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Dear friends

Welcome to the final edition of the Economist Intelligence Unit for a while. Today we’re taking a close look at the Colombian economy. Today’s report has been paid for and commissioned by Lorenzo Medici. If you enjoy the report, send him a nice message thanking him.



Treasury income this week is a bit weird- as are the rest of the figures. This is because of the big period of upset mid-week when the admins changed the money markets, the bot prices and pretty much everything to do with the economy module.



You can see clearly from this graph the point when the module changed. What happened here? The value of currency changed rapidly, and a lot of people took advantage of it by buying from cheap countries and selling in expensive countries to the bot. So countries like Colombia where prices are quite high saw a surge of foreign goods appearing on the markets, which meant a big increase in income from VAT. Even at 5% the proportion of goods crossing the markets meant that income over the week was dragged up to an average 38,191 COP, which is about twenty thousand more than what I’d normally expect.



This graph shows total income over the period vs total donations. Colombia made one donation this week of 100k, which is roughly half their income. It would probably have been sufficient if not for the crazy day when the country made 100k from the admins. Colombia also signed 2 MPPs this week, at a cost of 20k COP. They donated 43.64% of their income, and spent an additional 7.4% on MPPs.

Over the week the treasury grew by 119,146.19 COP. The country donated the currency equivalent of 61.81g, which equates to 10.3g per day average real terms income. There were 243 voters on the elections on the fifth, which makes the per capita income of Colombia 157.16 COP per citizen per day. Considering VAT is only 5% on weapons, that is a very good score. It is ahead of other countries with a similar VAT value, and this is probably due to the high price of goods and the high bot-buy price.



Well the obvious thing that happened here is the admins introduced the global currency, which I am going to call the Lemnaru 😛

After the Lemnaru (LMU) was added, all monetary markets globally were merged. So you can buy gold from someone with COP and they will receive SEK or PLN or whatever. Essentially this is just an illusion- there is only one currency now, it just has a different name in each country, kind of like the Euro has a different picture on depending where it was made, but it is all regulated centrally.



Demand on gold drove the prices of COP up early in the week. I also suspect the admins were buying up gold using a bot, to raise the price of currency higher before they forced a change to 0.01. If this had happened in 2 weeks time, it is likely no currency in the world would be trading for less than 1000 currency to a gold anyway. The currency followed an international trend amongst small-to-medium sized countries in rising to the low 1800s before the change came in, after which it dropped to the international average of around 1400. Since then this average has risen, and the prospect of 2000 currency to 1g is not far off. When I was born, the average was probably 35-40 currency per gold. You can see the major trend here, and it is a downward spiral the admins have done nothing to correct.



The markets again have been affected by an inrush of cheap foreign products. This is natural and will depress most of the smaller markets of the world for the foreseeable future. Previously the difficulty associated with converting currency->gold->foreign currency->products->currency was such that few people brought foreign goods past an import tax. Now it as easy as moving to a neighbouring country, purchasing a few thousand products, moving home and selling them. This has lowered the prices in smaller countries, but also driven up prices in larger ones, as the increased demand pushes up prices.





We can see here again the sharp drop in value- especially of WRM- immediately after the change. It is not difficult to do. Remember that before the crash WRM was trading in some countries at 0.14/0.15 and in other countries the bot bought at 0.33. It isn’t difficult to make a 100% profit if you’re quick, and this is something a lot of people did. If the bot price becomes universal (which it should) this will normalise over time. If it doesn’t, there will be a significant disadvantage to having cs in countries with low bot prices, which (since they are mostly larger countries) could benefit players in weaker economies.



Weapons prices took a hit here too, though it took a little longer. Since then, prices have fallen further. It seems that the global market seems to be averaging out around 37 currency before tax for Q6, maybe a little higher. The midweek prices, combined with wage costs, made Colombia a profitable country to live in. Whether this remains the case long term will be something to watch.



We see a sort of similar story here. Uncorroborated, I wouldn’t take anything from these results. Q6 Food is a notoriously unreliable indicator because of its scarcity and the fact few people buy it. However the sharp drop does suggest imports hitting the market, and the simplest solution is usually the correct one.



Colombian wages were very low by international standards. As the week went on they rose steadily. I was curious what would happen after the change- and the result is the trend remains unaffected. Since then wages have hovered around 140 COP. This will probably change over time. People moving abroad to get a better wage will become much more common now you are paid in the universal currency. With this in mind, labour market competition for the remaining workers should force up the wage cost. It really depends on how intelligent the normal population is. From the Colombian governments perspective, people should stay at home where they can pay more tax. But from an individual perspective it often makes sense to look for the best deal. The changes have really punished smaller countries.



Here you can see the profitability of both weapons industries. The graph shows the profit per unit in weapons companies with your current wages, RM prices, bonuses and so on. Both Q5 and Q6 are historically very high profit companies in Colombia, due to a limited supply. However in future this will change as the economy becomes more globalised. How to deal with this will be a tough question, and it depends on the bot. If the bot remains active, low prices will probably mean more income for Colombia as more goods move through the market. If it doesn’t, it could be a real problem as money flows out of the country. Either way, there is not a lot you can do from a government perspective.



In conclusion: The times are changing. Previously a closed economy with a small number of wealth generators, the economy of Colombia has been forcibly opened up by the admins. Anyone with citizenship there can now become an entrepreneur simply by exploiting price differences internationally. Wages will probably rise and prices will continue to drop. However profits are still strong and it will take a while for Q6 owners to feel the squeeze.

And that’s that!


Take care,

Iain