African Entrepreneurship Records 2

Chapter 1517 Cheka Deployment
After reprimanding his subordinates, Joseph calmed down a bit. He sat back down at his desk, picked up his pipe, put it in his mouth, and took a deep drag.

"We cannot allow imperialist countries to laugh at the Soviet Union, especially the puppet government in western Ukraine. Once they discover the problems in eastern Ukraine, it may expose our weakness to Germany and Austria-Hungary."

"Before the completion of the Soviet defense industry, we had no ability to compete with these imperialist countries in the field of weaponry."

"Even though Germany and Austria-Hungary are having a hard time due to the economic crisis, we have to admit the huge industrial gap between the Soviet Union and them."

The pressure faced by the Soviet Union in this timeline is much greater than in the previous one, because Germany is unprecedentedly powerful in this timeline, and the Austro-Hungarian Empire, which has not yet disintegrated, is also a force to be reckoned with.

Most importantly, these two top-ranking imperialist powers in the world were located near the Soviet Union, so the Soviet Union faced unprecedented defense pressure.

The shortcomings in industry and military will take time to make up for. Before that, the Soviet Union must pay more attention to internal stability and unity. Even if fiscal revenue is reduced this time, Joseph cannot allow major problems to occur in eastern Ukraine.

This action would actually have a certain impact on Soviet industrialization, as the reduction in fiscal revenue would inevitably delay the completion of the First Five-Year Plan.

Joseph frowned, exhaled a puff of smoke, and said to Rosengolds, head of the Trade Committee, "This grain transaction must be kept strictly confidential. It would be best to minimize the vigilance of countries like Britain, the United States, and East Africa, while also paying attention to trade with relatively neutral grain exporting countries like Argentina and Brazil."

"Using the guise of feed and industrial raw materials to conceal the purpose of this trade, while also increasing efforts to export grain and importing more grain from regions with lower grain prices, even if the quality and taste are inferior."

"Take East African rice for example. Although our domestic population may not be used to the taste, we can import it in large quantities as long as the price is right."

In East Africa, rice is cheaper than flour. This is partly because rice is a staple food in East Africa, and partly because rice yields per acre are generally higher than wheat yields.

Meanwhile, East Africa is a world leader in rice cultivation, being the only major rice-growing country in the world to have achieved mechanized farming. It also excels in rice paddy area, planting technology, irrigation facilities, pesticide and fertilizer usage, breeding and cultivation, and other aspects.

However, the international sales of East African rice have never been outstanding, mainly because the purchasing power of rice consumers in the international food market is relatively low.

Apart from East Africa, Japan has the best economy among the world's major rice-consuming countries. However, as is well known, the living standards of the Japanese people are among the lowest in the world's major powers.

Non-industrialized rice-growing countries, on the other hand, not only do not import rice, but they also hope to expand exports, even if their own people go hungry. The most typical example is India.

In summary, rice prices on the international market were slightly lower than wheat prices, giving the Soviet Union a price advantage when importing rice from East Africa.

Rice prices are slightly lower than wheat prices on the international market, but the situation is quite different in non-rice-producing countries. For example, in countries where wheat is the staple food, rice is more expensive due to its scarcity.

This was the case in the Soviet Union. In the crop procurement prices set by the Soviet government, the price of rice was higher than that of wheat. After all, only a very few regions in the Soviet Union could grow rice, as well as the northern part of the Far Eastern Empire. The price of rice was about one to two silver dollars higher per shi (a unit of dry measure) than that of wheat.

However, this situation did not prevent East African rice from fetching a low price on the international market. The Soviet government intended to use the price difference in grain trade between the two countries to address the food shortage problem.

The price difference in grain trade alone was clearly insufficient to make up for this shortfall, as East Africa's imports of Soviet wheat were also limited.

Joseph said, "We can make appropriate concessions to East Africa on other products, such as coal, bauxite, and copper."

East Africa was one of the buyers of Soviet coal. Coal from the eastern Ukrainian region, which is close to the Black Sea, was easily exported to some areas in northern East Africa via the Suez Canal.

As for bauxite, the Soviet Union also had large reserves. At present, the Soviet Union did not have an aluminum smelting industry. Therefore, before the New Economic Policy, East Africa had trade with the Soviet Union.

As for copper, it goes without saying that East Africa is a major consumer of copper ore, and its non-ferrous metals metallurgy has always been well-known in the international community.

However, the minerals Joseph mentioned, except for bauxite, clearly had limited appeal to East Africa, and were not particularly important to the Soviet Union at the time.

Just like with oil and gold, trade with East Africa was not a priority. The main buyers of Soviet oil were European countries, especially Germany and Italy. As for gold, the Soviet Union focused on trading with intermediate countries such as Switzerland to avoid international boycotts of Soviet gold.

In addition to these minerals, the Soviet Union's exports of manganese ore, iron ore, potash, and other minerals held an important position in the international market in 1930.

The Soviet Union was the world's second-largest exporter of manganese ore, after East Africa. Germany and the United States were both important buyers of Soviet manganese ore, thus creating competition between East Africa and the Soviet Union in manganese ore exports.

The Soviet Union mainly exported iron ore to Europe, especially to countries such as Germany, Austria-Hungary, France, and Italy, while East Africa mainly imported iron ore from India, Australia, Southeast Asia, and South America.

Potash is a key raw material for fertilizer production and is very popular in the international market, even in short supply. However, the Soviet Union also prioritized exporting it to Germany.

The reason is simple: Germany has limited arable land and a very high population density, resulting in significant food pressure. Therefore, Germany is willing to invest heavily in agriculture, even importing potash from the Soviet Union, a hostile country, at a higher price than other countries.

Joseph was very familiar with the Soviet Union's export situation, so he said to Rosengolz: "The Foreign Trade Committee should take into full account the national conditions of each country and the advantages of our own Soviet Union, and relax restrictions on agricultural and mineral exports this year to obtain as much foreign exchange as possible."

"Ideally, we can make up for the food shortage while ensuring funding for the country's industrial development."

Simply put, Joseph's idea was to raise more funds by selling off mineral resources at a low price, since the Soviet Union couldn't use these resources now, and it was better to use them for emergency purposes.

Ultimately, it was because the Soviet Union's level of industrialization was too low; otherwise, its exports should have been mainly industrial products, rather than agricultural and mineral products.

As for the claim that Soviet industrial products were of poor quality, that depends on the comparison. Compared to other industrialized nations, Soviet industry was indeed somewhat unbalanced.

In reality, even the Soviet Union's industry, which was characterized by its uneven development, was still stronger than that of Tsarist Russia and later Russia, especially its much-criticized light industry. After all, in the 21st century, after Russia returned to a market economy, its light industry remained very backward. Not only was its light industry inadequate, but it also gradually lost the advantages of the Soviet Union's heavy industry.

As far as Ernst knew from his previous life, many of Russia's domestically produced light industrial products were still stuck in the Soviet era, such as pots and pans, as well as chocolate, pickles, sausages, and so on.

The only competitive sector in the Russian market might be its food industry, but this is not because its food processing industry is strong, but rather because its products tend to be marketed based on "regional characteristics" and "sentiment."

However, the Soviet Union did not need to consider these factors at the time, and prioritizing the development of heavy industry was undoubtedly the right approach. Previously, Germany and East Africa had both chosen the path of industrialization by prioritizing heavy industry, and only later gradually made up for their shortcomings in light industry, thus becoming well-rounded industrial powers.

As for prioritizing the development of light industry, if the Soviet Union had done so, it would have been suicidal, because the Soviet Union's external situation was too severe, especially when facing a super industrial power like Germany in the early 20th century.

Therefore, the Soviet Union could only prioritize the development of heavy industry and defense industry to ensure the survival of the regime. Only by surviving could it talk about the future.

……

After giving a reprimand to the officials of the Ukrainian Foreign Trade Committee, Joseph dismissed them from his office.

He put down his pipe, picked up the telephone beside him, and ordered into the receiver, "Have Menzhinsky from the Security Bureau come to my office."

The Security Service is what East Africa calls the Cheka, and Menzhinsky is now the head of the Cheka and also Joseph's confidant.

Over the past year, Menzhinsky has diligently assisted Joseph in many important matters, including the repression of kulaks related to collective farms, the construction of the Gulag, the suppression and purge of domestic anti-government elements, and foreign affairs.

The Gulag played a vital role in the Soviet economy, and Menzhinsky was a key figure in promoting the current Soviet Gulag system.

During the implementation of collective farms, many "landlords" and "kulaks" were sent to various labor camps under the Gulag. By 1931, nearly one million kulaks in the entire Soviet Union had become labor prisoners for resisting collective farms.

This is one of the main sources of Gulag prisoners today. Of course, there are also many saboteurs, spies, and anti-government elements who are their fellow inmates.

The Gulag can actually be understood as the "General Administration of Labor Camps." It is different from the general prison system because the prisoners in the Gulag were required to contribute to the country's development.

For example, the White Sea-Baltic Sea Canal currently under construction in the Soviet Union, as well as the mines and towns in Siberia and Central Asia, and the construction of Soviet railways, all bear the marks of the labor camp prisoners managed by the Gulag.

From this perspective, the Soviet Union and the United States are indeed natural "enemies," as both countries are masters of their own unique approach to "prisoner economy."

The Soviet Union acquired a large labor force through the Gulag to build the country, while the prevalence of private prisons in the United States also contributed to the economy of American prison wardens. This corresponds precisely to the two components of "planning" and "market".

Soon after, Menzhinsky arrived at Joseph's office. He looked extremely weak and thin, which was indeed the case, as Menzhinsky suffered from health problems such as heart disease and neurasthenia.

However, this seemingly unremarkable, frail, and sickly man was a fearsome figure in the Soviet Union and a tough nut to crack for intelligence agencies in other countries.

“Comrade Joseph, what brings you here?” Menzhinsky asked.

At that moment, Joseph was reviewing documents on his desk when he heard Menzhinsky's words. He put his pen in the inkwell on the desk.

"Comrade Menzhinsky, there is indeed something I want to discuss with you today."

"As you probably know, the Soviet Union is currently facing some food problems, so we need to import a batch of grain from abroad to cope with this temporary crisis."

Menzinsky frowned and said, "Comrade Joseph, do you mean our Security Bureau should cooperate with this operation and help with the grain procurement?"

Joseph waved his hand and said, "The Trade Commission can handle the grain procurement. You can also send someone to keep an eye on it, but that's not why I called you here."

In reality, the Trade Commission's overseas offices are themselves subject to Cheka oversight, and some officials may even be Cheka agents.

For example, the head of the Soviet trade representative office in Rhine was Kantorovich, a Cheka official responsible for monitoring the behavior of personnel abroad and preventing defections.

Joseph continued, "The mission of the Trade Commission does require attention and cover, and the reason I called you here is to find an opportunity to draw the international community's attention to a hotspot."

"At the same time, it is also for the needs of our foreign affairs. And this time, the place where we made our move was none other than the Austro-Hungarian Empire, especially Austria and Bohemia, which are relatively industrialized regions of the Austro-Hungarian Empire."

"In comparison, as you know, this economic crisis has caused heavy losses to European and American countries, especially Austria-Hungary. The Habsburg family's rule in Austria was already unpopular, and coupled with Austria-Hungary's current economic difficulties, a large number of workers are unemployed, and there are also internal ethnic issues."

"Therefore, I believe now is the best time for us to take action against Austria-Hungary. If we do it properly, Austria-Hungary can become our ally. Even if we fail, we can still tear this imperialist country apart."

"Therefore, we have ample reason to take action against Austria-Hungary, support the Austrian Labour Party, and launch an armed revolution within Austria-Hungary. What do you think?"

Menzhinsky naturally wouldn't object, because he had long noticed the weakness of the Austro-Hungarian Empire. In Lenin's words, "The Austro-Hungarian Empire has replaced Russia and become the weakest link in the new imperialist chain."

This economic crisis in the Austro-Hungarian Empire brought the people of Austria-Hungary to the brink of discontent with Habsburg rule.

Therefore, Menzhinsky said firmly, "Comrade Joseph, I support your judgment. If we miss this window of opportunity, it will be much more difficult to mobilize the workers to seize power in the Austro-Hungarian Empire. The only pity is that I am afraid my health will not be able to direct this operation."

Joseph was naturally aware of Menzhinsky's physical condition, and he said, "Then who do you think should be sent to Austria-Hungary to carry out this mission?"

"Neither Comrade Yagoda nor I are suitable for carrying out missions abroad. I have higher hopes for either Lydonsky from Ukraine or Beria from the South Caucasus. Both of them have excellent execution and command abilities. However, they have been working domestically before, and their foreign affairs capabilities are questionable."

"Therefore, Artuzov, who is in charge of work in Western Europe, is more suitable. He is more familiar with the situation in various European countries and has rich experience."

Joseph nodded and said, "Then let's go with Artuzov!"

(End of this chapter)