African Entrepreneurship Records 2

Chapter 1574 World Economy
With the early commencement of statistical work, by October 1934, the economic development of East Africa during the Seventh Five-Year Plan period was roughly revealed, and the economic development of East Africa in recent years can be summarized as relatively stable.

There was neither large-scale growth nor significant contraction. International trade was affected by the economic crisis and shrank considerably, but domestic investment and consumption largely offset the adverse effects of foreign trade.

Looking at the achievements during the Seventh Five-Year Plan period, Ernst was satisfied. In his words, under the current circumstances, stabilizing the economy was a victory. As for rapid growth like that of the Soviet Union, it was unrealistic for East Africa's national conditions.

Prior to this, Crown Prince Frederick had briefed the world's other countries on their development. After all, East Africa's participation in global competition necessitates information about potential rivals, which would be more beneficial for its strategic planning.

Crown Prince Frederick said: "In 1934, the world economy has improved significantly compared to the previous year, and all major world powers, except France, have shown signs of recovery or growth."

France is unique because it was affected by the Great Depression later than other countries. Proportionally, France suffered less damage. For example, its unemployment rate was significantly lower than that of Germany, the United States, and the United Kingdom, and its industrial decline was also lower than those countries.

However, France's seemingly small loss actually reflects its current predicament: compared to other major world powers, France is increasingly falling behind.

In the industrial sector, France faces constraints from factors such as raw material costs, population, and policies, resulting in high development costs and, one could even say, a lack of capacity despite its willingness.

Of these, the one that had the greatest impact on France was its population. France already had a relatively small population among the great powers. Apart from Spain, France ranked second to last in terms of population, even having several million fewer people than the British mainland.

Moreover, France lost a large number of its labor force after World War I, and coupled with a low birth rate, France's population structure is also showing signs of aging.

The direct impact is that France now has to bring in immigrants to solve its labor shortage problem. Factories, mines, and even the French army are all absorbing foreign immigrants to fill the manpower gap.

Crown Prince Frederick said, "The speed of France's decline is visible to the naked eye, especially as the French economy becomes less and less competitive in the world."

"Solving the problem is also difficult, and it depends on the French government's resolve, such as changing immigration policy and relaxing immigration restrictions. Of course, given the frequent fluctuations in French politics today, it will be very difficult to do so."

France's relaxation of its immigration policy clearly requires immense courage, as immigration is a double-edged sword, and many French people find it difficult to accept psychologically. This necessitates a strong and stable government to overcome public opposition and implement the policy, but given the current rate of government turnover in France, it is unlikely that such a government will emerge.

Now, France changes its leaders almost every few months, and a few months is a very short time for a country, especially for major national strategies.

As seen in France, the drawbacks of the current capitalist democratic system will inevitably need to be improved.

Of course, France is not worth paying too much attention to in East Africa right now. At least among the major competitors in the international community, France has already fallen behind. The countries that Crown Prince Frederick will mention next are the key countries that East Africa should focus on.

"Apart from France, Austria-Hungary is not included in our consideration for the time being due to the war, while the economies of the United States, Germany and the United Kingdom are now recovering."

"After President Roosevelt took office, his economic policies have begun to show results. The unemployment rate in the United States has decreased slightly, and industrial production has begun to recover, although it is not obvious yet."

Roosevelt's New Deal was obviously not an instant success; it needed time to take effect. The end of 1934 was precisely the point at which Roosevelt's policies began to take effect.

"In Germany, although the political situation has been quite turbulent recently, the German economy has improved since Adolf came to power, especially in the military industry and large projects. Germany has a high level of execution."

Through several bloody purges and elimination of dissidents, Adolf had seized absolute power in Germany, and Wilhelm II had become nothing more than a figurehead. As for those who had tried to control Adolf as a puppet, he had used various means to either turn them into supporters, strip them of their rights, or even persecute them.

In Germany, Adolf's autocratic rule naturally led to a higher level of efficiency in the German government, which itself was a relatively efficient country in the international community during the 20th century.

Therefore, Adolf implemented economic measures faster than the United States, which resulted in Germany recovering earlier than the United States. In fact, Adolf and Roosevelt came to power around the same time.

"Then there is Britain. Britain's response to the economy has been much better than France's. This year, British industry has been the fastest growing in Western Europe."

"Britain's steel production even recovered to levels close to those of 1929, and in 1933 its total steel production once again exceeded ten million tons, ranking fifth in the world."

Previously, Britain had long ranked fourth in the world in steel production, after East Africa, the United States, and Germany. However, after the Soviet Union completed its first Five-Year Plan in 1932, Britain relinquished its fourth-place position.

As for the top three countries, East Africa's total steel production in 1933 was over 47 million tons, firmly holding the top spot in the world. The United States, which ranked second, only produced about 25 million tons. Germany's steel production in 1933 was close to 17 million tons, which was the period in recent decades when the gap between Germany and the United States in steel production was the smallest. This shows the severe decline in the United States caused by the Great Depression.

This is also related to the political differences between the United States and Germany. In this timeline, Germany is not as severely weakened as in the previous life, and its political system has not changed much because of World War I.

Since the late 19th century, Germany has always been a country that values ​​national power. Therefore, after the outbreak of the economic crisis, Germany's intervention in the economy, while not as extensive as that of the Soviet Union or East African countries, far exceeded that of traditional capitalist democracies such as the United States, Britain, and France.

"The rebound of British industry was mainly due to the reform of the British monetary system, which led to the devaluation of the pound and improved the competitiveness of exported industrial products. At the same time, Britain and its colonies implemented imperial preferences through treaties such as the Treaty of Ottawa, reducing tariffs on the colonies to the mainland and raising tariffs on other countries to protect their domestic industries."

This is the advantage of having many colonies. Among the great powers, only Britain and France had the resources to do so. Although East Africa also had many colonies, the quantity and quality of East African colonies were not on the same level as those of Britain and France.

At the same time, East Africa's own size was too large, which resulted in a weak ability of its colonies to support the East African economy. If East Africa were merely a country like the Netherlands, it would undoubtedly have lived comfortably with the help of these colonies. However, East Africa's population and industrial scale were far beyond what its colonies could support. The colonies' main contribution to East Africa focused on the supply of raw materials rather than meeting market consumption needs. In 1934, the combined population of all the East African colonies was even smaller than that of the neighboring Abyssinian Empire, which had a population of just over ten million.

In terms of overseas export markets, in 1934, the most important regions for East Africa, in order of importance, were Europe, South America, the Far East, and then Southeast Asia and the Middle East.

Europe remains East Africa's largest overseas market. Even though it has shrunk in recent years, the European market is still much larger than a horse. Meanwhile, South America has replaced the Far East as East Africa's second largest overseas market.

East African businesses are spread throughout almost all of South America, and South America has a population of 80 million, with a relatively high cost of living. At least for now, the standard of living in South American countries is much higher than that in the Far East and India.

As for the Far East market, although trade between East Africa and the Far East Empire has been on the rise, competition has also become more intense. Within the Far East Empire, the United States, Britain, France, Germany, Austria, Japan, and others have all established a presence. Recently, the Japanese invasion of its northeast has hindered the development of trade between East Africa and the Far East Empire.

Of course, the main reason was that Ernst was unwilling to interfere in the affairs of the Far Eastern Empire; otherwise, East Africa could have expanded its market in the Far Eastern Empire just like the United States.

It is worth mentioning that, due to the floods of 1931 and the impact of the Japanese invasion, East Africa suffered a significant decline in its traditional market in the Far Eastern Empire, namely the Huaihai region.

In recent years, East Africa's main strategic deployment in the Far East has been in its northwest and southwest regions, but these two regions are far less developed than the coastal areas of the Far Eastern empires. Even the Huaihai region, after suffering widespread damage from the 1931 floods, is still economically stronger than its inland areas.

The withdrawal of East Africa from the Huaihai region was primarily a strategic retreat, influenced by both the previous Northern Expedition and the risks of future wars within the Far Eastern Empire.

After all, the Huaihai region has been a frequent site of wars and disasters for the Far Eastern empires throughout history.

The withdrawal from East Africa has also triggered some chain reactions. For example, the representatives of interests supported by East Africa in the Huaihai region have also moved outwards, or even settled in Southeast Asia. After all, their past development was closely related to the support from East Africa. When the East Africans leave, some people will naturally follow.

On the one hand, the withdrawal from East Africa would shake their sense of security. On the other hand, they distrust the Nanjing government, which is backed by Britain and the United States, and which, if not hostile, is certainly hostile towards East Africa. Not to mention the Nanjing government's own corruption and incompetence, which is enough to deter many people.

This has led to a significant increase in the number of merchants from the Huaihai region in Xi'an and Chongqing in recent years, which is actually a result of the change in East African policy.

After the Far East market, the Southeast Asian region came next. The fact that Southeast Asia became the fourth largest market in East Africa is mainly due to East Africa's emphasis on the Southeast Asian region.

The South Pacific market involved not only East African colonies, but also non-East African colony regions such as Southeast Asia and the East Indies.

Take the East Indies, for example. The Dutch obviously couldn't prevent East Africa from entering this market. After all, they were afraid that East Africa would take a hard line if they didn't give up some of the profits. In addition, there were neutral countries like Siam and French Indochina colonies. Although East Africa couldn't monopolize the market, it could still share some of the profits.

Finally, there is the Middle East and Central Asia market. This market has been the second largest in East Africa's expansion in the last decade or so, after South America. Although the trade volume is not as large as that of Southeast Asia, East Africa started its expansion into Southeast Asia much earlier than the Middle East and Central Asia.

Moreover, East Africa's focus on the Middle East and Central Asia markets has been increasing rapidly in recent years. The Indian Ocean region has always been a priority for East Africa, and it is easier to open up markets in Southeast Asia, the Middle East, and Central Asia, unlike South Asia and Australia, which were firmly established by the British.

In South Asia and Australia, East African investment and exports are restricted and hindered by the UK; however, apart from the UK, East Africa has a stronger economic influence on the region than other countries.

Crown Prince Frederick said: "The Empire's overseas markets are being built step by step, which can be described as a supplement to the north. We have difficulty making a difference in Europe, the Far East, and North America, but an economic system with the Empire at its core is quietly taking shape in the Southern Hemisphere."

The layout and expansion of East Africa's overseas markets are clearly influenced by East Africa's geographical location. It is evident that East Africa's market scope in the Southern Hemisphere is growing larger and its interest chains are becoming more numerous. South of the equator, East Africa has virtually no competitors.

The only other major powers with influence in the Southern Hemisphere are Britain and the United States. However, Britain is clearly weak in its competition with East Africa, and this will become increasingly apparent over time until one day Britain completely withdraws.

The United States will also find it difficult to gain an advantage in its competition with East Africa, especially after East Africa has fully established the trade system it built in South America, which will further strengthen the relationship between South America and East Africa.

All the United States can do is undermine and antagonize cooperation among most countries in East Africa and South America. Unless East Africa itself declines, these petty tricks by the United States cannot overthrow East Africa's dominant position in South America.

Crown Prince Frederick concluded by saying, "East Africa's development has been generally progressive relative to other powers, but ultimately, we need to pay attention to the Soviet Union and Japan."

"On the Soviet side, the Second Five-Year Plan is progressing steadily. After its completion, the Soviet Union is expected to firmly establish itself as the world's fourth largest industrial power and threaten Germany's position as the third largest industrial power. If the Soviet Union can continue to develop peacefully and at the current growth rate, its industry will inevitably surpass Germany's within ten years."

"After all, the Soviet Union's current industrial development model is the same one that East Africa has followed in the past. Given the Soviet Union's population and size, it wouldn't be too difficult for it to surpass a medium-sized country like Germany."

"As for Japan, its economy is similar to Germany's now, focusing on developing the military industry. This can stimulate the economy in the short term, but it will inevitably have to rely on war to transfer the accumulated contradictions and problems, which is unsustainable."

"Japan's industrial scale is far behind that of other major powers, and may not even be stronger than that of Italy. However, the strength of the Japanese navy should not be ignored, especially given its geographical location, which makes it even more difficult to deal with its navy."

(End of this chapter)