Chapter 1552: Trade Situation in 1933
This is East Africa's "reputation" in the international community. Apart from Britain and France, East Africa has been the country with the most powerful overseas colonial expansion in the past fifty years. If East Africa itself is included, even Britain and France would have to admit defeat.
After all, the East African mainland was also obtained through colonial expansion, but now it has completed complete assimilation and effective governance, becoming a country and is no longer simply regarded as a colony, which is similar to the United States.
Zhang Jin was not aware of Governor Badoglio's inner criticism of East Africa, but at least on the surface, Governor Badoglio's attitude was very satisfactory.
"Your Excellency, the North African Railway will be a very important transportation route for both East Africa and Italy in the future. Therefore, it is very important to maintain security along the railway."
"East Africa is an important market in the world, and Italy has access to the European market. The future of the North African railway may not be as bright as that of the Suez Canal and the Strait of Gibraltar, but it is still a new option, especially for our two countries."
In terms of countries alone, East Africa was actually the world's largest market in 1933, followed by the United States, Britain, Germany...
East Africa itself is at the forefront of the world in terms of land, population, agriculture, industry and economic scale. The gap between the United States and East Africa is quite large, but it is also unique compared with other countries.
Then there is the United Kingdom, which has a strong financial foundation and the largest number and scale of overseas colonies in the world. It controls and dominates the direction of many overseas markets, such as India, Canada, Australia, etc., and indirectly affects countless market areas.
Germany's main influence is in Europe, and it is currently the most powerful country in Europe. Although the Soviet Union's economy is larger, there is a clear gap in quality between it and Germany.
If measured by region, Europe still has the advantage. Britain controls important keys to global trade, such as the Strait of Malacca, the Suez Canal, Cape Town, Gibraltar and other important trade routes. Germany is strong in the industrial field and has world-class technology. France has vast overseas colonies and its size cannot be underestimated. The Soviet Union's domestic industry and economic scale are second only to East Africa and the United States.
Europe also includes the Austro-Hungarian Empire, Italy, Belgium, the Netherlands, Spain and other countries. It is not an exaggeration to say that these countries have their own strengths, such as the Austro-Hungarian Empire's military industry, Italy's light industry, Belgium's steel, the Netherlands' finance and re-export trade, and Spain's influence.
If someone could integrate Europe's resources, Europe would indeed be "invincible", but the reality is that Europe is divided into three major political interest groups.
These three groups are headed by Britain, Germany and the Soviet Union respectively. Outside the three groups, the relations among European countries are also complicated and full of contradictions.
Outside of Europe, there are two major markets, North America and Africa. It remains to be seen which of the two is stronger. In North America, there are two industrial powers, the United States and Canada, and Mexico's strength is also average.
As for Africa, the only thing that can be mentioned is East Africa. Below East Africa, Egypt, South Africa and the Abyssinian Empire are in the same tier, followed by the Italian Red Sea colonies and the Kingdom of South Germany.
Therefore, when Zhang Jin said that East Africa is an important market in the world, he was referring to the whole of Europe.
He said: "Europe is the world's most developed economy, and while East Africa's economy may not be comparable to Europe's, it still ranks among the top three. Trade between these two important international markets represents enormous economic benefits."
"The total annual trade volume between Europe and East Africa is around 50 billion Rhine guilders. Before the economic crisis, it even exceeded 100 billion Rhine guilders."
Governor Badoglio had no intuitive understanding of East African currencies, so when converted to Italian lira, 100 billion Rhine guilders was equivalent to about 300 billion lira. This was a staggering figure, considering that Italy's current GDP did not even reach 90 billion lira.
That is to say, before the economic crisis, the annual trade volume between East Africa and Europe was equivalent to the total value created by Italy in three years.
And this is just the trade between East Africa and Europe. You should know that the Far East, the Indian Ocean coast, and South America are all important markets for East Africa, and the scale of trade between East Africa and North American countries is also not small.
Of course, among these markets, Europe and the United States have stronger consumption power, but after the outbreak of the economic crisis, the United States began to use tariff barriers and trade protectionism, which caused the scale of trade between the two countries to shrink rapidly.
The situation in Europe was not good either. In 1932, trade between East Africa and Europe was almost halved compared to before the economic crisis, falling by almost 50%.
Fortunately, East Africa has been mentally prepared for a long time, and the scale of trade with South America and the Middle East has grown rapidly recently. Europe's trade with the Soviet Union has also increased.
However, the Soviet Union as a buyer is not a long-term high-quality customer. Now that the Soviet Union's Second Five-Year Plan has officially begun, the pattern of the Soviet Union importing large quantities of foreign industrial products will undergo a major turning point in the future.
An important goal of the Soviet Union’s second five-year plan was to achieve localization in the industrial sector and replace imported industrial products with domestic industrial goods.
Of course, this does not mean that trade between East Africa and the Soviet Union will end. In the field of non-industrial products, especially agriculture and minerals, there will not be much change in the trade between the two countries.
Food is a basic need, and the Soviet Union happened to be weak in this area. Even if the Soviet Union established an independent pesticide and fertilizer production system and began to roll out agricultural mechanization, it could not change this.
This was demonstrated by the surge in Soviet grain imports from East Africa as early as 1932.
East Africa's grain exports to the Soviet Union also had various favorable factors. First, East Africa was the world's largest grain producer. Second, East Africa was the major grain exporter closest to the Soviet Union.
Taking 1932 as an example, the world's major grain exporting countries were East Africa, the United States, Argentina, Canada, Australia, Brazil, etc.
Most of these countries are located in the Americas, followed by Oceania. That is, apart from the United States and Canada, East Africa is the closest to the Soviet Union.
However, the United States and Canada's grain exports are primarily supplied to Western Europe, namely countries such as Britain, France and Germany. In the Central and Eastern European market, East Africa is more competitive. The grain trade between East Africa and the Soviet Union can even be traced back to the Tsarist era.
Relying on the Suez Canal and the Black Sea route, goods from East Africa can be transported directly to the Black Sea coast in the southwest of the Soviet Union, and then open up markets inland through the Soviet rivers.
The Dnieper River and the Don River eventually flow into the Black Sea. Through the Don River, the Volga River can be transported directly to the Caspian Sea and connect to the Ural River.
From this we can perhaps understand why the Soviet Union and Tsarist Russia have always been obsessed with Constantinople (Istanbul).
The three most important rivers of the Soviet Union, the Volga, the Dnieper and the Don, all connect to the Black Sea.
The Volga River is its "mother river" and the most important inland waterway in the entire Soviet Union, connecting major cities such as Moscow, Kazan, and Stalingrad (Volgograd). In the past, its inland freight volume accounted for more than half of Russia's total.
The Dnieper River passes through Ukraine and extends deep into the Belarusian region. These regions are of great significance to the Soviet economy. The Dnieper Hydropower Station, completed in 1932, is even more famous and has become an important symbol and symbol of the Soviet Union's industrialization process.
Finally, there is the Don River. After the Volga-Don Canal is completed in the future, the five seas in the European part of the Soviet Union, namely the White Sea, the Baltic Sea, the Caspian Sea, the Black Sea, and the Sea of Azov will all be connected and navigable.
Although the Don River cannot do this at present, it is not far from the Volga River and the cost of cargo transshipment is not high.
In short, because of the direction of the Soviet Union's rivers and its population and economic distribution, importing East African grain could benefit more areas of the Soviet Union.
Although the distance from East Africa to the Black Sea coast is farther than the distance from Canada and the United States to St. Petersburg, St. Petersburg lacks the river system of the southwestern Soviet Union to support the expansion of trade.
And this is only in terms of food exports. East Africa's real advantage lies in the field of cash crops. Because the Soviet Union is at a high latitude and has fewer types of cash crops, its complementarity with East African agriculture is actually higher.
From tea and coffee to tropical fruits and vegetables, tobacco, rubber, etc., East African agricultural products have an unparalleled market share in the Soviet Union.
In terms of agriculture, the Soviet Union imported a lot from East Africa, and in turn, East Africa had a greater demand for Soviet minerals. This was also an important basis for the "barter" trade between the two countries.
At least, at this stage, the scale of trade between East Africa and the Soviet Union is still on an upward trend, and trade with the Soviet Union is also an important means for East Africa to cope with the world economic crisis.
Governor Badoglio was not clear about the trade situation in East Africa, but he knew that East Africa was an important trading partner for Italy, especially in the areas of food and industrial products, and the scale of trade between the two countries was not small.
At present, if the Libyan Railway is built, the trade between East Africa and Italy will be further expanded. After all, the Libyan Railway passes through the Italian-occupied area.
So, Governor Badoglio asked a question: "Mr. Zhang Jin, do you think the Libyan Railway can replace the Suez Canal?"
In Badoglio's view, it would be great if the Suez Canal was blocked after the Libyan Railway was built, so that the role of the Libyan Railway could be maximized.
Zhang Jin rejected his idea: "Your Excellency, Governor, don't overthink it. It's hard to say whether the North African Railway can even recoup its costs in the future. As for surpassing or replacing the Suez Canal, that's completely nonsense. Unless the entire Red Sea disappears and the middle becomes land, that's about right."
The distance from the Gulf of Aden to the Red Sea is about 2,000 kilometers, and the North African Railway from the East African border to the Mediterranean coast is about the same distance. The North African Railway loses because it is not a water transport.
Assuming that the Gulf of Aden and the Red Sea become land, it would indeed be more cost-effective to take the North African railway, but this is impossible. It is more realistic to block the Suez Canal than to fill up the Gulf of Aden and the Red Sea.
Zhang Jin said, "Of course, you don't have to be discouraged. I think the North African Railway has a very good future. After all, there are only two sea routes from Europe to East Africa, and the North African Railway is the third."
"The Sahara Desert's harsh environment has become a key competitive advantage for North African railways, as there are no other competitors in the entire Sahara region."
Even in the past, the North African Railway was the only railway line that crossed the Sahara Desert.
In the past, the most likely railway to cross the Sahara Desert was the railway project between Egypt and Sudan, but it has also been in the planning stage for a long time.
This means that whether there will be a second railway across the Sahara Desert in the future depends entirely on East Africa's ideas.
Zhang Jin said: "Once the North African Railway is completed, it will directly become a major artery for trade between the northern interior of East Africa and Europe, involving my country's East Azande Province, West Azande Province, Nile Province, Bavaria Province, North Great Lakes Province, and Hesse Province."
There are six East African provinces directly connected to the North African Railway, but its sphere of influence is actually larger. Countries like the Kingdom of South Germany and the Darfur colony will also benefit from it.
Although the several provinces mentioned by Zhang Jin are not very prominent in the whole of East Africa, it is not an exaggeration to describe them as the "economic depression of East Africa".
However, that depends on who you compare them to. These six provinces are indeed "poor students" economically in East Africa, but on a global scale, each one of them is a relatively strong competitor. This is similar to a poor student in an excellent class, whose grades might rank in the upper middle class in an ordinary class.
Take the Nile Province as an example. Its economy and industry are not much worse than those of neighboring Egypt. However, Egypt is a country, and the lower limit of these six inland provinces in northern East Africa has been raised by East Africa.
However, East Africa is still quite concerned about the economic development of the northern region, and the North African Railway is also one of the important strategic projects related to its economic development.
The biggest disadvantage of the northern part of East Africa is actually the lack of access to the sea. Although the western and eastern parts of the northern region are coastal, the quality and quantity are very poor. For example, the east is directly connected to the Somali Desert, and is separated by the East African Plateau and the Ethiopian Plateau. Land transportation has not developed smoothly, so in the past, a large amount of goods from the north passed through Mombasa in the south, and the northern railway also extended through the East African Plateau to the northern inland.
The western coastal areas of Cameroon and Gabon have good port conditions, but they are also separated from the northern inland provinces by rainforests and mountains.
At this time, the emergence of the North African Railway is a new opportunity for the northern inland provinces. After the completion of the North African Railway, the northern inland provinces of East Africa can directly carry out trade activities with North Africa and Europe.
And open up the connection between the East African railway network and North Africa. Although the East African railway network is huge, it mainly serves the Indian Ocean and Atlantic Ocean trade. As for the Mediterranean, it is not that the East African railway department does not want to, but it is too difficult.
With the construction of the North African Railway, the East African Railway has realized the connection between the Indian Ocean, the Atlantic Ocean and the Mediterranean Sea, further enhancing East Africa's position in world trade.
Of course, Zhang Jin certainly cannot just talk about the benefits to East Africa, after all, the North African railway passes through the Italian-controlled area.
He promised Governor Badoglio, "After the railway opens, the benefits to the Port of Benghazi will be enormous. Even a small amount of trade between East Africa and Europe will be enough to make your country rich."
"Furthermore, this railway can directly strengthen your country's control over Libya's inland areas and promote the economic development along the route."
"Italy will also become one of the transit points for trade between East Africa and Europe in the future, so maintaining the construction of this railway requires the joint efforts of both countries."
(End of this chapter)
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