Of course it can. It makes no difference that originally it was a neutral territory. Its current status is a territory of the United States and therefore, with an IPC value of two,it can be a location where a minor industrial complex can be placed.
I haven’t been able to post a map picture, but after thinking about it more, additional context of the German army disposition in nearby territories could impact the decision as well, as they would be the next power in theater to move. If France taking Kaz’ would prevent any armored and mechanized forces from Novosibirsk moving through Kaz’ into the Caucasus, it may be woth sacrificing the 1 IPC income to prevent Germany from securing a 5 IPC bonus. Always multiple points of context to consider, which makes for a very rich gameplay.
That’s the thing-I don’t think national objectives imbalance the game, especially in the Europe version where the Soviets are almost guaranteed to get 9 IPCs a turn after going to war.
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During the civil war the North and South used different track widths also, because front lines moved back and forth so much, there were special units dedicated to changing trackwiths as ground was gained.