African Entrepreneurship Record

Chapter 1087: Chapter 96: Markets and Contradictions

During the entire second five-year plan period, the industrial output value of East Africa increased by 187%, while the first five-year plan increased by only 103%. This performance is significantly higher than the first plan, which is closely related to the comprehensive explosion of advantageous industries such as automobiles and electricity during the second plan.

Especially the automobile and tractor industries, which have had a significant impact on driving East African industry, have become the leading products of East African industrial exports.

In the past, East Africa was also a major power in machinery such as automobiles and tractors, but the scale of production and export was not large at the time. Entering the second five-year plan period, due to the development of relevant industries in the United States and Europe, East Africa began to increase the scale of exports of large-scale machinery such as automobiles and tractors.

At this time, the cost of manufacturing American automobiles had been compressed to less than one thousand US dollars per vehicle, with rapid growth from numerous car companies like Ford and General Motors, marking the initial formation of the American automobile industry.

Therefore, to cope with the competition from these emerging forces, East Africa intensified its dumping efforts in the international market, bringing ”warmth” to the international automobile market.

The impact of the automobile industry on the overall industrial growth of East Africa during the second plan cannot be overstated. Automobiles, as high value-added industrial products, significantly increased East Africa’s total industrial output, at the same time driving the rapid development of related industries such as bearings, engines, rubber, steel, alloys, oil, and chemicals.

In a previous era, the automobile industry was Japan’s largest sector, accounting for about 10% of the country’s gross national product and as much as 40% of its manufacturing industry. In Germany, another manufacturing powerhouse, the automobile industry accounted for more than 50% of manufacturing and about 9% of the gross national product.

From the importance of the automobile industry to Japan and Germany in the previous era, we can see the strong capacity of the automotive industry to drive economic and industrial growth. Currently, as the world’s largest automobile producing country, East Africa’s automotive industry has a very significant driving effect on the national economy.

This point is vividly reflected in East Africa’s export of industrial products during the second plan, although East Africa’s power equipment and product exports were already excellent in the 1990s. The United States and Germany still have competitive power, but during this plan, East Africa’s automobile industry had a crushing advantage over these two countries.

In reality, the automobile industry was the main reason for East Africa’s industrial growth rate during the second plan, which was significantly higher than that of the first plan. Of course, East Africa’s development in other areas was also commendable.

Especially in civilian industrial product production, East Africa has significantly improved compared to the past. During the second plan, light industrial production became a new growth point for East African industrial growth, although export performance was not satisfactory, it met most of the domestic market demand.

”By the end of 1909, the country’s industrial scale was nearly three times that of 1900, with over thirteen thousand new registered medium, small, and large enterprises nationwide. During the second plan, the increase in light industry was significant, heavy industry maintained rapid development, and agriculture progressed steadily.”

During the two five-year plans, the number of enterprises in East Africa exceeded the total number of construction enterprises in East Africa throughout the 19th century, more than doubling. Although due to historical reasons, East Africa only had a few decades on the world stage in the late 19th century.

During the second plan, the development of heavy industry in East Africa remained at the forefront, greatly benefiting industries such as steel, electricity, railways, energy, mining, chemical, and with automotive industry development being particularly prominent.

Compared to the first plan period, light industry received more attention, but there was still a significant gap with other industrial countries. The reasons were still technology, market, production efficiency, and so on.

Agriculture focused on stable development, during the second plan, the increase in East African agricultural exports was not significant, with international prices continuing to be depressed. However, due to technological and mechanization improvements, as well as the domestic market safeguarding, agricultural output value barely achieved positive growth.

The East African government’s investment in agriculture was also relatively high, so agriculture did not reach the East African government’s psychological expectations in terms of income creation.

However, this was also within the East African government’s expectations. Before East Africa decided to vigorously develop industry, the government already understood that relying solely on agricultural development did not have a ”bright future.”

Especially after entering the 20th century, East Africa’s domestic population grew on a large scale. From a global perspective, East Africa was no longer a country that hadn’t received effective development.

In the past few decades, the amount of engineering work in East Africa was even more than that of the entire South America combined over a hundred years. Nowadays, the whole region south of the Sahara, with East Africa on its own, can compare agricultural and industrial data with any other region in the world.

”Among the world’s major economies, East Africa’s economic growth rate was maintained in the top tier globally, with annual economic growth exceeding that of the United States and Germany, hovering around 10%.”

Since 1890, East Africa’s economy has been maintained at a high level, next coming the United States, then Germany. Of course, although the growth rate of the United States and Germany was not as fast as East Africa’s, their larger economic bases meant their economic increments were greater than East Africa’s.

After entering into 1900, European and American countries frequently encountered economic crises, which further elevated East African industrial growth speed, standing out among great power nations, especially since last year when the U.S. economy and industry even experienced a certain degree of recession, although America quickly adjusted.

The German economy also suffered certain negative impacts, however, by investing in military industries, Germany temporarily slowed its downturn, pushing further on the path of military expansion.

East Africa, the United States, and Germany have developed the fastest industrially over the past two decades, other countries only fare worse. However, the Three Kingdoms face the same issue, which is market competition. To advance further, apart from self-factors, the market is the main constraint.

The industrial level of the United Kingdom and France is evidently not in proportion to the international market they occupy, which is the contradiction between emerging industrial nations and traditional industrial nations.

Of course, the contradiction between France and Germany is the most prominent, not solely because of market factors, but at least for France, if it wants to advance further on the European Continent, it must defeat Germany, its strong enemy.

Excluding those colonial powers, East Africa, the United States, and Germany’s share of the international market is fairly unstable, although the Three Nations industrial development has surpassed other countries, a market cannot be opened solely relying on the quality of domestic industrial products or cost advantages.

For example, the past trade between the United Kingdom and the Far East Empire, although the Far East Empire’s industrial development was relatively backward, relying solely on strong traditional handicrafts, it could still suppress the United Kingdom in international trade. Practically, India before British colonization was the same, with the Far East Empire and India being the most important centers before the arrival of the industrial era.

At that time, British and other emerging countries ultimately defeated these traditional powers, relying on military force to solve the problem.

From the development paths of the United Kingdom and France, it’ll require Germany along with East Africa and the United States to break the current international system and compete for international markets—ultimately they’ll have to solve it through war.

It’s just that East Africa and the United States, having a wider range of choices than Germany, have more revolvable room. Therefore, the main force to overturn the old world order has to rely on Germany.

Countries like East Africa and the United States, being bulk countries, have access to more resources and a larger sphere of maneuverability, allowing them to engage and negotiate with large colonial powers like the United Kingdom or France. In contrast, Germany doesn’t have these conditions, with a smaller territory, scarce resources for industrial development, and a heavy population pressure.

Thus, Germany might gamble if choosing the war route; choosing peaceful competition might conversely offer minimal chances for Germany since it holds the fewest cards.

Of course, if Germany were to choose the latter, it wouldn’t necessarily be without advantages. Currently, German industry has already developed, adding population advantage to economically infiltrate various European countries. Germany’s national strength has a large upward potential, but this is ultimately limited given the power of nations like the United Kingdom, France, Austria, and Russia, along with other countries not being weak, making this path rather challenging.