Most of the countries dont have any fabrication plants. So they cannot produce anything except garrisons. Also only 4 or so countries have heavy production, which means they will be your only challange. However they are not going to focus primairly on cranking out as many units like you the player will. So you will easily always be able to outpase the AI in production.
Well, that's quite interesting. After purchasing the game recently I started as Brazil, and chose "no units," mainly because I want to familiarize myself with the economic and diplomatic aspects of the game without worrying about immediate war. I must say that I'm really enjoying just trading commodities, improving relations with various countries and building a better Brazilian society.
The only unit I have built so far is an engineer battalion, to help speed up my construction.
I didn't know that most nations don't have fabrication plants. I assume, then, that it will be quite easy for me to conquer most of South America, should I choose to do so.
If you begin with units on, and most countries don't produce units, do you simply win most wars by waging a battle of attrition? Or do countries without fabrication plants simply purchase units from their allies? I'm very curious about this.