From Monday’s FT:
India should be no late-comer to Africa. Yet in a modern-day scramble for influence and assets on the continent, New Delhi trails Beijing.
An Indian diaspora is deeply rooted in east and southern Africa. Traders have plied the Indian Ocean for centuries. India, as one of the first colonies to win independence from Britain, gave inspiration to the ambitions of countless African liberation movements and leadership as the world’s largest democracy within the Non-Aligned Movement.
Today, Indian Railways runs the networks of close to a dozen African countries as part of bilateral technical and aid support that predates China’s recent engagement.
Yet it has taken Manmohan Singh, the prime minister, and his predecessors in New Delhi a long time to join the dots and come up with a state-led initiative to raise the profile of India in Africa.
In what is often described as a race between the two emerging economies, China has stolen a march on India over the past two decades in its outreach to Africa. It has hosted African summits in Beijing, and has purposefully acquired energy and mineral assets across the continent while offering credit at terms to rival the World Bank.
As a UN Security Council permanent member, China has offered political protection. In one or two cases, it has also given support to controversial leaders, such as Zimbabwean president Robert Mugabe, who have faced opprobrium for human rights abuses and democratic infringements.
China-Africa trade is worth about $75bn a year; that with India is touching $30bn.
Over the past week, the 79-year-old Mr Singh has tried to make up for lost time. On a six-day visit to Ethiopia and Tanzania, he spread some of the largesse of the fastest-growing large economy after China. He announced a $5.7bn loan package to help create 80 training institutes and a host of development projects across Africa. Tanzania alone has had a $180m credit line to improve water supply in Dar es Salaam, its capital.
Mr Singh emphasised the transformative power of information technology, and promised to share some of the rapid successes of companies such as Tata Consultancy Services, Infosys and Wipro with the continent.
Mr Singh should do more. India’s diplomatic footprint is not what it should be. Turkey has more missions on the continent than the world’s largest democracy.
But New Delhi is likely to trail its private sector. Indian companies will determine the country’s success in the region rather than the state, which remains largely inward-looking.
Companies such as Tata have considerably expanded in Africa. Alongside the UK, US and China, Tata identifies South Africa as one of its most promising future markets. Bharti Airtel, the telecommunications company, has taken a massive stride into Africa with the acquisition of Zain’s assets. Soft commodity companies, such as tea producer Macleod Russell, are busy buying assets in east and central Africa.
Many of these companies approach Africa as they do their home market. Indian innovation is well suited to meet Africa’s challenges.
The comparisons between the markets are legion. Africa, like India, has about 1bn people. Many are English speakers. It has an overwhelmingly young population, a growing middle class and an extraordinary diversity of peoples. It also has poor infrastructure, many poor people and weak governance.
Commentators like to describe a fevered competition between India and China over Africa as they scrabble to feed their economies with energy and raw materials. Delhi need not measure itself against the rising power across the Himalayas. Its private sector will naturally identify opportunity in Africa, while both regions have much to share in development strategies.
A rush into Africa would be a mistake. Enthusiasm may encounter a backlash. Already that may be under way. Earlier this month, African National Congress leaders in South Africa were expressing concerns about the level of Indian and Chinese investment in Africa. They fear that emerging power investments will leave nothing left for the locals.
Mr Singh has stepped lightly. Now he needs to step carefully.
James Lamont is the FT’s South Asia bureau chief
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