07/09/2007versione stampabileprintinvia paginasend

In the race for the African market, India slips in between China and the US
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.

Lo staff della Tata Motors in ZambiaThe boom. 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.

Una fonderia della Mittal in SudafricaModel. “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.

Scontri durante le manifestazioni antiasiatiche a KampalaCompetition. 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 to 2011.
“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.
Matteo Fagotto