Indias engagement in Africa: strategies, perspectives and dilemmas

Dr Emma Mawdsley
Cambridge University

Development Context: the changing geographies of economic and political power

India-Africa
Africas share of Indias global trade increased from 5.8% in 2002-3 to 8% in 2006-7 (Vines 2008/9) 2000-2007 trade value: $3.39 to $30 billion Association of Chambers of Commerce and Industry of India estimated $50 billion by 2012 India has pledged to double Lines of Credit to Africa to $5.4 billion by 2013

EXIM Bank operative Lines of Credit as of March 2008 (total value $2.963 billion)
Percentage

Sub-Saharan Africa
North Africa Rest of Asia West Asia

42
18 17 9

SE Asia, Far East, Pacific Latin America and Caribbean

Europe and CIS

6 5
3

Adapted from Chanana (2009)

Historical relations
Pre-colonial trade ties

Colonial ties Indentured labourers, lower level colonial officials, traders

Independence movements, Non-Aligned Movement, Nehruvian idealism E.g. 1967: India offered the ANC a base Post-1991: surging economy underpinning a growing global assertiveness and stature Late 1990s onwards: re-engagement with the diaspora

Current relations
Highly varied by sector and country (!) Geographical shift from Commonwealth/Anglophone Africa to West and Central Africa 2004: launch of TEAM-9 initiative Additional desk for Central Africa in the MEA Private firms and state contractors Arcelor Mittal, Tata, Mahindra and Mahindra; also Railway Technical and Economic Services (RITES), Indian Railway Construction Company (IRCON), ONGC/OVL Full range of economic activities Sleep walking, slip-streaming and/or strategically emerging?

Indias history of development cooperation

Decades of engagement and experience
Development assistance to Nepal from early 1950s; Indian Technical and Economic Cooperation Scheme established 1964 (competition with China)

Dominated by Asian regional neighbours Modalities Project-based and technical cooperation Some infrastructure development (S. Asia) Increasing financial instruments Lines of Credit, concessional loans, debt relief Historically, dominated by NAM politics Historically, lead agent: Ministry of External Affairs

The geography of Indias dev coop

Country/region Bhutan Bangladesh Nepal Sri Lanka Myanmar Maldives Africa Afghanistan Central Asia Latin Americ Other LDCs 2005-06 of Indias Aid Program 2006-o7 Destination (in US $) 251.36 11.56 14.67 5.56 4.89 2.93 13.55 120.4 4.44 46.67 6.23 8.89 1.33 4.44 2007-08 162.44 13.33 22.22 6.22 4.44 4.33 11.11 96.44 4.44 0.34 53.35

111.96

98.94

Excluding Lines of Credit. Source: Ministry of External Affairs, Annual Reports 2006-2007

Table 1 Indias Aid & Technical Assistance Outflows Source: Ministry of External Affairs, India-Outcome Budget 2008-09

Allocation (in Rs Billion) Country/ Region Bangladesh Bhutan Nepal Sri Lanka Maldives Myanmar Other developing countries ITEC African countries Central Asia Revised 2007-08 .6 7.31 1 .28 .19 .2 1.8 .6 .5 .2 EstimateBudget Estimate 2008-09 (Proposed) .16 9.53 1.4 .34 .17 .56 1.76 .65 .8 .28

Afghanistan Total Aid Budget

4.34 17.02

4.45 20.11

Current shifts and trends

ECOSOC (2008) estimate net disbursement of Indian development cooperation in 2006: $504-$1000 million
China: $1500-2000; Korea: $579-885; Turkey: $714; Thailand: $74

Indias transition from recipient to donor Continued and growing focus on training and technical assistance Est. 40,000 ITEC alumni globally; Africa gets c. 1000 of c. 3000 ITEC places (rising to 1600 out of 4000) Growing focus on ICTs Pan Africa e-network

Current shifts and trends

Growing focus on Lines of Credit: heavily tied

Significant contribution to UN peace-keeping, World Food Programme

Changes in the institutional structures of development cooperation Increased role for Ministry of Commerce and the EXIM Bank Discussions over an India International Development Cooperation Agency Closer ties to the private sector (e.g. CII)

Current Operating LOCs between India and East African countries

Republic of Madagascar - rice productivity and fertilizer production (25 million USD) Republic of Tanzania Agricultural Mechanization (tractor, pump and equipment/40 million USD) Republic of Djibouti - Cement plant project (10 million USD) Federal Democratic Republic of Ethiopia Sugar processing industry (640 million USD) and energy transmission and distribution project (65 million USD) Central Bank of Djibouti - For financing goods and services from India (10 million USD) Eastern African Development Bank - For financing export of eligible goods and services to Uganda, Kenya and Tanzania (5 million USD) African Exim Bank - To facilitate purchase of capital and engineering goods, industrial manufactures, consumer durables and services and other items in any of the Afreximbanks Member States (30 million USD) Eastern and Southern African Trade and Development Bank (PTA Bank) - For financing export of eligible goods and services to any PTA bank member countries viz., Burundi, Comoros, Djibouti, Egypt, Eritrea, Ethiopia, Kenya, Malawi, Mauritius, Rwanda, Seychelles, Somalia, Sudan, Tanzania, Uganda, Zambia and Zimbabwe (40 million USD) Zambia: $75 million LOC and $5 grant

Issues
India is acutely aware of Chinas presence and power Elite goodwill at the diplomatic and commercial level is not always matched by ordinary ethnic relations on the ground Push for stronger strategic leverage, but > institutional pluralisation LOCs better described as economic diplomacy Indias development cooperation about promoting mutual economic growth, not poverty reduction per se Mostly cautious about declaring the advantages of/a model for democracy and development Cautious about development cooperation with DAC donors, triangular cooperation etc

Opportunities and challenges

1) 2)

3)

4)

What will be the impact of the NDDs on poverty reduction, development and well-being? What will be the impact of the NDDs on the existing architecture of foreign aid the dominant institutions, practices and ideologies of the DAC donors? What part will NDD development assistance play in the wider economic and geopolitical changes that are emerging globally? What challenges does the rise of the NDDs pose for contemporary theories of postcolonial politics, identity and development?