BANGALORE - India's announcement of a
multi-billion dollar credit line to Africa has set
the stage for an enhanced engagement between New
Delhi and African countries.
Speaking at
the second India-Africa summit at Addis Ababa last
week, Prime Minister Manmohan Singh pledged US$5
billion for the next three years "under lines of
credit to help achieve development goals in
Africa".
The announcement marks an
increase of $1.6 billion in lines of credit on the
$5.4 billion India had pledged for the 2009-14
period during the first India-Africa summit in New
Delhi in 2008. Around $2 billion has already been
spent on a host of projects in Africa.
Besides credit on easy terms for
development projects, India has announced a host
of initiatives including $700 million for new
institutions and training
programs, $300 million to build a railway linking
Ethiopia with Djibouti and $2 million to the
African Union Mission in Somalia (AMISOM).
To support institutional capacity building
at a pan-African, regional and bilateral level,
India is setting up around 80 institutions in
areas as diverse as food processing, agriculture,
textiles, weather forecasting and rural
development. It also proposes to set up an
India-Africa Virtual University where 10,000
scholarships will be made available for African
students.
India announced 400 more
scholarships for African graduates and 500 more
training positions under the Indian Technical and
Economic Cooperation Program (ITEC). "We will thus
offer 2,500 ITEC training positions every year for
the next three years. Our total commitment for the
next three years by way of scholarships to African
students will stand at more than 22,000," the
Indian prime minister said.
India's
partnering in Africa's development while laudable
is not wholly altruistic. Delhi has economic
interests in the continent and is looking to it to
achieve foreign policy goals and address security
concerns.
Africa is an attractive market
for Indian goods and services. It is rich in
resources like oil, diamonds, gold, manganese and
uranium. India is looking to diversify its oil
sources and Africa has emerged an increasingly
attractive option. India's diamond-cutting
industry, the world's largest, depends on uncut
stones from Africa, while uranium in Niger, Uganda
and Tanzania is eyed by India's nuclear power
sector.
Africa is also rich in votes at
the UN General Assembly. As India intensifies its
efforts to bring about UN reform and secure for
itself a permanent seat in the Security Council,
the 53 votes from Africa in the General Assembly
will play a crucial role.
India has
security concerns too that Africa, especially the
Indian Ocean littorals can help address. The civil
war in Somalia has provided safe havens there for
Islamic radicals and left its waters open to
pirates. The latter have captured Indian vessels
and nationals threatening India's trade with
Africa and the Middle East. India's extension of
funds for AMISOM is aimed at bringing a semblance
of order and stability in strife-torn Somalia.
Media reports have described India's
engagement of Africa as a "neo-colonial grab" for
Africa's resources and drawn attention to an
"India-China rivalry" in the continent and likened
this to the "19th century European scramble for
Africa".
Indian officials have dismissed
these views, pointing to India's very different
strategy in Africa. "Unlike the West, which only
extracted Africa's resources or cultivated regimes
through arms sales, India is partnering Africa in
its development, even as it seeks to achieve its
other goals there," an official in the Ministry of
External Affairs told Asia Times Online.
Officials emphasize that India's aim in
Africa is to build "sustainable partnerships"
unlike the "loot and leave strategy of others".
India is setting up diamond processing
facilities in countries like Botswana that provide
its diamond cutting industry with rough diamonds.
"Even as our diamond cutting industry benefits
from Botswana's diamond roughs, we are helping it
to move up the value chain in the diamond
business," he said.
Indian pharmaceutical
companies are expanding their business in Africa
while their supply of low-cost generic drugs and
support to health and humanitarian programs across
Africa is considerable. Ranbaxy, a leading Indian
pharmaceutical company, has provided medicines,
particularly anti-retroviral drugs, at affordable
cost to several African countries and has
production facilities in Africa.
India's
commerce ministry is considering a special program
for Burkina Faso, Mali, Chad and Benin, the
world's poorest countries that rely on cotton
production. Liberal subsidies being extended to
American cotton farmers have helped to keep these
four countries trapped in poverty and deprivation.
India proposes to help them improve their farming
practices. "We will stay involved till yields
increase," a commerce ministry official has said.
As for the Sino-Indian rivalry Africa,
officials insist that India "isn't following China
into Africa, since its ties with the continent go
back several centuries". India also worked with
several countries in their anti-colonial and
anti-apartheid struggle. Officials have denied
India is in competition with China, drawing
attention to their different strategies and
strengths in engaging Africa.
While Delhi
is seeking to step up trade and investment in
Africa, "this is not aimed at catching up with
China," an official with the Ministry of External
Affairs said, pointing out that India's
"relationship with Africa stands on its own".
Still, China is way ahead of India in
Africa, the official pointed out. Beijing's annual
trade with Africa is around $110 billion compared
with India's at $45 billion and China's investment
in the continent is estimated at $32 billion,
three times that of India.
Unlike the
Chinese, who are focused on resource-based
investment and construction of large
infrastructure projects in Africa, such as two
railroads linking Zambia with Congo and Tanzania,
100 wind energy projects, 52 stadia, and
hydroelectric power plants, India is engaged in
capacity building and training as well as in
helping with setting up of small businesses.
Indian investments are largely private
sector riding on the backs of lines of credit
extended by the government, while China has sent
in its public sector companies with thousands of
workers and hundreds of managers, causing some
local resentment. Indian companies are also
creating local job and opportunities by hiring
from the indigenous population.
China's
strength lies in its deep pockets, which are said
to have helped it swing deals in its favor.
India's advantage lies in public goodwill and
Delhi hopes that this and its soft power strategy
will help it build sustainable partnerships in
Africa.
Even so, both countries are eyeing
Africa's oil and gas, and it is in its quest for
oil deals that India's sustainable partnership
strategy will be tested. Africa meets over 16% of
India's oil needs, with about 13% of India's oil
requirement imported from one country - Nigeria.
In Sudan, before its division, India is the
country's third-largest partner in the oil sector
and Indian companies there account for a 25% share
of the off-shore oil industry. India made an
initial investment of $1 billion in the
hydrocarbon sector, which increased to $2.5
billion. ONGC Videsh Ltd has stakes in several
wells with a daily production of 160,000 barrels.
Of this, roughly 100,000 barrels per day of
production are from wells falling within South
Sudan.
There was concern that the
secession of the south would result in India
losing out, but South Sudan has assured India that
all agreements and contracts pertaining to it will
be honored.
More contentious is the "land
grab" issue. Indian companies have bought up
swathes of land in Ethiopia, Kenya, Madagascar,
Senegal and Mozambique, where they are growing
rice, sugar cane, maize, and other crops,
triggering local resentment.
Sudha
Ramachandran is an independent
journalist/researcher based in Bangalore.
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