African Entrepreneurship Records 2

Chapter 1186: Southern Hemisphere Economic System

Debt-financed development was the basis of East Africa’s Third Five-Year Plan and the New Economic Policy, while the European War was one of the important ways to resolve the debt problem.

The main reason for the emergence of this pattern is that East Africa’s first two five-year plans greatly consumed East Africa’s original capital accumulation in the previous thirty years.

In the first thirty years of East Africa, a large amount of social wealth was accumulated by exploiting its own cheap labor force and taking advantage of Africa's land and mineral resources. After all, colonization itself is a small investment with a big investment. If the factor of military expenditure required for colonization is excluded, it is almost a profitable business.

It’s just that East Africa, like the United States, turned its colonies into lands that had existed “since ancient times.” For the development of East Africa, the interests of nearly 40 million black indigenous people were sacrificed.

However, colonization cannot solve all problems. After all, East Africa cannot just be plundered, but must also be responsible for construction issues. The agricultural reclamation, large-scale infrastructure, and the construction of a national defense industrial system in East Africa in the 19th century all required huge expenditures.

So East Africa in the 19th century looked glamorous, but it did not make much money. This is also the main reason why the scale of East Africa’s first two five-year plans after entering the 20th century was far less large than that of the Soviet Union in the past.

The development model of the 19th century could not have been maintained at all. After all, by the beginning of the 20th century, the black slaves in East Africa had been almost exhausted.

Looking back at the economic development process of East Africa in the first fifty years, it can be roughly summarized into four stages in chronological order: the land expansion period (colonial expansion), the era of large-scale immigration, the era of agricultural construction, and the era of industrial system construction.

By 1914, East Africa had basically completed the construction of its own industrial system, forming a huge industrial system covering the three major industrial fields of defense industry, heavy industry and light industry.

Ernst said: "Our country has made brilliant achievements in the past fifty years, but this has also led to a new bottleneck in our development. If we can successfully overcome the European war, then our country will undoubtedly go a step further and become one of the makers of the future international order. Otherwise, it may stagnate and repeat the passive situation of Germany today."

East Africa is indeed prosperous today, but it lacks the foundation and corresponding international influence. This is also the dilemma faced by the United States after World War I in the past.

After the end of World War I in the previous life, the US economy was so dazzling, but in the post-war conference, Britain and France were still able to control the United States. It can be said that at that time, the United States' international status and its economic strength were completely mismatched.

Today, East Africa has become the world's largest industrial country, so as a late-developing country, it is bound to confront the two old empires of Britain and France after the war.

Therefore, East Africa is not completely worry-free. If a late-developing country cannot make further progress, it will be extremely dangerous even if it has developed smoothly in the early stages.

For example, Germany in 1914 and the Soviet Union in 1991 were stuck at the last step. The former chose war as a last-ditch effort, while the latter simply gave up and chose death.

There were more such cases in the 21st century. Many countries that did not cross the "middle-income trap" had bad results. Their economic miracles ended up in a mess, and they could only continue to serve as leeks harvested under the Western discourse.

This is exactly what Ernst is worried about. He went on to say: "When the European war is over, the victors will have time and energy to counterattack latecomers like us, thereby continuing to maintain their position as the top predator in the international order."

"So taking advantage of the gap in the European war to build an economic moat with the local area as the core is the main direction of our country's economy, military, politics and diplomacy at this stage."

"The so-called economic moat is the international trade system centered on East Africa, which will further consolidate my country's advantages in Southeast Asia and South America and serve as the two wings supporting my country's future development."

This is actually equivalent to East Africa regarding many countries and regions in the Southern Hemisphere as its sphere of influence. After all, geographically speaking, East Africa's territory and economy are still mainly in the Southern Hemisphere.

With East Africa as the core, it has an inherent maritime transportation advantage over South America and the eastern coast of the Indian Ocean and the South Pacific countries, making it easy for East Africa to dominate the economy of the Southern Hemisphere. After thinking for a while, Ernst said bluntly: "In the entire Southern Hemisphere, and some areas of the Northern Hemisphere near the equator, we in East Africa are the most powerful economic entity."

"So it is our destiny to establish a southern hemisphere economic system with East Africa as the core, so that we can transform from a regional power to a world power in the true sense."

The Southern Hemisphere economic system sounds very grand. After all, it involves three continents: Africa, South America and Oceania. From this point of view alone, it occupies a small half of the world's territory.

The introduction of this concept actually means East Africa or Ernst’s initial idea of ​​reshaping the international order, similar to the United States’ “Monroe Doctrine” or the “Belt and Road Initiative” of the Far East Empire in the 21st century. This is a step that any world power must take.

Going further, there are ideological concepts, such as the United States’ “democratic system” and “Cold War mentality”, the Soviet Union’s “communism”, and the Far East Empire’s “community of shared future for mankind”.

As for the latter, Ernst did not have any idea at the moment. After all, for an imperial country like East Africa to engage in ideological competition would be like King Wei of Qi in Tian Ji's horse race, with no chance of winning.

On the contrary, the vague ideological proposal of the Far Eastern Empire of “community of shared destiny” is worthy of reference for East Africa in the future.

This can be regarded as Ernst's self-knowledge. No one knows the patchwork imperialism in East Africa better than Ernst. In fact, this is very similar to the Far Eastern Empire in the previous life. After all, after the combination of planning and market, the Far Eastern Empire has become a hodgepodge and cannot please both sides.

But in the final analysis, it is still a competition of strength. If you are strong, other countries will naturally move closer to you, and black can be blown into white. Once East Africa's industry is thoroughly developed and reaches a leading level, there will naturally be people willing to bring their own dog food and brag that East Africa's industrial waste gas is "sweet" in the future.

As Ernst put forward these concepts, East African government officials were excited.

Today, world hegemony is certainly a delusion, but hegemony in the southern hemisphere is much easier. By controlling the economy, trade, culture, politics, and military of the southern hemisphere, East Africa can build a huge regional market.

In this way, even if East Africa is excluded from the world market by some countries one day, it can still live a comfortable life relying on this small system. After all, the lower limit of this southern hemisphere economic system is much higher than the previous Warsaw Pact system.

The economy between the Warsaw Pact countries relies on land transportation, and the cost is far lower than that of the southern hemisphere economic system. After all, East Africa is a two-ocean country. If overseas territories are included, it is a three-ocean country, and the advantages of sea transportation are obvious.

The size of the southern hemisphere economic system described by Ernst is obviously not comparable to that of the Warsaw Pact, and its upper limit is much higher. After all, the land area of ​​Brazil alone exceeds 8 million square kilometers, and other countries such as Australia, Argentina, and Peru are not small countries in Europe.

Of course, the economic strength of these regions today cannot be compared with that of European countries, but this is also beneficial to East African operations.

If they did not lag behind, East Africa would have no chance of bringing these countries together, and if they developed, they would instead compete for the regional voice and become East Africa's rivals.

Therefore, for the countries in the southern hemisphere, East Africa should learn from the United States and use coercion and inducement to forcibly drag them onto East Africa’s economic chariot.

Compared with other simple and brutal colonists, the United States in the early 20th century was the "light of civilization", but in fact, the United States was just a less black crow among the group of crows of the great powers.

(End of this chapter)