India in Africa

Indians African policy – extensive relations already in early years after Indians independence or a new phenomenon?

When India became independent from the British in 1947 it became a very important role among the developing countries which one can consider in the Non-Alignment Movement (NAM). Countries of the third world declared in this movement its political independence from the Eastern bloc and the US. India began to struggle for decolonisation and discrimination in Africa, which was highly influenced by Mahatma Gandhi and the first Indian Prime Minister Jawaharlal Nehru (Beri 2003: 2). For decades India felt solidarity with the African continent and stopped treating African countries as a bloc. New selected friendships took place and a policy of economic diplomacy was launched in the mid 1960s (Beri 2003: 2).

Indias´s new African policy – a challenge for whom?

With the end of the cold war, the NAM became less important and India also changed the ideologica” view with liberalisation of the economy from 1991 on. Economic interests were increasing and with the rise of Indians economy from this time on, things changed a bit. With those changes also the Indian policy towards “people of Indian origin (PIO)” (Beri 2003: 2) changed. The Indian Diaspora in Africa was spread within several countries in eastern and southern Africa and for example in Mauritius there were about 716.000 Indians, which is about 60 percent of the total population. Even more PIOs lived in South-Africa (1.2 million, 6,25 percent) (Biallas/Knauer 2006: 4). In contrast to early years India today sees the PIOs worldwide as a chance, so does it in Africa. We can consider that the recollection of the PIOs is a part of economic interests in the continent. India now wants to use its retaining connections to bring out more of it, for example use the knowledge of the people there to invest more easily, because structures were assembled in the past.

This could be seen as an argument that India wants to exploit not only the continent, but also its own people, which have gained only little attention the decades before? Is this rash argument true?

Let us now have a look at some economic data to have deeper impressions about Indian explorations in Africa or at least in some countries.

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Economic indexes In “The Rise of China and India”, a development report of the OECD (2006) one could find lots of data according to India on the southern continent and the authors make up, that “in fact, African trade with China and India has shown striking dynamism since 2000” (OECD 2006: 19-20). African exports are stronger with China, but also trade with India was increasing colossal from 1990 until 2004 with almost 1000 percent (China: 4000 percent). While India delivered 4,5 percent of its exports to Africa between 1997 and 2003 the share of the imports from Africa was about 7,5 percent (Biallas/Knauer 2006:6).

Africa´s exports are dominated by oil and the continent is the only region where the share of Non-Oil Exports did not increase during the last 24 years (Broadman, 2006: 7-9). But Africas growing export rates are not limited to fuels. India also imports labour-intensive raw or semi processed agricultural commodities which are used for further processing.

“South-Africa alone accounts for 68 percent of Sub-Saharan exports to India” (Broadman, 2006: 12). In these numbers we can see that Africa is a growing market for India and the fact, that South-Africa holds alone 68 percent of African exports to India leads us to the question about the main trade partners for India.

“Trade between South Africa and India has been growing at about 30 percent per annum in the recent years” (The Economist Times, “India and South Africa: Partners in progress”, 2007) which shows that the India-South-Africa relationship is already very important. We can say, that connections between those two countries has always been important due to the fact, that over a million PIOs live in South Africa, so it is still important for India.

The difference is a more economic relationship today, which shows again the importance of the economic dimension of India in Africa. But both countries share also similar social conditions and problems like poverty and urban-rural divide and unemployment (The Economist Times, 2007).

With the “Focus: Africa” programme (between 2002-07 implemented) India wanted to accelerate trade with sub-Saharan countries and beginning target countries were Mauritius (where the share of PIOs was 60 percent), Kenya and Ethiopia. The Government of India provided financial assistance to trade promotion organisations as well as export promotion councils (Africa business Pages, “India – Boosting Trade with Africa).

As a final example I want to represent the Indian-Sudan economic relations. The Sudan is the largest country in Africa and economy in Sudan has grown 8,8 percent in 2006 (5,2 percent in

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2005, 9,0 percent in 2005) which is really considerable due to the fact it has one of the largest political trouble spots in Africa with the crisis in Darfur (AWO-Wirtschaftsreport Sudan, 2007: 2).

Nevertheless hunger for oil in the Sudan grew and besides India also China and Malaysia are knocking at the door. Sudan has great potentials for Indian companies (not only governmental interests) and during the past three years bilateral trade has grown by 100 percent (“India-Sudan Economic and Commercial Relations”). In 2003 the state-owned oil company ONGC Videsh Ltd. acquired 25 percent of the Greater Nile Oil Project (GNOP), while China has 40 percent (Biallas/Knauer 2006: 7). This might be another sign of strong interests in African commodities. Those are only a few examples, but with many countries in Africa trade is not very distinctive and comparing to China it is difficult to identify bold outcomes. We can sum up economic investments and relations between India and Africa are growing immense since a few years and India tries to support this even more with policy programmes on the one hand and direct investments of companies on the other. India has bilateral trade agreements with 19 countries in Africa (Beri, 2003: 4).

But what is the profit for African nations? Does Indian presence on the continent help the economy to grow? What is in it for Africa?

Since 2000 the annual growth rate of African imports was about 20 percent while the growth rate of imports from the South-Asian country is faster climbing (OECD 2006: 20). The fact that non-oil export of products could not increase over the last two decades means for Africa that it “has not taken full advantage of international trade to leverage growth” (Broadman, 2006: 8). We can consider that trade between single African countries and the entire continent with India are not steady.

As long as data is still very fresh we have to wait a few more years to see efforts of growing trade with China and India where Africa can also benefit from. China and India are already competitors in some fields on the African continent and perhaps Africa can use this to serve itself and to use economic growth like the Sudan has. This should be used for social benefits. Nonetheless the Sudan is a good example. If leaders in African countries will be corrupt and aggressive in the future and mass execution like in Darfur will not stop benefits for the population will remain extreme low.

The advantage of big investments is that global players like India and China can help the continent to change things question is, if they have the will.

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