African Entrepreneurship Record-Chapter 639 - 317: Closure and Openness

"The city of Dedradawa also wants to pursue border trade. Do you think this is feasible?"

"Actually, the idea of Dedradawa city is not entirely unachievable, but practical factors must be considered. The Red Sea coast is inherently a place teeming with merchants, so I find their plan quite unreliable. Even our own ships sometimes sell goods along the Red Sea coast. Moreover, the Red Sea now relies on the Suez Canal, connecting the two major markets of Europe and Asia, so it's simply impossible to have a shortage of goods."

"That's not necessarily true. While maritime transport is convenient, it may not meet all demands. For example, the tropical economic crops from the northern provinces are primarily sold to Europe, because other regions don't have the purchasing power, or their offers are unsatisfactory to us. So market demand is not a cold number, but rather flexible and changing. Being on the border, Dedradawa city may well have such a market, but it's not worth our energy to invest in. Instead, we should leverage the market and the capabilities of the border populace to develop it."

The two most important markets for East Africa are undoubtedly Europe and the Far East. The European market mainly supplies raw materials, as East African industrial goods cannot compete with those from Germany and Austria. Meanwhile, the Far East is the primary sales region for East African industrial products.

Although the Middle East is geographically closest to East Africa, a significant portion is managed by Zanzibar traders, who control the sales channels. They import goods from East Africa, and whether or not they make a profit depends on their methods.

Furthermore, the Middle East today is not as diverse as it was in previous eras. The Ottoman Empire remains a dominant force, so the decision-makers in the region are still present, unlike the fragmented Arab nations of the past.

A significant portion of industrial goods in the Ottoman Empire comes from Europe, making it difficult for East African industrial goods to penetrate. Arab traders are notably shrewd—having fallen from grace, yet in the medieval era, the Arab region was the world's commercial hub, particularly due to the ancient Silk Road, which monopolized East-West trade. This dominance was only broken by Europeans during the Age of Exploration.

East Africa primarily follows the Omani route. Omanis share common origins with those in Zanzibar and Oman is an independent Arab nation, a historical maritime power along the Indian Ocean coast. The commercial capabilities of maritime nations like Oman, which heavily rely on overseas trade, should not be underestimated. 𝒇𝒓𝒆𝒆𝙬𝒆𝒃𝓷𝒐𝓿𝙚𝙡.𝒄𝓸𝒎

For industrial sales, the East African government mainly targets the Far East. While East African industrial goods are low quality, they come at a low price. However, the quality comparison varies: certainly inferior to Europe, but with some advantages over non-Western countries, especially after the economic crisis of 1873 when East Africa adopted many European technologies and equipment.

The most exported items from East Africa are undoubtedly raw materials, primarily consisting of food, tropical economic crops, and minerals.

The destination countries for raw material exports are naturally those with more advanced industries and greater demand. Clearly, such regions are the Central and Eastern European countries, led by Germany.

Having some industrial base allows regions to consume large amounts of raw materials. However, many raw materials necessary for industrial development cannot be entirely sourced within Europe, particularly for the three landlocked countries of Germany, Austria, and Russia.

Nevertheless, being a raw material supplier country is not necessarily disadvantageous, especially for East Africa at present. It is a low-effort, profitable endeavour that helps reinforce relations with relevant countries.

Producing raw materials, unlike industries, does not require highly sophisticated technology and is relatively easier to manage. Even feudal states can execute this well, with rural areas often more adaptable than cities due to the self-sufficient nature of agriculture. In contrast, industries are heavily market-dependent.

If workers become unemployed, the risks increase significantly. For farmers, unemployment risks exist but are generally due to disasters, crop failures, or land consolidation leading them to become tenant farmers. Independent farmers fare well during this time, especially those in Europe.

East Africa currently does not face this problem because its agriculture follows a collective model. Agriculture is centrally produced but differs from traditional estates, capitalist large farms, or collective farms, incorporating various characteristics.

In other words, it's neither too left nor too right, forming a mixed agricultural economic system. However, Ernst cannot easily change this now. In the West, there's an emphasis on choosing sides, with black-and-white thinking. Yet, in any capitalist or democratic country from past lives, neither planning nor the market can be entirely eliminated; instead, it's a matter of distribution.

As a major raw material supplier, East Africa's agricultural model is relatively stable. Agricultural outputs grow steadily each year with little turmoil, achieving more through accumulation over time.

Correspondingly, East Africa's agricultural output is generally surplus. Under a normal country, this would require large-scale production cuts to achieve a balance, but East Africa is not a normal country. As there isn't such high international demand, East Africa can only leverage its domestic market to absorb the surplus agricultural capacity.

This includes various large-scale projects, national infrastructure development, and capacity reduction. Capacity reduction is not truly a reduction but an optimization and rational distribution of agricultural resources.

East Africa has developed a lot of arable land, but each year land is also reverted to forest or grassland. The areas undergoing such transitions are not small, particularly in the eastern regions.

The northern province is a typical example, focusing mainly on grassland restoration. Many pastures have been canceled while actively promoting the planting of economic crops to seek higher economic value.

"The problem of Dedradawa city is not merely an economic one but involves a national issue. Currently, East Africa has opened nearly ten port cities, some of which are even unfinished. Dedradawa city differs significantly from these coastal areas.

It represents East Africa's border trade issues. Border trade has always existed, but none have been publicly opened. The primary purpose of the northern Turkana province's border trade is to provide support to the Abysinnia Empire, preventing them from falling behind in competition with Italy. Similarly, our southern arms trade with the Orange people serves the same purpose."

"Dedradawa city is also a military stronghold, making it even more worthy of our discussion. Its primary consideration should be military matters. Of course, from the perspective of settling immigrants on borders, local economic development is essential. Otherwise, relying solely on government fiscal support only addresses urgent needs. In this aspect, Jezira city in the Nile Province has performed well.

However, the situation in Jezira city is unique, being the most advantageous location for development in the entire Nile Province, and situated at the border. In contrast, Dedradawa city's conditions are much inferior to Jezira city."

"In the end, it all comes down to whether Dedradawa city should be opened up. I believe it should be. East Africa today is no longer what it used to be. We are regarded as the strongest nation in Africa, making security issues less pronounced. The strongest powers to the north are merely the Italians and the British. While the British controlled Egypt some years ago, their primary border point is the Sultanate and the British Somaliland in the Mand Strait, which pose no threat on the level of Cape Town.

The Italians are even less of a threat militarily and require our support to establish a foothold on the Ethiopian plateau."

This is not meant to insult the Italians but stems from the German's traditional psychological advantage over them. Italy itself is not a formidable power, especially since the restoration of the Kingdom of Naples, and is only slightly stronger than the Kingdom of Portugal in East Africa's eyes.