Persian Empire 1845

Chapter 81 Somali Trade

Iran is doing relatively well in maintaining stability during an economic crisis. After all, it hasn't escalated into a global crisis, and there's still potential to explore markets near Iran.

The Sultanates of Geldi and Magirtin, which are tributary states of Oman, occupy the Somali region, which is of considerable importance due to its location in the Horn of Africa.

The Iranian trading company was located in Mogadishu. Lawrence acquired a large tract of land in Mogadishu for 5000 gold coins and began trading in East Africa. Locally produced spices and a small amount of timber, which the company began shipping around the Indian Ocean.

At this time, the East African coast and inland areas were not as prosperous as they would become in later years. In addition, the Suez Canal was not yet open, so Iran did not have to worry about British pressure for the time being, since their troubles in Europe were not yet over.

Lawrence is working on his next business expansion plan in his office building in Mogadishu, a relatively commercialized area. If he were to venture deeper into the African interior, he would probably only see gorillas smiling at him.

"President, a ship loaded with timber has already been sent to India."

Lawrence hummed in agreement. These things couldn't be transported indefinitely, but they had already started moving livestock to other places. Even so, profits weren't maximized, and to pursue higher incomes, they still needed to grow something.

The company currently owns a large tract of land where they grow cotton and sugarcane, and also controls the export of local frankincense. These are the company's main sources of revenue.

"I think everyone received their dividends from the company last year. As long as we continue to expand, even more profits will come into our pockets!"

The people who partnered with Lawrence all had powerful backgrounds; they were all essentially connected to someone in the royal family. When they heard that the company could make money, they invested some money themselves. If it really worked, they would increase their investment; if it didn't, their losses wouldn't be significant.

As a result, they each earned 20,000 riyals last year from exporting frankincense and agricultural products. Although it was a bit less, they are sure to earn more this year.

According to the charter granted to the company by the Crown Prince, the trading company has the right to trade with other East African countries and is also permitted to cultivate arable land. Therefore, what they need to do now is to cultivate plantations and continue to expand trade.

Lawrence's approach was all too common on plantations; in the American South, the exploitation of Black slaves was their guiding principle. The same was true here, except that Black people were being turned into Somalis.

"Since the president has already figured out the next steps, we naturally support you."

These shareholders can also earn extra money by contracting plantations and mines, and since there is no European country involved, they can monopolize the profits.

Now that they all supported him, Lawrence could move on to the next step. Sugar and cotton produced in Somalia were shipped to Iran, and various industrial goods were then shipped from Iran back to Somalia.

To achieve this, the port of Mogadishu needs to be expanded, a ship repair yard needs to be built, and a sugar mill needs to be established—these are the things the company currently needs. Additionally, the company needs to hire 100 Persians for management positions, which is in line with the hiring practices of franchised companies. The main dirty and strenuous work will be done by local natives, while the management will be handled by Persians.

"Our task is not easy, because this place is very important to Iran. Before I left, the Crown Prince and the Shah talked to me about this issue. I think the main reason that is currently restricting development here is the port's navigation capacity. I inspected Mogadishu and found that the port here needs to be widened and deepened so that even if more ships are added in the future, the port's throughput capacity will not reach its limit too quickly."

Lawrence's words made everyone present realize that he must have more plans. "President, if I may be so bold as to interrupt, Mogadishu wants to expand, which will require a lot of money, and trade has not yet taken off, so there is no need to start so soon."

Lawrence smiled and said, "I understand the situation. I didn't say we should build Mogadishu immediately, but we do need to build roads. From what I understand, the land in the south is very fertile, and there are rivers that provide irrigation. That will be our goal."

Of the tasks assigned by the Crown Prince, Lawrence believes that building a trade transit point is the easiest, because Somalia itself has great trade potential, but the low volume of local trade limits its development.

After Iran occupied the area, there were no restrictions, and with the help of Indian Ocean trade, there was an urgent need to expand the port and build various supporting facilities.

Furthermore, Mogadishu could serve as a settlement for Iranian colonization in East Africa. While Nasser al-Din doesn't believe Black people have much purchasing power, the region's abundant resources, compared to Iran's, could supplement the nation's economy. It could also serve as a refuge for some of the population.

But right now, the company needs to make money for the royal family, so all that colonial immigration stuff has to take a backseat. All they want to do now is make money.

Furthermore, Lawrence believed that relying solely on government funding was insufficient for local development, not to mention the company's annual profit remittances to the royal family. This significantly slowed down local development. So, if he didn't use private capital, what else could he rely on?

"Of course, I think you also know that the company's funds are insufficient, so the company will only contribute a portion and then sell some areas to raise funds."

Lawrence's words caught everyone's attention, and someone asked, "I wonder which lands the president plans to sell?"

“Part of the dock and its warehouse area, as well as some commercial and residential plots, will also be sold.”

This answer made everyone present realize the enormous benefits involved. Mogadishu is situated on the rolling hills along the Indian Ocean coast, controlling a vital north-south sea route in Northeast Africa. It is bordered to the north by the lower Shabelle River plain, has a vast hinterland, and boasts excellent harbors suitable for merchant ships.

By the 13th century, it had become a renowned commercial port in East Africa. In the 14th century, merchants from the East and India also came here to trade. In addition, Mogadishu was a trading center for frankincense, myrrh, and leather along the East African coast.

Since there are benefits involved, some people will not want to fall behind.

How much funding are you prepared to have the government invest?

"The company will contribute half of the funds for road and port construction, and the government will also allocate funds as appropriate."

In that case, they need to act quickly. The shareholders aren't just investing money and waiting for dividends; they also plan to acquire properties in Somalia. However, their current strength is still limited, and they can't afford to engage in short-sighted exploitation like Europe. Therefore, trade is the primary focus for now. Additionally, they need to secure some funding from Iran to accelerate development.

(End of this chapter)