Competitive Exams: Current Affairs 2011: Indo-Africa Ties

Indo-Africa Ties

  • Thus far, India's engagement with Africa has operated at two levels.

  • The first level is official, where the government has grafted on to the political goodwill built up over several decades some real financial heft. After pursuing regional and pan-African initiatives like the Team-9 framework for cooperation in West Africa and the e-network project, the first Africa-India summit in 2008 envisaged a line of credit worth $5.6 billion to be spent on development and capacity building projects. Least-developed African nations were to get preferential access to the Indian market and India also committed itself to establishing 19 centres of excellence and training institutions in different fields across Africa.

  • Side by side with this official thrust, the Indian private sector has also shown a willingness to invest billions of dollars in Africa. The Second Africa-India summit to be held in Ethiopia this week is likely to increase the pace of this engagement. There is talk of pushing bilateral trade with Africa to $70 billion by 2015, up from the current level of $46 billion. Cumulative Indian investments in Africa stood at $90 billion in 2010 and are likely to rise dramatically in the years ahead.

  • At the same time, there are several steps India needs to take to ensure the current momentum is maintained and even intensified.

  • First, India must ramp up its diplomatic presence in Africa. Indian companies and citizens will be more likely to work in countries where India maintains an embassy. And it would help if these embassies were robustly staffed by young diplomats anxious to make a mark rather than by those at the fag end of their career who see a tour of duty in Africa as a punishment posting and who have little or no interest in African culture and society.

  • Second, the government should consider establishing a special purpose vehicle (SPV) to pursue strategic investments and business opportunities in Africa, especially in sectors such as mining, infrastructure and agriculture. Such an SPV could harness the talent and resources that the Indian public and private sectors have to offer but which their managements are often unable to utilise in overseas projects in a timely manner for a variety of reasons.

  • Third, the SPV or some other official entity must pay attention to corporate social responsibility issues connected to all Indian FDI projects in Africa, especially since many of them might be in countries where domestic regulatory frameworks for workers rights and environmental protection are inadequate or dysfunctional. As public pressure in India makes it less easy for Indian companies to cut corners at home, some of the motivation to invest in Africa might be linked to their belief that they can get away with dodgy business practices there. India has a strategic interest in ensuring that Indian companies operating abroad act responsibly and must come up with an appropriate monitoring mechanism.

  • Fourth, there must be a strict audit of all monies disbursed through the Lines of Credit for Africa. Two years ago, there were reports of questionable dealings in the subsidised export of rice to a number of sub-Saharan African countries. With Indian credit lines now running into several billion dollars the eventual beneficiaries of which will be Indian companies and suppliers to whom recipient governments are obliged to buy from there must be complete transparency in the process from start to finish.

  • Fifth, a greater effort should be made to build on the domain knowledge and cultural equity that the Indian diaspora across Africa has in abundance about local business conditions and customs. It is estimated that there are as many as two million people of Indian origin living in Africa. Though the bulk of the diaspora is in countries like South Africa, Kenya, Tanzania and Nigeria, Indian businessmen and even teachers and professionals can be found in virtually every African country. For a variety of reasons, these communities are not so well integrated within the political and cultural milieu of their host countries. But the more economic and cultural interaction there is between India and Africa, that could well change.

  • Sixth, the commerce of ideas that Mahatma Gandhi envisaged the future relationship between India and Africa to revolve around should be made a central element of Indian policy. The 2.2 billion people of India and Africa share many problems and could learn from each others experiences in resolving these. Promoting partnerships between the media and academic communities might be one way to do this.

  • Innovative work in the field of handicrafts has just started and the rich field of cultural interaction has remained practically unexplored. As much if not more than business deals and lines of credit, it is this commerce of ideas which will provide true depth to the emerging partnership between Africa and India.

India in Africa

  • The second India-Africa summit at Addis Ababa has set the stage for a comprehensive re-engagement between the worlds largest democracy and an emerging continent. The Africa-India Framework for Enhanced Cooperation and the Addis Ababa Declaration adopted at the summit envisage economic and political cooperation, and also cooperation in a host of other areas including science and technology, social and infrastructure development, tourism, culture, and sports. Africa and India recognise the opportunities they bring to the table for each other; both are now better positioned to use these opportunities in ways that can give substance to the old political slogan of South-South cooperation. As a leading player in the global economy, it is natural for India to seek participation in a resource-rich continent that Prime Minister Manmohan Singh has described as the new economic growth story. His announcement of a $5 billion credit line over the next three years was the eye-catcher of the summit, but clearly, African nations are interested in enhancing their own skills and capabilities. India, with its substantial technology knowledge pool, is well placed to contribute to such capacity-building. This will also help in better utilisation of Indian financial assistance of the committed credit line, unused funds from a previous financial package comprise $3.4 billion.

  • Following the first summit in 2008, India initiated several such efforts, including the Pan-African e-Network Project across 43 countries, which drew appreciation from the beneficiary countries. That new proposals for capacity-building discussed at this summit cover fields as diverse as information technology, textiles, food processing, and weather forecasting underscores the needs of a continent seeking to stabilise itself economically and politically. As important, it highlights Africas recognition of rising Indias capabilities to assist other developing countries. The India-Africa relationship is not new; it draws on a long, shared history of struggle against European colonialism, and a determination to ensure equality in the post-colonial world order. Africa has played host to a large Indian diaspora, and independent India was among the first to take a firm stand against apartheid in South Africa. Reducing

  • India's ties with Africa to a rivalry with China is to take a narrow view of history. Given the realities, it is also meaningless Chinas $126 billion trade with Africa is way ahead of Indias $46 billion. It is best for New Delhi to use the present momentum to build its relationship with Africa in ways that will be of optimal benefit to both sides.

Courtesy: The Hindu and Times of India