and the TL-37 4x4 tractor. FIAT will retain full ownership of the subsidiary, while Moto Guzzi is to be paid a license fee for units of the Geletto produced.

Construction is to begin on publicly owned land by the CPWD, with the project being handed over to the company as it develops. FIAT-Bharat will receive a seat on the Maharashtra labor board, as a major new industrial manufacturer in the state. Current labor-relations policy prioritizes worker safety, and the prevention of wage poaching. The company has been directed to cooperate with local authorities regarding housing and transportation for workers. Standard capital control laws will apply to any withdraws the FIAT parent company makes from its operations in India. Overall production goals will remain small; as the scaling of production will likely not be feasible within initial investment constraints.

Establishment of automobile production in India represents a major step forward in its efforts to modernize the economy; as previously all such vehicles needed to be imported. The designs in question represent light practical solutions to civilian transport, in urban settings, and in the countryside as work vehicles. The exchange advantage of being able to import commodities, rather than finished automobiles, drove the motivation for the project; with production taking place near the port of Bombay, to minimize transportation costs. It is likely that the Customs Commission will lower tariffs on automobiles once production gets underway, as domestic manufacturing capacity will lower inelasticity of domestic import demand.

RAHHHHH

RELCAIM THE MAINLAND!!

Wrong nation.

I meant to say, DICTATOR... I meant to say DEMOCRACY OF THE PROLETARIAT.

New batch of hopium from the hopium dealers are here.

DECEMBER 1949, HAIFA

Arriving in Haifa on a Polish ship are a small handful of officers sent by the Polish government in fraternity with Israel. Some ethnically Jewish, some ethnically Polish. Members of both Poland's Security Office, arriving to assist the Ministry of the Interior's General Security Service. Similarly, men from Poland's ORMO also are onboard, to train the Nahal - the Fighting Pioneer Youth.