The race for the new African markets? A matter between the Tiger and the Dragon.
We are not talking about Ang Lee’s film, but of the new economic partners of the
black continent. In the last years the United States, and an ever more present
China, have been joined by India, which according to the analysts is destined
to remain a secondary partner compared to the first two, but one which could bring
to Africa far more lasting benefits (not only of an economic nature). From Johannesburg
to Lagos, from Abidjan to Dakar, the Indian model of development is becoming the
one to follow for a continent that up to now was only seen as a store of raw materials.
Less than fifteen years ago, the Indian presence in Africa was limited to a
few embassies in the more important Countries and to a minimal bilateral trade.
Today, Indian firms build cars in Senegal and South Africa, they extract oil in
Nigeria, they launch agricultural projects in Kenya and they build motorways in
Ethiopia. Bilateral trade with Western Africa, not based on oil, has reached three
billion dollars, trade with the southern part of the continent four billion. In
the last years, trade between New Delhi and the continent has been growing at
the impressive rate of 25 percent a year, touching 19.3 billion dollars in the
period between April 2006 and January 2007: decidedly respectable numbers, although
they are still far from those that USA and China can boast of. But, from several
points of view, the Indian presence in Africa is better accepted than that of
Beijing and Washington.
Philosophies. It’s all due to a different approach to the continent, the experts say. “The
secret of the success of Indian penetration is its soft character, focused on
agro-industrial projects, on the sale of low-cost medicines, on the transfer of
technology and know-how”, Alex Vines, director of the African programme at the
Royal Institute of International Affairs in London, explains to Peacereporter.
An example? The Indian state of Andhra Pradesh has reached an agreement with Kenya
for the granting of lands to 500 Indian farmers, who will enjoy the use of them
for 99 years in exchange for their engaging to train the local population in the
new techniques of cultivation, which should solve the problems due to the lack
of water and the shortage of fertile lands. More generally, with the launching
of the Focus Africa Programme in 2002, the Indian government has favoured bilateral
trade with Africa by granting credit lines that would stimulate a complementary
exchange of products: machinery, medicines and technology on the one side, raw
materials, textile products and agricultural and food products on the other. And
if no-one can fail to notice that the commercial scales hang qualitatively in
favour of India, Indo-African trade is still more diversified than the trade with
China and the USA, who are accused of looking at Africa as a mere tank where they
can quench their thirst for raw materials.
“In Africa there is a sort of respect for what India has shown itself to be
in the last years – Karen Monaghan, analyst for the Council on Foreign Relations
in Washington, tells Peacereporter- A guiding nation in Asia, democratic, with
a free press and an active civil society. A model to imitate”. India represents
everything that Africa aspires to become in the next years: also considering their
common colonial past, many African leaders think they could derive some useful
lessons from the Indian experience. India is more and more involved in education
projects, apart from representing the possible solution to many of the continent’s
problems: their low-cost drugs sell like hot cakes, as do the investments in the
field of communications, which are fundamental to a territory like the African
one where the dispersal of the population did not allow the creation of adequate
infrastructures. And while Chinese clothes are in competition with the local manufactures,
the Indian low-cost cars and machinery, built in joint-ventures with African firms,
are all the rage. Also, the Indian penetration is lead by private firms, unlike
the Chinese one, which is lead by state firms. This should make the government
in New Delhi safe from accusations of collusion with non-democratic Countries
such as Zimbabwe and Sudan.
Diaspora. However, the Indian experience is not quite exempt from problems: the recent
matter of the steel colossus Mittal, who was obliged to re-negotiate with the
Liberian authorities a mining exploitation contract they had signed with the transition
authorities, certainly did no good to the image of the Country. Mittal had in
matter of fact made sure of a binding contract, in which the rights of exploitation
of the iron deposits had not been fixed, and no labour protection was contemplated.
The contract was not even subject to the Liberian legislation and gave the multinational
the possibility of exploiting exclusively, and without paying any rent, the port
of the city of Buchanan. A nasty business which was solved in 2006, with the drawing–up
of the new contract.
Despite the media prominence given to the matter, the affair seems not to have
had consequences in the nearby Countries of western Africa, where India has been
present for a short time. Things are rather different in the eastern part of the
continent: in the Seychelles and Mauritius islands more than half the population
is of Indian origin, but the relations with the locals have not always been easy.
“In the mind of the diaspora the images of the mass expulsions of Asian people
from Uganda (decided by president Idi Amin in 1972 to “favour” an economy lead
by black people, Editor’s Note) is still very much alive – Ms Monaghan reminds
us- This is why firms like Tata Motors undertake to create joint-ventures with
local subjects, as is done in Senegal or South- Africa. They do not want to be
seen as Indian firms”.
In April, in Uganda again, a protest against the grant of a third of the forest
of Mabira to the Indian society Mehta Group, which should have started a sugar
cane plantation there, led to a savage witch-hunt against oriental people. Proof
that, in some Countries, the resentment against a community that is very well
integrated especially in small trade is still strong.
It will be difficult for these problems to stop the Indian expansion: in the
next three years investments in the southern part of Africa should rise to 12
billion euro, while just the Ivory Coast will attract a billion dollars from now
“The Indians are much better at training local personnel and at integrating them
in the projects, and they also speak English. All these are not unimportant advantages
over their Chinese rivals”, Ms Monaghan underlines. But most importantly the arrival
of India has widened the African market, giving the continent the possibility
of bargaining from a position of relative strength. “If it is true that India
will never come to compete with China and the USA on an investment level, since
it starts from a much lower base- Vines concludes- it will still bring greater
competition on the market, and this will allow the African Countries to secure
more advantageous conditions”. Who knows whether between the tiger, the dragon
and Uncle Sam, the one to come out on top may not be the African gazelle.