Seriously, does ADF get off to making this fictional country as miserable as possible?
I think, to some degree, Phil is dimly aware of how Mary Sue-ish fake countries and OCs on DeviantArt tend to be, and in his own special way, making Australatina a shit hole is overcompensating in trying to make Australatina more "realistic." Almost like how 90s comics became a bit of a self-parody in trying to reboot everything as "dark" and "gritty." I guess it's a bit appropriate as Phil is a perpetual edgelord.
Theres also the fact that Phil is a bit racist, and tends to view the third world countries he wants to emulate as dirty, corrupt, dangerous, etc. Its weird but he's not really interested in Latin America for the history, the culture, or even the nice scenery, he's mostly just lashing out against his sheltered white suburban upbringing and views it as edgy to play act at being "Latinx" by cosplaying as J. Lo and stuffing himself on Taco Bell. He doesn't really like brown people in real life.
It's part of the reason why Australatina's history is so poorly researched that he literally just copy-pasted a brief history of Israel! My personal favorite was the part of Australatina's history just labelled "South Africa," as if anyone else would even have any idea what the fuck he was referring to. LOL. At least CWCkville has a fake history and amusing characters. Phil isn't even that creative. He just appointed J. Lo head of state for some reason and imagines himself as a minor functionary while he gets off killing imaginary Jews.
Incidentally, that's another difference between him and Chris right there. Both have a hard time distinguishing reality from fiction due to autism, but while Chris gets to play with Magi-chan and all his little Pokemon buddies, Phil knows Australatina isn't "real" on any level. It's just that fictional things have as much impact on him as real ones.
Back when he was in his Naruto cosplay phase, anime characters were as important and influential to him as people he knew in real life, maybe more so in fact. For you or me, the idea of making life altering decisions based on a cartoon seems absurd, especially at his age, but remember that Phil has the mentality (and emotional maturity) of toddler. He started basing his interests, diet and even relationship goals on Sakura, because he couldn't differentiate between cosplaying and... well being normal. He did the same thing with Hetalia when he became obsessed with Communism, bicycles and yaoi. And to a degree he's even doing it now with his Kylo Ren obsession.
To Phil's mind, the impact of fictional characters and their deaths is a big deal, and because he likes to pretend we're all white supremacists, he thinks people are Kiwifarms would be torn up by the deaths of millions of anonymous unnamed characters in his imagination land. Of course he also thinks Zuckerberg would know or care about the deaths of imaginary Jews for the same reason. I think, if things were reversed and some autistic on these boards made a fictional country where they purged trannies or Latinxes, Phil would probably get all huffy and start making angry autistic posts in retaliation (or "solidarity," or whatever).