Financial functions, Education and Health.

GOTW header05 Finance

Make sure you understand the financial pages, the health and education pages and gradually extend your control of the country.

Increase your income with more corporations and high employment and cut cost if necessary. Large loans are OK if you invest in growth but the interest will increase your monthly cost.

The country finances are shown in some detail on the financial pages. Graphs are also available, showing the changes in the past 18 months.

It reports the available cash of the country and the income and cost in the past month, year to date and expected finance results for the year.

The cash flow
The cash of the country depends on the monthly income and expenses. If expenses are higher than the income, you can expect the available cash to go down. It should go up if there is more income than cost. There are however several other factors influencing the available cash.

Loans you take are not considered income but are added to your cash. When you pay these loans back, it is not considered cost, but they are subtracted form your cash. The interest you receive or pay for loans does count as income or cost. Also investments in new corporations are not considered cost but they do influence the cash flow.

Loans and investments in new corporations are not considered cost because they do not change the total assets of the country. If you take a loan for 10 B, the total of your loans increases by 10 B but your cash goes up by the same amount and your assets are unchanged. If you build up a new corporation, the cash may go down by several billions but you get a new corporation with about the same value and again, your assets remain unchanged.

Taxes paid by the population are income. You receive the tax payments and your cash goes up. Salary payments for teachers in the country are costs as you pay the teachers and your cash goes down.

The cash data on the financial page is important. It shows the current cash available but it also shows how much you owe in loans and the value of your corporations. The assets are a good measure for the success of your presidency and for your country. The more assets you have the better the country is doing. The assets influence your assets index which is a factor in the total score.

Income and cost
This is the main financial report that shows how the country is doing from month to month. It shows the income from taxes and contributions people pay towards education and health and it shows income from corporations all types of corporations.

The cost side shows the amount you spend on every government item including health, education, transportation, social security and defense. Interest income from loans you gave to others and interest payments on loans you have received is also part of this report.

You are advised to watch this report frequently and you must understand the figures. When you are trying to improve the economy of your country or you are investing in a strong army, results of your efforts will become visible on the financial data page.

Having a negative cash flow and financial shortages is not a major problem when you are investing in your economy. In the long run however, your investments should translate into higher income that will make it possible to pay the interest on the outstanding loans and also pay the loans when they are due.

Getting loans
When your cash goes red, you will automatically receive a loan. You may request the loan yourself and avoid your cash from going red but if it does happen, a loan request will be issued automatically and it will be large enough to bring your cash back into positive territory.

Loan paybacks are also automatic. They take place when the loans are due and may put your country in a negative cash position. As explained before, this will again result in a new loan in the following month. If your income is high and cash goes up every month, loan paybacks will not trigger new loans or will result in smaller loans and in the long run you will repay all your loans and end up with a positive cash balance.

The maximum period for a loan is 120 months. The highest amount, that can be offered is 9999 Billions.

Interest rates for loans are set to 1% per game year. Countries with large cash reserves can offer loans on the money market.

Interest rates for loaned money are low per game year; they are very high in real terms. At 1% interest per game year, which is 4 days, interest rates in Simcountry reach 90% to 180% in real terms.

Any member could exchange real money into game money, loan the game money out and receive 1% interest in 4 days. The game money can be exchanged into gold coins and into cash. The scheme is however unlikely to succeed on a large scale.

The main difficulty in this scheme is that there is no guarantee that the loans will be taken. The market may have enough cash and the available cash is not needed. If many players use the scheme, the market will be flooded with loan offerings with no takers at all.

When no money is available from players, loans are provided by the World Bank. These loans carry the same interest rate. The world-bank never takes any loans.

In periods of money surplus, the world-bank receives money back from loans that are due to be paid back. The money is taken out of the market.

A country may want to pay loans early. Cash can be earned from the sale of a corporation or from sale of shares in country owned corporations that went public or from an increased income from taxes. All loans can be paid early and such early payment carries a 2% penalty.

The investment funds
Each country has an investment fund that is managed by the president. The investment fund receives contributions from high salary workers in the population and it is intended to supplement the income of worker in the country. Some of the money is invested in the share market another part is loaned to the world-bank. The fund has a monthly income from these loans and from dividends from the stocks it owns.

The investment fund is managed by the president. The president cannot however use the money to pay country debt or in any other way move funds into the government financial system.

The contributions by workers amount to about 2.5% of the total salaries in the country. The percentage may differ in some countries as it depends on the income levels in general and the composition of the work force.

A new development in the game will extend the capabilities of the funds and make it possible to tune the payments to the population. The financial reporting of the fund will also improve.

Higher income by the population results in increased spending and economic growth. Your country will benefit from higher tax income.

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