Empire Rising: Spain

If one blindly pursues steel production, producing steel products that can’t be sold will lead to an economic crisis.

While the rapid development of various industries is pleasing, we must also resolutely prevent the occurrence of economic crises and avoid the blind development of these industries, ultimately resulting in overcapacity problems.

With the rapid economic development of Spain, the ones who suffer are Portugal, which is forced into economic trade with Spain.

Since the railroad tracks of the two countries synchronized, economic trade between Spain and Portugal has become quite frequent. Spain is Portugal’s only land neighbor and the only land channel for Portugal to trade with other European countries.

Since the two countries conducted economic trade and synchronized their railroad tracks, the total trade volume between Spain and Portugal has seen a huge increase in a short time.

At the initial stage of the first five-year development plan, the total import and export trade volume between Spain and Portugal was less than 1 million Pessetas. The relationship between the two countries was incredibly tense, with almost no trade relations.

By the end of the second five-year development plan, the total import and export trade volume between Spain and Portugal had reached 46 million Pessetas, making Portugal an important trade partner for Spain.

Of course, only Spain benefits from such a trade relationship, while Portugal suffers more disadvantages than advantages.

Firstly, the influx of a large number of industrial products impacted Portugal’s industrial environment. Given that the effects of the economic crisis had not been completely eliminated, Portugal’s industry suffered quite severely.

Many small-scale factories directly went bankrupt during the economic crisis, which also led to a nearly one-quarter reduction in Portugal’s total industrial production.

The remaining factories seem utterly helpless in the face of Spanish industrial impact.

During the severe phase of the economic crisis, Spanish exports of industrial products to Portugal resulted in little success.

After all, many Portuguese workers lost their jobs back then, and they couldn’t afford to buy Spanish industrial products at all.

But when the impact of the economic crisis gradually diminished and these unemployed workers found work again, Spanish industrial exports began to show significant results.

Compared with Portuguese manufactured industrial products, Spanish manufactured industrial products not only are more comprehensive but also have the advantages of better quality and lower prices.

This is what Spanish manufactured industrial goods rely on to impact the Portuguese market. In this situation, the total import and export trade volume between Spain and Portugal keeps climbing, and the trade imbalance between the two keeps expanding.

To date, Portugal has to import goods worth more than 30 million Pessetas from Spain annually, which includes a wide range of industrial manufactured goods, even large items such as rails and trains.

There’s no other choice; Portugal needs to build railways. Under the premise of the collapse in production of Portuguese steel plants, Portugal can only purchase cheaper rails from its neighbor Spain, even reducing Portugal’s expenditure on railway construction.

The total value of goods Spain imports from Portugal is only around 16 million Pessetas, leading to a staggering trade deficit of 14 million Pessetas.

Companies engaged in import-export trade and bulk commodities trading are making huge profits, and most of those involved in these industries are Spanish nobles and capitalists.

Currently, the import and export trade between Spain and Portugal mainly relies on the railway connecting Badajoz to Portugal, which is also the only railway connection between Spain and Portugal.

From the map, it can be seen that Spain’s railway network is extensive, but only a small stretch of track in the lower left corner is connected to Portugal’s railway.

The Spanish Government has proposed connecting more railways to the Portuguese Government, but all such proposals have been ultimately rejected by the Portuguese Government.

The reason is simple: if the Portuguese Government fully integrates its railway with Spain’s, Portugal’s safety would be at the mercy of Spain.

Although Spain has mountainous terrain, the route from Toledo to Lisbon is almost a flat land, with no natural defenses.

If Spain truly had plans for Portugal, it could rely on the railway connecting the two countries and march into Lisbon, the capital of Portugal, in a short period.

This is absolutely unacceptable to the Portuguese, which is why they are only willing to have a single railway connection with Spain.

With only this small stretch of railway connecting the two, if a rift appears in relations between the countries, the Portuguese side can blow up this railway at any time, ensuring the Spanish Army doesn’t quickly enter Portugal’s border through the railway.

If the north, central, and south regions are all connected to Spain by railway, it becomes quite difficult to stop the Spanish Army’s advance by blowing up the railway.

Carlo finds this regrettable. If a comprehensive rail connection with Portugal could be established, Iberia’s railway would form a gigantic network, facilitating economic exchanges across Iberia.

This would certainly be a good thing for Spain, but not necessarily for Portugal, and that’s why the Portuguese Government refuses.

So far, Spain’s domestic development has been relatively smooth, but there are still many problems in the development of its colonies.