The Indian elephant returns to Africa

Posted in Africa , India | 25-Apr-08 | Author: Chietigj Bajpaee| Source: Asia Times

Indian Prime Minister Manmohan Singh

In an address to the Nigerian National Assembly last year Indian Prime Minister Manmohan Singh was unequivocal in his stance on Africa's resurgence. "India intends to be a partner in Africa's resurgence," Singh said at the time.

Recent years have seen a surge in India's engagement with its "sister continent", as demonstrated most recently by India playing host to its first India-Africa summit earlier this month.

Unlike the Cold War period when India's engagement with Africa was embedded in the rhetoric of historical and cultural links, India's current relationship with Africa has been fueled by pragmatic concerns over resources and development. Nonetheless, India faces numerous challenges in its rediscovery of Africa, notably playing catch-up with its regional rival China and avoiding the criticism that Beijing has incurred for allegedly fueling the region's instabilities and engaging in neo-colonialist Asiatic imperialism on the African continent.

Embedded in history
India's relations with Africa are embedded in their shared history and cultural exchanges. Trade between the two continents dates to the 14th century. During the period of European colonialism these links were strengthened as both regions shared colonial masters. For instance, Mozambique became the staging ground for the Portuguese presence in Goa while the British East Africa protectorate, which comprised present-day Kenya and Uganda, was originally administered from Bombay (Mumbai).

Following its independence in 1947, India's first prime minister Jawaharlal Nehru became a leading voice of the anti-colonial struggle in Africa, which was supplemented by the Non-Aligned Movement during the Cold War era. Beyond history, both regions share several cultural linkages. India's Siddi community came from Africa in the 10th century and there are approximately 2 million people of Indian origin in Africa, where they form a vital link between their motherland and adopted homeland. The Indian government maintains diplomatic missions in 19 of the 47 sub-Saharan countries with plans to open others in Burkina Faso, Niger and Gabon.

Rediscovered by trade and resources
With the end of the Cold War and India initiating its economic liberalization reforms in 1991, India's foreign policy has moved away from being driven by ideological principles to becoming increasingly pragmatic. Gandhian idealism and Nehruvian non-alignment have taken a back seat to attracting investment, expanding trade and upgrading infrastructure to fuel growth and development.

As part of this, India reoriented its foreign policy toward a focus on major power diplomacy, including improving relations with the United States, the European Union and Russia, as well as China, Japan and other Asian powers as part of its "Look East" policy. India has also looked to stabilize relations with its periphery to maintain investor confidence and focus on development needs. In doing so, India neglected relations with its brethren in the developing world.

India's recent re-engagement with Africa has been fueled by pragmatic concerns, namely expanding economic interdependence and meeting resource needs. Bilateral trade between India and Africa has grown from US$967 million in 1991 to over $30 billion in 2007-2008 with intentions to double this to $50 billion by 2012. Africa's share of India's global trade increased from 5.8% in 2002-2003 to 8% in 2006-2007.

Meanwhile, India's official investment in Africa stands at $2 billion in addition to $5 billion from the private sector. Economic cooperation spans several sectors, including agriculture, small and medium enterprises, health, education, information technology and communications, automobiles, manufacturing and railways. In February, India announced a 60% increase in aid to Africa over the next financial year to 800 million rupees ($20 million).

Several bilateral and multilateral initiatives have also been used to forge closer economic links between India and Africa. In March, India hosted the fourth India-Africa Project Partnership in New Delhi, which was attended by over 500 business delegates from 33 African countries. Some 150 projects worth $11 billion were discussed while the Export Import Bank of India extended $30 million in credit to finance Indian exports to Africa.

Meanwhile, at the first India-Africa forum summit in April, Manmohan pledged to provide over $500 million in development grants to Africa over the next five to six years as part of the Aid to Africa budget of the Ministry of External Affairs, as well as doubling India's line of credit to the region to $5.4 billion from $2.25 billion in the last five years. He also announced a Duty Free Tariff Preference Scheme for Least Developed Countries, under which India will provide preferential market access for exports from 50 of the world's least-developed countries, including 34 in Africa. The plan will cover 94% of India's total tariff lines.

African states have sought to learn from India's development experience given its rapid growth and success in a number of industries such as information technology. For instance, the India-backed Pan-African e-Network Project seeks to digitally connect 53 countries of the African Union by linking universities and hospitals in India and Africa.

Meanwhile, Mauritius has emerged as the largest offshore investor in India while South Africa accounts for two-thirds of Africa's exports to India, which comprise mainly of gold. India accounts for 90% of the world's exports of cut and polished diamonds and as such it has also sought an increasingly close relationship with African states such as Angola, Botswana, Congo and South Africa, which account for 90% of the world's supply of rough diamonds. Ore and metals continue to dominate India's imports from Africa although uranium may emerge as an increasingly important import from the region as India expands its civilian nuclear program.

India's trade relationship with Africa has traditionally been skewed toward east and southern Africa although its trade with west Africa is likely to increase given its growing dependence on oil imports from the region, as 70% of Africa's oil production is concentrated in the Gulf of Guinea, which stretches from the Ivory Coast to Angola.

India has increasingly looked to Africa to meet its energy security needs given that Africa possesses 8% of the world's known oil reserves and West African crude is generally easier to refine given its low sulfur content. India has also sought to diversify and reduce its oil import dependence on the Middle East, which accounts for over two-thirds of its oil imports. Notably, India's state-owned Oil and Natural Gas Corporation Videsh (OVL) has invested $2 billion in eight African countries, including Nigeria, which is the region's leading oil exporter accounting for 10% of India's oil imports.

India's Essar Group, Gas Authority of India Limited (GAIL), Indian Oil Corporation and Reliance Industries have also obtained interests in African energy assets. Imports now account for more than two-thirds of India's oil consumption and India's energy demands are expected to double by 2030 making it the world's third-largest net oil importer, after the US and China.

Cemented by security and strategic concerns
India and Africa are also seeking a larger "voice" on the international stage through greater representation at international forums. Notably, the 53-nation African Union (AU)and the Group of Four (G4)countries (India, Brazil, Germany and Japan) are attempting to forge a united front in the expansion of the UN Security Council.

In previous years, the G4 and African states had hindered each other's efforts on the issue of UN reform given disagreements over the structure of a reformed UN Security Council. As the largest bloc of nations at the UN, AU support is pivotal if India is to achieve its goal of a permanent seat on the Security Council. India also engages Africa through several South-South initiatives such as the Non-Aligned Movement, the Asia-Africa Summit, the Indian Ocean Rim Association for Regional Cooperation, the India-Brazil-South Africa trilateral developmental initiative and the G33 bloc of developing nations at the World Trade Organization.

At the first India-Africa Forum Summit in New Delhi in April, representatives from India and 14 African countries were in attendance, including eight African heads of state and the current and future chair of the African Union Commission. The summit culminated in the signing of two documents: the Delhi Declaration and the Africa-India Framework for Cooperation, which identified areas of common interest and cooperation between both sides. Speaking at the opening of the conference, Manmohan also proposed the establishment of an India-Africa Volunteer Corps to address development issues in both regions, as well as announcing the doubling of student scholarships for African students in India.

In the security sphere, the fact that 90% of India's trade volume and 70% of its trade value comes by sea has prompted India to play a more prominent role in protecting sea-lanes of communication along the Indian Ocean. As part of this, India established its first overseas surveillance facility in Madagascar in July 2007. India has also reached defense agreements with several African states along the Indian Ocean Rim, including Mauritius, the Seychelles, Madagascar, Mozambique, Kenya and Tanzania, as well as stepping up joint military exercises with states in the region. India will be holding joint naval exercises with South Africa and Brazil off Cape Town in May, as well as joint naval exercises with Seychelles this year.

This follows joint exercises between the air forces of India and South Africa in 2004 and naval exercises in 2005. India also provided joint patrols off the coast of Mozambique during the AU summit in 2003 and World Economic Forum meeting in 2004, as well as providing relief to African states that were hit by the Indian Ocean tsunami in 2004. Finally, India has been a major source of peacekeepers on the African continent, with India being the world's third-largest supplier of UN peacekeeping troops.

The great game in Africa
Finally, India's re-engagement with Africa has been driven by its quest for "great power" status and desire to balance the presence of other external powers in the region, most notably regional rival China, which has made considerable inroads in recent years.

For instance, while India's trade with Africa exceeded China-Africa trade until as recently as 1999, India-African trade is now dwarfed by China's burgeoning trade with the region, which amounted to $73.3 billion in 2007, making it the region's third-largest trading partner after the US and EU. China and Africa have pledged to bring bilateral trade to $100 billion by 2010. China's investment in Africa stands at approximately $8 billion; four times India's investment on the continent while China's aid to African countries has often matched that of major international organizations and Western donors.

Similar to India, China's relations with Africa have shifted from holding a strong ideological bias in support of communist regimes and Marxist insurgencies to being led by market and resource considerations. Notably, China now obtains a third of its oil imports from Africa, as well as looking to the region for other raw materials such as minerals and metals. Apart from resource interests, China's engagement with Africa has been driven by its desire to isolate diplomatic recognition of Taiwan, maintain a peaceful international environment or "harmonious world" so that Beijing can focus on internal development needs, prevent humanitarian intervention in states with poor human rights records, which may set a precedent for future intervention in China, exercise leadership in the developing world, and create a multipolar world.

In achieving these goals China has relied on both substantive actions and symbolic gestures. For instance, the Chinese Foreign Minister has maintained a policy of making his first overseas visit to Africa every year; the Chinese government appointed its first special envoy to Africa in May 2007 to address the genocide in the Darfur region of Sudan, and China hosted the heads of state of 48 African countries at the Forum on China-Africa Cooperation in November 2006. Since 1990, China has also deployed troops on 15 UN peacekeeping operations in Africa, making it the largest contributor among the five permanent members of the UN Security Council.

In taking a holistic approach toward engagement with the region, China has often overtaken India in Africa. For instance, India has often lost energy assets to China as the latter has adopted a more strategic approach that integrates financial incentives with aid, infrastructure projects, diplomatic incentives and arms packages. For instance, in 2004, China's Export-Import Bank extended $2 billion in soft loans to Angola, which led Angolan company Sonangol to support the bid by China's CNPC (China National Petroleum Corporation) over that of India's ONGC for a stake in an offshore block.

Aside from India and China's growing role in the region, the United States has also been increasing its presence in Africa. It is estimated that African crude will account for a quarter of the United States' oil imports by 2015. On the security front, the US established the United States Africa Command (AFRICOM) in October 2007, which will be fully operational by September 2008.

A new framework for engagement
India is finally developing a "Look West" policy to complement its "Look East" policy. India's rediscovery of Africa has been fueled by its pragmatic concerns, namely meeting resource needs. However, this pragmatic relationship continues to be embedded in shared culture and history. In addition to this, a string of shared strategic concerns have brought India and Africa closer together, including the need to address shared security threats emanating from maritime piracy, terrorism, health epidemics such as HIV/AIDS, climate change and food security.

Nonetheless, India is keen to distinguish its role in Africa from Western states, which were seen to be exploiting the region's people and resources. In his opening address to the first India-Africa Forum summit, Manmohan noted that the India-Africa partnership is "anchored in the fundamental principles of equality, mutual respect and mutual benefit". Indian Junior Minister for External Affairs Anand Sharma has also noted that "India's engagement with Africa is time tested, different and cannot be compared to any other country."

Meanwhile, China has been accused of fueling the region's instabilities by forming close relationships with pariah regimes such as Sudan, Zimbabwe and Angola, and selling arms to the region. China has also been accused of extracting resources from Africa without benefiting the region's people and undermining the local environment. The World Bank has noted that Indian companies generally have a better record than Chinese companies in Africa, with the former employing more locals that then latter. Sharma stated that "the first principle of India's involvement in Africa is unlike China. China says go out and exploits natural resources, our strategy is to go out there and add value."

Nonetheless, India's engagement with Africa has not been without controversy. Notably, there is a long-established history of labor unrest between ethnic Indians and indigenous Africans in countries such as Kenya and Uganda. For instance, on October 11, 2007, Indian steelworkers were abducted in Nigeria over a pay dispute with union members. India also engages with many of the region's same unsavory regimes that China does.

Notably, Indian firm OVL has a 25% stake in Sudan's Greater Nile Oil Project while India's trade with Zimbabwe amounted to $40 million in 2006. So far, India vhas avoided the international scrutiny that China has incurred over its policies in Africa although this is likely to change as it steps up its engagement with the region.

Africa remains vulnerable to instabilities ranging from piracy to terrorism, inter-state and tribal conflict, AIDS and political instabilities. Given the weak governments and significant Muslim populations of the region, the African continent is also a potential hub for Islamic extremism and terrorism. Finally, oil-rich countries in Africa have been unable to escape the "curse of oil", which has fueled corruption, conflict and environmental degradation across the region. Adding "great power" competition to this volatile mix could further destabilize the region.

Africa's most prominent Indian, Mahatma Gandhi, who lived in South Africa between 1893 and 1915, observed that "the commerce between India and Africa will be of ideas". Speaking at the opening of the first India-Africa Forum Summit this month, Manmohan noted this was a "new chapter in the long history of civilizational contacts, friendship and cooperation between India and Africa" with the goal of achieving "economic vibrancy, peace, stability and self-reliance". He added that he wished to see the 21st century as the "Century of Asia and Africa with the people of the two continents working together to promote inclusive globalization".

It remains to be seen if India's re-engagement with the region will be based on a new framework or follow a similar pattern taken by other external powers that fuels the region's instabilities.

Chietigj Bajpaee is a research analyst for Asia in the Country Intelligence Group at Global Insight. Prior to this he worked at the Center for Strategic and International Studies in Washington DC, the London-based International Institute for Strategic Studies, and for a New York-based risk management company. The views expressed here are his own. He can be reached at [email protected]