African Entrepreneurship Records 2

Chapter 1367 Economic Winter
While the Kitwe City Government, led by Deborn, is ambitiously trying to carry out a radical overhaul of the city's economy, the situation across East Africa is not friendly.

As time went by, the European flu completely evolved into a national health problem in East Africa. In order to deal with the European flu, various parts of East Africa took corresponding measures. Workers were given holidays, factories were shut down, business premises were closed, and the entire market was depressed.

The East African economy has entered its first cold winter in history, and the people of the country have for the first time deeply felt the pressure brought by the economic crisis.

By June, industrial production activities in East Africa were severely affected. Take steel companies as an example. 60% of the country's steel companies were affected by the epidemic and economic crisis and had to reduce production or even temporarily stop operations.

The East African Minister of Industry pessimistically reported to Ernst: "The national steel production this year may be cut in half. Due to the outbreak of the epidemic, some steel companies have to give workers holidays to prevent the spread of the epidemic."

"At the same time, the sluggish market has led to insufficient orders, and some factories that have not been affected by the epidemic have been forced to reduce production."

"According to the current trend, my country's steel production this year may fall to just over 30 million tons. If the epidemic and the market continue to deteriorate, it may even fall below 30 million tons."

In fact, since 1918, affected by the war situation in Europe, East Africa's steel production has begun to decline. At this time, the European market's demand for East African steel and related products has fallen due to the rapid expansion of production capacity in the United States.

However, even the decline is a relatively slow process. In the past three years, East Africa's steel production capacity has remained above 37 million tons.

Now, because of the European flu and the economic depression it caused, East Africa's steel production may directly decrease by six or seven million tons, which is almost equivalent to a direct reduction in the UK's annual steel production. Of course, this only counts the UK's domestic steel production.

Ernst frowned and said, "Although we had anticipated the post-war industrial contraction trend, the impact of the European flu far exceeded our expectations."

"Right now, the economic situation around the world should be bad. If we are still in this situation, the situation in the United States, Europe, and Russia must not be much better!"

This is exactly as Ernst said. It is difficult to estimate the specific losses Europe has suffered due to the war. After all, no matter how serious the epidemic is, the situation for European countries will not be worse than the damage caused by the war. However, Europe will definitely not be feeling well.

The United States can be described as a country that has experienced too much joy and then sorrow. It is true that Americans were not satisfied with the benefits that Wilson had secured for the United States after the war.

However, it is undeniable that during the war, the US economy prospered greatly, and even surpassed East Africa again in the later stages of the war. It can be said that the five years of war were one of the best economic periods in the history of the United States, and this is why Wilson was able to continue to sit on the presidency.

However, ever since the European flu broke out around the world, Americans have been unable to be happy.

North America is the second largest epidemic area in the world after Europe, and the consequences of the blind expansion of the United States' industry during the war are also emerging at this time.

It is true that East Africa's economic development was also very radical during the war, but no matter what, East African governments have always intervened in their own economies.

In a completely liberalized market country like the United States, under the catalysis of war, American companies and factories expanded and developed greedily and without restraint like wild horses.

Taking steel production as an example, by the end of the war, the United States' steel production had exceeded 40 million tons, reaching a level similar to that of the previous life.

However, this is obviously unreasonable. After all, a new player, East Africa, has appeared in this time and space. The emergence of East Africa has directly led to the world's steel production capacity increasing by nearly 40 million tons compared with the previous life.

After all, the African continent in the previous life was still a colony at that time, and was affected by the war. Germany and Britain fought each other on the African continent, which made the already negligible economy of Africa in the previous life even worse.

With the unexpected factor of East Africa, East Africa not only integrated the resources of nearly half of the African continent to become the world's leading industrial power, but also further expanded the world's industrial capacity.

However, the world market is limited. With the emergence of East Africa, an industrial powerhouse, the industrial capacity of the United States is approaching the level of the United States during World War I. Obviously, there is not enough market to absorb this extra industrial capacity.

Because of the epidemic in the United States, the East African government is currently unaware that the U.S. industry has been almost cut in half, which is reflected in the steel industry, whereby the U.S. steel production capacity has directly dropped by half.

It is already the middle of 1920. If the US economic situation does not improve, the US steel production capacity this year may fall to more than million tons, or even less than the annual steel production of the United States before the war.

This is easy to understand. In the absence of any market constraints, during the war, American steel companies used various means to obtain loans from banks, stock markets and other financial institutions to expand production. At that time, the European market was almost like a Pi Xiu, accepting almost all comers.

So after gaining huge profits, this further stimulated American companies to increase investment in industries and expand industrial production capacity. As a result, a huge economic bubble was formed in the United States at an accelerated pace.

However, once the war in Europe stopped, orders decreased, and the US economy was already on the brink of a cliff. This is why the US did not want the war to stop.

However, at this time, American capital obviously had no intention of stopping. Instead, it continued to heat up the economy, thereby looking for domestic buyers, namely bank depositors, stock market investors and some blind investors.

The epidemic dealt a fatal blow to the already precarious U.S. economy, and the backlash became even more severe.

East African Minister of Industry Mette said: "Right now, the economic situation around the world is not good. Even though we in East Africa have made a lot of preparations in advance, we have been affected. The economic situation of other countries can be imagined."

"In Europe, countries are now heavily in debt, and the economy, which was already hit hard by the war, is now even worse. It is conceivable that this will further slow down the speed of Europe's post-war economic recovery."

"We don't know the specific situation in the United States, but it may be worse than Europe. European countries have just emerged from the shadow of war, and the impact of the epidemic on Europe is not that severe. However, the United States has gone from a country with a booming economy to an economic depression overnight, and people's lives are difficult. This psychological gap is bound to cause social conflicts in the United States."

"Russia is the biggest victim of the war. The world war and the civil war have dealt a huge blow to Russia's fragile economy. Now it is facing an economic blockade from countries around the world. The situation is obviously not going to get any better."

From the conversation between the monarch and his minister, we can also find that East Africa now places the United States, Europe, and Russia on an equal footing. This detail is enough to illustrate the current decline of Europe. Once upon a time, any major European country occupied an important position in the world pattern.

At present, although this is still the case, a single European country obviously cannot compete with a country of the size of East Africa. To be precise, there are only two countries of this size in the world, namely East Africa and the United States.

Although Britain has strong overall strength, its empire is made up of overly scattered colonies, and this colonial system makes it difficult to compete with East Africa and the United States. Germany has developed industry, but its size is too small, especially its strategic depth and geographical disadvantages are fatal.

Excluding these two European powers, other countries will not be able to compete with East Africa and the United States.

Finally, there is Russia, but Russia is not a purely European country. The East African government lists it as an important force in the world pattern.

However, the main ideological threat facing Russia now is that as for its comprehensive national strength, it can only be said that it has potential. Even so, Russia's ideological weapons are enough to attract the attention of other countries in the world, especially Germany and Austria-Hungary.

Ernst said: "From this point of view, the European flu disrupted the rhythm of the whole world, which also brought uncertainty to the future world pattern."

"Under normal circumstances, after the war, all countries in the world should have launched a joint armed intervention against Russia, but now it cannot be implemented because of this."

"We cannot predict how the Russian Labor Party regime, which has been given a respite, will develop, and what impact it will have on the future of Europe and the world."

The World Labour Party at the current stage is a world political force that likes to take the initiative and export its ideology throughout the world. With Russia as its base, it provides logistical support and guarantee for the World Labour Party's subversive activities around the world.

If it weren't for the sudden outbreak of the European influenza pandemic, the imperialist countries would have already started a real fight with Russia.

The relationship between the two is black and white, they are mortal enemies, and they cannot coexist. Of course, under the leadership of Ernst, East Africa is obviously slightly different from ordinary imperialist countries, but the two are obviously in a hostile relationship.

If East Africa had taken action at the beginning, it would definitely be enough to give the Russian Labor Party a hard time. However, this would also affect the changes in the entire world pattern. After all, if East Africa was dragged down by Russia, Europe might still be in a state of war, and in a state of war, there would always be some accidents, such as the birth of a new Labor Party regime.

The birth of the Labour Party regime was inherently accidental. For example, the Paris Labour Party established its regime because of the Franco-Prussian War, the Russian Labour Party seized power through World War I, and the Labour Party regimes in Eastern Europe were established during World War II...

In summary, the emergence of labor states was largely due to the internal struggles within imperialist countries, which gave labor parties in various countries an opportunity to take advantage of.

Of course, the contradictions of imperialism, in the final analysis, are contradictions among the upper classes of various countries, and the labor parties of various countries represent the will of the lower classes, so uniting the grassroots people is the main means of the labor party.

If the imperialist countries were to unite directly, the possibility of the emergence of a labor state would be greatly reduced. However, the unity of the imperialist countries is obviously impossible. At least before the Russian Labor Party seized power, without a unified enemy, the imperialist countries would fight to the death. After all, the World War I that just ended is proof of this.

Thinking of this, Ernst said: "Under the dual influence of the epidemic and the economic crisis, the world situation will be temporarily frozen for a period of time. We must also promote the upgrading of industrial structure and high-quality economic development as soon as possible."

Now, because of the European influenza pandemic, countries around the world are in a difficult situation and naturally have no time to cause trouble for other countries. This is true for both the imperialist countries and Russia.

"For the European influenza pandemic, we must strictly limit its further deterioration and development before the end of this year and get through its most severe stage."

"By next year, no matter what, we will make full efforts in the economic field. The Fifth Five-Year Plan has been dragged down, and we cannot stand still because of this."

East Africa's fifth five-year plan has come at the worst possible time, as the impact of the European flu has caused the East African government's policies, projects and programs to progress very slowly.

This made Ernst feel anxious. Although the European flu was a crisis, if it could be used well, it was also a good opportunity for some countries to overtake others or widen the gap with other countries.

At this time, it is actually a competition of what is worse. Whichever country is least affected by the European flu will develop faster than other countries. At least among the major countries in the world today, the situation in East Africa is much better than most countries.

"It is unknown whether the global economic depression caused by this epidemic will end after the epidemic ends, so we must be mentally prepared."

In the past, although the Spanish flu had a negative impact on the world economy, European and American countries also ushered in a post-war economic prosperity that lasted for nearly ten years.

Therefore, Ernst hoped that this European flu would be like the previous Spanish flu and would not have much impact on the world economy.

In this way, after completing industrial upgrading in East Africa, it will be able to take advantage of the rapid development of the world economy and re-enter a stage of rapid development.

For a large late-developing country like East Africa, it is extremely difficult to make further progress after completing initial industrialization.

Therefore, the East African governments naturally do not want the world economy to fall into a long-term depression in the coming period, as that would be detrimental to the further development of the East African economy.

This is similar to the Far Eastern Empire in the previous life. After a long period of rapid economic development, it is the country that most hopes for the recovery of the world economy, especially in its economic transformation stage. This is like passing through a barrier. If you can get through the sea, sky and air, if you can't, it may fall into a half-dead cycle like those former economic upstarts in Southeast Asia and South America.

If East Africa cannot successfully break through in the economic field, it can only start from the military field and turn the table directly like Germany did before.

Of course, what Ernst hopes to see most is that East Africa achieves breakthroughs in all areas, so that East Africa’s achievements and gains will be more solid.

Therefore, Ernst said: "Although the Fifth Five-Year Plan has been affected by the epidemic and the economic crisis, it is also an opportunity for the empire. We must do better than other countries and be the first to get out of the epidemic and the economic crisis."

"In the next six months, the government will take the lead in further strengthening epidemic prevention work to ensure the operation of social production and life to the greatest extent possible, and to stop the downward trend of economic development in the next one or two years."

"At the same time, we are closely following the developments in Europe and the United States, especially the changes in the situation in Eastern Europe. I think there may be some problems in Eastern Europe in the coming period."

Regarding the last point, Ernst was of course talking about Russia. You know, the Russian Labor Party stabilized the domestic situation earlier than in history, and before that they ceded huge interests to the Allies. In the previous life, because of the defeat of the Allies, Russia recovered its losses without any effort. Obviously, the Russian Labor Party in this time and space will not give up. I just don’t know what specific actions the Russian Labor Party will take.

(End of this chapter)