CEP Debates Higher Tariffs, Cost-Cutting Measures | EVE Online

CEP Debates Higher Tariffs, Cost-Cutting Measures

2008-04-10 - Por Svarthol

New Caldari – The current fragility of the Caldari economy was front and center in the most recent session of the Chief Executive Panel, with a number of representatives voicing concerns that funding for State-wide programs was sapping resources needed by the megacorporations to deal with their own financial problems. The overall feeling of the Panel was summed up in a statement by the Nugoeihuvi delegation: “The time has come for us to remember that business is our priority, and all other concerns are secondary; we must aim for the best return for every kredit invested if we are to continue to prosper in this environment.”

However, while the Panel seemed to have a consensus as to the problem, there seemed to be considerable disagreement as to the solution. Of the many suggestions for how to rejuvenate the economy, two seem to have gained traction; one, advanced by the Kaalakiota delegation, has been the increase of tariffs on imports into the State, while the second, advanced by the Nugoeihuvi delegation, is a reduction in the budgets of the both the Caldari Navy and the Caldari Business Tribunal. Both suggestions spurred contentious debate during the session, and the issue has spilled over into other discussions as well, most notably during the session that was supposed to be devoted to dealing with the attempted assassination of Amarr Court Chamberlain Karsoth.

Advancing the plan for higher tariffs, the Kaalakiota delegation blamed much of the State's economic woes on inferior quality goods flooding Caldari markets. “The fact of the matter is that the Federation, Republic, and the Empire have an advantage in terms of labor cost; how can we compete with goods assembled by poorly-paid migrant workers, sweatshops, and slaves? The State cannot simply solve its problems by throwing more people at them, unfortunately. We must make our goods competitive until the economy stabilizes.” The corporation called for an increase of import tariffs on most raw materials, foodstuffs, textiles, and other low tech goods where the megacorporations have been least competitive with foreign imports.

Reaction in the Panel was mixed; though support was strong from Wiyrkomi, Sukuuvestaa, and Nugoeihuvi, the Ishukone delegation blasted the proposal as “protectionism” that was “a tiny bandage on a sucking chest wound.” “Reducing the impetus to compete cluster-wide will only create further doubt in the market when that is exactly what we should be trying to avoid. Perhaps if certain corporations spent more time reducing their own inefficiencies instead of blaming it on someone else, we would not be in this situation in the first place,” said one Ishukone delegate. Ishukone's statements were seconded by the Hyasyoda delegation, and received muted applause from both Lai Dai and the CBD Corporation as well. No decision has yet been made, although the plan does appear to have barely enough support to become law should Kaalakiota push the matter.

Meanwhile, in the same session, Nugoeihuvi advanced a proposal to trim the budget for both the Caldari Navy and the Caldari Business Tribunal by nearly 15%. “While the defense of the State must be a high priority, the economic strength of our corporations cannot be threatened by paying billions of ISK to fund expansion of a military force already sufficient to defend our current interests,” said the Nugoeihuvi statement. “Though important, military expenditures are not an investment, they are overhead, and we all know that overhead must be the first thing trimmed whenever a budget is reevaluated. Meanwhile, we have seen an increasing number of Tribunal investigations end with no charges brought and no damages assessed; perhaps cutting their budget will convince them to engage in fewer frivolous investigations and concentrate on those of more weight.”

Once again, this proposal was not greeted quietly in the halls of the Panel. “Cutting the budget for the Navy at this time, so soon after such obvious Gallente provocations as the Kassigainen incident and the so-called 'Brothers of Freedom' is not only ill-advised, it is criminal,” refuted the Wiyrkomi delegation.

“Is it a coincidence that Nugoeihuvi, which has been the target of 17% of the Tribunal's investigations this year, is calling for a reduction in their budget? Somehow I doubt that very much,” commented a member of the Lai Dai delegation. Still, despite resistance from the Patriot corporations and some resistance by Ishukone, a major Navy contractor, the measure seemed to find some support among the other Panel members, placing it in a similar position to the tariff measure.

Though officially, neither the Navy or the Tribunal have any comment on political matters, it is clear that many within the ranks of both organizations find the prospect of reduced budgets a disturbing one. “It seems to me it would be better if the pencil pushers in New Caldari left the judgement of what was 'necessary' to the military instead of telling us we don't need things,”said one Navy captain that asked not to be identified.

In the Tribunal, many are concerned that a reduction in their budget will only worsen intercorporate strife while at the same time handicapping the Tribunal's ability to act as a firebreak on open warfare. “Tension between the various megas is the highest I've seen it in my 17 years here,” said one member of the Tribunal's legal department. “Shorting our budget could have serious consequences in keeping megacorporate hostilities at an acceptable level.”

Perhaps most telling about both of these initiatives is that five or ten years ago, such measures would both have little if any support among most of the Panel members. “Ever since the end of the war, the Navy's budget has been almost sacrosanct,” said Amaari Karnuras, professor of political and memetic science at the School of Applied Knowledge. “And Kaalakiota's assertion that labor costs are higher in the State is shaky at best; the State continually looks towards more automation, which is comparatively cheap to maintain. The fact that these measures seem to be getting more traction now is a sign that the Panel is at least privately of the opinion that the economy is not nearly as strong as it once was.”