Indias Economic Engagements with Sub-Saharan Africa

Indias Economic Engagements with Sub-Saharan Africa INTRODUCTION Africa till recent past quite easily qualified for the unceremonious category of â€Å"hopeless continent† that largely failed to provide basic services to their people that have non-existent or fragile government and are subjected to regular outside interference. Decades of impoverishment, factional feuds, power struggles, natural calamities, harsh living conditions and exploitative attitude of global powers ravaged most of the countries of Africa pushing them to bottom of the third world, incapable of sustaining themselves despite enormous wealth of natural resources. A lot has changed recently, wherein democracy has not only found its feet but also, strengthened manifolds leading to economic growth. There has been renewed interest of many powers, world over to engage with Africa as its equal partner, while boundaries of power take a new shape. This has its roots in ever increase in positive narrative of Africa. The history indicate a long and ancient account of indo-African relations[1], with Africa being a host to Indian Diaspora for a reasonably long time. Recent times have witnessed a new set of dynamics emerging in the form of rapid expansion of relations. In 2010/11 Indo-African trade reached USD 45 billion and is expected to grow beyond USD 75 billion by 2015[2]. While carrying out any study on Africa it will be important to understand the human scene with an attention toward a general review of the kinds of peoples and social organisations that are to be found in Africa. In societies, such as those of traditional sub- Saharan Africa, which have a fairly simple socio-economic structure, the various sectors of human life which are organised and from which stem a measure of established authority are more closely interwoven than in more complex societies[3]. Each area of life is more sensitive to change and to influences emanating from every other part. Human life is simpler, because its needs are fewer and the methods of satisfying them are more restricted and more sharply defined. The native Africans need to be contrasted with millions of Europeans, Indians and Syrians apart from sprinkling of people from all over the world. A special character emerges owing to the disparity which has been impacted by outside world on its original form. Hence it becomes imperative that any evaluation of present situation on the continent and particularly any planning for the future, regard the indigenous African and his traditional way of life and thought as a major factor in determining the facts and assessing the probable results of change. While US shifts its focus on Asia-Pacific region, China competes with all emerging powers for energy resources and markets for finished products apart from a big time engagement in infrastructure development. India’s growth, though not as spectacular as China, its capitalist interests are ambitious to extend their commercial reach. The pursuit for economic growth has superseded previous outlook of Indian foreign policy which has provided drive to the commercial ventures in newer avenues. Africa, as portrayed by ex Prime Minister Manmohan Singh as ‘a major growth pole of the world[4]’, can be viewed for new investment sites, export markets and capital accumulation for Indian-based interests[5]. The launch of Export-Import Bank of India (EXIM) as part of its â€Å"Focus Africa† initiative can be regarded as a stepping stone towards upsurge in economic activity[6]. The project initially targeted Ethiopia, Kenya and Mauritius with extension of lines of credit i n support of goods export to these countries. Engagement is the buzz word for today’s world and involves many dimensions, to include politics, trade and commerce, security, infrastructure, capacity and capability building etc. India continues to deploy troops in Peace keeping missions in Sudan as well as Democratic Republic of Congo under UN flag apart from provision of expert advice as part of defence cooperation to many countries such as Nigeria, Zambia, Lesotho and Botswana in development and transformation of their militaries. The western analysts have propounded many theories with respect to nature of Indian engagement with Africa; some see it as a supplier of investment and aid donor whereas others narrate ‘benign and nuanced approach; while it lacks in foreign reserves to compete with Chinese cheque book diplomacy and futility of economic munificence alone. Ian Taylor in his paper titled India’s rise in Africa questions if â€Å"India is a scrambler or a development partner†, a self interested actor bent on exploitation or one that aspires to some level of mutual benefit[7]. Amidst these analyses the most pertinent factor which needs to be seen is how African leaders seek to leverage Indian engagements. Thus politics comes to fore, which has two related dimensions, the competitive pursuit of private interests, and the determination of public policy. Observing the priority of African elites to accelerate efforts to improve the conditions, develop institutions and enabling infrastructure for overall growth, a discussed/researched approach for symbiotic relationship holds the key to any engagement. While addressing its national interests in the area, a holistic study of all possible areas of mutually beneficial engagements will add to focussed betterment of the region at large. The mutually beneficial engagements should allow a lasting impact in polity as well as common public of sub Saharan Africa that their true interests and future lie with India. The skilled yet jobless youth of India can find meaningful engagements in these countries contributing to th eir capacities while earning goodwill, friendship and favourable environment for enhanced engagements. The study seeks to analyse existing engagements of India with sub Saharan Africa in fields like economy, military, education etc. with examination of feasibilities to enhance the same, as the opportunities, which emerge in contemporary times in the backdrop of highly competitive world may not arrive/ relent in times to come. The study has been organised into various chapters as under:- (a)Chapter I: India’s Africa Policy in Contemporary Times. (b)Chapter II: India-Africa Security Cooperation and its Evolution. (c)Chapter III: Economic Situation in Sub Saharan Africa. (d)Chapter IV: India’s Initiatives in Sub Saharan Africa. (e)Chapter V: Indian Diaspora and its Contribution. (f)Chapter VI: Way Ahead. CHAPTER I INDIA’S AFRICA POLICY IN CONTEMPORARY TIMES Post independence, seventeen years of Nehruvian era witnessed non-alignment as the corner stone of India’s foreign policy. This was adopted primarily as a visionary policy based on idealism. The geography as well as fragile economic conditions acted as material reasons for following a policy of non alignment, which certain academicians view as a safe path to seek cooperation of big powers and prevent any power bloc from turning hostile, apart from Nehru’s strong conviction against balance of power, military alliances and rush to exhibit military power. India became extremely inward looking during Cold war era as it was marred by its domestic problems. Persistent levels of poverty, rising corruption and poor governance during 1970’s and 1980’s along with tumultuous neighbourhood tied India to sub-regional and national issues, overlooking African Continent as being irrelevant to its National interests. Post cold war the policy mandarins in Delhi were compelled to reshape its foreign policy, taking into account the new impulses of global arena. In addition, India’s growth rates have averaged at around 6% per annum since 1990’s, after taking off in 1980’s[8]. India’s pro-business strategy followed by liberalisation in early 1990’s along with refocus of Indian Companies to fresh markets and investment opportunities in regions having large Indian diasporas resulted in consolidation of old ties. Impressive growth rates allowed India to address its internal problems and fine tune its foreign policy with economic ambitions. After a detailed arrangement to send envoys to sub Saharan countries during 1996-97 as a mark of reaffirmation of India’s assurance to strengthening cooperation with these countries in a spirit of south-south partnership[9], the Government of India increased its involvement with African states further in 2003. This was followed with announcement of Indian Development Initiative. India is in drastic need of finding new suppliers of energy and other primary resources. For India to become a global power it must grow above 8 percent annually for at least two decades. The assured availability of energy will be a key factor. India despite its domestic production of oil and natural gas will still incrementally require additional resources of energy. India’s hydrocarbon import dependency has been predicted to rise from current 70 percent to almost 92 percent by 2030[10]. As true to any Nation, the continued growth of India depends on availability of raw materials for industrial production and energy sources to support industries. As per reports till 2009, India imported 70% of its oil requirements and provided heavy subsidies on domestic prices, leading to double digit inflation figures after being under 6%[11] for 13 years. India’s Africa policy has laid emphasis on expansion and diversification of supply sources and to that end Indian national oil co mpanies have purchased equity stakes in overseas oil and gas fields to ensure reserves and provide a boost to production capability. These include fields in Africa, Southeast Asia South, America and Caspian Sea region. Despite these efforts the majority imports arrive from Middle east where Indian companies struggle for direct access or investments[12]. The tilt in relations of immediate neighbours of India towards China, tensions with Pakistan, competition with China and demonstration of African partners as all weather friends during world wide sanctions post nuclear tests were the major motivators for India to reformulate its foreign policy. While India is seeking to be a more dominant power and credibility in global scene, it is increasingly relying on Southern backing. Objectives of Indian National interests appear to be fulfilled through newly identified means of â€Å"Aid†. On one hand India rejected foreign aid from most of its donors in 2003 to draw attention of world order to its self sufficiency in tackling its internal problems of poverty, corruption etc. and on the other hand to reflect its role as a new donor. India initiated its development assistance way beyond its immediate neighbours along with scaling up of diplomatic initiatives within Africa, increasing the number of Indian embassies in the continent. It a lso covered the regional divisions of Africa by creating three joint secretaries[13]. Historical and ideological linkages between India and African countries have been important factor, too.1950s witnessed south-south cooperation as a platform for struggle by former colonies for independence and greater autonomy. Bandung conference of 1955 brought together 29 Asian countries with Africa to promote cultural and economic cooperation in Asian-African region. Mutual interest and respect for national sovereignty was the basis of this conference. NAM came to being in 1961 and Group of 77 in 1964, which were viewed as anti hegemonic. India and China championed these movements and have been in competition to lead the representation of Southern states, since then. While China provided military assistance for liberation movements, India was assisted in anti- apartheid struggles in Zimbabwe and South Africa. Ideals of Mahatma Gandhi were integral to India’s foreign policy, who has been quoted to have said that â€Å"ideas and services will be drivers of commerce between India and Africa unlike Western exploiters busy in trading manufactured goods against raw materials†. This resulted in emergence of India’s philosophy of developmental assistance to Africa which culminated in creation of ITEC programme[14]. This placed training and capacity building ahead of financial assistance. During Delhi declaration of India-Africa Forum Summit in 2008 Prime Minister Manmohan Singh, announced that: â€Å"The time has come to create a new architecture for our engagement in the 21st Century. We visualise a partnership that is anchored in the fundamental principles of equality, mutual respect and mutual benefit. Working together, the two billion people of India and Africa can set an example of fruitful cooperation in the developing world†[15]. The Indian policy makers identified the pre conditions of Western donors which was attached for a long time on any aid without aligning it with the aspect of developing the productive ‘supply side’ of economies. A model of developmental assistance with minimal conditions and respect for the national sovereignty worked out by Indian policy makers appeared to be more acceptable and less imposing. A new body for governing India’s outgoing development assistance, called development Partnership Administration (DPA) has been set up under the Economic Relations Division of MEA, which is just short of an â€Å"aid† agency. It is mandated to streamline administrative issues of entire process apart from assessing the effectiveness of credit lines that India is extending to its partners.[16] It primarily allowed African states to set terms of agreement and overall purpose of aid. In 2009, Paul Kagame, president of Rwanda, announced his desire that:- â€Å"All would benefit if the world focused on increasing investment in Africa, and if Rwanda and the rest of the continent worked to establish more equitable international partnerships. A trade relationship built on this new approach would be more helpful in reaching what should be our common goal: sustainable development, mutual prosperity and respect†[17] Value and Sector based distribution of Lines of Credit   Source: Indian Development Cooperation Research at Centre for Policy Research India’s security concerns and contribution into stability of African security are also related issues with an aim to secure its National interests. Owing to deteriorating conditions of piracy at sea on West Africa and existent threat off the coast of African horn, there lies an opportunity to exercise its well espoused maritime doctrine published in 2004 and revised in 2009[18]. India’s experience in UN peace keeping missions especially in Africa has its origin in contributions to ensure stability of the region. There exists a framework for defence cooperation in the form of training teams to evolve better training programmes for the countries it is engaged with. India’s naval presence is largely restricted to anti piracy in the gulf region, but there exists a wider scope for enhanced engagement in operations as well as training with a broader aim of addressing strategically important Indian Ocean rim. Analysis What emerges from the study of evolution of India’s foreign policy with respect to Africa, is that the main drivers of India’s relations with Africa present a tricky mix of strategic, economic and political factors based on national interests of India with complex set of internally diverse actors and historically stated policy of non alignment generally understood as non interference, thus providing enough space for the other partners to have a say in engagements. In effect, India has sought to develop and pursue a strategic partnership simultaneously maintaining bilateral policy objectives. African relations are suggestive of being a conduit to India’s wider international objectives with a focus on improving trade as well as political conditions not only for itself but also developing nations at large employing its economic and political muscle. As part of revisionist approach India has pushed hard for reconfiguration of some of the institutions of global govern ance. African nations have been observed as useful allies in such ventures, as almost all of them have backed India in its bid for permanent seat in UN Security Council. The critics of the subject have highlighted certain specific issues with respect to hidden intent of India, incoherent policies, pitfalls in thought process by way of over reliance on nostalgia of Nehruvian era and over stretched MEA with limited staff to address a huge area and lack of decentralised agency to ensure correct and transparent implementation policies on ground. A relatively ad-hoc system of overseeing various policy issues have led to significant gaps in implementation of identified thematic areas. Though India’s private sector actors drive numerous commerce related agendas, businesses haven’t progressed based on the regional strengths against the backdrop of fragile security conditions. Issues of poor infrastructure, lack of access to finance for small traders and limited logistic support act as impediments that need to be addressed to harness unprecedented opportunities that emerge for Indian companies. The experts also point at pitfalls in public-privat e economic diplomacy approach to Africa largely due to poor coordination, lack of long term vision and enthusiasm to pursue apart from poor market intelligence. Despite provision of Lines of Credit commitments, in consonance with the principle of mutually beneficial development cooperation, engagement on economic affairs also should seek enhanced role and integration of Confederation of Indian industries, with pan-African mechanisms such as NEPAD (The New Partnership for Africa’s Development), AU (African Union) and AfDB (African Development Bank Group). As more and more oil imports are planned from traditional oil producing countries in Africa, security strategies need to be put into place in greater details. Countries like Nigeria which are one amongst the largest oil suppliers to India from Africa face internal as well as external security crisis. While groups like Boko Haram pose threats closer home to various oil producing infrastructure, emerging piracy in the west coast of Africa pose threat at sea. The scrounge of piracy has been addressed in a very limited manner by certain groupings like Economic community of West African States(ECOWAS), India’s capabilities in defence and familiarity with wide ranging security concerns can empower ECOWAS to address insecurity caused by rising piracy on the region. India needs to consider initiating economic diplomatic strategy including maritime defence cooperation and innovative infrastructural financing mechanism aimed to benefit local development in gas and oil producing countrie s in Africa while securing imports that could assist in India’s need for fuel. To sum up the analysis it is felt that India has tremendous potential and value to stimulate development and economic growth across Africa, but it has lacked to articulate a coherent Africa Policy which appeals Africans. In addition, more clarity needs to be brought into the actual agencies dealing with India’s development cooperation to Africa along with a vibrant spokesperson who clarifies any ambiguities which are perceived in daily discourse of business. A greater coordination of Indian private sector with African regional and continental governance frame works rather than bilateral engagements will bring better prospects. [1] Beri R, ‘India’s Africa policy in the post-Cold War era: an assessment’, Strategic Analysis 27: 2, 2003, p 216–32 [2] Noury V, ‘Trade levels grow by 400% in five years’, African Business, Jan. 2012, p. 35. [3] Peter FM Mc Ewwan and Sutcliffe Robert B, ‘The Study of Africa’, p 13. [4] Times of India, 24 May 2011. [5] Agrawal S, Emerging donors in international development assistance: the India case (Ottawa: International Development Research Centre, Partnership and Business Development Division, 2007), p.7 [6] Noury Valerie, ‘Trade levels grow by 400% in five years’, African Business, Jan 2012, Issue 382, p. 35. [7] Corkin L and Naidu S, ‘China and India in Africa: an introduction’, Review of African Political Economy 35: 1,2008, pp. 115–116. [8] Jenkins Edwards, 2006:2007 [9] En.wikipedia.org/wiki/Foreign_relations_of_India#Africa, accessed on 03 Nov 2014. [10] Gupta Ranjit, Special Commentary, India and Gulf: Looking beyond Energy, Islam and the Diaspora, www.ipcs.org, accessed on 03 Nov 2014. [11] Mc Carthy Tom, Assessing China and India’s New Role in Africa, www.e-ir.info /2011/07/26, accessed on 03 Nov 2014 [12] Independent Statistics and Analysis by US Energy Information Administration, www.eia.gov/countries/cab.cfm?fips=in , accessed on 03 Nov 2014 [13] Mc Carthy Tom, Assessing China and India’s New Role in Africa, www.e-ir.info /2011/07/26, accessed on 03 Nov 2014 [14] 50 years of ITEC, www.mea.gov.in / uploads/PublicationDocs/24148_Revised_50yrs_of ITEC_brochure.pdf, accessed on 03 Nov 2014 [15] www.idsa.in, 9 April 2008, accessed on 04 Nov 2014 [16] www.thehindu.com/opinion/op-ed/aid-from-india-coming-to-a-country-near-you/article 3859607.ece , accessed on 04 Nov 2014. [17] www.paulkagame.com/speeches_main_3.php, accessed on 04 Nov 2014 [18] Indian Maritime Doctrine release (release ID: 52223), Indian MoD, 28 August 2009, pib.nic.in /newsite/erelease.aspx?relid=52223, accessed 04 Nov 2014 ; News article titled â€Å"Maritime doctrine makes subtle changes in principles of war†, published in THE HINDU, on 30 Aug 2009, accessed on 04 Nov 2014 www.thehindu.com/todays-paper/tp-national/maritime-doctrine-makes-subtle-changes-in-principle-of-war/article216179.ece