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    South Asia
     Jun 2, 2011

India deepens Africa role
By Sudha Ramachandran

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.

(Copyright 2011 Asia Times Online (Holdings) Ltd. All rights reserved. Please contact us about sales, syndication and republishing.)

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