Chapter 1126: Chapter 135: The Great Loan
However, this does not overlap with Keuer’s business, after all, he is just a business manager of a small bank, and to intervene in the economy of Maputo City requires a medium.
So he asked Rog: "Mr. Rog, I wonder what the main content of your investment promotion this time is?"
Rog said: "Two directions, one is hoping for someone to invest in setting up a factory in our Maputo City, and the other is introducing funds for business development."
Rog’s second point made Keuer’s eyes light up, and he said: "How do you see our Rooney Bank? Although it’s not a big bank, we still have strength."
"Hmm!" Rog hadn’t expected Keuer to make a suggestion at this time, as Keuer was just an arranged reception staff by the Berlin City Government, originally Rog planned to develop business at the banquet.
However, even a small mosquito is meat, being arranged by the Berlin City Government, Keuer probably is not just an ordinary person.
After careful consideration, Rog said: "If you can participate in the investment for our city and meet the regulations, we certainly welcome it, but I’m afraid there is nothing within our delegation that meets the investment interests of your bank."
The main issue is that Rooney Bank is not powerful enough, and most of the representatives who came for the investment promotion for Maputo City are from reasonably scaled businesses in East Africa.
Rog’s words dimmed Keuer’s heart, but then he heard Rog say: "But you aren’t without opportunities, actually, this Berlin business delegation is just a start."
"Nowadays, Maputo City, guided by policies, definitely hopes to attract more foreign enterprises, as for banking, it’s also opening up in East Africa, you might have prospects to develop related business in Maputo City."
"As far as I know, there are now quite a few entrepreneurs domestically, many of them are ordinary people lacking funds, if you develop business in East Africa, you have a promising future."
"Of course, it does pose risks, but currently it’s a trending opportunity, high risks also mean big opportunities, in other aspects, you can directly purchase our East African national debt, but many want this piece of the pie, you might also consider our city government’s development bonds."
Since the start of the Three-Five Plan, East Africa has significantly lowered the threshold for attracting foreign investment, now East Africa is like a piecemeal, able to consume as much as it’s offered.
Before 1911, East Africa’s total foreign debt was less than twelve billion Rhine Shields, roughly over forty million British Pounds, mostly accumulated through foreign trade.
This debt level is globally quite low, among the major nations worldwide, the debts owed by the East African Government compared to other countries are almost negligible.
Yet within the year 1911, East African debt increased by 7.2 billion Rhine Shields, and this figure is rapidly growing.
Besides the significant borrowing by the East African Government for development, regional governments have also relaxed foreign borrowing conditions, although there are many restrictions, the scale is considerable, given East Africa has over forty provinces and hundreds of cities.
With so many provinces and cities, it’s impossible for the East African Government alone to take care of all, so borrowing money from abroad is one of the easier ways for them to develop.
Maputo City is one of them, this year alone, the Maputo City Government dispatched five teams to Germany, the United Kingdom, France, the United States, and Austria-Hungary.
Keuer was very tempted by the two options offered by Rog, he said to Rog: "Director Rog, if our bank starts business in Maputo City, will there be any troubles?"
Rog reassured: "You can rest assured on this, currently the domestic economic policy is quite relaxed, with many opportunities, as long as you don’t breach the law, it is basically a profitable business."
"East Africa is a super large market with over a hundred million people, and compared to Europe, the economic activity is rather low, many industries are still blank."
Ultimately, the East African Government hopes to leverage funds from other countries to develop the domestic light industry, East Africa doesn’t lack talent, market, or technology, what is most lacking is startup capital.
And the majority of the East African Government’s industrial investment is concentrated in infrastructure, heavy industry, and agriculture fields, making it difficult to focus on light industry.
Rog suggested to Keuer: "If possible, you might send someone to inspect our city, Maputo City itself has quite a few Germans and Portuguese living here, here is my business card, if you visit Maputo City in the future, you can contact me."
Rog handed a piece of paper to Keuer, which had Rog’s office location and phone number, nowadays East African government agencies have generally popularized telephones, so contact is fairly convenient.
Keuer cautiously accepted the business card, Rog’s identity as the Director of Investment Promotion of Maputo City is something Keuer should regard highly.
...
Cities like Maputo that directly dispatch "diplomatic" teams are not scarce in East Africa, in 1912 alone, East Africa’s government-organized business delegations amounted to over twelve hundred, nearly covering developed regions such as Europe and America.
Furthermore, the East African Central Government extravagantly borrowed from abroad, national-level borrowing has always been high, often reaching several billion Rhine Shields, although Rhine Shield’s value globally is relatively low, during the early 20th century, most national currencies had much higher gold content compared to lifetimes past.
Rhein City.
Sivert reported to Ernst: "Currently our nation’s debts amount to twenty-two billion Rhine Shields, and this does not include local debts, nationwide foreign debts reach over thirty billion Rhine Shields."
"Such high debt numbers are indeed too much for us, far exceeding the past, but it has fueled the development of our local economy, many cities are expanding industries, especially thriving in light industry, our national freight volume for transportation has significantly increased."
Over thirty billion Rhine Shields, which is actually over three hundred million British Pounds, an astronomical figure, at the same time the United States owed the United Kingdom about the same amount, of course, besides the United Kingdom, the United States also owes France, Germany, and several other nations significant debts, combined, likely over a billion British Pounds.
So East Africa’s nationwide debt seems alarming, but East Africa still manages, even able to borrow more, East Africa has the capacity to take that on.
Ernst said about this: "Although these debts are many, they are within our acceptable range, the main focus now is to transform these funds into tangible industries."
"Moreover, I see that we can borrow at least thirty billion more debt, with the government’s borrowing target concentrated on loans from the UK, France, and Germany."
Ernst’s words left others in the East African Government feeling terrified, as the current East African Government’s debt is already seen by many as astronomical, if according to Ernst’s suggestion it doubles, they wonder how it will be repaid in the future.
In fact, Ernst’s suggestion is quite conservative, as he sees, borrowing more now, as long as European war erupts, East Africa could potentially repay the debt, maybe even earn greatly after the war.
Just for prudence, Ernst dares not bet too large, in case war does not erupt or is not as extensive or prolonged as anticipated lifetimes past, it might backlash economically on East Africa.
Thus, Ernst’s formulated "large borrowing" plan is actually leaning towards conservative, now Ernst merely hopes for the European war to unfold historically as it did, for East Africa this is an important chance to economically surpass Europe.
Just like the United States of past lifetimes, before the war owed Europe a huge pile of debt, and after the war reversed to Europe owing the United States.
So this round of East African "big borrowing", is actually Ernst’s advance layout for war, currently, East Africa has only one goal, which is to expand the domestic industrial capacity and compete with the United States for the wartime market during World War I.
