Saturday, October 24, 2015

An Africa wave in Indian foreign policy

by Ratnakar Tripathy

As India rose above its stereotypes after the 1990s, Africa in recent times is fast emerging above the long-standing clich├ęs around it. Africa never loomed large in the Indian consciousness after the days of Non-alignment in the 1960s. All this is about to change this week with the India-Africa Forum Summit 2015 (IAFS-III), being held from October 26-30. This summit and the accompanying extravaganza will see the participation of 54 countries and 35 heads of states. The two earlier summits in 2008 and 2011 were much smaller in comparison, registering the presence of 15 leaders or so.

Even the Indian media unused to Africa coverage is likely to get a sudden jolt this week and perhaps come up with dedicated Africa Desks in the coming months. Most of all, the educated Indian in the process may begin to see Africa not as a uniform mass but a continent offering as much variety and contrasts as Asia.

So what is the drive and the purpose behind this grand meet apart from the breaking of myths and stereotypes and the bonhomie that will be on display? The government website at this stage does not reveal much apart from the general objectives but India has focused on five elements as part of a ‘development compact’. These are trade and investment, technology, capacity building, lines of credits, and concessional finance. This is meant to contrast with a purely transactional manner in which other global players have sought to deal with the continent. Also the data from recent years is quite revealing – it shows not simply that Africa and India are coming closer but that there is a certain urgency that needs to be addressed.

India is looking at many advantages in its interaction with Africa. In the context of a new multi-polar global order, Africa can prove an important partner for India on all global strategic issues. Africa is one of the fastest growing regions with huge natural resources. According to African Economic Outlook 2015, the continent’s GDP is expected to strengthen to 4.5% in 2015 and 5% in 2016 from 3.5% in 2013 and 3.9% in 2014. This growth is driven by mounting investments in natural resources and infrastructure, strong household spending, and rising trade with emerging countries like India and China.

India-Africa bilateral trade grew around 23% annually between 2005 and 2013, with trade figures at $93 billion in 2013 expected to hit $100 billion by end of this year. In fact, the Indian government through its Duty Free Tariff Preference (DFTP) scheme promotes African exports to India. Capital investments from India to Africa have risen to $54.5 billion between 2003 and 2014, with 363 projects. Coal, oil and natural gas, and metals at this point top the Indian investment in Africa aimed at reducing India’s dependence on Middle East. These together account for over 55% of India’s capital investment in Africa but other unexplored possibilities await attention from India. Why India should continue to take such a keen interest in Africa is therefore not a difficult question to answer.

And yet the scale of the India-Africa Forum Summit 2015 does deserve a more substantial and far-reaching answer!

The answer lies in great part in what China has been up to in Africa in recent times – China has thus far been indisputably dominant in Africa. Its trade with Africa stood at more than $200 billion in 2013 and is estimated to cross $385 billion by the end of 2015. But with signs of the Chinese economy slowing down, Africa’s heavy dependence on China may begin to look unhealthy and worrisome. The past months have seen a significant drop in Africa’s trade balance with China and things could quickly get worse with the lower forecast growth rate of 3.1 percent for China. This is why we stand at a moment when the Indian and the African interests seem to converge rather nicely. After all India lies much closer to Africa with far longer cultural, political and economic ties with the region. Add to it the Indian diaspora in a number of African countries and the possibilities seem immense. Taking a broader view of the matter, India after all needs Africa not only for its growing energy needs but also the expanding African markets created by a rising middle class. The Indian naval interests and ambitions in the region go far beyond the issue of piracy and are on the upswing. 

The different regions of Africa offer a variety of options to the Indian business interests which are by no means confined to extractive industries. There are resource-rich landlocked countries, low median-age populous countries, post-conflict nation, nations with major agriculture and floriculture potential, and countries with special infrastructure requirements. Further, eastern and southern Africa are likely to emphasize infrastructure, farming, manufacturing and tourism and extracted resources would be a priority for West Africa. The land-locked states may be expected to construct infrastructures for access to distant ports.

Among the 137 Indian projects across 41 African countries with lines of credit worth US$ 7.5 billion almost 70% have a capacity-building component. Another instance of the capacity-building programmes are the 40,000 fellowships for African students created between the first India-Africa Forum Summit in 2008 and 2015. The recipients of the fellowships are quite likely to act as ambassadors in the coming years. The demographic profiles of India and Africa match very well – while India has 65% of its population at 15-64 years, Africa stands at 57% in this measure. This further raises the possibility of start-ups in the realm of ICT. Water conservation and alternative energy are some of the important areas where the two can collaborate fruitfully.

For all the above reasons the next week will be a time to watch out for the numerous concrete deals, MOUs and pacts made between India and the African nations individually as well as through various common African platforms and bodies.

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