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Airtel and the new great game

Airtel and the new great game
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First Published: Tue, Feb 16 2010. 09 47 PM IST

Illustration: Jayachandran / Mint
Illustration: Jayachandran / Mint
Updated: Tue, Feb 16 2010. 09 47 PM IST
At the beginning of this century, everyone believed it was Asia’s turn to drive the world’s economy. Indeed, events of the past 10 years have only served to underscore the growing importance of India and China, Asia’s two largest countries. Yet, the 21st century may not be Asia’s but Africa’s.
One reason for this is the continent’s immense mineral resources that have made it an ideal arena for a new version of the great game—this one between India and China.
Illustration: Jayachandran / Mint
Another is the emergence of that continent—at least pockets in it—as a market for a variety of products and services. The second explains Bharti Airtel’s obsession with acquiring a presence in Africa. Bharti isn’t alone in its desire to have a presence in what was once described as the dark continent. From the Tata group to Dabur to Mahindra and Mahindra, several Indian firms are looking to serve the emerging African market.
In many ways, Indian firms are better equipped to tap the emerging African opportunity than Western multinationals. Indian businessmen are more used to dealing with the kind of regulatory ambivalence and poor governance that is the hallmark of many African regimes (more on this in a bit), operate on shoe-string budgets, and produce high-quality, low-cost offerings (by and large). Over the past two decades, they have also become better governed (again, by and large), and adopted modern management techniques.
The big challenge for these firms, however, is acquiring a multinational mindset, an area where some of them, notably those belonging to the Tata group, have done better than the others.
There is, of course, the larger point concerning Africa itself.
Democracy and good governance remain a rarity in the continent where several countries are still ruled by dictators. Worse, Africa faces several health crises that threaten lives and economies across the region.
That shouldn’t deter companies, though. After all, India and China had their share of issues 20, 30 years ago (not the same sort of issues Africa has, though some Western multinationals may differ on this count).
This century is still young, and Africa’s combination of mineral resources and emerging markets is too alluring for Indian companies to ignore the continent. Bharti’s Sunil Mittal won’t be the last Indian businessman to bet big on Africa.
Will Indian firms prosper in African markets? Tell us at views@livemint.com
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First Published: Tue, Feb 16 2010. 09 47 PM IST