The South Asia Channel
In India, it’s Time for Africa!
India recognizes a complementary role between India and China in Africa, but the continent’s China fatigue is the window of opportunity India was waiting for!
This week New Delhi hosts the third India-Africa Forum Summit with delegations from all African states, more than 40 of which represented by their heads of state or government. It’s the largest diplomatic conclave the Indian capital has hosted in more than thirty years.
The first two editions of the summit, in 2008 and 2011, were rather low-key, attended by only a dozen African states and overshadowed by China’s gigantic Forum on China-Africa Cooperation summits. But the momentum has now changed in India’s favor: Chinese economic slowdown, the Shanghai stock market crash, and the devaluation of the Yuan exposed the limitations of relying excessively on Beijing, and several African governments are coming under increasing domestic pressure to diversify their partnerships.
China fatigue as window of opportunity
Africa’s China fatigue is the window of opportunity India was waiting for. There are significant reasons why India’s domestic growth plans hinge on closer engagement with Africa. In order to reduce its dependence on the Gulf countries, India now sources more than a quarter of its oil imports from Africa, with an estimated 10 percent to be sourced from Nigeria alone by 2016.
Africa’s share in India’s global trade rose from 6 percent ($4.8 billion) in 1997-98 to almost 10 percent ($68 billion) in 2013-14, and with the continent’s economic growth rate expected to peak at 5 percent in 2016, Indian Prime Minister Narendra Modi’s new Make in India policy to power exports crucially depends on tapping the demand in Africa’s rapidly expanding consumer markets.
However, how best to implement and achieve these objectives is a topic of heated debate. In the early 2000s, many analysts argued for India to mimic and match Chinese companies’ colossal entry into Africa but ignored Beijing’s first-mover advantage. This was obvious in Angola where, in 2006, China’s Sinopec bid for an offshore oil block trounced India’s Oil and Natural Gas Cooperation by more than twice the value. As recently as 2013, Zambian Vice President Guy Scott warned that India is “unable to match” China’s monumental presence in Africa.
To explain these setbacks, Indians developed their own version of China’s win-win rhetoric. Government statements argued that in contrast with Western countries, India’s cooperation was slower because it was purely “request-based, non-intrusive and non-prescriptive,” while privately officials also hinted critically at China by underlining India’s opposition to “rapaciously extractive” and “neo-mercantilist” policies; in 2013, India’s then foreign minister equated China to a “cold ATM” in Africa.
In 2011, Vivek Katju, then India’s senior-most diplomat in charge of Africa, recognized that there was a “complementary role” between India and China, each building on respective strengths at their own pace. This week’s summit marks not the beginning, but the confirmation of this new Africa policy, based on a targeted exploration of sectors in which the Indian government identified a comparative advantage over China.
Seven comparative advantages
First, India’s image in Africa still derives positive returns from its historical role in influencing anti-colonial leaders such as Julius Nyerere of Tanzania, Kenneth Kaunda of Zambia, Kwame Nkrumah of Ghana, and Obafemi Awolowo of Nigeria. Some would argue that a new generation has now taken over leadership on both sides, and the relationship has moved on to be more transactional. But when properly packaged as soft power, India’s history of diplomatic support for democracy, opposition against colonialism, and racial discrimination continues to resonate with younger Africans.
Second, India’s proximity to East Africa offers a potential for cooperative infrastructure projects that bridge the Western Indian Ocean. Little more than 3,000 miles separate Zanzibar from Mumbai, and as Africa is one of the world’s least broadband penetrated regions, there are multiple opportunities for India’s private sector to explore, including new submarine fiber optic linking both coasts, such as the Seacom/Tata connection, launched in 2009, and new shipping routes as piracy activity off Somalia decreases significantly.
East African coastal states look up to New Delhi as a privileged partner who can help develop their coast guard and naval capabilities, from the Gulf of Aden to the Mozambique Channel. India has taken a lead in three key initiatives: the Indian Ocean Naval Symposium, which includes thirteen states in the East African littoral sub-group; the Indian Ocean Rim Association, which includes South Africa, Mozambique, Tanzania, Kenya, as well as Madagascar and Mauritius; and the IBSA trilateral, which hosted four rounds of joint naval exercises in Southern Africa’s Indo-Atlantic link waters.
Third, India can build on its wide experience in contributing to security and stability on the continent. By 2008 India’s military had emerged as the largest contributor to U.N.-mandated peacekeeping and other operations in Africa, with more than 30,000 personnel involved in 17 out of 22 total missions since 1960. To date, New Delhi has also trained over 100 military officials from more than 20 African countries at the regional Center for United Nations Peacekeeping in New Delhi.
Fourth, on the economic front, India’s model of penetration driven mainly by private sector interests has its own advantages that differ from the state-driven Chinese model. A World Bank study thus notes that unlike Chinese businesses that tend to result in enclaves with limited spillover effects, Indian firms pursue strategies that result in greater integration with domestic markets. And a 2013 study on anti-corruption and accountability among firms operating in Africa, concluded that while nine out of the 11 worst were Chinese, companies from India performed the best overall, mostly because of domestic disclosure requirements. This may now prove to be an advantage as several African governments are seeking to subject foreign investments to greater transparency and check corruption.
The Indian government has also focused on the softer sectors of education and human resources based on its domestic experience with private entrepreneurship and its English-language educational institutions. In 2005, India became the first Asian full-member country of the African Union’s Africa Capacity Building Foundation and almost 50 percent of Indian grants to Africa are now in the Information and Communications Technologies or education sectors.
Fifth, the Indian diaspora in Africa, estimated at more than 1 million people, is far more integrated socio-economically than the massive new Chinese labor diaspora. According to a 2007 World Bank survey on international firms operating in Africa, 48 percent of company owners of Indian origin held African nationality, against only 4 percent of Chinese company owners. Being substantially more integrated into the business community in Africa, overseas Indians are also able to better assist New Delhi’s efforts to develop local partnerships.
Sixth, there is also a wide scope for India to foster regional integration and multilateral cooperation in Africa instead of pursuing a strictly bilateral approach as in the case of China. The second Africa-India Summit, in 2011, was organized in partnership with the African Union, the New Partnership for Africa’s Development, and the continent’s eight regional economic communities. Unlike China, India has also reached out to a variety of African countries via the Commonwealth, the G-77 of developing nations, the Non-Aligned Movement, and has also expressed interest in joining the Community of Portuguese-speaking Countries as an observer rather than building its own, separate forum.
A final comparative advantage relates to India’s exceptional experience in democratic governance of one the world’s most ethnically, linguistically, and religiously diverse populations. As sub-Saharan Africa experiences an unprecedented wave of democratization, the sustainability of the so-called Beijing consensus is being called into question. A founding member of the Community of Democracies, India is now increasingly confident to respond to a rising number of requests from African government and civil society organizations to share its expertise on electronic voting systems, election management, federalism, parliamentary procedures, decentralization, and local government. This represents an immense potential for inter-democratic cooperation that China won’t be able or willing to tap into.
Partnering with “like-minded” democracies
While this week’s summit in New Delhi will focus on initiatives that strengthen Indian comparative advantage in Africa, Prime Minister Modi’s plans will continue to be constrained by his public sector’s lacking financial capacity and Indian private company’s reluctance to take risks abroad.
This underlines that rather than working alone, it may have a greater impact by working together with the United States as a “like-minded” partner in Africa. The sense that India’s distinct presence already complements U.S. efforts to promote greater stability and security in Africa is reflected in the recent announcement that Washington and New Delhi will jointly train troops in six African countries for U.N. peacekeeping missions.
Prime Minister Modi’s decision to invite the United Arab Emirates and Singapore to attend this week’s summit aims to strengthen the financial clout of India’s Africa policy by accessing their vast capital funds, but there are strong indications he will also pursue opportunities for trilateral cooperation with the United States, the European Union, Brazil, Japan, Australia, and other democratic great powers that are committed to assist Africa in its quest for sustainable economic growth under political freedom.
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