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It is quite easy to make countries in the game, profitable.
Even with little care for education, health etc. the economy can do moderately good and be profitable. When the player takes very good care of the economy, the country can be very profitable and provide a lot of cash for expansion, including the possibility of a large army.
Although hard to fail, it is also possible to let the country deteriorate and fall into very bad shape. Countries that fail are declared bankrupt and the president loses them. Having countries can bring you success in the game but you have a responsibility to keep them afloat. If you do not, they will bankrupt.
Countries that fail see two stages of failure. When a country is considered close to bankruptcy, control is in fact taken over by an automatic procedure and it makes an effort to fix the finances.
When even that fails, the country will bankrupt.
Simcountry allows countries to flourish and develop into very powerful entities. It does not allow countries to continue when they are bankrupt.
Country "Close to bankruptcy"
When a country has negative cash it should fix it quickly. When cash is going under -1 trillion or the value of its materials becomes negative, it is considered close to bankruptcy. At that stage an automatic procedure will try to save the country.
How to get out of this condition
Transfer money from the account to the country and make it cash positive. The money can originate from another country in the account.
Take a loan for the country. The loan can be taken elsewhere and the money can be moved to the failed entity.
A country is also considered close to bankruptcy if the value of its materials is negative.
Negative value of materials means that the country has severe shortages of all kinds of materials including materials the population needs to survive.
Such shortages cause MANY people to leave the country and the population will diminish.
What causes such severe shortages: The player can stop automatic orders to cut the spending. Also cash shortages (cash under -4 trillions) will stop all orders by the country and materials will go short. If cash is very low, a country cannot place orders.
How to fix this: Take loans, and let the country place orders to resolve the shortages.
Move money into the country and make it cash positive. It will immediately start placing orders for the materials it needs and you may need to move more money into it to continue the ordering until all shortages are resolved. Migration from the country will decline quickly.
What happens if the automatic procedure take over?
If the country is nearly bankrupt, an automatic procedure will start fixing what can be fixed.
Salaries will decline, reducing the cost for government and corporations.
The education will be tuned and workers and professionals will become available in numbers that will allow more hiring. If there are enough workers, new and profitable corporations will be set up to reduce unemployment and increase production.
Education health and transportation will be fixed slowly (if needed). The army will quickly go into the reserves, reducing cost and freeing workers for the economy.
As a result, costs will decline, income will increase and the country will become profitable. the procedure will take some time to produce results.
In all cases, we have seen great results. When in very bad shape, the procedure will be take a long time to complete. You can shorten it by moving cash into the country.
The procedure will continue as long as the country is close to bankruptcy.
How can you stop the automatic repair and regain control?
The procedure can be stopped by fixing the "Close to bankruptcy" conditions as described before.
Countries in very large empires may be harder to fix because government cost remains relatively high although government costs too will decline rapidly with the decline of salaries.
When the country assets are negative, the country is in fact bankrupt. Country assets include all cash and loans, the value of corporations and shares the country owns in public corporations, all the materials the country owns, government facilities, and all army assets. The assets show in details on the financial pages under "Assets".
If all fails, and the country assets remain negative for a period of more than two weeks, the country will bankrupt. A message is showing on the country home page, warning of pending bankruptcy and showing the number of game months before termination of the country.
What happens at bankruptcy of a country in an empire?
The country is gone and out of your control. It is not coming back. The amount of negative assets is inherited by the main country in the empire.
Your empire can continue with the other countries but will have to take care of the inherited debt.
What happens at bankruptcy if the country if the last one you have in the entire account?
The country is gone. you can immediately start fresh with another country. The debt is forgiven.
Warnings about "close to bankruptcy" and Bankruptcy conditions.
The notification system has specific warning for such conditions. You can set up such notifications and you will receive messages that will allow you to login and fix the failing country.
There are notifications for both "Close to Bankruptcy" conditions and for [text] "Approaching Bankruptcy" showing you that the 14 days period (84 game months) before bankruptcy has begun.