ARCHDEUS

HIGHWAY AND TOWER (1)

After Alex finished taking care of his entire company, he this time turned his attention from the business world to politics.

As a lord, of course, political life will be his top priority. Currently based on the reports of subordinates social and fiscal policies from Alexandreia seem to get a positive response. But of course the big and useful policy has a price that is not small.

Alex realized that the social budget he spent, especially on education and health budgets, looks very lame compared to other budgets. If it continues like this he is worried that his regional budget will run a deficit further.

Currently the Alexandreia regime uses a balanced budget system, which is a budget that the amount of revenue is at least equal to the amount of expenditure during a certain period. So that he has no readiness in making expansionary fiscal policy.

Perhaps if in a special case, Alex could rely on the monetary authority he created such as the Alexandreia Central Bank in 'financing' his territory budget. But it would be a bad history for the monetary authorities as it would point to an overly conspicuous fiscal[1] dominance and a lack of central bank independence as a counter-cyclical[2] in the economy.

In addition, in the realm of national politics, there is one thing that worries Alex is the dominance of Sandwealth and Norchaster. These two duchies were too powerful now and although the two had yet to show him anything, he knew that when all of his ports had been able to operate, they would show their fangs to him.

Either by force or suggestion.

The ruler of the southern region in this case was Alexandreia, meaning de facto ruler of the seas. It was only in Alexandreia that the people of Artchania could access the sea.

So realizing how dangerous his future is, Alex decides to look for other backups in addition to relying on his relationship with Norchaster or his familial relationship with Fertiphile. He had to create his own 'fraction' that would join hands in times of crisis.

Alex has an idea. Instead of uniting people through practical political ties such as marriage, it is better to unite the lords not through political action but through business interests. It is an instinctive act that man will be infatuated with wealth and Alex believes the lords are too. At least he knew one person who was quite infatuated with money.

Harol, Regis, Countess of Otilia, and Count of Yorksall are now in Alexandreia, in the mansion of Lord Alexandreia. The presence of these four people was related to the economic cooperation put forward by Alexandreia.

Alexandreia referred to this cooperation as the Southeast Economy Corridor which integrates the markets of the feudal territories in the south and southeast in an economic area.

Of course hearing that the four rulers of the region such as Fertiphile, Morhust, Otilia, and Yorksall were very interested. Especially Yorksall and Otilia who currently need large amounts of money to pay off their debts. Both regions were heavily indebted to be able to finance their spending during the crisis two years ago. Now they are dealing with mounting debt. Both realize if they miss an opportunity like this, both worry about not being able to pay their debts which could create a new crisis.

The four people along with Alex were currently in the meeting room in the mansion. The three of them seriously listened to the explanation Alex was explaining.

"... so I believe with connectivity between regions, we can improve the economy of our regions. Inequality is expected to decrease and we can also secure the supply chain" explained Alex.

In addition to hearing Alex's exposure, the four men also read a proposal containing an explanation of the project made by Alex.

Everything with a serious look can not immediately decide. They do not refuse or accept it for the time being. It seems like the four people are thinking about the profit and loss they will get if they take part in this project.

"Can you guarantee that the project you are referring to will be completed on target and will provide a small return?" ask Eugenie.

Eugenie, Countess of Otilia asked Alex about Alex's readiness to work on the project. Alex answered with confidence.

"Of course, I have several companies and subsidiaries that will be able to work on this project soon. I also have an abundant workforce so I believe the project is workable and without significant obstacles" Alex said.

"Ah ... that's why you bought slaves in bulk from me?"

Since they are currently in a formal meeting, Regis replies to Alex's explanation in formal language. But of course, Regis responded to Alex's explanation with quite a shock.  He did not expect Alex to have designed this project for a long time.

So maybe there is nothing wrong to support this project further.

What they are discussing is a project called the Southeast Highway, a highway that will connect all major cities in Alexandreia, Yorksall, Otilia, Fetiphile, and Morhust.

This will create connectivity between regions and make infrastructure-based regional economic growth possible.

Based on Alex's explanation, this project does look nothing to lose considering that traders may still use this road even though it is a little expensive.

In addition to preventing free riders, the sides on both highways will be limited whether it is short stone fences to make a trench both sides so that access to the road is limited and can only be passed through the gate. In short, the system is similar to a toll road.

But the problem is the cost is not small. It would take at least 500,000,000-700,000,000 gold coins to build this road.

With such a large investment value made all the lords who were here a little doubtful. It was not a small amount especially for small counties like Otilia and Yorksall.

"Alex are you sure this project will work?"

This time it was Harol who asked Alex. He speaks to Alex in an informal language that shows his concerns as a father.

"I'm sure Dad. This will make our area all very rich. Imagine, if the agricultural produce from Fertiphile must take up to two weeks to get to Alexandreia, with the presence of this road will cut the time by half. Of course the merchants would be infatuated when they heard it. In addition, Morhust can also export its mana stone more efficiently because the price and time during transportation will be reduced drastically if this road exists" said Alex confidently.

Harol didn't ask anymore. He closed his eyes as if thinking seriously.

"But how are you going to make this road? Doesn't it require high technology to do it?"

This time the Count of Yorksall asked Alex.

Alex answered confidently.

"No Master. We will use materials that are usually used in the manufacture of roads in Arcentioch or the capital of the region in general. But of course we will adjust the quality of existing materials to ensure that the road will last many years."

All the lords looked at each other. Although they did not speak but through the sight of one another, they seemed to understand the contents of the other party's head.

This is not a bad idea but the cost incurred is too high. They seemed to have to consult with their respective subordinates especially on their dynastic chamberlain to ensure that this project would not have a significant impact on the financial condition of the dynasty if the project broke.

Note:

fiscal dominance[1] is the condition in which the monetary authority engages itself in the affairs of government policy. This condition can be exemplified when the central bank presses its benchmark interest rate during high inflation on the grounds of the government's fiscal ability to pay its debts. If the central bank continues to raise the benchmark interest rate, the risk of default from the government will be increasingly inevitable. Conversely, if the central bank does not raise its benchmark interest rate when the inflation rate is high then the inflation target they target will not be achieved.

counter cyclicals[2] are policies that monetary authorities generally use in maintaining the economy. Cyclical counters are very commonly seen in macroprudential policies where when the business cycle and credit circulation are very high which is an incentive for the economy will try to be pressured by macroprudential policies of central banks to prevent a crisis that potentially happen.