African Entrepreneurship Records 2

Chapter 1531 Negotiation
The East African government had an idea, and the Ministry of Foreign Affairs quickly took action, communicating with Chile and Argentina. The Argentine military government rejected the East African proposal without hesitation. As a result, East Africa shifted its focus to Chile.

At this time, Chile's political situation was unstable. Affected by the economic crisis, Chile's agricultural and mineral exports decreased significantly. In particular, the withdrawal of British and American capital caused the export price of nitrate, an important source of income for Chile, to be almost halved.

Saltpeter exports account for nearly 40% of Chile's foreign exchange earnings and more than half of the government's revenue. During Chile's economic heyday, Chilean saltpeter even held 80% of the world market share.

During the Great Depression of 1929, many of Chile's major buyers of nitrates, Britain and the United States, went bankrupt or reduced production due to the economic crisis. This was one of the important reasons for the decline in Chile's nitrate exports.

Meanwhile, East Africa and Germany have significantly reduced their imports due to breakthroughs in the field of synthetic nitrates, which is one of the main reasons for the sharp drop in Chilean nitrate exports.

Besides nitrates, Chile's second largest mineral resource is copper. In 1931, Chile was the world's third largest copper producer, after East Africa and the United States.

Chilean copper mines are mainly controlled by American capital. Although East Africa has tried to expand cooperation with Chile in related fields in recent years, the results have not been significant.

The reasons are quite simple. One is the obstruction from Britain and the United States. The historical ties between Britain and the United States and Chile are much longer than those between East Africa. For example, in Chile's nitrate mines, Britain previously dominated, while the United States dominated the copper mining sector. Both countries jointly excluded East African capital from entering the market.

Another reason is that Chile is a Pacific coastal country, which gives the United States a greater advantage in regional competition than East Africa. Although Chile can trade with East Africa through the Strait of Magellan, the Strait of Magellan has poor navigation capabilities, and the area it passes through is not the core economic region of Chile, and the population is very sparse.

In addition, Chile itself is also very shrewd, and its diplomacy is more flexible than Argentina's, basically avoiding offending the three major powers of Britain, the United States, and East Africa. However, this has also led to the fact that trade between East Africa and Chile has not been as active as expected in recent years.

This can be seen from the construction of the Asunción-Lima railway, which ended in Peru rather than Chile, which is richer in mineral resources.

Although Chile has good relations with East Africa, it remains wary, especially of infrastructure projects like railways that involve regional balance and have military strategic significance.

Previously, Chile did indeed have the resources to reject East Africa. If Argentina was the richest country in South America before the economic crisis, then Chile was the second richest.

Argentina, the richest country in the world, is arrogant and boastful, with strained relations with Britain, the United States, and East Africa, and aspires to be a regional leader. Chile, the second richest country, is also ambitious, though lacking Argentina's aspirations.

Santiago, the capital of Chile.

The current president of Chile is Montero, who only took office at the end of last year. However, he was not born at a good time, as 1931 was a period when the global economic crisis was worsening.

Currently, Chile's unemployment rate is as high as 30 percent, even exceeding that of powerful industrialized countries like the United States and Germany. Riots are frequent in the northern mining areas, protesting against the current Chilean government, which has led to the Chilean Labor Party gaining considerable momentum.

Inside the presidential palace, a haggard-looking President Montero mustered his strength and warmly greeted East African Ambassador Hugh with a smile.

"Ambassador Hugh, it's been a while. You're still so energetic, unlike me, who's been bogged down by all sorts of problems. You've been making a fool of our country these past few days," President Montero said with a touch of self-deprecation.

The East African Embassy in Chile is located in Santiago, the Chilean capital, which has recently been plagued by various violent incidents, worker strikes, and urban conflicts, turning the entire city into a chaotic metropolis. This is why Montero made such a sarcastic remark about the situation in his country.

Ambassador Hughes and other East African diplomats were naturally well aware of the chaos in Santiago and throughout Chile.

Instead of criticizing the current situation in Chile, he comforted President Montero, saying, "Your Excellency, you don't need to blame yourself too much. It's just that your election was somewhat ill-timed."

"Since the economic crisis, even many industrial and economic powerhouses have not fared much better. For example, the United States, Britain, and Germany have been plagued by various chaotic situations and violent incidents."

"Therefore, this is due to the overall environment, not your personal responsibility. Moreover, you have only been in office for a few months, and even if you wanted to adjust the domestic economy, there would not be enough time."

"The collapse of Chile's economy is largely the responsibility of Chile's previous presidents."

Although Hugh's statement was not entirely accurate, President Montero found it very pleasing.

He said, "Ambassador Hugh, you understand my predicament better. After all, the economic crisis is an international event, not caused by Chile's own economy. The United States is the main driver of this round of global economic crisis, and Chile has been affected by the global economic downturn."

"While I may appear successful now, I am actually just a scapegoat. The previous president, Ibanez, simply walked away, leaving me with a mess."

Ibanez was a political strongman and a former military man who seized power in a coup in 1927. During his presidency, he attempted to modernize Chile and improve governance through authoritarian rule. He established a police force, suppressed the opposition, controlled Congress, and cracked down on the media and labor unions.

Of course, he was not without achievements and ambitions. For example, he attempted to promote the nationalization of Chile's mineral resources in order to gain autonomy over nitrate and copper mines, and to promote the construction of highways and ports.

At the same time, Ibanez was not fond of imperialism and treated the United States, Britain, and East Africa—the three main imperialist countries that Chile dealt with—on an equal footing. He also tried to reduce the influence of these three countries in Chile and maintain their neutrality.

In conclusion, Ibanez was no mediocre man, but he came to power through a coup, and his rule was naturally resented by the Chilean people. Moreover, he was unlucky; shortly after seizing power, he encountered the global economic crisis, which rendered some of his economic policies ineffective due to the fiscal crisis.

As previously mentioned, Chile's main source of fiscal revenue is mining. However, due to the economic crisis, Chile's fiscal revenue has decreased significantly due to reduced exports. Furthermore, the infrastructure projects promoted by Ibanez have been forced to default due to the fiscal crisis.

So in late 1931, under pressure from domestic opposition, the Chilean president resigned and went into exile in Argentina, where Montero was later successfully elected.

Compared to Ibanez, Montero's election was much more legitimate. However, precisely because of Ibanez's coup and subsequent poor economic performance, Montero's election promises were basically the opposite of Ibanez's.

For example, Ibanez was a dictator, so Montero naturally supported democracy and freedom. Ibanez governed the country with harsh measures, while Montero chose laissez-faire. Ibanez pursued infrastructure and transportation construction, while Montero canceled these projects on the grounds of wasting public money and reduced government spending... President Montero's approach cannot be said to be wrong, but it is definitely inappropriate. After all, if his approach had been effective, the US economy wouldn't be in its current state. Compared to Chile, the US is more free and democratic, more permissive of businesses and merchants, and more firmly opposed to government intervention.

In his previous life, Montero's rule was very short-lived. In just a few months, this "democratically elected" president would be ousted from office.

East Africa doesn't care about Montero's fate; it only wants to expedite further negotiations, so Hughes only says nice things.

He said to President Montero, "That's right, Your Excellency President Montero. Chile's current economic situation has nothing to do with you. Ibanez has gone to Argentina, but he has indeed left you with a lot of messes."

"However, I believe that with your efforts, Chile's economy should improve, but this will take time before your policies take effect."

Of course, in reality, Hughes actually favors former President Ibanez more. Given the current situation in Chile, where the lower classes are on the verge of exploding, a strongman like Ibanez is more likely to implement some quick-acting policies and temporarily suppress the domestic political turmoil.

Unfortunately, although Ibanez was a dictator, he wasn't actually overly enthusiastic about power and knew when to step back; otherwise, he wouldn't have resigned voluntarily. Furthermore, Ibanez wasn't particularly adept at the economic sphere, given his military background.

This can be seen from his previous life. In his previous life, Ibanez served two terms as President of Chile. His first term was a failure, just like in this timeline. In his previous life, he became President of Chile again in 1952. As for the effectiveness of his governance, opinions in Chile were polarized.

Some regard him as a national hero, a reformer, and a defender of the rights of the lower classes, while others say he was a dictator, a failure in economic management, and relied on personal charisma rather than the system. In short, Ibanez's life was very dramatic, and he was capable, but his talents were somewhat limited.

As for Montero, his personal abilities are quite mediocre. To put it bluntly, the economic policies he's currently implementing are basically things any normal person in his position could do. For example, reducing government spending and increasing taxes on the public.

His social relief program also basically encourages government officials and businessmen to do some charitable activities and provide some free food and supplies. This approach may have some effect, but it is very limited.

Montero dared not implement structural reforms and even intensified the exploitation of the lower classes, which explains why he was overthrown by the Chilean Labor Party in his previous life.

However, compared to the difficult-to-deal-with Ibanez, or the accomplished Alexandre, East Africa clearly prefers foreign politicians who bully the weak and fear the strong.

After a long conversation, Hughes finally steered the conversation to the main topic: "President Montero, I am here on behalf of the East African government to discuss military cooperation with your country."

"We in East Africa hope to lease a piece of land in the temperate zone of southern Chile, namely Tierra del Fuego, or the surrounding area, to help the East African army simulate a high-latitude combat environment."

Although he had a pleasant conversation with Ambassador Hughes, President Montero's expression changed when the topic turned to such a sensitive subject.

He asked somewhat cautiously, "Why is your country so insistent on high-latitude warfare? After all, East Africa is a tropical country; there shouldn't be any need for high-latitude warfare there!"

Ambassador Hugh said, “Your Excellency, your words are somewhat biased. Precisely because East Africa is a tropical country, we in East Africa place even greater emphasis on high-latitude training for our troops.”

"Because East Africa is different from other tropical countries. As President Montero is aware, East Africa can be said to be the only tropical regional power in the world."

"It is also the only global power in the low-latitude region, and the so-called global power obviously cannot be limited to regions, but rather to most parts of the world."

"East Africa's adversaries are those powerful nations in the mid-to-high latitudes, who are better adapted to combat environments with lower temperatures. As for us in East Africa, we naturally need to conduct targeted training in order to better safeguard the empire's global interests."

“If we had high-latitude territories on our own soil, we wouldn’t have taken the liberty of discussing this matter with your country.”

Hugh's reasoning was reasonable, but Montero did not dare to agree easily. He said, "Your country has also said that this is very presumptuous. If other countries had said such a thing, I probably would have kicked them out long ago."

“But East Africa is Chile’s friend, which is why I can discuss this with you calmly. But you should also understand my difficulties, after all, this matter involves Chile’s national security and cannot be ignored.”

“No sovereign state in the world would allow foreign troops to enter its territory, especially the large-scale one you are requesting.”

In response, Ambassador Hugh said, “President Montero, you must trust our sincerity in East Africa. We have no ambitions toward Chile. If you are concerned about national security, we have solutions that can put your mind at ease.”

Hearing Hugh's confident tone, Montero became interested and asked, "What solutions does your country have?"

Hughes said, “We just want the defense forces to adapt to the high-latitude environment, so the two countries can build training grounds in the south under the guise of military cooperation and exchange.”

"At the same time, troops and personnel from East Africa who come to train can do not carry ammunition. Your country can send people to supervise them, so you don't have to worry that we will pose a threat to your country's security."

This is indeed a good idea. As long as Chile sets up a checkpoint at the entrance to the Strait of Magellan, it can prevent East Africa from transporting ammunition and eliminate the possibility of East Africa starting a war.

However, there are still certain risks involved, so President Montero is still hesitant to agree rashly.

Therefore, Hughes could only continue to persuade him, saying, "This is also a good thing for your country. For example, when we conduct training in your country, some of the personnel's consumption can boost the regional economy and alleviate your country's current economic difficulties."

"In addition, we can also provide some economic assistance to your country. For example, we can offer you preferential treatment on the issue of copper exports. Currently, only East Africa can provide you with economic support. Whether you can seize this opportunity is entirely up to your own choice. If you do not have this idea, we will not force you."

(End of this chapter)