In Geopolitical Simulator, Debt is the amount of money a state has borrowed from investors of other states. It is also widely knows as public debt.
How debt works in GPS Edit
Debt is a great burden for almost every state. It could be useful on the short-term, but on the long-term it could be the ruin of your budget if mismanaged.
A national entity in Geopolitical Simulator incurs debt by deficit or overspending on construction projects such as oil pipelines, high-speed railways, stadiums, energy projects, etc. It is possible to have a deficit and pay off the player's debt by simply avoiding major spending programs and increasing the spending of the nation. Reducing spending and promoting austerity policies can also benefit the player to pay off the national debt, at the cost of popularity and Gross National Happiness in Power & Revolution.
The "Debt" tab Edit
When you open the tab (found under the first section) you will see several data almost everywhere. The most important part of this screen is the table on the right, which displays the list of lenders. From that table you can see how much debt you have contracted (and that you have to extinguish of course), what's the interest rate on various periods of time, and the debt you are going to contract. A noteworthy information is that you can reach an agreement on the interest rate with a particular investor only for a quarter. To do so take an appointment with him, and after a coffee and some compliments let's negotiate the rate: if you have a very low interest rate, it's very difficult to reduce it further, but if you have an enormous rate, then you can reduce it by several points, which can let your budget breathe.
The "Agency" tab Edit
Under this tab, you can take a look to the rating agencies. These institutions have the task of evaluating the financial situation of your state; each agency has its evaluation system, and the rating can vary from CCC(which is the worst evaluation) to AAA(which is the best, synonym of a healthy economy).
Every agency except Harsness & Rules bases its evaluation on three factors: two of these are common (projected budget deficit and amount of debt related to the GDP), and the following table displays the third factor for every agency:
|Harshness & Rules||No third factor|
|Kitch Ratings||Strenght of national
of public sector
There's a strong link between interest rates and rating agencies, because every investor consults the evaluation of the four agencies: you can notice in fact if you play with a Western Europe country, where the majority of the states has a high rating, the interest rates are very low (around 2 or 3%), but if you choose a third-world country, with a very poor rating, the interest rates are around 15 or 20%!
However, some investors won't care about your rating and will maintain a high rate. Also, there are some states that aren't rated by the agencies, meaning that the investors can apply every interest rate they want, and don't expect a convenient rate: even if you have a budget surplus in most cases it will decrease around 5 or 6%