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India dazzles, but China ahead in Africa

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Jyoti Malhotra Dar Es Salaam
Last Updated : Jan 20 2013 | 8:45 PM IST

Next month, Prime Minister Manmohan Singh will travel to Addis Ababa, the capital of Ethiopia, to inaugurate the second India-Africa summit. But in what seems a case of unintended irony, the sparkling 30-storey building which headquarters the African Union (AU) was built by the Chinese at a cost of $150 million not too long ago.

The story, already part of diplomatic lore in the capitals of sub-Saharan Africa, goes like this. In July 2006, the erstwhile president of the African Union commission, Alpha Oumar Konare, announced the decision to hold India-Africa summits on a regular basis. Two months later, Konare summoned the ambassadors of India, China and Brazil to ask them about their nations’ interests in Africa.

The Brazilian and Indian envoys are said to have gotten off reasonably lightly, but the Chinese diplomat was allegedly cross-questioned by Konare over China’s state-led development model of resource extraction across Africa in exchange for Chinese goods. Beijing is believed to have been so upset by the hectoring that it sought to pacify matters by immediately sanctioning $150 million to build the AU headquarters in Addis Ababa.

Not that China needs to be really worried about India’s slow, but determined, effort to influence Africa’s elites. Across all parameters, China is winning the game hands down, except that Indian companies at times look like they’ve decided to sidestep the competition and create their own opportunities. To cite examples, in Tanzania, whose largest trading partner is India, Airtel had completely transformed mobile telephony by lowering prices and expanding the market — just like it did in India. Gagan Gupta, a small-time entrepreneur from Mainpuri in Uttar Pradesh, bought 300 acres of land to create the country’s first special economic zone just outside Dar Es Salaam. In Ethiopia, Ram Karuturi of Bangalore grows millions of roses to satisfy Western Europe’s hunger for elegance and is now contemplating the purchase of 100,000 hectares of land in South Sudan – the world’s most recent nation when it secedes from Sudan on July 9 – to grow both rice and maize.

However, India’s impudent entrepreneurs, however dazzling their ideas may be, cannot match the sheer scale and vigour with which the Chinese have engaged in Africa over the last couple of decades. An Indian diplomat likened the Chinese effort to “a large vacuum-cleaner that has been sucking up Africa’s natural resources”, implying the one-sided, neo-imperial relationship is systematically stripping Africa of its vast habitat.

The Chinese, as is their wont, seem determined to ignore the criticism, saying they are, in fact, employing Deng Xiaoping’s strategy of “crossing the river by feeling the stones.” That is, they are utilising Africa’s incredible mineral wealth to create infrastructure, improve transport links and connectivity and establish entire systems in healthcare and education.

Unlike the eponymous ‘scramble for Africa’, that took place when Europe divided up the continent in 1884 to extract its natural resources, on the back of which it consolidated the industrial revolution at home, the Chinese argue its strategy of building Africa on barter is helping several countries move up the value chain. Three Chinese oil-backed loans are helping build Angola’s roads, hospitals and schools. In hydrocarbon-rich Nigeria, as much as $7 billion has been invested in the oil-rich Niger Delta, besides an additional $16 billion by private Chinese companies. In the Democratic Republic of Congo, a hydropower project is being repaid in oil, while a $3-billion copper-backed project will build railways, hospitals, schools and universities. China imported $6.5 billion worth of raw goods from South Africa in 2009, besides investing in mining, telecommunications and energy.

Tanzanian Prime Minister Minzengo Pinda rejected the idea that a ‘new scramble for Africa’ was underway these days, with China decidedly in the lead, while India and other western nations brought up the rear. “Africa is a largely wealthy continent. But we also long for foreign direct investment, which will enable us to get out of this cycle of poverty. We need India and China because although you are powerful nations, you are also developing countries and understand us better. You understand we don’t have the capacity to sit at a table and strongly argue our case…We need India and China to capacitate us,” Pinda told visiting Indian journalists.

Indian diplomats argue China’s much larger treasury, both as a function of its older economic reform process as well as the authoritarian nature of the state, enabled its much larger investment, $14 billion since 2004, as well as a whopping $115-billion trade with Africa.

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China has also launched a $5-billion venture capital fund and put aside another $1 billion to help small & medium enterprises set up operations in Africa’s special economic zones. According to Standard Bank research, by 2015, Chinese investments in the continent would touch $50 billion, while trade would soar to $300 billion.

In a contrast, despite competing needs at home, India’s trade with Africa touched $39 billion in 2009-10, growing 3.5 times in the last five years and is expected to touch $75 billion by 2015. At the first India-Africa summit in 2008, India doubled the line of credit to $5.4 billion, gave grants of $500 million and committed $6 billion to building 21 institutes to “capacitate” Africans across the continent — for diamonds in Botswana, foreign trade in Uganda, information technology in Ghana and educational planning and administration in Burundi.

The Pan-African e-Network, an ambitious project connecting all 53 African countries through satellite or fibre optic cables to India’s top universities and hospitals, enables e-learning and e-health to distant corners of the continent. “From the time of the anti-colonial struggles, India’s one-point programme is to help fellow Africans help themselves,” said an Indian diplomat, adding, “In keeping with the reality of the new India, we are trying to create networks across Africa.”

Clearly, Africans are lapping up all the attention. Ethiopian Prime Minister Meles Zenawi, when asked about the India-China contest in Africa, said, “Inevitably, in a family, there are bound to be sibling rivalries. But unlike the time of the two superpowers, this is a no zero-sum game. The fact is, we need the markets of India and China, and we need you to train us. If there is tension here, it has the potential of being a very creative one.”

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First Published: Apr 13 2011 | 12:43 AM IST

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