Once a wealthy nation, the Grand Duchy of Fenwick has fallen on hard times. This

Question

Once a wealthy nation, the Grand Duchy of Fenwick has fallen on hard times. This little-known nation, rumored to be hidden somewhere between Eastern Europe and Western Europe, for decades had relied on exports of a vital ore, which only it had and the rest of the world wanted. Now it is gone and this tiny nation of 1,066 people must develop a new source of income as savings dwindles. One day, an old soldier, Captain Spaulding, suggested declaring war on the United States. Within an hour of the declaration, Fenwick would surrender and discuss terms. These terms would include massive infusions of money and other aid from the U.S. since it has been the practice of the U.S. to rebuild the defeated nation. Captain Spaulding figured this plan could last for years if they played their cards right. In the meantime, surely someone would come up with a new and possibly permanent means of sustaining the economy. ‘Brilliant! Hooray for Captain Spaulding!’ shouted the crowds as he received the thanks of the nation.

That is your task—outline a plan for this tiny nation to have a long-run, sustainable economy within a reasonable time (say, the next 5 years). Alternatively, you may imagine that you are advising Fenwick’s government on how it can “restart” its economy and put it on a long term path of prosperity.

To get you started, assume the following: The population is educated and has stabilized at a reasonable level. It has a small amount of arable farmland but not enough to be self-sufficient. The infrastructure is in disrepair. It has no natural resources to consume or export. It is very mountainous and its climate delivers the four usual seasons. The government is a parliamentary system and it is stable. Its currency is the Tura (named after a former prime minister’s favorite famous actor, Joseph Tura) and it floats on international markets.

Although this question appears to be open-ended, the best answers will remain focused and take a systematic approach. Be sure to state any additional assumptions you are making.  

Explanation / Answer

The nation now has no natural resources. First of all the nation must focus on skills it has, The best industry for a small nation like this can be tourism industry which has potential to brings thousands of visitors a year to see its natural glory and also infuse huge amounts of reserves that come along with them.

It can alternately develop sustainable energy. Nations spend a huge amount of their savings on fuel so they can use renewable energy to get rid of dependence on import of fossil fuels.

As this is a small nation taxes must be higher than normal, If taxes are high they can collect back the money they are spending on the country. The nation can engage in activity that involves labor activity so it can employ its population. In my opinion service industry would suit them very well.

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