Chapter 1574 World Economy

With the early development of statistical work, the economic development of East Africa during the Seventh Five-Year Plan was roughly shown in October 1934. In summary, the economic development of East Africa in recent years has been relatively stable.

There was neither large-scale growth nor large-scale shrinkage. The international trade sector was affected by the economic crisis and shrunk significantly, but domestic investment and consumption offset a large part of the adverse factors brought about by foreign trade.

Looking at the report card during the Seventh Five-Year Plan period, Ernst was satisfied. In his words, in the current environment, being able to stabilize the economy is a victory. As for rapid growth like the Soviet Union, it is unrealistic for East Africa's national conditions.

Prior to this, Crown Prince Friedrich first reported on the development of other countries in the world. After all, if East Africa wants to participate in global competition, it must also know the news of potential competitors, which will be more conducive to East Africa's strategic layout.

Crown Prince Friedrich said: "In 1934, the world economy has improved significantly compared to the previous year. The major countries in the world, except France, have shown signs of recovery or upward trend."

The reason why France is special is that it was affected by the Great Depression later than other countries. In terms of proportion, the losses suffered by France are relatively small. For example, the unemployment rate in France is significantly lower than that of Germany, the United States, and the United Kingdom, and the industrial decline is also lower than that of the above countries.

However, although France's losses seem small, it just reflects France's current predicament, that is, compared with other major powers in the world, France is increasingly unable to keep up with the pace.

In the industrial field, France is restricted by factors such as raw material costs, population, and policies, and its development costs are relatively high. It can even be said that it is powerless.

The biggest impact on France should be its population. France's population is relatively small among the great powers. Except for Spain, France's population ranks second to last among the great powers, even millions less than that of the United Kingdom.

Moreover, after World War I, France lost a large number of its labor force, and coupled with the low fertility rate, France's population structure also shows aging characteristics.

The direct impact is that France now has to introduce immigrants to solve the labor shortage problem, including factories, mines and even the French army, all absorbing foreign immigrants to solve the manpower gap.

Crown Prince Friedrich said: "The speed of France's decline is visible to the naked eye, especially the increasingly weak competitiveness of the French economy in the world."

"Solving the problem is also very difficult. It requires the courage of the French government, such as changing immigration policies and relaxing immigration restrictions. Of course, given the frequent fluctuations in French politics today, this is difficult to achieve."

It obviously takes great courage to relax France's immigration policy. After all, immigration is a double-edged sword, and many French people find it difficult to accept this psychologically. At this time, a strong and stable government is needed to implement it against all odds. However, at the current speed of government changes in France, it is difficult for such a government to emerge.

Now, the French leader changes almost every few months, and for a country, it is basically difficult to promote and implement some major strategies that require national execution in a few months.

We can also see from France that the shortcomings of the current capitalist democratic system will inevitably need to be improved in the future.

Of course, for East Africa today, France is not worthy of too much attention. At least among the major competitors in the international community, France has fallen behind. The countries that Crown Prince Friedrich will mention next are the focus of East Africa's attention.

"Apart from France, the Austro-Hungarian Empire is not currently in our consideration due to the war, while the economies of the United States, Germany, and the United Kingdom are all recovering."

"After President Roosevelt came to power, his economic policies have shown results. The unemployment rate in the United States has dropped slightly, and industrial production has begun to recover, but it is not yet obvious."

Roosevelt's New Deal obviously did not produce immediate results. It took time to develop, and the end of 1934 was exactly the time when Roosevelt's policies took effect.

"As for Germany, although German politics has been quite bloody recently, the German economy has improved since Adolf came to power, especially in the military industry and major projects. Germany has a strong execution capability."

Through several bloody purges and the elimination of dissidents, Adolf had monopolized power in Germany, and William II had become a complete mascot. As for those who had tried to control Adolf like puppets, he used various means to either turn them into supporters, or lose their rights, or even persecute them.

In Germany, Adolf was the sole decision-maker, so the efficiency of the German government was naturally much higher. Germany itself was a relatively efficient country in the international community in the 20th century.

Therefore, Adolf's economic measures were implemented faster than those of the United States, which was reflected in the fact that Germany recovered earlier than the United States. In fact, the time when Adolf and Roosevelt came to power was not much different.

"Then there's the UK. The UK's response to the economy is much better than France's. This year, the UK's industry is arguably the fastest growing in Western Europe."

“Britain’s steel production even recovered to a level close to that of 1929. In 1933, its total steel production once again exceeded 10 million tons, ranking fifth in the world.”

Previously, Britain's steel production had long ranked fourth in the world, second only to East Africa, the United States and Germany. However, after the Soviet Union completed its first five-year plan in 1932, Britain gave up the fourth place.

As for the top three countries, the total steel production of East Africa in 1933 was more than 47 million tons, ranking first in the world, while the United States, which ranked second, had only about 25 million tons. As for Germany, its steel production in 1933 was close to 17 million tons, which was also the period with the smallest gap in steel production between Germany and the United States in recent decades. This shows the serious recession of the United States due to the Great Depression.

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

Since the late 19th century, Germany has always been a country that attaches great importance to national power. Therefore, after the outbreak of the economic crisis, although Germany's intervention in the economy is not as great as that of the Soviet Union and East African countries, it is far greater than that of traditional capitalist democracies such as the United States, Britain, and France.

"The key to the rebound of British industry was the reform of the British monetary system, which led to the devaluation of the British pound and increased the competitiveness of its industrial exports. At the same time, Britain and its colonies implemented the Imperial Preference System through the Ottawa Treaty and other treaties, lowering tariffs on the colonies and raising tariffs on other countries to protect their own industries."

This is the benefit of having many colonies. Among the great powers, only Britain and France have the conditions to do this. Although East Africa also has many colonies, the number and quality of East African colonies are not on the same level as Britain and France.

At the same time, East Africa itself is too large, which leads to the weak ability of East African colonies to feed back to the East African economy. If East Africa were just a country like the Netherlands, then there is no doubt that East Africa would live comfortably relying on these colonies, but no matter the population size or industrial scale, East Africa cannot be supported by the colonies in hand.

The main contribution of the colonies to East Africa focused on the supply of raw materials rather than market consumption demand. In 1934, the combined population of all the colonies in East Africa was not even as large as the population of the Abyssinian Empire next to East Africa, and the population of the Abyssinian Empire was only more than 10 million.

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

Europe is still East Africa's largest overseas market. Even though it has shrunk in recent years, the size of the European market is still bigger than a lean camel. The Far East has been replaced by South America to become East Africa's second largest overseas market.

East Africa's business covers almost the entire South America, and the population of South America is as high as 80 million, and the consumption level is not low. At least now the living standards of South American countries are much better than those in the Far East and India.

When it comes to the Far East market, although East Africa's trade with the Far Eastern Empire has been on an upward trend, the competition has also become more intense. Within the Far Eastern Empire, the United States, Britain, France, Germany, Austria, Japan... all have layouts. Recently, its northeast was occupied by Japan, which has hindered the development of trade between East Africa and the Far Eastern Empire.

Of course, the more important reason is that Ernst is unwilling to interfere in the affairs of the Far Eastern Empire. Otherwise, East Africa can expand its market in the Far Eastern Empire just like the United States.

It is worth mentioning that due to the flood in 1931 and the impact of Japanese invasion, East Africa's traditional market in the Far East Empire, namely the Huaihai region, shrank seriously.

In recent years, East Africa's main 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 East Empire. Even the Huaihai region, after suffering a large-scale flood in 1931, has a much stronger economy than its inland areas.

East Africa's withdrawal from the Huaihai area was mainly a strategic withdrawal. On the one hand, it was affected by the previous Northern Expedition, and on the other hand, it was due to the consideration of the risk of future war in the Far East Empire.

After all, from ancient times to the present, the Huaihai region has been a region where wars and disasters have frequently occurred in the Far East Empire.

The withdrawal of East Africa also triggered some chain reactions. For example, the interest representatives supported by East Africa in the Huaihai region also moved outward and even settled in Southeast Asia. After all, their past development was closely related to the support of East Africa. When the East Africans left, naturally some people would follow.

On the one hand, if East Africa withdraws, their sense of security will be shaken. On the other hand, they do not trust the Nanjing government, which is backed by Britain and the United States. They are not hostile to East Africa, but they also dislike each other. Not to mention the corruption and incompetence of the Nanjing government itself, which is enough to deter many people.

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

After the Far East market, it is the turn of the Nanyang region. The fact that Nanyang has become the fourth largest market in East Africa is mainly due to the attention that East Africa pays to the Nanyang region.

The Nanyang market not only involves the colonies in East Africa, but also includes non-East African colonial regions such as Southeast Asia and the East Indies.

For example, in the East Indies, the Dutch obviously could not prevent East Africa from entering this market. After all, if they did not give up some of their interests, they themselves were afraid that East Africa would take tough measures. In addition, there were neutral countries such as Siam and France's Indochina colony. Although East Africa could not monopolize the market, it could share some of the profits.

Finally, there is the Middle East and Central Asian market. This market has expanded in East Africa in the past decade or so, second only to South America. Although the scale of trade is not as large as that of Southeast Asia, East Africa started to layout Southeast Asia much earlier than the Middle East and Central Asia.

Moreover, East Africa's attention to the Middle East and Central Asian markets has been increasing rapidly in recent years. The Indian Ocean coastal area has always been a priority for East Africa, and it is easier to open up the South Pacific, the Middle East and Central Asia, unlike South Asia and Australia which are controlled by the United Kingdom.

In South Asia and Australia, East African investment and exports are restricted and hindered by the UK. However, apart from the UK, East Africa's economic influence on the above regions is stronger than that of other countries.

Crown Prince Friedrich said, "The Empire's overseas markets are being built step by step. It can be generally described as a situation where we lose in the north and make up for it in the south. While we have difficulty developing in Europe, the Far East, and North America, an economic system centered on the Empire is quietly taking shape in the southern hemisphere."

The layout and expansion of East Africa's overseas markets are obviously affected by East Africa's geographical location. It is obvious that East Africa's market scope in the southern hemisphere is getting larger and larger, and there are more and more interest chains. South of the equator, East Africa has no competitors at all.

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

It will be difficult for the United States to gain an advantage in the competition with East Africa, especially after the trade system built by East Africa in South America is thoroughly established, the relationship between South America and East Africa will be further strengthened.

What the United States can do is only to destroy and disgust the cooperation between East Africa and most countries in South America. Unless East Africa itself declines, these small tricks of the United States will not be able to overturn East Africa's dominant position in South America.

Crown Prince Friedrich concluded by saying, "East Africa's development is basically progressing compared to other powers, and ultimately, the two countries that require attention are the Soviet Union and Japan."

"As for the Soviet Union, the Second Five-Year Plan is progressing steadily. Upon its completion, it is expected that the Soviet Union will secure its position as the world's fourth largest industrial nation and threaten Germany's position as the third largest. If the Soviet Union can continue to develop peacefully and maintain its current growth rate, its industry will undoubtedly surpass Germany's within ten years."

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

"As for Japan, its economy, like Germany's today, focuses on developing its military industry. This can stimulate the economy in the short term, but it will inevitably resort to war to divert accumulated contradictions and problems, which is unsustainable."

"Japan's industrial scale is far behind that of other powers, and may not even be stronger than Italy. However, Japan's naval strength cannot be ignored, especially considering its geographical location. It is even more difficult to deal with its navy."

(End of this chapter)