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Guest Post: India's African "Safari"

Tyler Durden's picture




 

Submitted by Sudha Ramachandran via The Diplomat,

Although its interests in the continent are broadly similar, India’s engagement with Africa differs significantly from China. Will it prove sustainable?

India’s engagement with Africa has grown remarkably over the past decade.

Trade with Africa jumped from U.S. $3 billion in 2000 to $52.81 billion in 2010-11 and is expected to exceed $90 billion by 2015. India has emerged as Africa’s fourth largest trade partner, after the European Union, China and the United States. Its cumulative investment in the continent exceeded $35 billion in 2011 in industries diverse as energy, pharmaceuticals, agriculture and telecommunications.

Close ties between India and Africa are not new. Trade has flourished between East Africa and India’s west coast for centuries. India also supported Africa’s struggle against colonial rule and apartheid, and its freedom movement inspired the anti-colonial struggles of African countries, Ruchita Beri, an expert on India-Africa relations at the Institute for Defence Studies and Analyses (IDSA) in New Delhi told The Diplomat. Throughout the 1960s and 70s, India worked closely with the newly liberated African countries to forge common positions on global issues. 

However, New Delhi’s interest in Africa waned in the 1990s. With the end of the Cold War, India was preoccupied with mending relations with the West and establishing ties with the newly independent former Soviet republics in Central Asia. As a result Africa moved to the margins of India’s foreign policy.

Rapid economic growth and soaring energy requirements, however, forced India at the turn of the new millennium to rethink its neglect of Africa.

India imports 70% of its oil, much of it from the politically volatile Middle East. Finding new suppliers to diversify its oil sources is crucial to its energy security and Africa is an attractive option. 

Besides oil, Africa is rich in gold, diamonds, platinum, copper, manganese and uranium. India's diamond-cutting industry – the world's largest – depends on rough diamonds from Africa, while uranium in Niger, Uganda and Tanzania is vital for India's nuclear power industry.

There are other reasons too for India’s renewed interest in Africa. Africa is rich in votes at the UN General Assembly, which India needs when it pushes for a seat in the Security Council.  Realization of its strategic ambitions too hinge on cooperation with Africa. India is keen to assert its naval power across the Indian Ocean from Africa’s east coast to the western shores of Australia. This has prompted it to step up naval cooperation with Africa’s Indian Ocean littorals like Seychelles, Mauritius and Madagascar. Tackling problems like piracy off Somalia’s coast too requires India to work with Africa.

India’s interest in Africa is thus multifaceted although its focus is on the economic dimension.

Historically, India was active in Africa’s Anglophone countries and in East Africa. It was the large Indian diaspora in countries like Kenya, Tanzania and Mauritius that facilitated close economic relations. Over the past decade, however, India is looking beyond East Africa. With oil and other natural resources emerging as key drivers of its engagement, West Africa and South Africa are the focus of its attention. Nigeria’s immense oil wealth has contributed to its emergence as India’s top trading partner in Africa, accounting for roughly 30% of India’s trade with the continent.

India’s imports from Africa consist mainly of primary commodities (91% of its imports from Africa in 2010). Oil accounts for 61% of Africa’s exports to India. The continent also provides a market for India’s manufactured goods – over two-thirds of African imports from India are manufactured goods such as pharmaceuticals, machinery and transport equipment.

The domination of oil and natural resources in India’s imports from Africa and of manufactured goods in its exports to the continent has drawn criticism that India is indulging in a “neo-colonial grab” for Africa’s resources. Critics liken its trade with Africa to that which the European powers engaged in with their colonies.

“This is an uninformed view,” argues HHS Viswanathan, a distinguished fellow at the Observer Research Foundation in New Delhi and India’s former ambassador to Nigeria and Cote d’Ivoire. “Africa of today is not the same as during colonial times. When countries exploit the resources of Africa today, the terms are set by the African nations and not by outsiders. The deals are mutually beneficial.”

Echoing this view, IDSA’s Beri said that India’s relationship with Africa is “not a one-way street,” with benefits flowing to one side only. “India is sharing its own development experience with Africa,” she said. It was its services sector that spurred the Indian economy and India is now helping Africa achieve a similar growth by building its services sector.

“Capacity building is an important component of India’s engagement of Africa,” says Aparajita Biswas, head of the Department of African Studies at the University of Mumbai. India is supporting institutional capacity building at the pan-African, regional and bilateral levels. It is setting up scores of institutions in areas as diverse as food processing, agriculture, textiles, weather forecasting and rural development. A pan-African e-network linking schools and hospitals across Africa with top institutions in India will make Indian expertise in healthcare and education accessible to the African people.

Illustrating the mutually beneficial nature of India’s ties with Africa, an official in India’s Ministry of External Affairs (MEA) drew attention to training in diamond cutting, polishing and grading that India is providing to the people of Botswana. “While India’s diamond cutting industry has benefitted from Botswana’s diamond roughs, India is enabling Botswana to move up the value chain in the diamond business,” he pointed out.

Similarly, while Africa provides a major market for India’s pharmaceutical industry – 14% of India’s $8 billion pharmaceutical exports in 2009 went to Africa, “the role it has played in controlling the spread of HIV/AIDS and other diseases by making treatment affordable cannot be ignored,” the official said. Besides pharma companies like Ranbaxy are not just selling to Africa but have set up production facilities there.

India’s investments in African land have drawn criticism too. It has been accused of engaging in a “land grab,” especially in Ethiopia where Indian companies like Karturi Global, one of the world’s largest exporters of roses, have leased vast tracts of land to cultivate cash crops.  This could undermine Africa’s food security, critics charge.

“Land grab is too strong a term” to describe Indian companies’ cultivation on Africa’s land, counters Viswanthan, “So far, the projects have benefitted both parties,” he says. However, he cautions that such projects have to be “constantly monitored for any adverse effects on local food security.”

Parallels are often drawn between India and China’s African “safaris.” Indeed, their trade with Africa has grown at similar rates; India’s at a compounded annual growth rate of 24.8% and China’s at 26.3%. More importantly, access to natural resources and especially oil is the main driver of both Asian giants’ engagement of the continent.

There are important differences though.  For one, India’s footprint in Africa is small compared with that of China. Take their role in Africa’s trade for instance. In 2011, India accounted for 5.2% of Africa’s global trade compared with China’s 16.9%. Besides, unlike China’s investment in Africa, which is led by state-owned companies, Indian investment is mainly driven by the private sector. In another contrast with Chinese companies, India hires local laborers while many Chinese companies bring Chinese laborers to their projects in Africa.

Indian officials admit that China’s aid-for-oil strategy, which involves extension of soft loans for massive infrastructure projects in return for African oil, used to impress them as it helped Beijing secure deals in its favor, according to the MEA official. This prompted India to follow the Chinese strategy in some countries where it was seeking oil deals.  However, India was unable to match the aid the Chinese offered. It underscored the need for an approach that built on India’s strengths, which ultimately resulted in India focusing on capacity building in Africa.

India is upbeat over its relations with Africa. It has reason to be. With regard to oil for instance, not only has its access to African oil grown significantly – Africa now accounts for  20% of India’s fuel imports – but also it has been successful in acquiring equity in African oilfields, observes Viswanathan.

The question is how secure are its investments in Africa? Its experience in Sudan underscores the need for caution. ONGC Videsh Ltd (OVL), the overseas unit of India’s state-run Oil and Natural Gas Commission, invested $2.5 billion in oil exploration and production in an undivided Sudan. This investment came under threat with South Sudan’s secession from Sudan in 2011, with three OVL blocks in the Muglad Basin straddling the border between the two Sudans and one entirely in South Sudan. This situation became especially precarious earlier this year when Sudan forced South Sudan to halt oil production, resulting in massive losses for OVL.

As for allegations of neo-colonial exploitation, these have been leveled largely by the western media. Will such a view eventually be echoed by Africa, potentially jeopardizing India’s presence there?

India hopes that its capacity building, people-centric approach and efforts to build a sustainable partnership with Africa will keep such allegations at bay.

 

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Mon, 12/03/2012 - 21:42 | 3031330 Samsonov
Samsonov's picture

It all seems quite normal.

Mon, 12/03/2012 - 21:42 | 3031332 dark pools of soros
dark pools of soros's picture

So that AIDS approach fizzled out?

Mon, 12/03/2012 - 22:13 | 3031390 Divine Wind
Divine Wind's picture

 

 

I spent 2010-11 living in Liberia to help establish a gold mining operation deep in the interior.

In Monrovia, Indian nationals were widespread, as were Arabs and Chinese.

Many businesses are operated by these three groups. Particularly stores. From grocery stores to buildng materials, Indians and Arabs dominate.

The President of Liberia is protected by a contingent of crack female soldiers from India.

Groups of them guard the entrances of the Ministry of Foreign Affairs using armored vehicles and crew served weapons.

There are also a large contingent of Indian soldiers there as part of the UN mission.

Most of their work involves trying to scrape and rescrape roads through some of the densest jungle in the world.

Tue, 12/04/2012 - 10:15 | 3032222 LFMayor
LFMayor's picture

Crack female bodyguards?  meh.  Ask Moammar how that worked out for him.   Should have kept his NBC's.

Mon, 12/03/2012 - 22:14 | 3031405 Monedas
Monedas's picture

The Indians and the Chinese will grow weary of those impossible people .... give it some time !   

Mon, 12/03/2012 - 22:52 | 3031484 old naughty
old naughty's picture

Or, when "those impossible people" grow weary, Indian and Chinese weapons may come in handy?

Old world against new world (or old against newer, considering India and China are old)? 

Tue, 12/04/2012 - 09:05 | 3031974 TruthHunter
TruthHunter's picture

"Chinese will grow weary of those impossible people ...."

 

I worked with a Ugandan of Indian descent in Houston back in the 70's. He was kicked out by Idi Amin,  so its also

a question of when the impossible people get weary of Chinese and Indians.

Mon, 12/03/2012 - 22:45 | 3031469 sangell
sangell's picture

India may aspire to a 'people-centric' relationship but they will be dealing with the same old group of kleptocrats and thugs who could care less about such things.

Mon, 12/03/2012 - 22:59 | 3031503 zorba THE GREEK
zorba THE GREEK's picture

Gold and silver are real money, everything else is fiat crap.

Tue, 12/04/2012 - 00:26 | 3031665 Oh regional Indian
Oh regional Indian's picture

The key difference is the one mentioned right in the middle of the article. Indian diaspora. I'm descended (ascended???)  from Indian's who were in Ethiopia for generations (Kenya post the Idi Amin putsch) who finally ended up in the UK, rich and rescued, automatic citizenship etc..

It's good old colonialism under a different garb is all.

One article, in the economist at that, years ago, that I wish I'd saved was the fact that 2 or 3 Indians control 90% of the Uranium in Africa (Niger Yellowcake) and are major power-brokers globally. Gujaratis, but details slip the mind.

ori

Tue, 12/04/2012 - 01:54 | 3031726 groundedkiwi
groundedkiwi's picture

One always has to get past the French first in parts of Africa.
http://mobile.dudamobile.com/site/thinkafricapress?url=http%3A%2F%2Fthin...

Tue, 12/04/2012 - 06:24 | 3031837 Urban Redneck
Urban Redneck's picture

The article is worth reading, but whether or not the CFA franc is eventually devalued is an open question.  This was actually a 2011 Sarko scheme when French troops were sent into Côte d'Ivoire to protect western Coffee & Chocolate addictions.  Now the French are tied up in the Sahel trying to protect Areva's Uranium addiction from the frankenfreak Al-CIAda creation in Libya.

France which is already has a GDP heavily skewed towards the public sector risks nationalizations if devaluation is not done in concert with and with the consent of African States.  Nationalizations might not just be of Total or Areva interests (which would further erode private sector GDP contribution in France) but across the entire spectrum of French foreign investment.

WAMI's Eco initiaitve is somewhere between running behind and DOA, but if BdF missteps not only will it eliminate the possibility of propping up the Euro with the Eco, but a larger & stronger non-BdF but rather ECOWAS currency could emerge, which would cost the French (and the Eurozone dearly) since the demand for raw materials is global and the French are currently buying with a discount card.

http://thinkafricapress.com/economy/consensual-rape-francafrique-currenc...

Tue, 12/04/2012 - 07:10 | 3031861 JOYFUL
JOYFUL's picture

...Now the French are tied up in the Sahel trying to protect Areva's Uranium addiction from the frankenfreak Al-CIAda creation in Libya...

interesting, nést pas?...I believe the correct term here be 'deja vu, all over agin'...the French\Corsican heroin monopoly(circa 1957-60) in SE Asia gets challenged by an Anglo-Merikan newcomer and - voila! - boots on the ground n all...

http://youtu.be/Xaw0oDqDFlY Steely Dan\Pretzel Logic

Rottenshields poisoned Nappy slowly with arsenic...seems they ain't finished yet!

Tue, 12/04/2012 - 02:27 | 3031746 q99x2
q99x2's picture

Distance is expensive for the middle man that lives on far away shores.

Tue, 12/04/2012 - 04:10 | 3031796 AnAnonymous
AnAnonymous's picture

Aint it good when 'americans' try to censor any 'american' wannabee when the latter try harder to become fuller 'americans'?

The world of tomorrow: 'americans' vs 'americans'

Wont be a world of peace for sure because if there is something 'americans' cant stand, it is when others behave the 'american' way.

Unfortunately for established 'americans', they cant fool other 'americans' about what 'americanism' is. The place is no longer 1777. And 'americanism' reigns supreme over the planet.

More than two billions human beings waiting to get their chances at 'americanism' in China and India alone, looking to build their 'american' middle class.

Long Indians, they are already a scarce commodity these days. It wont improve in the near future.

Tue, 12/04/2012 - 08:19 | 3031814 JOYFUL
JOYFUL's picture

...Long Indians, they are already a scarce commodity these days. It wont improve in the near future...lol AA,

clearly you(collectively?!??!)have taken the hard caning delivered you by some of our more acerbic contributors[c'mon up AKAK/4thStg\]'to heart...

and the resultant pause for woodshedin has produced a remarkable refashioning of the Creature From the Bottom of the HanPool into a valuable voice amongst our congregation of mutants...I stand in awe of your transformation, but maybe that's just the true face of China -decades of bloody stasis followed by quick progressions - at any rate, the usual menu of your interjections of American Envy are increasing being spiced with observations of merit...this is surely your best to date...one great bon mot after the next! This is just a hat's off to your remixed presence...I'll follow up with an actual response later.

Tue, 12/04/2012 - 10:10 | 3032200 LFMayor
LFMayor's picture

Yes, AnAnon is now Fortified with more Tiger Ballz!

Tue, 12/04/2012 - 05:40 | 3031827 falak pema
falak pema's picture

Africa the new continent emerging and the BRICS make a play for it; no more a reservation for Anglo-French-US multinational domination. If Chindia represents >20% of African exports today, it will grow inevitably in the current dynamics.

Where will the Chindian investment  go : think of Ethiopia, Madagascar, Mozambique, and Angola. All Italo-portuguese ex-colonies and now lands of promise for RM and agri business. Its the soft underbelly of European presence. 

A lot of future out there. What the Arab spring has shown us is that the convoluted Renaissance age of Africa is now very much on the cards, as the cess pool of ME simmers in overexposure to Pax Americana's incredible mismanagement and cultural fracture based on classical neo-colonialism.

Will the BRICS bring more rationality to their African involvement? Lets hope too many cooks don't spoil the broth.

In the final analysis only the indigent people can define their destiny, whatever the catalyst may be in terms of technology or geographical/cultural invasion from outside. We are not there in this asymmetric world. Far from it.

Africa could be a scene of continuing great tragedy, as in Congo/Rwanda,  as of promise.

Tue, 12/04/2012 - 05:59 | 3031829 JOYFUL
JOYFUL's picture

This is one of those classic ZH articles where the commentary from the punters far outweighs the value of the original author's own contribution(which in this case is not without it's merits!)

We are blessed with representation from not just one, but both of the Asian Tigers currently feasting upon the tender springbok flesh on hoof, and both are insightful...it's long been my hope that ZH could leverage it's ability to attract the remaining brain power from the western prison plantation into a truly international platform of conspirators for truth in the age of it's irrelevance...and this thread perhaps proves the potential be realized.

ORI, your disclosure of antecedents solves a puzzle for me, and it's been great to see you back at full power lately...more evidence of woodshedin may I presume? The issue of India in Africa, for me, is not possible to discuss without bringing another member of the Indian diaspora(West Indies Section) into the discussion....

V.S. Naipaul I have long considered to be a writer in the very highest ranks of C20th authors...but A Bend in the River has to be the single greatest effort ever put to pen in describing the essence of the experience of being the "foreigner" in the Dark Continent...the blending of a microscopic examination of the troubled psyches of the "white man" and the "brown man" both, as trespassers upon, and ultimately victims of, the rage of the black man returned to his native state of totemic terrorist, in rebellion against the veneer of civility pasted upon the rough patches of modernity in blissful ignorance of jungle reality...only Apocalyse Now has come close to meeting the challenge since...on a different continent, but with the same jungle rhythm beating a tatto of blood spattered body parts...

over to you ORI, I believe that we are close to the removal of said veneer from all parts of the geopolitic body politic shortly, and your sense of intuition in this regard has proven impeccable in the past...

folks, Africans be long machetes...you wanna be long mattresses...and a means of gettin out quickly, from wherever your present location...the terrorists in command of the Secret Government in DC are turning Africa\America from north to south into another Uganda...soon we be all Tutsi...

http://blackagendareport.com/content/second-wave-genocide-looms-congo-su...

 

http://www.pbs.org/wgbh/pages/frontline/shows/evil/interviews/gourevitch...

 

http://youtu.be/mkjqPktVnOs Nights over Egypt\Incognito

Tue, 12/04/2012 - 09:46 | 3032093 tip e. canoe
tip e. canoe's picture

funny i was just going to link that CongoSusanLeeza Rice report.   this is revealing as well:

http://www.ethiopianreview.com/content/42962

Tue, 12/04/2012 - 06:38 | 3031846 Monedas
Monedas's picture

Only 16 posts ?  I think we got some indifference going on here !  LOL

Tue, 12/04/2012 - 10:13 | 3032210 LFMayor
LFMayor's picture

Why blow all that money travelling half way around the world when you could mount a safari on the cheap to East St Louis or Detroit for a fraction of the cost?

Tue, 12/04/2012 - 06:50 | 3031854 GreatUncle
GreatUncle's picture

Set the scene. Africa has corrupt polticians, seems part of the natural state of a poltician who then by negotiating with India sells you out for a nice wedge of income in their back pocket.

No different to colonialism, the only way people are exploited is through an intermediary "your own politicians". In colonial times, you were only exploited through having people you supported in power selling out to those who wanted what you have.

 

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