The first India-Africa summit held in New Delhi in early April promises a more constructive and mature relationship between two latecomers to the global development game. Each side recognizes that the partnership will have to be sustained over a long period, and that it must focus not just on growth, but also on development which improves the quality of life of its people. It appears that finally some substance is being infused into Jawarlal Nehru’s frequent references to Africa as a “sister continent”.
India’s economy has grown at more than 6% a year over the past quarter of a century, and is expected to sustain an even higher growth rate in the coming decade. There is now genuine optimism about Africa’s growth prospects, based on the boom in commodity and minerals, and on signs of improving governance.
India’s economic and strategic diplomacy towards Africa has been consistent. Many initiatives launched in the final years of the National Democratic Alliance government have not only continued but also flourished during the United Progressive Alliance regime. The commerce ministry has the “Focus Africa” initiative, which tries to encourage projects and create market access in specific countries; the finance ministry’s “India Development Initiative” supports feasibility and pre-feasibility reports on specific projects; and the ministry of external affairs has funding mechanisms to encourage Indian businesses to go into Africa. These initiatives have been ably complemented by the private sector.
India’s academic and research institutions, however, need to develop much greater understanding of individual African countries and broaden linkages with their counterparts in Africa. There is also an urgent need to create a larger pool of Indians in all spheres with familiarities with languages spoken in Africa. Such familiarity and empathy for Africa’s challenges can provide India with valuable competitive edge. The Indian media also needs to assist in creating more positive perceptions of India in Africa, and of Africa in India.
India-Africa bilateral trade in goods and services has grown by 285% in the past four years to reach $25 billion, a rather modest figure in relation to the potential. India’s trade and investments are, however, spread in all parts of Africa, giving it a solid base from which to expand. Over the last five years, India has extended lines of credit worth $2 billion to African countries.
The Indian Prime Minister, during the inaugural address at the summit, announced that India would give preferential access to 34 countries in Africa which are among the least developed nations in the world. This should also help spur bilateral economic relations.
African entrepreneurs of Indian origin have also helped deepen business partnership between India and Africa. There is a strong case to expand Indian diaspora in Africa— at two million, it is less than 10% of the 25 million global diaspora—and widen the areas of its activities to include manufacturing, professional services and agriculture. The private sector should play a leading role in this expansion.
India’s economic model and its approach to engaging Africa is consistent with what former World Bank economist William Easterly, in his 2006 book The White Man’s Burden, called “searchers”. They, unlike “planners”, eschew global blueprints and seek to meet the demand of customers in a way that uses decentralized and customized approaches, while applying an existing stock of knowledge in a practical way to reduce resource costs and improve efficiency.
A 2006 World Bank study by Harry Broadman, Africa’s Silk Road: China and India’s New Economic Frontier, which was based on a survey of Indian and Chinese firms operating in Africa, found that in contrast to China’s enclave-type, state enterprise-dominated corporate profiles with limited spillover effects, Indian firms have been better integrated into domestic markets. Moreover, unlike Chinese firms—which bring workers from China even for construction and other tasks when African countries have a severe unemployment problem—Indian firms overwhelmingly opt for Africans even for managerial positions.
African countries are being wooed by all the major economic powers, particularly for their minerals and energy resources, giving them leverage. Sustainable benefits to the average African citizen are, however, likely to be realized only when partnership involves strong domestic linkages; develops human resources; and assists in employing modern knowledge and technology to address developmental challenges, particularly in agriculture. If these criteria are applied, African countries will find Indian businesses to be appropriate developmental partners.
The pan-African e-network joint initiative between India and the African Union, launched in 2007, aims to develop information communication technology (ICT) infrastructure across the African continent. Under it, India would donate $1 billion to connect 53 African countries through a satellite and fibre-optic network to promote tele-medicine and tele-education.
Given the importance of food security for both sides, applying knowledge of integrated crop management, and development of more efficient logistics arrangements, should be a priority.
Africa can play a crucial role in India’s economic growth and development. It is mineral-rich, and can provide markets as it sustains high growth. Some of those countries, such as South Africa, have capabilities and technologies to assist India and benefit from its growth.
A long-haul developmental partnership, based on application of knowledge economy, development of human resources and deeper domestic linkages, will assist both sides in managing the challenges of the 21st century, and diversifying their global risks while increasing their leverage in the global affairs
Mukul G. Asher is professor of public policy at the National University of Singapore and Sushant K. Singh is with public policy journal Pragati. Your comments are welcome at firstname.lastname@example.org