African Entrepreneurship Records 2

Chapter 1468 Asuncion-Lima Railway

The basis for targeting the Soviet and Ottoman Empire markets lies in the replacement of the ruling classes within the two countries, thereby disintegrating the original interest relations and establishing a new local order.

Take the Soviet Union for example. During the Tsarist era, the Russian economy was basically controlled by European capital. After the establishment of the Soviet Union, the original European and American interest groups and the compradors they supported were wiped out.

In this way, the Soviet Union became a new "virgin" market, and everyone's competition for the Soviet market returned to the same starting line. The Ottoman Empire would also become a new market to a large extent due to Kemal's reforms.

East Africa does not mind taking the lead in breaking the ice with the two countries and starting economic cooperation. Although the Soviet Union has confiscated East Africa's assets in the past, for East Africa itself, the assets confiscated by the Soviet Union are far less than the benefits East Africa obtained from the Soviet Union.

The Ottoman Empire will most likely copy some of the previous Soviet policies, especially the Kemal government's attitude towards foreign investment, which will inevitably reshape the original economic structure of the Ottoman Empire.

The Ottoman Empire was also a large market with a population of nearly 30 million, which meant that East Africa could not ignore it.

Ernst said: "While the world economic situation is still good, the Empire should also speed up the development of overseas markets, especially for those agricultural countries and backward regional markets, and try to ensure the smooth flow of our trade routes in the form of treaties."

"We can even make appropriate concessions to induce them to strengthen their economic ties with East Africa, such as helping them build some industries, roads, railways and other infrastructure..."

"It would be best if it were some large, long-term projects, and the penalty for breach of contract should be set higher."

Simply put, it is to help some East African companies' overseas businesses to survive the economic crisis as much as possible through overseas engineering construction, especially for non-industrial countries and backward regions when the economic crisis breaks out.

After all, these countries and regions have the strongest demand for industrial development and infrastructure, but generally speaking, imperialist countries are not charitable, and the price they have to pay for developing their own industries is very high.

And now East Africa is using the slogan of economic cooperation and aid, and almost no demands or high prices can help them achieve this.

Many countries are bound to be attracted, allowing East Africa to obtain orders from many countries to help them build factories, railways, power stations and other industrial facilities. These countries only need to pay the costs and ensure that East African companies do not suffer losses.

Of course, if an economic crisis breaks out, those countries that have signed contracts with the East African government will have to pay high penalties if they want to go back on their word. If they want to evade even the penalties, then East Africa will have a good reason to send warships there, thereby forcibly opening up a new market and completely transferring the risks.

Ernst said to Friedrich: "We can adopt this approach in our policy towards the Soviet Union. Now we are helping the Soviets build various factories and railways at normal or even lower prices than the market price. Do you think they will accept it?"

Friedrich nodded and said, "Of course. After all, the Soviet Union is now facing sanctions from the international community and lacks technology, capital, and talent. If we offer such generous conditions at this time, they will most likely be tempted."

"And if an economic crisis breaks out in the future, it will be almost impossible for other countries to cooperate with the Soviet Union at normal prices. They may even offer lower prices and sell more technology for the Soviet market."

This has been proven in the past. After the great world economic crisis in 1929, companies from various countries gave the green light to the Soviet Union in order to survive. Sanctions and blockades were no longer important. Some companies even tried their best to win orders from the Soviet Union.

Of course, one can never be too cautious when developing economic cooperation with a country like the Soviet Union. As Ernst mentioned before, the bait laid in East Africa in advance is most effective for backward countries and regions.

The Soviet Union was a big country. Although its industry was not as good as that of the top powers, it was not weak. For example, compared with countries like Japan and Spain, the Soviet industry was actually stronger.

Therefore, Ernst said to Friedrich: "We cannot make too many concessions when doing business with the Soviet Union. After all, the economic crisis has not yet broken out, and the international community is still vigilant against the Soviet Union."

"So, now we are negotiating with the Soviet Union and are in a proactive position. The Soviet Union needs us instead."

"When cooperating with the Soviet Union, we should try our best to set the price within a range that both parties are satisfied with."

"This way, even if the Soviet Union regrets its decision after an economic crisis breaks out in the future, there will still be room for negotiation between us and them."

After the economic crisis broke out, the Soviet Union would inevitably regret it. After all, at that time, they would find that the international market had collapsed. The technology and industrial equipment that they had previously requested but could not obtain were now available to them, and the imperialist countries were almost on their knees, begging them to accept them.

However, their previous contract with East Africa was not cost-effective.

Assuming they tear up the contract, East Africa has no good countermeasures against a world power like the Soviet Union. At the same time, under the economic crisis, it is also impossible for East Africa to give up the Soviet market.

It was precisely because of the possibility of this situation that Ernst had to take precautions in advance.

He went further, saying: "It would be best if the Soviet Union could pay in full, or even accept barter."

As for the Soviet ruble, due to the boycott of the international community, its value in the international market is very average, and the credit of the Soviet ruble itself is difficult to guarantee.

……

La Paz, Bolivia.

The capital of Bolivia is Sucre, but the actual administrative capital is in La Paz, including the government and parliament. Only the Supreme Court is in the legal capital, Sucre.

At this time, in a mansion in La Paz.

Smith, manager of the American Standard Oil Company's Bolivian branch, is talking with Bolivian Resources Minister Reyes.

"Minister Reyes, President Hernando seems to be too biased towards East Africa recently, which has greatly damaged our interests, especially the A-Li Railway. The president is trying to bypass us and cooperate with the East Africans." Smith said to Reyes with dissatisfaction.

Reyes also said with a serious expression: "President Hernando has indeed deviated from his original policy and is becoming increasingly difficult to control. He may want to bring in East Africa to gain more power."

"But unfortunately, he is now the country's top leader. Even if he makes decisions that go against the national interest, we don't have much way to oppose it."

Hernando is now the democratically elected president of Bolivia. Of course, in fact, Hernando himself was brought to power by the Bolivian Mining Alliance.

Mineral resources, such as silver and tin, account for a large share of Bolivia's economic exports. Therefore, the Bolivian Mining Association has a lot of say in Bolivia.

As a president supported by the Mining Union, Hernando himself did come from the Bolivian elite, but he was not willing to be a puppet of the Mining Union. He was also a person with ideals and ambitions, and tried to promote social reforms in Bolivia.

In doing so, he offended many people, which gave the Americans an opportunity because they were also dissatisfied with President Hernando.

Especially Hernando's pro-East African tendencies. Of course, for President Hernando, he certainly does not really have a good impression of East Africa.

East Africa and the United States are the same to him. As for why he excluded the United States and wooed East Africa after taking office, it was entirely out of the need for checks and balances.

Because the United States has too much influence in Bolivia and has many agents and collaborators, and these people have great influence in Bolivia, the United States has actually become an obstacle to his governance.

Before East Africa's massive push into South America, Bolivia was primarily influenced by American and British capital, but now that the British have become a thing of the past, the United States' influence on Bolivia has greatly increased.

Although the influence of East Africa has also spread over, American capital is ultimately more powerful in Bolivia. In addition, Bolivia's geographical location also makes it very difficult for East Africa to compete with the United States locally.

First of all, Bolivia is on the east side of the Andes, close to the Pacific Ocean, but in fact it is a landlocked country. At the end of the last century, because of the war with Chile, they lost their last outlet to the sea.

This means that Bolivia's foreign trade is greatly restricted. Of course, Americans will definitely not be affected. After all, in the eastern Pacific, the influence of the United States radiates from North America to the southernmost tip of South America.

These countries on the west coast of East Africa and South America have only three options for trade and communication. One is the Strait of Magellan, but due to natural conditions, the role of the Strait of Magellan is very limited.

The second is land trade, which requires going through third-party countries. For example, Bolivia can trade with East Africa through Paraguay, and Chile can trade with East Africa through Argentina.

Going through a third country also means being subject to others’ control, and the cost of land transportation is much higher.

The third is to take a detour by sea transport. For example, trade between East Africa and South America can pass through Australia and cross the Indian Ocean and the Pacific Ocean, but the distance is too far and the cost-effectiveness is not high.

Therefore, the traffic restrictions between East Africa and Bolivia have greatly affected East Africa's development of the Bolivian market.

Therefore, in 1927, East Africa proposed the idea of ​​the Asuncion-Lima Railway, which was to build a railway starting from Asuncion, Paraguay and ending in Lima, the capital of Peru, in order to open up an international land transit trade channel between East Africa and the west coast of South America.

Ships from East Africa can depart from ports on the west coast of East Africa and arrive directly at Asuncion, the capital of Paraguay, via the Paraguay River.

Paraguay has close relations with East Africa and is located in the hinterland of South America. It has Uruguay to the east, Brazil to the north, Argentina to the south, and Bolivia to the west. It is a natural crossroads of South America, so East Africa hopes to strengthen trade with the inland and western coastal areas of South America through Paraguay.

This is obviously not what Americans want to see, especially the west coast of South America, which is considered an important area of ​​interest by the United States.

Smith said: "The Yali Railway must not be built successfully, otherwise it will be a great harm to our interests. Therefore, we hope that you and the Mining Alliance can prevent President Hernando and East Africa from reaching this cooperation."

Reyes is one of the US-supported spokesmen in Bolivia, and Mobil Oil is his important partner. The two are almost tied together.

However, regarding the Yali Railway, Reyes said to Smith with some embarrassment: "I personally am definitely opposed to the construction of this railway, but this matter is not easy to handle. It is not just a problem for President Hernando. There are also many people in the Mining Alliance who support Hernando's move."

“Although President Hernando himself is unpopular, the mining alliance also hopes to do business with East Africa to make more money.”

Bolivia must not be a monolithic entity, because throughout the 19th century and early 20th century, there was never any peace in Bolivia and the politics was extremely turbulent.

But on the issue of the Asuncion-Lima railway, the vast majority of Bolivians support it.

Because now Bolivia has become a landlocked country, and for a landlocked country, the development of land transportation is of self-evident importance to their economic development.

If the Asuncion-Lima railway is successfully built, it will obviously not be a bad thing for landlocked Bolivia, not to mention that the railway can connect the Atlantic and Pacific Oceans at the same time.

The Mining Alliance is engaged in the mineral export business, so if the Asuncion-Lima railway can be successfully built, they can also gain huge profits from it.

As for the attitude of the Americans? Many Bolivians really don't care. After all, Bolivia has become a landlocked country. It is difficult for the United States to threaten Bolivia unless their troops can go through Peru or Chile.

However, even if the Americans have this idea, Peru and Chile probably will not agree.

As for the fact that Americans are now the largest buyers of Bolivian minerals, aren’t there people from East Africa coming? Obviously, if the United States and East Africa compete, it will be very beneficial for Bolivian mineral owners to negotiate prices.

Therefore, even though Reyes is a member of the Mining Alliance, he is actually very supportive of the Asuncion-Lima railway.

But, unfortunately, he is too deeply tied to the Americans, who have a lot of dirty information about him, so he can only go the same way as the Americans until the end.

However, although he could only stand with the Americans, he was very clear about one thing: it was impossible for him to destroy the Asuncion-Lima railway advocated by East Africa in Bolivia relying solely on his own strength.

Reyes said: "Now, even if I stand up and oppose it, it is highly likely that this matter will not pass and will have no effect on President Hernando."

"Because the vast majority of Bolivians, including most of the mining union, support the construction of this railway. If you want to stop this from happening, there is only one way, and that is to overthrow the current democratically elected government."

Today, public opinion in Bolivia supports the construction of the Asuncion-Lima railway. If the United States wants to go against public opinion, it can only let warlords and dictators come to power. However, is the United States willing to pay such a price? Not to mention that East Africa is not a small country. If the United States takes action, East Africa will inevitably take counterattacks.

(End of this chapter)