Chapter 1428 Financial Industry
The fact is that it is impossible for any country's economy to maintain high-speed growth all the time, and East Africa is no exception. Therefore, during the Fifth Five-Year Plan, the East African government was able to basically achieve the goals it had set at the beginning. Sometimes this is enough for a government.
As for the final results of the 5th Five-Year Plan, in addition to the government's actions, it also depends on the development of internal and external situations. For a country, the government is undoubtedly the first responsible party, but this does not mean that it really takes care of everything.
Of course, such words cannot be said directly. For a government, it is also important to maintain its enthusiasm, and no country can avoid this.
Therefore, Ernst will not tell East African officials that they should accept reality, the economy is good now, and everyone should not blame themselves. The government should also maintain its enthusiasm.
Therefore, when summarizing the Fifth Five-Year Plan, Ernst emphasized: "Although the Fifth Five-Year Plan did not meet our best psychological expectations, this achievement is barely acceptable. We must realize that the development of the empire has now reached an important bottleneck period."
"Only by breaking through this bottleneck can the Empire's economy break through the limitations of a primary industrial country. This requires the Empire's industrialization level to be further improved, and the urbanization rate to eventually reach more than 60 percent."
"The current urbanization rate of the Empire is only around 40 percent, which means that there is still a lot of room for the Empire to grow. When the Empire's industrialization level reaches that of Germany today, coupled with the Empire's huge population and total size, East Africa will become the most important country in the world."
"However, each step forward will be more difficult, so the government should be more meticulous and in-depth in formulating economic plans, based on actual conditions, and not develop blindly."
"In general, the era of rough development of the imperial economy has ended, and the Fifth Five-Year Plan is in a transitional stage. We want to find new economic growth points, and the challenges we face are greater."
In addition to East Africa's own economic development, this challenge also includes fierce competition in the international arena. After all, if East Africa's economic scale and population size today want to continue to progress, it is no longer entirely East Africa's own business.
In the agricultural age, everyone basically lived their own life, but in the industrial age, the whole world eats from one pot, and this pot is the world market.
There is no doubt that given East Africa's size and population, this also means that East Africa has a bigger appetite, but the food in the pot is limited. If East Africa eats more, then other countries will eat less, unless someone adds new things to the pot to meet the needs of everyone.
In the past, East Africa’s significance to the world economy lies in this. After all, East Africa also represents an emerging market with a population of over 100 million. To a large extent, East Africa has played a more food role in the past.
For example, during the early economic development of East Africa, a large amount of East Africa’s mineral resources, labor, products, etc. were also involved in the international division of labor and cooperation. Therefore, in the early days, East Africa mainly played the role of food.
This is also the reason why Germany, the Austro-Hungarian Empire, and other countries in the world had good relations with East Africa from the last century to before World War I. East Africa as a whole was the losing party.
However, East Africa has now shed its identity as a food ingredient and is now sitting at the table of the international community as more of a diner. The conflicts and competition between East Africa and other countries, especially other powers, are becoming increasingly fierce.
To put it more simply, East Africa is no longer satisfied with serving as a raw material production base and low-end consumer market in the international community.
Ernst said: "In the formulation of the Sixth Five-Year Plan, we should also continue the spirit of the Fifth Five-Year Plan, increase investment in scientific and technological innovation, financial construction and other fields, and at the same time build an international emerging market with Rheinshield as the core."
“Continue to strengthen the Empire’s military presence, expand the Empire’s sphere of influence and external economic boundaries, and strengthen East Africa’s confidence in the face of international economic turmoil.”
“Everyone should note that since the outbreak of the European war, the world economic order originally dominated by Britain has been on the verge of collapse, but a new international financial center has not yet been formed.”
"We and the United States are the two most important competitors in this regard. However, compared with the United States, we lack development experience in the financial field."
From the mid-to-late 19th century to the early 20th century, since the United Kingdom established the gold standard system, London has been the world's most important financial center.
However, after the outbreak of World War I, a large amount of gold flowed out of Britain and even the whole of Europe, and the original gold standard system was on the verge of collapse.
At the same time, East Africa and the United States became major gold recipients during World War I, and correspondingly, the influence and importance of the Rhine guilder and the US dollar in the world increased significantly.
In the future, the new world financial center will most likely be created in cities in the two countries, with Mombasa in East Africa and New York in the United States.
There is no doubt that under current conditions, New York has far greater advantages than Mombasa. After all, New York's financial industry has always been relatively developed, while Mombasa's financial industry has only just started in recent years. Of course, Mombasa's advantages should not be underestimated.
Take its geographical location for example. Mombasa is located in the northeast of East Africa, on the coast of the Indian Ocean, directly facing the three continents of Asia, Africa and Oceania. At the same time, through the Suez Canal, it has a strong indirect influence on Europe.
This location advantage facilitates the development of Mombasa's international business, especially for the Indian Ocean coastal areas, Mombasa is undoubtedly the first choice.
Mombasa is close to the main trade route between Europe, Asia and Africa, which is the most important artery of world trade. Therefore, Mombasa can take advantage of the convenience of the main trade route between Europe, Asia and Africa to promote the development of the financial industry.
In terms of material, Mombasa has East Africa behind it and has the confidence to compete with New York. East Africa has become the new "world factory". Of course, the United States is not bad in this regard, and it and East Africa each have their own strengths, but East Africa as a whole has more advantages.
At the same time, East Africa has many overseas colonies, which is also conducive to consolidating the international status of the Rhine Shield. East Africa's colonies are spread across the Pacific Ocean, the Indian Ocean, Africa and other regions. They are like nodes, which is conducive to strengthening the Rhine Shield's position in international trade.
Take East Africa’s colonies in the South Seas for example. In East Africa’s own colonies, there must be East African banks, enterprises and other institutions.
This will help the Rhine Shield play a greater role in the regional economy and make it a "hard currency" in the Nanyang region.
Other countries and regions in Southeast Asia can go to the East African colonies nearby to conduct financial activities such as financing, loans, mortgages, and storage.
At the beginning of this century, when the German mark attempted to internationalize, a major difficulty it encountered was the lack of support from a colonial network.
The colonies in East Africa, regardless of their size and economic value, are at least numerous and relatively dispersed, which is also conducive to the flow of the Rhine Shield around the world.
Ernst emphasized: "The financial industry is the top layer of the international industrial structure and is also the most profitable industry. If the empire wants to become a world power, it must promote the construction of its own financial industry and expand its overseas influence."
"For the development of the Empire's financial industry, the most important thing is the construction and optimization of the financial system to enhance the international reputation of Rhine Shield."
"This is also the shortcoming of our country's financial industry. The empire's financial industry does not lack economic foundations and political and military guarantees."
In terms of economic foundation, East Africa is the world's factory, with its total industrial output value ranking first in the world. It can provide comprehensive and abundant industrial products to endorse the development of its own financial industry. At the same time, East Africa is one of the supply centers for important agricultural products such as grain, cotton, rubber, and tea. It holds the pricing and bargaining power of many agricultural products in the world. Finally, East Africa's mineral resources are rich and relatively comprehensive.
East Africa's industry, agriculture and mineral resources all occupy an important position in the international market, which undoubtedly makes the Rhine guilder one of the mainstream currencies in world trade settlements. The Rhine guilder, like the British pound, the US dollar and other currencies, can be used to buy most commodities.
Secondly, it is the trade network. The reason why the pound has become the world currency is inseparable from London's status as a global trade center and its hub value. If the world trade network is compared to the East African railway network, London is most likely equivalent to the central hub of the East African railway network, New Frankfurt.
Since the beginning of this century, East Africa has been committed to building a global trade network with East Africa as the core. In addition to overseas colonial expansion, there are also companies going overseas, cooperation between countries and regions, etc., all for this reason.
This is also one of the important reasons why Mombasa can become the financial center of East Africa. As a trade network center, the location of this central hub must be excellent, just like London and New York.
Mombasa is well-positioned to radiate to the four continents of Asia, Europe, Africa and Oceania, an advantage that London and New York do not have.
In other words, Mombasa is centered on the Indian Ocean, while London and New York are centered on the Atlantic Ocean, which means that the competition between London and New York is more intense.
And it's not just London and New York, Cabinda and Luanda in East Africa and Paris in France are also important competitors and players in the Atlantic region.
It has been said before that East Africa has always liked to backup its industrial layout on the east and west coasts, which has led to the fact that there are currently five cities in East Africa trying to become financial centers. In addition to the capital of East Africa, Rhine, there are two cities on each of the east and west coasts. The east coast is Mombasa and Dar es Salaam, and the west coast is Cabinda and Luanda.
The city of Rhine is easy to understand. After all, it is the political center of the empire, and it is mainly convenient for providing services to the country. Due to its inland location, it is not easy to conduct international business.
Therefore, in order to build a world financial center, the East African government has given the greatest support to Mombasa. This is because Mombasa has the best geographical location, while Dar es Salaam is relatively worse. However, this does not mean that Dar es Salaam has no possibility of surpassing Mombasa. After all, the East African government just supports Mombasa more.
As long as Mombasa does not have any problems, it is highly unlikely that it will be surpassed by Dar es Salaam. This involves the financial system issue mentioned by Ernst earlier. Currently, Mombasa's financial industry is far ahead of Dar es Salaam, so as long as Mombasa does not encounter major credit bankruptcy problems, it can rely on its first-mover advantage to suppress Dar es Salaam.
Then there are the two cities on the west coast, Cabinda and Luanda. They also have a certain competitive relationship. Correspondingly, the East African government supports Cabinda more.
The West Coast financial industry mainly serves the West Coast of Africa, South America, North America and Western Europe, but it is obvious that there is no possibility for Cabinda and Luanda to compete with London or New York.
The ceiling of the financial industry of these two cities is currently Paris. In addition to being the economic center of France, Paris can also radiate to France's vast colonies in the Atlantic, especially West Africa and North Africa.
Similarly, Cabinda and Luanda in East Africa are also targeting the financial business in South America. In the North Atlantic, these two cities have no chance of winning, but the opposite is true in the South Atlantic.
In general, Mombasa is more likely to become an important financial center in East Africa and the world in the future, which is also what the current East African government is vigorously promoting.
As for the development of the financial industry, political and military security, on the political level, East Africa is one of the most powerful countries in the world, with quite a few overseas colonies. It also controls numerous overseas assets, such as oil in Venezuela and the Middle East, various industries in Europe and the United States, investment in Latin America and the Far East, and so on.
Militarily, the East African Navy is strong. Its current actual naval size is second only to that of the United Kingdom, and it has an absolute advantage in the Indian Ocean and the South Atlantic. This also explains why East Africa chose Mombasa as the most important financial industry development center, because the security of Mombasa can be strongly guaranteed by the East African Navy.
In the Indian Ocean, no country can put pressure on the East African Navy. At the same time, the main trade routes between Europe, Asia and Africa converge in the Indian Ocean, which further strengthens the East African Navy's ability to maintain the safety of shipping routes and protect the security of its own trade and financial assets.
Therefore, in general, East Africa already has the hardware foundation for developing the financial industry. Correspondingly, the financial industry in East Africa itself developed late, has less experience, and is relatively lacking in systems. In addition, the East African government also prefers to intervene in the financial business market, which has also created uncertainty for the financial industry in East Africa.
Therefore, Ernst said: "The development of the imperial financial industry fundamentally lies in improving the credibility of the Rhine Shield and the financial services industry and establishing a fair market environment."
"This will make the Rhein Shield a mainstream choice in international trade in the future, which is also one of our important tasks during the Sixth Five-Year Plan."
“Correct the long-term absence of financial markets in East Africa, which has led to the relatively backward and unsound reality of the empire’s financial industry compared to European and American countries.”
“Therefore, we should strive to close the gap between us and northern countries in the financial field within the next decade.”
The so-called northern countries can be understood as what the Far Eastern empire often calls "Western countries". However, whether it is the United States or Europe, their corresponding locations are in the north of East Africa, so East Africa generally calls Europe and the United States northern countries.
This is a recognition of the strength of Europe and the United States. After all, the northern countries at the mouth of East Africa cannot be Egypt or the Abyssinian Empire.
(End of this chapter)
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