Now it's India's Turn to Woo Africa

Posted by: Bruce Einhorn on April 9, 2008

During the Cold War, leaders from China and India liked to polish their Third World cred by emphasizing their ties with countries in Africa. The Chinese and the Indians could present themselves as natural allies of the Africans, since all had only recently gained their freedom after enduring years under domination by Western colonialism.

The days of the Chinese and Indians wanting to present themselves as leaders of the developing world are long one, of course, and now the two Asian giants are focusing on Africa for different reasons. With the Chinese and the Indian economies booming, both countries want to boost ties with the continent in order to secure access to new export markets as well as access to the raw materials their factories need. “We bump into Chinese companies everywhere,” Ratan Jindal, CEO of Jindal Stainless, told BusinessWeek last year. (For more on the competition between the Indians and the Chinese for resources, see this BusinessWeek story by my colleagues Frederik Balfour and Manjeet Kripalani from last December.)

That’s why the Chinese hosted a big China-Africa gathering in late 2006 and it’s why the Indians are hosting one right now. Top officials from over a dozen African countries were in New Delhi yesterday for the first Indo-Africa summit, which closes today.

The Indians are behind the Chinese in expanding ties with Africa, according to this story from AFP. India’s trade with Africa amounted to $30 billion last year, compared to $55 billion in Sino-African trade. And China attracted representatives from almost 50 African countries to its summit, compared to just 14 for India’s. The November 2006 Beijing summit concluded with the Chinese companies signing deals worth $1.9 billion with African counterparts.

Maybe we’ll see similar big numbers for Indian companies with the conclusion of the New Delhi meeting today. Indian Prime Minister Singh says he wants to boost ties and yesterday promised to increase financial credit by over 100% to $5.4 billion over the next five years. Singh also promised to work with Africans on agriculture, IT and other projects and said India would open its markets more to African cotton, garments and other exports.

With both the Indians and the Chinese courting them, though, the Africans seem to be sensing that they suddenly have a bit of leverage. For instance, consider comments from Democratic Republic of Congo president Joseph Kabila. According to AFP, he complained about “words and speeches (that have) remained mere words for decades. ‘We need immediate visible projects,’ he said.”

Meanwhile, in the Indian Express, C. Raja Mohan argues that the Indians actually have an edge over the Chinese in Africa: “India’s Africa policy is more broad-based and capable of high endurance. The Indian private sector is also more sensitive to local risks that the state-driven Chinese strategy is not always good at managing. India has no reason to benchmark itself against China in Africa. Nor should it agonise over China’s presumed “lead”. Instead, India has the opportunity to develop its own model for sustainable cooperation with Africa.”

Reader Comments

Andy

April 10, 2008 12:47 AM

"Private sector is more sensitive to local risks than state owned companies"

Sounds like a hit and run tactics to me. Like the Koreans with their shoes factories in Asia that just disappeared overnight leaving the workers without compensations.

Sud

April 10, 2008 11:15 AM

For a change, I actually agree with C Raja Mohan here.
India should keep a low profile and focus on building capabilities, infrastructure, relationships, institutions, technologies etc. Much like china has been doing for yrs now.

No point going overboard and jinxing what should otherwise be a loooong period of sustained rise for India. In a way I think all this publicity in the international press hurts India. It goes to the head and distracts from the huge obstacles yet to be negotiated.

Just my 2 paisa, of course.

Steven

April 12, 2008 10:24 AM

Currently, Africans need to develop their industries. China has a huge edge over India to help them in these area if India's industries are considered.

Africa countries today only have raw materials to sell. China is the No. 1 commodity buyer for many kinds. India?

Africa countries urgently need to develop their infrastructures. China has a huge edge over India in supplying equipement, providing skilled labours, providing expertise in these. India? forget about it.

African countries need money for their development. Indian government run on huge deficit. China has huge amount of money in hand.

Peter

October 18, 2008 4:28 PM

I think as long as indiginous African leaders have the integrity to build infrastructure for the benefit of all people, not just the political elite, then we can see carefully sustained honest trade developing between the countries. However I am very cynical about the way the Chinese and Indians have attempted to gain favour with African countries for their own ends, seeing Africans as a bunch of simple, backward types who are lower down the food chain and easy targets for major manipulation. I hope I am wrong...

Nandy

August 5, 2009 12:22 AM

The west, with all its acquisitive, exploitive tendency who have complicated their own lives, with unnatural and superficial attitudes and stupidity are causing havoc in all dimensions of life.

So they are the one who are dangerous stupids and neurotics and their collective attitude is like virus among lives.

Sorry for the harsh language but when I think about, it cannot be helped.

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Bloomberg Businessweek’s team of Asia reporters brings you the latest insights on business, politics, technology and culture from some of the world’s biggest and fastest-growing economies.

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