African Entrepreneurship Record

Chapter 1491: Chapter 34: Rhine Shield Internationalization (2)

In the context of the relatively lagging industrial and military development of the United Kingdom, the financial industry can be said to be Britain’s last straw, so Britain will inevitably suppress any currency that might threaten the status of British Pounds.

So not only the Rhine Shield in East Africa, but also the US Dollar, Franc from France, and Mark from Germany are subject to Britain’s suppression.

Among these, the US Dollar and Franc had already become the main international currencies only second to British Pounds before the 20th century. For example, the US Dollar ranked second in the share of foreign exchange reserves worldwide, thanks to the United States’ strong economic and industrial power, as well as its highly developed international trade.

Since modern times, France has always played an important role in the international community, even being one of the long-term dominators of the international order, with widespread influence globally and having large colonies only second to the United Kingdom. Thus, the Franc has always been a major international currency.

In contrast, both the East African Rhine Shield and German Mark were actually latecomers. The unification of Germany happened in the latter half of the last century, only after the Franco-Prussian War did Germany become a major economic power in the world. However, the recently unified Germany had a decent economic foundation, which allowed the international market share of the German Mark to continue growing rapidly.

The East African Rhine Shield appeared even later than the German Mark and has been less effective.

After all, East Africa fully opened its domestic market only after 1910, prior to which East Africa’s economic international participation was not high.

So Ernst said: ”The impact and value of the Rhine Shield in the world are not matched, which is one of the disadvantages of East Africa as a late-developing country, even the most youthful country in the world.”

The United States, Germany, Japan, and these countries are similar to East Africa in being late-developing, but East Africa still holds the title of the world’s youngest country, with a history of less than a century, much younger than countries like the United States that developed from colonies.

”Therefore, the internationalization of the Rhine Shield must further increase its recognition in the economic market, making it a widely accepted international hard currency, thereby closing the gap between us and Europe and America in the currency field.”

”And through long-term efforts, we have already laid a solid foundation for the internationalization of the Rhine Shield. In the industrial field, East Africa has the largest industrial base in the world, coupled with vast land and abundant resources, providing strong intrinsic value to the Rhine Shield.”

Of course, Ernst has not yet mentioned one point, which is East Africa’s abundant gold reserves. In the gold standard era, this is a huge advantage for the East African Rhine Shield.

”Now what the Rhine Shield lacks is external influence. So, in order to improve the international liquidity of the Rhine Shield under the new economic circumstances, the Empire should embark on establishing the Rhine Shield’s international payment system, international clearing system, international reserve system, etc.”

”During the Five-Year Plan period, this imposes higher requirements on us to further enhance our financial industry system.”

”The Empire’s financial industry saw considerable development prior to World War I, but compared to Europe and America, it can be considered quite immature. Therefore, one of our current economic tasks is to streamline the domestic financial market and build a complete financial system.”

”At the same time, at the national level, planning to establish a new international financial center to facilitate economic exchanges between the Empire and countries worldwide.”

Prior to this, East Africa’s international financial center was Mombasa. During the period of World War I, because East Africa became a major exporter of industrial and strategic resources, Mombasa’s economy developed rapidly, and its status as an international financial center was greatly strengthened.

However, one cannot ignore the drawback of Mombasa, which is its location on the East Coast of East Africa, unfavorable for East Africa’s development in financial-related fields with the countries along the Atlantic Coast.

Thus Ernst said: ”Mombasa’s geographical position is flawed, or rather East Africa’s terrain impedes our financial development; therefore, in order to strengthen financial construction and facilitate exchanges between East Africa and abroad, two new international financial centers should be established.”

”One being Cabinda as the international financial center on the West Coast of East Africa, and Dar es Salaam City to serve as an important supplement to the financial development on the East Coast.”

In fact, if it weren’t for the Gabon Province and Cameroon Province in the northwest of East Africa, constrained by natural factors and poor transportation, the new financial center on the West Coast would surely be better located further north.

Similar to Mombasa, its location most conveniently facilitates exchanges between East Africa and the Far East, Indian Ocean Coast countries, and other regions. Further north is the Somali region, although part of East African territory, the climate there is too harsh.

Meanwhile, the northwest region’s Gabon and Cameroon present the other extreme; Somalia is a typical tropical desert zone, while the northwest is a typical tropical rainforest area.

East Africa’s expansion of two new international financial centers ensures one on both East and West Coasts, which means Mombasa and Cabinda, while Dar es Salaam City is designated to facilitate development in central and southern parts of East Africa.

Although East Africa is a country bordered by two oceans, there still exists a gap between the East Coast and the West Coast, with the East Coast’s economy generally stronger than the West Coast’s, mainly due to the longer livable zone on the East African East Coast.

The livable zone on the West Coast is only limited to the Angolan coast, creating a significant economic disparity between the two. This is, of course, related to the later development of the west, less population and resources, given that West Africa’s current economy lags even behind East Africa’s central region.

”In addition to the construction of the three international financial centers, also strengthen the functions and status of the domestic financial center in Rhein City.”

As the Eastern Africa Capital, Rhein City is both the national center city and a transportation hub, naturally advantageous for building a national financial center. In fact, if it weren’t for the insufficient development of aviation, Rhein City could also be built into an international financial center.

However, achieving this goal is currently impossible, as Rhein city’s transportation still relies on land, being a hub for railway and road networks, facilitating domestic capital concentration and radiation, but not conducive to international exchange.

This also relates to East Africa’s geography, occupying nearly half of the African Continent, yet surrounded by no strong nations or economic bodies comparable in scale. The second most developed economy in Africa besides East Africa turns out to be Egypt, which is a semi-colonial state.

Egypt’s population barely reaches ten million, only limited to cultivable land along the narrow band by the Nile River banks, its industry can be practically ignored, and it lacks sovereignty for independent economic development.

Apart from Egypt, East Africa’s other neighboring countries and regions are even more appalling, with only the Southern German Kingdom being an independent state, while others are colonies of different countries. Yet the Southern German Kingdom is too small, with a population only reaching several million.

Hence, the economic volume of East Africa alone accounts for more than ninety percent of the entire African continent, from an industrial perspective, East Africa can represent the entire African Continent alone.

Therefore, the economic conditions of the African Continent are insufficient to support the current stage of Rhein City becoming an international financial center.

However, worldwide there’s a greater possibility in inland cities with such potential, and that is Moscow, given that Moscow and Russia stretch across Europe and Asia, with numerous land neighbors and considerable economic volumes.

In theory, Moscow can leverage the Eurasian railway and road network to become the Eurasian financial center; however, this remains theoretical. Current circumstances show Europe’s, especially Western Europe’s economy, is much stronger than Russia’s, and from a historical perspective, the Far East Empire is destined to revive, so Russia’s geographical position, seemingly advantageous to both ends, risks being siphoned off by the two developed economic entities. Historical evidence of Russia’s economy confirms this.

However, Russia’s geographical advantage shouldn’t be denied on this basis, given the saying ”where there’s a will, there’s a way,” Russians just lack the capability to capitalize on it.