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1 Votes - 5 Average   Developing nation

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John77
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Post: #1
Developing nation

I've recently started a developing country in a world, and am confronted with very high unemployment, low popularity, no valuable tradable goods, pensions and welfare that do not meet living expenses, debt, and very little infrastructure, any advice on how to proceed?

My initial thoughts were to raise pensions and welfare while cutting income taxes and raising customs, though I do not want a spiraling debt crisis. Any help would be greatly appreciated.

19.01.2012 23:52
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ystradband
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Mosh
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Post: #2
RE: Developing nation

Income taxes are your main source of income in a developing country. I'm normally all for cutting these, but wouldn't rush to do so with this template. Customs, on the other hand, provide a negligible income so you may as well cut these and try to stimulate export growth.

Possibly your alliance will be able to start a tax reform at some point or you could use some action points to launch the reform yourself.

Fixing things will take a lot of time. Don't try to do it all at once. Look for tasks that could improve your state without costing too much money. There are usually some early ones that will help you to get the crime rate down.


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20.01.2012 00:14
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Rising Phoenix
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Post: #3
RE: Developing nation

Leave welfare as is, do not raise as it will have menial effects on your country's living standards.

Focus on infraestructure, rather. Make small investments to PE Administration and Others (I would also recommend raising a tad of Justice as well). Drop customs to a ~2% level.

Keep inflating your money supply and maintani a relatively low interest rate. You need the investment.
Also: A bug! Check his economic page:

http://www.ars-regendi.com/state/111167/detail6.html

The first graph appears as an error to me.

20.01.2012 01:06
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John77
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Post: #4
RE: Developing nation

Thank you both!

20.01.2012 01:34
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Lyu
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Post: #5
RE: Developing nation

Rising Phoenix Wrote:
Leave welfare as is, do not raise as it will have menial effects on your country's living standards.


Uh, no. Welfare is a very crucial matter for small and poor states. Once you hit a certain bottom line in the welfare to living costs ratio, the population begins to starve. This normally happens if living costs increase due to inflation - and you want a little bit of inflation, else there will be no economic growth - but you do not adjust welfare (or even decrease it. This is why the liberalism reform is not a good thing for developing countries).

In this state, there are 8 starving deaths, so it might be already very close to this border and an increase in welfare could prevent a big fuckup (when you get several thousand deaths per quarter, your reputation goes down to -5 or something, and your safety rates up to a few 1000 percent).

This post was last modified: 20.01.2012 10:12 by Lyu.

20.01.2012 09:46
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Rising Phoenix
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Post: #6
RE: Developing nation

Lyu Wrote:
Uh, no. Welfare is a very crucial matter for small and poor states. Once you hit a certain bottom line in the welfare to living costs ratio, the population begins to starve. This normally happens if living costs increase due to inflation - and you want a little bit of inflation, else there will be no economic growth - but you do not adjust welfare (or even decrease it. This is why the liberalism reform is not a good thing for developing countries).

Welfare in itself has no effects on the living standards on the long term. You can give people 1.000.0000 of curreny per month in welfare, does not means the general living standard of your country (ie; on average for everyone) has risen. Those 1.000.000 might as well be worthless, in turn.

Lyu Wrote:
In this state, there are 8 starving deaths, so it might be already very close to this border and an increase in welfare could prevent a big fuckup (when you get several thousand deaths per quarter, your reputation goes down to -5 or something, and your safety rates up to a few 1000 percent).

OK, if it is to avoid deaths I agree that it shuold be done, but I suggest a tax reform is implemented afterwards.

20.01.2012 16:14
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Lyu
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Post: #7
RE: Developing nation

Well, apart from preventing deaths, welfare (and pensions) can also be used as kind of indirect subsidies (less stimulation than using the direct subsidies, but they have a positive (or negative, if you decrease them) effect on popularity instead), so they are not completely worthless.

And the death thing really is important for developing countries and shouldn't be disregarded. Wink

I suggest to get the welfare up to at least 50% of living costs before doing any reform that affects the economy (especially the Negative Income Tax since it gives a huge and fast boost to the economy - which may be TOO fast for the poor ones to keep up with) .

20.01.2012 16:55
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Rising Phoenix
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Post: #8
RE: Developing nation

Lyu Wrote:
Well, apart from preventing deaths, welfare (and pensions) can also be used as kind of indirect subsidies (less stimulation than using the direct subsidies, but they have a positive (or negative, if you decrease them) effect on popularity instead), so they are not completely worthless.

I agree on those grounds.

Lyu Wrote:
And the death thing really is important for developing countries and shouldn't be disregarded. Wink

Most certainly.

Lyu Wrote:
I suggest to get the welfare up to at least 50% of living costs before doing any reform that affects the economy (especially the Negative Income Tax since it gives a huge and fast boost to the economy - which may be TOO fast for the poor ones to keep up with) .

Good advice. Specially since the effect of tax reforms is to decrease welfare & pensions.

20.01.2012 17:22
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Lasfaro
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Post: #9
RE: Developing nation

Would this plan work for a developing nation like mine?

I plan to increase Justice , as to help crush my shadow economy so that my normal economy will have more capital put into it

I want to invest in infrastructure , but I'm not sure how

I would cut capital tax, keep my money value at a stable semi-high value as to not increase inflation.

How do I increase my progress?

21.01.2012 01:20
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Lord Alexander
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Post: #10
RE: Developing nation

Lasfaro Wrote:
I plan to increase Justice , as to help crush my shadow economy so that my normal economy will have more capital put into it

I want to invest in infrastructure , but I'm not sure how

Spending on “PE justice” is inefficient against “Shadow economy”, it only useful for curbing “Misprisions” and “Capital crimes”.

If you want to develop "Infrastructure" you should increase spending on “PE administration”.

21.01.2012 13:41
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