African Entrepreneurship Records 2

Chapter 1052 Moving forward together
Rhine City.

Iringa can think of the market demand, and other cities in East Africa, especially some cities like Iringa that do not have obvious advantages, can also think of it.

The exploration of economic development by these cities and regions will also be gathered in the reports to Rhineland, the political center of East Africa, to provide the East African central government with more experience and data so that it can adjust the national economy at any time.

Ernst: "In recent years, cities including Maputo and Iringa have been actively promoting the transformation of industrial development strategies to adapt to the times. This is of great reference significance for my country's small and medium-sized cities and non-resource-based cities. Therefore, breaking conventional thinking is very important for urban development. We must actively absorb these opinions that are conducive to economic development and make corresponding arrangements."

The formulation of Iringa City's development strategy also reflects, to a certain extent, the flexibility of East Africa's economic development.

Although East Africa is a planned economy country, it is not a comprehensive plan, especially in the agricultural sector. Although East Africa began to develop heavy industry with all its strength after the 1990s, this does not mean that East Africa neglects agriculture and light industry.

By the end of the First Five-Year Plan, agriculture was one of the main sources of income for East African countries. Before the 1990s, the development of agriculture was East Africa's basic national policy and the real foundation of the country.

After all, in order to gain more population, agriculture must be the basic guarantee, so East Africa's grain production has been rising year by year, and East Africa's population reached an astonishing 80 million at the beginning of the century.

As of 1905, the proportion of East Africa's total agricultural output value was still as high as over %, which was still a long way from industrialization. Therefore, East Africa is still an agricultural country. Of course, compared with ordinary agricultural countries, it is a little stronger and can be considered a semi-industrial country.

Therefore, in order to ensure the stability of the country's main source of income and cope with the pressure of population growth in East Africa, East Africa will not underestimate the development of the agricultural sector.

As for light industry, East Africa's most significant shortcoming, it is not entirely caused by East Africa's economic system. Rather, East Africa has had an inherent deficiency in light industry since the colonial era. Therefore, although East Africa's light industry has developed relatively slowly among the national industries, it has made the greatest progress.

Therefore, the planned economy of East Africa is fundamentally different from that of the Soviet Union. In the first two five-year plans of the Soviet Union, investment in heavy industry accounted for more than 80% of total investment, while East Africa's investment in heavy industry was less than 40%. Together with light industry, East Africa's industrial investment was only more than 50%.

This is also the main reason why the first two five-year plans in East Africa were significantly less effective than those in the Soviet Union. However, the development of East Africa’s industrial structure will obviously not be as top-heavy as that of the Soviet Union.

Ernst went on to say, "During the Second Five-Year Plan, there were differences in the development of my country's light and heavy industries. The central and large state-owned enterprises were active in heavy industry investment, while local enterprises were good at light industry development. The typical feature was that national investment was concentrated in enterprises above a certain scale, while local governments were keen on establishing small and medium-sized enterprises, mainly focusing on light industry or basic processing industry."

"The agricultural sector is more flexible because it is not conducive to planned implementation and is easily affected by various natural disasters. The conditions for agricultural development in different regions are also different, so agricultural output in different regions is not stable. Agricultural management tends to be guided rather than hard-line instructions."

"In addition, there are service industries, including medical care, education, finance, catering, transportation and other special industries, which occupy an important position in our country's national construction, but are also the most easily overlooked in our country and industry."

The tertiary industry, also known as the service industry, is currently difficult to compete with the industry. However, East Africa's investment in the tertiary industry needs to be analyzed specifically. For example, medical care, education and transportation have developed rapidly in recent years, while finance, catering, entertainment, etc. have developed relatively slowly.

Although East Africa's industrial development is relatively fast, it is not particularly outstanding when compared with other countries and regions, especially when compared with the United States and Germany. In terms of agriculture and services, East Africa has its own advantages and disadvantages compared with other countries.

Of course, during the Second Five-Year Plan, in addition to normal industries, East Africa's defense industry expenditures grew rapidly, especially after the completion of the battleship Perseverance. In the next ten years, East Africa's maritime military power will enter a stage of rapid development. According to the plan, after this round of maritime power expansion, East Africa will further consolidate its position as the first military power along the Indian Ocean coast, and form an absolute advantage over all Indian Ocean countries and regions, including India.

Ernst: "It can be said that my country's economic development model is not available anywhere else in the world. So it is completely understandable that there are twists and turns in economic development and difficulties. Even industrial countries in Europe and the United States will face difficulties such as economic crises. So it is not surprising that we encounter various problems in economic development."

"The key is to solve these problems, rather than cover them up or ignore them. During economic booms, many contradictions and problems will be obscured by the booming economy, and this is what we need to pay attention to."

"Although the national economy is a chessboard, the same principles may not apply when it comes to local economic development. After all, each region has its own characteristics. What we need to do is to reconcile the differences between the regional and national economies, so that the national economy can develop more efficiently."

Ernst's words mean that he supports Iringa City's experiment in regional economic development. If the results are good, he will of course further promote Iringa City's development experience.

In fact, this experimental economic development model is not an isolated case in East Africa. It was also the case in the development of Maputo city before.

Today, Maputo has become the fastest-growing city in the Hanseatic Province, and its economic size is rapidly approaching that of the provincial capital, the Port of New Hamburg.

Of course, the economic development of Maputo is not as representative as that of Iringa, because Maputo has better conditions than Iringa. Maputo is an important coastal city in East Africa and is the intersection of the Mozambique Plain and southern East Africa, which Iringa does not have.

"Under the planned economic model, not all industries are suitable for planning. So in order to avoid economic rigidity, we must fully grant local governments some autonomy in development. Of course, some red line issues must still be coordinated under the leadership of the central government to achieve the goal of focusing on large and letting go of small in economic development and promote the vitality of the country's economic development."

In fact, Ernst's original purpose of implementing a planned economy in East Africa was to accelerate East Africa's industry, rather than to regard the planned economy as a "panacea" for economic development. This is also related to East Africa's national conditions.

East Africa has greatly improved the basic quality of its people through compulsory education, and at the same time has cultivated a large number of talents adapted to industrial development. Only on this basis can it cautiously carry out the planned economy.

In the past, many African countries actually belonged to the Soviet system. However, when they copied the Soviet experience, they were in chaos. Not only were they unable to achieve their own industrialization, they also messed up the national economy. To be honest, in the past, it was impossible for a region like Africa with such a low level of per capita prenatal education to carry out normal economic activities.

Asking them to govern the country according to the tribal governance model is already the limit for many African countries. Leaders who can maintain overall social stability are considered "wise rulers."

Ernst went on to say: "While developing our industry, we cannot ignore the development of other industries. Although the status of industry in the national economy is increasing day by day, a normal country is related to all aspects. This is also the main reason why we actively adjusted the comprehensive development of the national industry during the Second Five-Year Plan. East Africa wants to become a world power. Although developing industry is the key, developing industry alone will also lead to malnutrition."

"Therefore, in order to achieve prosperity in East Africa's economic development, we must diversify in the future and achieve the simultaneous development of various industries. Of course, our capabilities are limited at this stage, so it is understandable that we focus on the development of a certain field, but as the economy develops, we must always make up for those original shortcomings."

(End of this chapter)