Objectives & Issues

Dremica, like any other third world country faces uncountable issues on the forefront of development, politics and ethnic harmonization. Following
the principles of policymaking, we have tried to simplify the bafflement of varying issues.
Before, we come towards the analysis of this case; we contemplated over the poles of effective governance in this situation. They were:
Stability : The governance should be inclusive, and steps should be taken in a manner so that they remain
politically plausible.
-

Harmony: Civil Unrest at this stage could prove fatal and it needs to be avoided at any cost.

Balancing the economy so that growth occurs in every sphere of the society.

Furthermore, we will try to go by a piecemeal exclusive approach to get a solution. Conditions-

Pro - Agrarian
1. Keeping the economy closed. Maintain the status quo in all other
aspects.
- This would probably see restraint from the Yism group, but the Xism are
expected to challenge the governments decision.
- Also this would not benefit the states healthcare or economy in any
way. On a longer run, the bolstering industrial growth is expected to
peak before declining in absence of funds. The European meltdown and
the lesser liquid conditions are bound to impose a negative effect over
sentiments.
1. Fiscal Balance
2. Current Account Balance
3. Agricultural Production
4. Healthcare
5. Food and Nutrition
6. Money Supply to the Industries
7. Civil harmony - Expectancy
8. Stability of the government
2. Roll over the food security and healthcare bills in a year. Status quo
over keeping the economy closed.
- Again, this move would see an immense support from the lower quintile
of the society. But the Xism ethnic group (primarily pro-industrialist and
wealthier) is expected to turn rebellious against this move. Direct threat
to the government and society.
- Healthcare and nutritional levels will ameliorate, but this will cause
fiscal pressures. The rise in government spending will eventually drain
off the government reserves and easing things with printing more bills
[quantitative easing] would add to further inflationary burdens. [see
Ghanaian Model]
- If the government decides to levy a wealth tax or corporate tax in this
situation, to meet the budgetary deficit, the unrest would further increase
causing a civil war again.
1. Fiscal Balance
2. Current Account Balance
3. Agricultural Production *
4. Healthcare
5. Food and Nutrition
6. Money Supply to the Industries
7. Civil harmony - Expectancy
8. Stability of the government

Pro - Industrial
1. Open up the economy immediately. Follow Friedman Free Trade policy.
Ease up FDI and FII norms. Weak corporate regulator. No healthcare and
food security bill.
- Parts of this model have been followed in many developed economics
before the Neo-Keynesian Era started last decade. However, one could
cite many good words about this condition but snubbing the fact that it
overlooks the weaker section of the economy makes no sense. Increased
market-forces would perish the agrarian economy. It is important to
understand that Dremica is a premature, agrarian economy and it would
be stringent for it to tackle these challenges. By this step, we would simply
flush off the principle of inclusivity and give rise to greater competition,
neo-liberalism and possibly, greater protests.
1. Fiscal Balance
2. Current Account Balance
3. Agricultural Production
4. Healthcare
5. Food and Nutrition
6. Money Supply to the Industries
7. Civil harmony - Expectancy *
8. Stability of the government
2. Buy time. Form a standing committee to look over the formation of
drafting liberal policies and guidelines. In the meantime, allow offshore
institutional investors to invest in the nations economy (assign a
maximum cap over FIIs).
- This step could appease the Xism community, which is hoping to get the
economy open up.
- The agriculture community would surely protest over mix of candid,
but sometimes, fallacious arguments that opening up would ruin up their
lives. However, if proper steps are taken, the move could become a boon
for the agricultural community.
1. Fiscal Balance
2. Current Account Balance
3. Agricultural Production *
4. Healthcare
5. Food and Nutrition
6. Money Supply to the Industries
7. Civil harmony - Expectancy
8. Stability of the government
* Maybe

FINAL SOLUTION
The final step comes after traversing the pros and cons of both of these pathways.
The Dremican government should try to formulate the master plan based on both these pathways.
The economy should be opened up for the foreign institutional investors to invest in the listed stocks and
commodities. An independent regulator should be assigned the responsibility of looking after the corporate
transaction so that the seeds of corruption are not sown.
The government should also think over making it mandatory for the firms willing to get investments, to
show a minimum of 7.5-10% of their profit contribution to the CSR pool.
* An innovation strengthening the public-partnership model.
(Corporate Social Responsibility (CSR) will make it bending over the companies to share some part of their
profits to a common pool. As the companies are expected to get big investments, its expected that they
wont mind spending a small chunk out of there profits.)
- This would enable the government to attain a fiscal surplus, without using taxation hammer.
The fiscal surplus could be redirected to the food security and healthcare programs. This would directly
benefit the poorer strata of the society and help develop trust in the government. The Dremican authority
could also think over Minimum Support and assurance prices to the farmers.

1. Fiscal Balance
2. Current Account Balance
3. Agricultural Production
4. Healthcare
5. Food and Nutrition
6. Money Supply to the Industries
7. Civil harmony - Expectancy
8. Stability of the government

(In the Xism and Yism rebels, we sometimes forget that the actual threat is the suppression of one class
by other. As the stats suggest, it is obvious that a lot of people from Xism community might be professing
agriculture.
(Thus, the government should act towards the path of exclusive and exhaustive governance.)
Even after these measures, if a few people resort to protests, government should recommend a fair plebiscite
the nature of democracy isnt clear from the article). As the policies are expected to be beneficiary and
inclusive in nature, the government is expected to sail through it.
- The Set of liberal policies and norms [suggested by us]-> Independent corporate regulator for monitoring securities and exchanges.
-> Cap on FDI in various sector. Understanding that Dremican economy would crash because of excessive competition, completely opening up
would be foolishness.
-> Tariff regulations should work strongly for the first 10 years so that Dremica doesnt become a dumping ground. This should be eased up slowly
according to WTO regulations.
-> Focus over developing ties with the new world economies like India, China and Brazil. At present, there economies are stable unlike the US or
Eurozone and offer an empathetic ease of assistance. These countries are looking for states like Dremica, to develop economic and strategic ties, and
also, they are not too stubborn like the West over relaxing norms for strong neo-liberalization.

[In the whole exercise and threats, people usually forget that in Dremica, the greatest share of GDP comes from agriculture. It is conspicuous that the
biggest power centers exist around non-agriculturists and pro-industrialists. Thus, the threats for opening up are so palpable and evident.]
[Also, no country ever has been in harm after opening up its economy. In fact, globalization adds on to the countrys economy and growth in many good
ways if administered with proper caution. ]
Note In this short analysis, we have tried to be both inclusive and exhaustive in our approach. Although, as no policy is completely infallible and
pragmatic aspects are volatile and subject to changes every minute, there exists a high probability that some other proposal would work better than
ours in real life.

Response to the Dremican Update I As we aim to focus more over ties with developing states while coming out with liberal measures, the government would be able to solve the issue of
Eurozone crisis.
Response to the Dremican Update - II
By above mentioned diplomatic efforts, we believe that the government would be able to resolve the bi-party issue. Mentioned, that if the unrest
continues, carry along with a plebiscite or refrendum.
Citations
Martin Khor, The Experience of Ghana, Retrieved on 20-02-2013
http://goo.gl/0UpA5
Indian Model, Retrieved on 20-02-2013
http://goo.gl/6kOce
Submitted by1) Krishan Kumar Singh
2) Ayush Maiti
College - Netaji Subhas Institute of Technology, Delhi University
Team Code - TP019