Challenges and oppurtunities

EMERGING NEW WORLD ORDER: CHALLENGES AND OPPURTUNITIES FOR INDIA

INTRODUCTION

Background

1. There have been profound scientific, strategic, technological, economic, political and diplomatic changes in the twentieth century and the early part of the twenty-first century which have altered the strategic orientation of nations the world over. There has been a sea change in the way nations perceive themselves and each other in the international system. The world is fast moving towards a knowledge based economy. China has emerged as a global economic power house, and closer Indo- US ties balance the power in Asia. Also a tie up between India & America could contribute to a security paradigm for the global environment especially Asia.

2. However America's view on new world order is questionable. They view that with the fall of erstwhile USSR in the 1980's the world turned unipolar with the USA merging as the sole super power. The free will of executing the US agenda was evident in the 1990's like Invasion of Iraq. Once Russia resurrected under Vladimir Putin the US - Europe nexus or the NATO and its expansion has threatened the existence of the most successful security organization like the United Nations. Later the world saw the US presence right at the doorsteps of Russia i.e. in Poland and the fight for the Arctic.

3. Unnoticed initially , but noticed later by all , there came the third world countries like India, Brazil, South Africa , China and a few developed ones like Australia, New Zealand which formed a group which cannot be wished away. The IBSA (India- Brazil- South Africa forum) & RIC (Russia - India- China forum), Shanghai Cooperation etc cannot be wished away in today's world.

4. So what is the new world order? The power houses change so rapidly, moreover the so called power houses like Europe and USA are today on the economic downturn. The subprime crisis of the USA and the unemployment situation is considered to be the worst since 1930's. So are these perceived power houses today in a shape to project their power outside their national boundaries? Does the new world order belong to the new power houses like India and China who have proved to be fairly insulated from these economic crises?

5. But the ever increasing conflicts and the under development of nations especially those like in African continent, which cannot be ignored by the world community, is relevant. To add on, these are the Pandora's Box of richness that is gold, diamonds, minerals and the very green oil. However, it is prudent that these countries need assistance economically and materially and it is those countries which provide assistance who will control the resources. The US, European nations and China have been proactive in their approach and have been exploiting the resources of the African nations for decades. India though sharing a historical and traditional relationship with the African continent has failed to capitalize this relationship to further its economic and political goals. Africa other than being a repository of natural resources is also a conglomerate of fifty two nations with a large standing in all political organizations including United Nations.

Statement of The Problem

6. Utilizing the emerging situation in the world, with constant change of concentration of powers, it is imperative that India be proactive to have its share of the pie, specially being supported by the booming economy and its recognition worldwide. Hence this dissertation shall seek to analyse the emerging new world order, the growing opportunities for India in Africa and the changes required in its foreign and economic policies to exploit these opportunities.

Justification for the Study

7. In the fast changing world order, the opportunities presented to any developing country are enormous. Whether it is to restructure its own economy and bring up the standard of living of its population, or to enhance its clout in the global environment. Therefore it is imperative to analyze the changes required in India's foreign and economic policy especially with respect to the African continent. The requirement of resources of a fast developing India is ever increasing and the demand is expected to outpace the supply in the near future. Africa is the repository of mineral resources that is already recognized by the world and the major players of the world have already taken a lead in exploiting the opportunities provided by the various African countries. With the emergence of India as a global player , it is pertinent that India takes corrective measures to ensure that the traditional and historical relations with the African nations is given further impetus to further the nations interest at an urgent basis.

Scope

8. In the backdrop of above, the study on Emerging new world order and challenges and opportunities for India will essentially attempt at providing an integrated framework of national policy towards Africa. The study will specifically focus on the following issues:-

  • Emerging World Order with respect to Africa
  • India's role in the emerging new world order.
  • Growing opportunities in Africa.
  • Exploitation of the growing opportunities in Africa by the major global powers.
  • India's involvement with Africa in the present context.
  • Scope for India's involvement with Africa with respect to defense, economy, politics and the foreign policy.
  • Changes required in India's foreign and economic policy.

Method of Data Collection

9. The primary source of data collection has been through books, periodicals and newspaper, Articles, however an attempt was made to tap some material on the internet and relevant issues have been included in the text. A bibliography of sources has been appended at the end of the dissertation.

CHAPTER I

EMERGING WORLD ORDER WITH RESPECT TO AFRCIA

1. It has been clear for the past two decades that a global power shift from the "Euro-Atlantic " West to an Asia centered East has been in progress. This has far reaching implications not only for the nature of the international order as it emerges in the coming decades and great power relations, but also for the security environment. The shift has profound implications for the emerging world order due to the following reasons:-

  • Sustained high growth of economic and military power of China leading to perceptions and concerns about the "Rise of China".
  • Robust economic growth of India under a resilient democratic political system.
  • Economic recovery of Japan after the stasis of late 1980s and 1990s.
  • Economic and political recovery of Russia and its renewed urge to play a global role along with its increasingly closer ties with China.
  • Rising prices of oil along with the prospects of beginning of its depletion in the next quarter century affecting energy security of developing as well as the developed world.
  • Emergence of a global financial crisis bringing to fore the limitations of unregulated market structure, warranting greater intervention by the state in regulating the financial system.

2. In reality a diffused multipolar international order has been evolving into a polycentric system with six major players the USA, China, Japan, India, the EU, Russia impacting the future strategic environment[i].

3. At the same time economic development patterns in, Africa have become increasingly diverse over the last decade, with more and more success stories; Since the mid-1990s, 19 Sub-Saharan countries have had annual GDP growth of 4.5 percent or higher. The rise in the world price of oil is certainly a major factor at play for some of these countries. One-third of the world's resource-dependent economies are in Africa. Yet even excluding the oil-rich countries, the fastest growing group of African countries (total 15 countries) has had an average growth rate of at least 4.5 percent. These countries host 34 percent of the region's people. By contrast, the 13 slowest-growing economies in Africa have seen less than 3 percent growth on average, with some having near zero or negative growth[ii]. These countries, many either engaged in conflict or having recently emerged from conflict, account for 20 percent of the region's people.

4. The countries in Africa experiencing strong growth outside the oil- producing nations have been buoyed, in part, by global price increases in other primary export commodities. With the exception of raw materials, whose prices have been relatively stagnant, other commodities, including metals and non-oil minerals, have experienced noticeable increases in their price levels. This worldwide rise of com modity prices has been engendered in large part by the rapid growth of Asian developing countries, especially China and India. They contributed close to 40 percent of global import growth for precious stones, 30 percent for crude oil, and 20 percent for metallic ores. Their demand for these commodities is likely to grow, or at least not change from current levels, in the foreseeable future.

5. Still, a number of countries in Africa are diversifying their exports, no longer relying solely on the export of a few raw commodities. Exports are increasingly composed of light manufactured goods, processed foods, horticulture, and services such as tourism. Some countriessuch as Nigeria and South Africahave been increasing their shares of exports in technology-based products. In fact, they are moving up the technology ladder and exporting low- to medium-technology products in sectors where Asian countries are increasingly putting less emphasis

6. The ever increasing significance of the African continent is highlighted by the following turn of events. In 2008, several high-level meetings were organized with Africa's concerns high on the agenda. In April 2008, the India-Africa Forum Summit was held in New Delhi with 14 Heads of State and Government and representatives of regional bodies. A comprehensive Africa-India Framework for Cooperation was established, covering economic cooperation in such areas as agricultural development, political cooperation, science and technology, social development, tourism, infrastructure, energy and environment, and media and communication. A joint plan of action and implementation mechanism is to be developed within a year. One of the stated aims of the framework is to reinforce South-South cooperation to enable Africa and India to have greater leverage in international forums.

7. In May 2008, the fourth Tokyo International Conference on African Development (TICAD-IV) took place in Yokohama, with representatives from 51 African countries, including 40 Heads of State and Government as well representatives of African organizations and from many Asian countries. Japan pledged to double its official development assistance (ODA) over the next five years, focusing on infrastructure and agricultural development.

8. The first Turkey-Africa Cooperation Summit was held in Istanbul in August 2008 with the participation of representatives of 50 African countries, among them several Heads of State and Government. Turkey's trade and investment relations with Africa have increased dramatically over the past few years and Africa is a major market for Turkish contractors. Turkey has also formalized relations with AU and with AfDB.

9. In October 2008, a ministerial conference on economic cooperation between South Korea and Africa was held to discuss major economic development issues and share South Korea's economic development experiences with African partners. Other middle-income countries such as Brazil are also intensifying their economic and diplomatic ties with Africa. These developments are taking place against the recent backdrop of high growth in Africa, increasing demand for commodities, especially in emerging economies, and the search for low-cost locations for investments in simple manufacturing. They have helped halt the trend of Africa's declining share of world trade and foreign direct investment (FDI) flows[iii].

CHAPTER II

INDIA'S ROLE IN EMERGING WORLD ORDER INDIA RISING

1. The centre of gravity of the emerging international order and strategic affairs is increasingly shifting to the Asian landmass (and contiguous island territories). The 21st century is likely to be Asia-centred due to some of the reasons outlined below:

  • Asian landmass is where the most far-reaching social, economic and political changes are taking place. How these countries manage change will largely influence the course of world events in the coming
    decades.
  • The region still has extensive un-resolved disputes extending from issues of sovereignty to ideological issues which are often constructed on religious extremism.
  • By 2015, seven out of ten largest economies would be Asian countries (including three out of the four top being Asian, the other country being the United States with its deep and extensive interests in Asia).
  • Seven out of nine nuclear weapon states are located in Asia (including the United States which has strategically shifted forward into the Asian contiguous oceans, has deployed nuclear weapons in Asia, and will
    remain an "Asian" power).
  • World's energy "demand heartland" composed of Japan, Koreas, China and India is in Asia. And so is the energy "resource periphery" extending from Siberia, Central Asia, Persian Gulf, North Indian Ocean,
    South China Sea, and East China Sea. Future needs and availability of energy resource base are likely to further emphasise the Asia-centred world order while enhancing the role of major centres of power.

2. India as the world's largest democracy is now on the move in economic and technological terms. It has successfully progressed in what can only be described as the human history's most ambitious experiment - of transforming a traditional society into a modern one, of transforming an agrarian-based economy into a comprehensive industry-service sector- agricultural economy, rapidly increase social mobility transforming the country into a class-less society, and so on, all through processes of consultative politics. The World Bank estimates that India will possess the fourth largest economy in the world by 2020. Since independence India has made rapid strides and now has the world's second largest pool of highly competent scientific and technological expertise while its software strength is likely to play a major role in the coming years. India's economic growth, not as dramatic as that of China or the East Asia "Tigers" has nevertheless shown increasing rate of growth in every decade since the late 1960s.

3. India's geostrategists have a changed perception vis--vis the third world and other NAM countries, which the country was historically aligned to[iv]. India has used both "soft power" and "hard power" options to increase its influence on third countries. This perception is based on the following assessments:

  • India discontinued its government to government development cooperation with all but six bilateral donors (DFID, EC, Germany, Japan, USAID, and Russian Federation). Instead donors could assist NGOs directly.
  • India has gradually changed from a recipient of aid and assistance to a giver of aid. Minister of state for external affairs Rao Inderjit Singh stated in April 2005: "Our technical and economic cooperation programme -
    ITEC [to 156 states] is almost four decades old. ...a rough monetary value to the wide range of training and other facilities that we have shared with our friends from Africa, I am sure he would estimate it at well above a
    billion dollars". [32]
  • India Development Initiative (IDI) dedicates a $1.5 billion soft credit fund over five years through the Exim Bank for supporting development projects mainly in Africa.
  • India has leased an air base in Ayni in Tajikistan which it argues is for non- military purposes, but others see this is as part of India's move towards increasing its strategic depth in central Asia.
  • India has assisted Afghanistan in projects that range from roads to hospi- tal building as a way of maintaining its influence in the region. It has extended more than $100 million in credit to the outlawed Myanmar regime,
    including for upgrading their railway. India has thus emerged as Myanmar's second largest market, absorbing 25 per cent of the country's exports.
  • India maintains its influence in several south Asian states like Nepal, Maldives, Sri Lanka, as is well known.

4. In this context India has gradually dis- engaged from the large southern groups that it once partnered and has played a key role in forming new groups like the G-4, G-15, G-20 and G-33. India has become part of many regional groupings, like India-Brazil-South Africa (IBSA), Asia- Pacific Economic Cooperation (APEC) and the Bay of Bengal Initiative for Multi Sectoral Technical and Economic Coopera- tion (BIMSTEC), as a more direct way of promoting South-South Cooperation as well as establishing a stronger political and economic relationship. This gradual but significant disengagement with the third world is driven by India's great power perceptions. Its aid policies follow the intentions of the west in the creation of markets for Indian capital. The concept of "soft power" policies remains part of the neo-realist framework, where the interest of the state is primary, regardless of the impact on citizens.

CHAPTER III

GROWING OPPORTUNITIES IN AFRICA

1. As the 'dark continent', Africa has typically been painted with broad-brush strokes, as a place of uncivilized people, as savage and superstitious, as tribalistic and nepostic. Africa is a vast and exotic continent of about 900 million people in 54 independent countries. It has a total area of over 30 million sq. kms, about three and a half times the size of the United States and 10 times the size of India. It is the second largest continent in the world after Asia. It stretches from the shores of the Mediterranean in the north to the Cape of Good Hope in the south. Africa is rich in mineral and natural resources with large parts of its terrain teeming with wild life and magnificent plant life.

2. It possesses 99 percent of the world's chrome resources, 85 percent of its platinum, 70 percent of its tantalite, 68 percent of its cobalt and 54 percent of its gold, among others. It has significant oil and gas reserves. Nigeria and Libya are two of the leading oil producing countries in the world. Africa's enormous agricultural potential is vastly untapped. Africa's vast mineral wealth and strategic significance have encouraged foreign powers to intervene in African affairs. African oil constitutes 8% of the world's oil resources.

3. Political Importance of Africa is further compounded by the fact that it comprises the 54 votes that African Union (AU) maintains in the General Assembly. With world markets in turmoil, an unexpected and overlooked continent may benefit from its very isolation.

Opportunities

4. The continent has witnessed a trend towards democratisation that is visible in multi-party elections across the continent and the emergence of a democratic South Africa. It is also visible in the launch of the New Partnership for Africa's Development (NEPAD) through the joint efforts of South Africa and Senegal. This action plan promises to remove the tag of the 'Hopeless Continent'.

5. Yet all this has been accompanied by a steady drumbeat of optimism about the continent, and confidence in its prospects. Despite of the problems, the 48 countries of sub Saharan Africa (hereafter referred to as plain Africa) are, by several measures, enjoying a period of unparalleled economic success. And despite the turmoil in the world's financial markets, international investors still think they can make money there.

6. In 1990-94 annual GDP growth was a weak 0.9%; since then, growth has averaged closer to 5%. Before this autumn's financial meltdown, the IMF was predicting GDP growth of 6.6% this year; now it is predicting only a slightly lower rate. Annual GDP growth per person was 1.1% in the late 1990's; from 2004 to 2006 it was around 4%. In 1990 47% of Africans lived in poverty; in 2004 41% did and, if present trends continue, only 37% will by 2015. Zimbabwe apart, most African countries have been bringing inflation down, even if the trend is now creeping up again, in line with the rest of the world.

7. Many countries have been helped by better macro-economic management and big inflows of Western aid, investment and debt relief-as well as by more unquantifiable investments from Asia, particularly China, and the Middle East. The surplus petrodollars of the Gulf States have been flowing into East Africa. The IMF estimates that foreign investment and loans to Africa rose from $11 billion in 2000 to $53 billion in 2007. Much of this has stemmed from the commodities boom. Oil- producing countries such as Angola and Nigeria, and even war-torn Sudan, have supplied the soaring growth figures, and much of the foreign investment has gone into extractive industries.

8. Economic development patterns in Africa have become increasingly diverse over the last decade, with more and more success stories. Ghana, Africa's first nation to win its freedom from Europe, recently celebrated its 50th anniversary of independence. This is both cause for reflection on the past half-century and a reminder of how young African nations are.

9. In the past seven years we have seen the end of seven major conflicts: in the Democratic Republic of Congo, Sierra Leone, Liberia, Cote d'Ivoire, North-South Sudan, Ethiopia-Eritrea, and Angola. We are on the verge of a peace deal in northern Uganda. Although conflicts are still ongoing in Darfur and Chad, and the peace is fragile in several other places, the trend in Africa is toward the resolution of conflict. More importantly, the capacity of African nations to deal with conflicts has risen dramatically. African peacekeepers are increasingly active not only in Africa but around the world.

10. Most starkly, Africa is going through a very real economic resurgence. Economic growth is estimated at around 6.5 percent last year, the highest in memory, while inflation is in the single digits. High growth and low inflation are projected to continue this year despite a global economic slowdown. This success is not just in oil countries; about two dozen sub-Saharan African nations are enjoying real growth rates in excess of 5 percent. Only one nation -- Zimbabwe -- is really going backward quickly, a direct result of President Mugabe's scorched earth policy of clinging to power at any cost. That sad nation is entering its ninth consecutive year of a shrinking economy, and inflation is now well over 100,000 percent.

11. The striking thing about Africa today is really its massive economic potential[v]. After half a century of very low growth, combined with the colonial legacy which chopped up the continent into so many small countries, the economies of Africa are still tiny: Baltimore's economy is about ten times the size of Ghana's, and more than twice the size of Nigeria's. Only South Africa is larger, and not by much. The positive economic picture we now see in Africa is being driven by a host of factors, including a boom in commodity prices. But economic reforms inside Africa are also a big part. Macro-economic reforms undertaken over the past decade, with international assistance and encouragement, have brought down inflation and improved the investment climate. Countries are now turning to micro-reforms to make it easier to open, operate, and grow small businesses -- the true engine for turning poor countries into rich ones.

12. We are also seeing growing foreign investment in Africa[vi]. This is obviously led by oil, gas, and mining, but there are exciting trends in other sectors, such as telecommunications, agribusiness, and business services. Countries such as Ghana are starting to build specialized back office services like India has done so successfully. We are also seeing more interest from private equity firms, hedge funds, and other non-traditional investors that bode well for Africa's economic integration into global financial and business networks. Indicative of this interest, Africa was recently featured on the cover of Business Week for the first time ever. Another very encouraging trend is the returning of African professionals. Bankers who have gotten experience in New York and London are now going back and setting up their own investment firms and banks. We can see this clearly in the banking boom in places like Nigeria and Ghana.

13. Africa is clearly on a positive trajectory in terms of conflict, democracy, and economic prosperity. But all of these are extremely fragile. 2007 was one of the best years in recent memory for the continent.

The twin phenomena of a new 21st century global scramble for Africa's strategic energy and mineral resources and the on-going global economic slump are admittedly taking a heavy toll on the continent' s nascent democracy and security. This was the poignant conclusion of a high-level meeting of African experts and practitioners Convened by the Africa policy institute in Pretoria, South Africa in July 2009.

1. The world economic slowdown, now ravaging African economies, comes on top of the global race for the continent's resources crucial in the global political economy and security, especially mineral and energy resources. The new rush for Africa has increasingly drawn in cold war protagonists of Europe and Russia and more increasingly newcomers mainly China, and to a lesser extent, India, Brazil, South Africa, Korea and Malaysia. With the cost of food and fuel spiraling, commodity boom turning into bust, remittances from the African Diaspora falling, investments drying up and climate change taking its toll, questions remain about the implications of the new scramble for Africa and the both the swirling recession on the stability of the continent's democracy and long-term security.

2. The new scramble for Africa has unfolded against the backdrop of globalization in the post-Cold War era, which galvanized acute demand for African resources and the consequent integration of its economies into the global political economy. . With Africa's relatively weak markets and unskilled labour pool playing a marginal role in the knowledge-driven global economy, the new race for Africa has targeted strategic mineral and energy resources such as oil and gas which have immense strategic importance in the global political economy and security calculations of major powers. But despite integration of African natural resources in the global economy, the African labour has become even more marginalised, with studies indicating that the "new scramble appears to be diminishing rather than increasing the prospects for employment of African labour and undermining the foundation of African livelihoods" . The trend by neo-liberal globalization to divorce the African from his resources is spawning new dynamics of intensified internal conflicts and creating a new fault line of conflict between Africa and the global order[viii].

4. Secondly, the demise of apartheid in 1994 marked the complete liberation of the continent with South Africa becoming a key leader in what has been enchanted as 'African renaissance.' However, as a result of rampant poor governance, corruption and internal wars from Somalia to Darfur (Sudan) and Kenya to Zimbabwe, African leaders failed to use the continent's immense natural resources to ensure effective and pro-poor development. As such, while the newly liberated South African powerelite spearheaded the creation of a complex governance and security architecture within the aegis of the African Union to stabilize the continent, civil wars, poor governance corruption and unemployment intensified in the context of the new scramble for continent's resource's In turn, this has reinforced political instability and democratic crisis. The new scramble for Africa' s natural resources, especially oil, is therefore, supported and sustained by the predatory African elites who are the major beneficiaries, while majority of the poor Africans at the periphery of the economy continue to be more marginalised from the economic benefits of the new scramble.

5. Thirdly, the emergence of new economic powerhouses in the former 'south' including India, Brazil and, more saliently, China increased global competition for energy and refocused world attention on Africa as a new frontier in the search for alternative source of fossil fuels and land for growing bio-fuel and food crops to supply domestic and global markets, thus triggering the new scramble for Africa.

6. The entry of China and other new players into the African scene increased competition with western powers for oil and mineral resources, but the jury is still out regarding the impact of the interests and strategies of these newcomers on Africa's fledgling democracy and overall security.

7. But China's policy of " not mixing business with politics" or the see- no-evil, hear-no-evil" policy on governance has collided with the West' s emphasis on governance and human rights as a precondition for engagement with Africa, leading to non-cooperation between the two and intensifying the race for spheres of influence on the continent[ix].

8. Finally, in the last two years the continent has experienced the full weight of the raging global financial and economic recession which has shattered its economic growth and development prospects, threatened its economies and fostered a climate of political instability. The current global melt-down has intensified Africa's serious socio-economic and political challenges relating to endemic poverty, unemployment, rising inequality, debt over-hang and the knock-on effects of climate change. But the effect of the global recession on the scramble for Africa and their implications on Africa's democratic crisis are not patently clear.

9. The current scramble for Africa is markedly significant in two ways. First, it is a scramble by external forces for unfettered access to Africa' s wealth of mineral and energy resources which are significant for global economy and security, including oil, natural gas, uranium, coal, gold, diamonds, coltan, cobalt, copper, chrome, tin, iron, magnesium, nickel, platinum, lead and zinc.

10. Recently, arable land has entered the list as external powers lease large tracks of arable land to grow bio-fuel and food crops for the global market. Even though some analysts have highlighted " a trade war" between the European Union and the United States " over access to markets for their subsidized exports,". Africa' s share of the global market is still too small. This leaves natural resources as the epicenter of the current scramble. Additionally, analysts have identified elements of continuity and change in Russia's Africa policy since the end of the Cold War and the collapse of the former Soviet Union.

11. However, recently a resurgent and emboldened Russia has joined the race for the scramble of Africa, focusing attention on resource-rich countries and Africa's economic giants: Egypt, Nigeria, Angola and South Africa. The extensive visit in June 2009 by Russia' s president, Dmitry Medvedev, in Egypt, Nigeria, Namibia and Angola explains Russia' s new re- engagement policy with Africa designed to restore its past glory in the continent and also regain its standing as a global player. In Nigeria, President Medvedev signed an agreement of US$ 2.5 billion joint project to develop oil and gas fields and build a gas pipeline from Nigeria to Europe. Once completed, the project will strategically give Russia total control of Nigerian gas, consequently reinforcing the dependence of European gas consumers on Russia 9 Secondly, it is not only the traditional western powers which are vying for continued access to Africa's resources, but also emerging powers from Brazil to South Africa, India to Malaysia, with China as a clear front-runner. This development of the new actors has reconfigured Euro-African relationship, chipping into the influence of Europe and old colonial powers in Africa especially in areas of trade, aid and investments. Foremost among the actors in the scramble continuum are African leaders. These are kingpin players in the new scramble rather than pawns. African leaders now enjoy a wide sway in controlling Africa's resources previously dominated by hegemonic colonial and Cold War powers and giant multi-national corporations. As such, "these leaders, therefore, can no longer claim that their countries are ' victims' of hegemonic power's They have a chance to use the incomes generated from these resources to spearhead development and eradicate poverty especially in countries emerging from war.

12. Illegal exploitation remains one of the main sources of funding for groups involved in perpetuating conflict, especially in the eastern and northeastern regions of the Democratic Republic of the Congo[x]. Over the last year, such exploitation has been characterized by intense competition among the various political and military actors as they have sought to maintain, and in some instances expand, their control over territory Those militias have vied for control over strategic zones where lucrative resources are located, and which were formerly held by the foreign forces. The deteriorating security situation in the eastern Democratic Republic of the Congo, which resulted from intensifying armed confrontations among the militias, has had a direct impact on the level and nature of resource exploitation, compared to previous years. Much of the resource exploitation has concentrated on gold and diamonds. Those minerals which have a high revenue yield per unit weight, are easily transported and can be used in lieu of hard currency in transactions.

CHAPTER VI

INDIA'S INVOLVEMENT WITH AFRICA IN THE PRESENT CONTEXT

1. The dramatic new trend in South-South economic relations is transforming traditional patterns of economic development, and this is nowhere more evident than in African-Asian trade and investment flows[xi]. Indeed, while India emerges as economic giant in Asia, Africa is coming into its own, finding a vital role in this transformation. Both nations have centuries-long histories of international commerce, dating back to at least the days of the Silk Road, where merchants plied goods traversing continents, reaching the most challenging and relatively untouched markets of the day. India, too, has a long history of trade and investment with modern-day Africa, particularly in East Africa, where there are significant expatriate Indian communities.

2. Today's scale and pace of India's trade and investment flows with Africa, however, are wholly unprecedented. India has rapidly modernizing industries and burgeoning middle classes with rising incomes and purchasing power. The result is growing demand not only for natural resource-extractive commodities, agricultural goods such as cotton, and other traditional African exports, but also more diversified, nontraditional exports such as processed commodities, light manufactured products, household consumer goods, food, and tourism. By virtue of its labor-intensive capacity, Africa has the potential to export these nontraditional goods and services competitively to the average Indian consumer and firm.

3. With regard to investment, much of the accumulated stock of Indian FDI in Africa is concentrated in extractive sectors, such as oil and mining. While this has been grabbing most of the media headlines, greater diversification of these countries' FDI flows to Africa has in fact been occurring more recently. Significant Indian investments on the African continent have been made in apparel, food processing, retail ventures, fisheries and seafood farming, commercial real estate and transport construction, tourism, power plants, and telecommunications, among other sectors. Moreover, some of these investments are propelling African trade into cutting-edge multinational corporate networks, which are increasingly altering the "international division of labor." India is pursuing commercial strategies with Africa that are about far more than resources. The recent growth of African exports to Asia largely reflects a sharp upturn in its exports to China and India. African exports to India have been rising steadily. Though India still account for only 6 percent of all of Africa's exports, Africa's exports to India have grown 1.7 times the growth rate of the continent's total exports worldwide. Exports to India grew by 14 percent annually between 1999 and 2004. Three percent of Sub-Saharan exports are to India. The growth in African exports to India in the last few years is largely driven by large unmet domestic demand for natural resources, reflecting growing industries as well as increasing consumption by households.

4. As it is in other regions of the world, Indian FDI in Africa is mostly in the services and manufacturing sectors. However, in Africa, India also has signif- icant FDI in natural resources, including the oil sector (in Sudan, for exam- ple). Over the period 1995-2004, Africa accounted for 16 percent of India's FDI, at $2.6 billion. Like China, India seeks primarily to secure energy sources from Africa as well as other natural resources such as timber, non-oil minerals, and precious stones to support its dynamic economic growth.

5. Of course, India has been present on the African continent for decades. In East and Southern Africa, the large Indian diaspora, whose members have business ties to India and a good knowledge of Africa, has played a significant role in attracting new investment to the continent. This is especially true in recent years, given that India is flush with foreign reserves, and the govern- ment has lifted regulations and controls allowing firms to go abroad and has removed the $100 million cap on foreign investment by Indian firms. Mauritius is a major Indian FDI destination in Africa, particularly in the financial sector, as well as in the telecommunications and pharmaceuticals sectors. However, it is difficult to assess the extent to which the investment stays in the country or passes through to take advantage of Mauritius' low tax regime

India Boosting Trade With Africa

6. India has been actively promoting trade with Africa in recent years. To boost the country's trade with the Sub-Saharan African region, the Government of India launched the "Focus: Africa" programme under the EXIM Policy 2002-07. Target countries identified during the first phase of the programme include Mauritius, Kenya and Ethiopia.

7. India's potential exports to these countries include machinery and transequipment, petroleum products, paper and wood products, textiles, iron and steel, plastic and linoleum products, rubber manufactured products, agro products, chemicals and pharmaceutical products. These countries can also be important sources for import of petroleum, metallurgical goods, raw cotton, fruit, vegetables and preparations, chemicals, non-metallic mineral manufactures precious stones, textile yarn, gold, nickel, and ferro-alloys. Further, these countries offer potential for investment in sectors such as tourism, pharmaceuticals, electronics, computer software and accessories, information technology related products, financial services and textiles.

8. India has earmarked $1.5 billion in lines of credit to help Africa fight HIV-AIDS and other pandemics[xii]. The Prime Minister, in his communication to 53 heads of Government in the Union, said India would encourage its pharmaceutical companies to establish production facilities in Africa to cater for the increasing requirement of affordable medicines and to participate in upgrading the delivery systems. As Africa moved firmly to take charge of its own destiny, the Prime Minister promised India's active partnership in establishing democracy and good governance, expanding education and healthcare, building peace and democracy and bridging the digital divide.

9. INDIA, following the example of leading economic powers such as France and China, hosted an India-Africa summit for the first time in 2008[xiii]. The two-day summit, held in New Delhi in the second week of April, was attended by the leaders of 14 African countries and heads of the continent's regional economic groupings. The joint declaration adopted at the end of the summit identified food security, high oil prices and climate change as the top concerns of the developing world. India and Africa pledged to work together as partners to meet the economic and political challenges facing them. "The partnership will be based on the fundamental principles of equality, mutual respect and understanding," the joint statement emphasised. The African leaders present in New Delhi wanted the relationship with India to be on terms of equality. The cold shoulder the United States has been getting in its attempts to get permanent military bases in Africa is an illustration of the new-found confidence among African nations. The U.S. has announced the creation of the United States Africa Command (AFRICOM) and is eagerly looking out for military alliances on the continent. AFRICOM is reportedly a response to the growing Chinese presence in Africa.

10. Africa is the second largest supplier of crude oil - most of which comes from Nigeria - to India. India, like China, is investing in countries such as Sudan and Zimbabwe despite protests from the West. India recently completed a $200 million pipeline that links Port Sudan on the Red Sea with the Sudanese capital, Khartoum. India's trade with Africa rose from $97 million in 1991 to $20 billion last year.

11. At the India-Africa summit, Manmohan Singh pledged easier access for African exports to the Indian market. He said that the 21st century could be turned into a "century of Asia and Africa". The India-Africa Framework of Cooperation agreed at the summit pledged to boost trade and investment and share expertise in agriculture, science and technology, water management and education The Prime Minister said that in the next five to six years, India would issue grants for projects in excess of $500 million. He said that developing infrastructure in information technology, telecommunications, power and railways would be the priorities in Africa for the Indian government.

12. India's Africa policy in the post-Cold War era, it appears, is composed of five mantras:

  • Promoting economic cooperation
  • Engaging the PIOs
  • Preventing and combating terrorism
  • Preserving peace
  • Assisting the African defence forces

Promoting Economic Cooperation

13. In the early 1990s the government stressed that, "... in the future, new relationships based on concrete economic, technological and educational cooperation will assume enhanced significance." India engaged Africa economically through technical assistance, training and trade. The broad trends are as follows:-

Technical Assistance

14. India has extended technical assistance to African countries under the Indian Technical and Economic Cooperation (ITEC) programme and the Special Commonwealth Africa Assistance Plan (SCAAP). This involves the following aspects: -

  • Training (civil and military)
  • Projects and project-related assistance such as supply of equipment, consultancy services and feasibility studies
  • Deputation of experts
  • Study visits of senior officials/decision makers to India.

15. Over the past four decades, India has provided more than US $2 billion in technical assistance to the countries of the South and most of it has gone to Africa. In the 1990s, a number of projects were initiated with Indian help. An Entrepreneurial Training and Demonstration Centre (ETDC) costing US $ 4.49 million has been constructed in Dakar (Senegal) by Hindustan Machine Tools (HMT) and handed over in June 2000.In Namibia, India has assisted in setting up a Plastic Technology Demonstration Centre. In 1994, the government launched a programme for cooperation with select African countries for the development of small-scale industries (SSI). These countries were Nigeria, Senegal, Zimbabwe, Tanzania, Uganda, Kenya, Ghana and Ethiopia. The government offered finance for implementation of these programmes under ITEC. A small-scale industry development project is also under execution in Zimbabwe. An important training-cum-demonstration project entitled Indian Farmers Project is to be set up in Burkina Faso. In Senegal, Indian officials have been involved in providing feasibility studies for a dairy development project and an incense stick project. Feasibility studies for establishment of a poultry vaccine laboratory in Mali and for improvements in the education system in South Africa were also conducted.

Trade

16. In the last decade a number of initiatives were launched to promote trade with Africa. Apart from the government, the private sector also pitched in to explore the African markets.

17. From the mid-1990s, organisations like the Confederation of Indian Industries (CII), The Associated Chambers of Commerce and Industry (ASSOCHAM), the Federation of Indian Chambers of Commerce and Industry (FICCI) and the Federation of Indian Exporters' Organisation (FIEO) identified Africa as a thrust area and launched programmes to promote economic and business cooperation. This included exchange of information, conducting one-to-one business meetings and organising activities like 'Made in India' shows across Africa[xiv]. These chambers have also entered into joint business agreements with Mauritius, Kenya, Zambia, Uganda, Zimbabwe Nigeria, South Africa and Ethiopia.

18. The Government Initiatives are:

  • US $6 million EXIM line of Credit to PTA countries: In September 1992, the EXIM Bank signed an agreement with the Preferential Trade Area (PTA) Bank to extend an US $ 6 million line of credit to
    members of the PTA only for import of capital goods from India. The PTA covered 21 countries from Eastern and Southern Africa. In 1994 the PTA was replaced with the Common Market for Eastern and Southern
    Africa (COMESA).
  • Engaging West African Countries: In an effort to strengthen political and economic ties with West African countries, the then Prime Minister, P.V. Narasimha Rao visited Burkina Faso and Ghana in
    November 1995.
  • Revolving Fund for Africa: In 1996, Prime Minister, H.D.Deve Gowda announced at the G-15 Summit in Harare the creation of arevolving fund of Rs. 100 crores towards regional cooperation with Africa.
  • MoU with SADC: A Memorandum of Understanding on cooperation between India and the Southern African Development Community (SADC) was signed in October 1997 which envisaged both government
    and private sector cooperation in the region, similar to the one followed by COMESA and the Economic Community of West African States (ECOWAS).
  • Meeting of HoMs/Commercial Representatives: Meeting of Heads of Missions (HoMs) / commercial representatives of Indian missions in Eastern and Southern Africa under the Chairmanship of the Minister of
    State for Commerce Industry was held in June 2000. A similar meeting was convened in October 2000 in West Africa.
  • Focus Africa: The Focus Africa programme was launched as part of the EXIM Policy 2002-2003. Encouraged by the Focus initative in Latin America, the government launched a Focus Africa initiative.
    Selected Indian missions will provide business promotion services to visiting Indian exporters/businessmen at a nominal fee by setting up business centres. The first phase of Focus Africa focussed on Nigeria, South Africa,
    Kenya, Mauritius, Ethiopia, Tanzania and Ghana. Firms exporting to these markets were given 'Export House' status subject to a mininum export of Rs 5 crores.
  • Advent of AGOA

    19. Indian textile exporters have taken advantage of the opportunity to export goods to the US without restrictions, through the African Growth and Opportunities Act (AGOA), signed in 2000. Thirty-five countries in Africa are eligible for AGOA, but only 17 have qualified for exporting to the US through AGOA. Countries like China and Malaysia have got excited with AGOA and plan to increase investments in Africa. Malaysia has already invested in a textile unit in South Africa in 2002.

    Pharma Success

    20. In April 2001, the South African government won the case against multinationals to import generic AIDS drugs. This landmark judgement has opened the gates for pharmaceutical exports from India of generic AIDS drugs to Africa. Around 20 million people living in Africa are infected with the AIDS virus. These anti-retroviral drugs, or ARVs, could be supplied by the Indian companies at a fraction of the cost of Western drugs. Nigeria was the first country to import these from Cipla and Ranbaxy. India has seven pharmaceutical companies manufacturing ARVs. A four- day Africa-India Health Summit organised by the Government of India brought together 16 African countries. Leading pharma companies showcased their capabilities and products. At the end of the Summit the ground was laid for joint ventures in African countries. South Africa and Kenya have signed agreements for joint ventures with Indian firms.

    NEPAD

    21. This new initiative undertakes to promote and protect democracy and human rights in exchange for sustained levels of aid, investment and economic engagement with the developed world. A summit with the investors was organised in Dakar in April 2002. Subsequently, the Africans have engaged the G8 countries, the European Union and India. The G8 countries have pledged support to NEPAD and launched an African Action Plan at the G8 Summit in June 2002. Among the G8 countries, Japan has been actively supporting the cause of African development. In1993 the first Tokyo International Conference on African Development (TICAD) was held. This was followed by TICAD II in 1998 while TICAD III is scheduled to be held in September 2003. African development issues are on the agenda of the second EU-Africa Summit to be held sometime in the near future. The Indian government also appears to consider NEPAD as a viable action plan, and a conference was organised in July 2002 with 30 representatives from industry and the finance sector of a number of African countries.

    Promoting Peace

    22. Peace is an elusive commodity in Africa which has witnessed scores of conflicts over the years. It is estimated that 18 Sub-Saharan African countries are directly or indirectly involved in conflicts; in 12 others, conflict can erupt at any moment. In a number of these conflicts, the Blue Helmets were deployed. India has participated in a number of these peacekeeping operations[xv]. It was involved in the United Nations operations in Mozambique (ONUMOZ); Somalia (UNOSOM I, II); United Nations Angola Verification Mission (UNAVEM I, II, III) and Observer Mission (MONUA); and also in the United Nations Mission in Sierra Leone (UNAMSIL) and Ethiopia and Eritrea (UNAMEE). Some of India's contributions to peacekeeping efforts are given in Table 1, below.

    23. India's role in UN peacekeeping in Africa has been much appreciated by the local population.

    Defence Cooperation

    24. India has been providing military training to officers and JCOs of the African defence forces. Most of the African countries lack military training institutions and, therefore, the officers are often sent abroad either to the military colleges of the former colonial powers or friendly countries in the developing world. Since the 1960s India has provided military training to a number of Africans, primarily from Anglophone Africa. Training is imparted in national institutions under the three wings of the defence services, including the National Defence College New Delhi and the Defence Services Staff College, Wellington. The training covers fields such as security and strategic studies, defence management, artillery, electronics, mechanical, marine and aeronautical engineering, anti-marine warfare, logistics management and qualitative assurance services. During the period 1990-91 to 2000-2001, around 800 officers and JCOs from 12 African countries (Botswana, Burkina Faso, Ghana,Kenya, Mauritius, Nigeria, Senegal, Madagascar, Seychelles, South Africa, Tanzania and Uganda) were provided training by the Indian Army under ITEC. India has also sent training teams to various African countries like Botswana, Zambia and Lesotho. As part of its cooperation in defence, India has supplied a small quantity of conventional arms to the Africans.

    25. India has supplied patrol crafts (SDB Mk-2 type) to Mauritius and Guinea Bissau (one each) in 1993, and light helicopters (SA-316 B Aloutte-3 and SA-315B Lama) to Namibia (two each) in 1994. India has also imported weapons from South Africa.

    26. India's Africa policy indicates both change and continuity in the post-Cold War era. The people of Africa have acknowledged India's support in the past and there is a lot of goodwill towards India. They are attracted towards the new image of India in the 21st century as the new centre for technology and commerce in Asia.

    27. Economically, this partnership with Africa would entail working closely with Africa on NEPAD. Culturally, it would entail greater interaction with People of Indian Origin in Africa. Similarly, it involves the task of bringing Africa closer to the people of India through events like the Festival of Africa in India.Educationally, it would involve greater bilateral interaction between the two regions at all levelsschool, college and university. Internally, it should lead to popularising African studies in our country. Diplomatically, it should involve looking at ways and means to garner support for India's strategic interests.

    CHAPTER VII

    SCOPE FOR INDIA'S INVOLVEMENT WITH AFRICA WITH RESPECT TO DEFENSE, ECONOMY , POLITICS AND FOREIGN POLICY

    India's Africa policy indicates a slight change as also some consistency in the post-Cold War era. It appears to be composed of five mantras: promoting economic cooperation, engaging the people of Indian origin, preventing and combating terrorism, preserving peace and assisting the African defence forces. There exists enormous goodwill for India in Africa and India should take advantage of it to further strengthen ties through a new partnership

    1. India and Africa need to "shed inhibitions" and start exploring opportunities to realise maximum bilateral business and trade potential. "For trade to improve, both Africa and India need to explore each other's potentialities that will enable the entrepreneurs of both sides to identify the major thrust areas," D. Subbarao, secretary of the Indian finance ministry, said while delivering his keynote address at the Fourth India-Africa Project Partnership 2008[xvi]. The conclave had been organized by the Confederation of Indian Industry (CII) in collaboration with the Export Import (Exim) Bank of India and the government of India. . He also stressed on Africa providing more scope for Indian banks to operate there, which, he said, would prove beneficial for the growth of both India and Africa. During the session, Exim Bank of India and Africa signed an agreement for a line of credit (LOC) of $30 million to be provided by the former to the latter to finance India's exports to Africa. More than 500 delegates representing trade, industry, government and banking from over 30 African countries and 50 ministers attended the conclave.

    2. During the visit the two sides discussed 151 projects worth $10.55 billion across sectors ranging from textile, agriculture, infrastructure, finance, pharmaceuticals and small and medium sectors among others India's exports to Africa stood at $8.4 billion while imports recorded $11.4 billion. Exports to Africa are regionally diversified with eastern, southern and western Africa accounting for $2.5-3 billion each.

    3. As most African countries do not have a local drug industry to which they could issue compulsory licences, the generic ARV drug producers in India could chip in and export the requisite drugs to Africa at an affordable cost. Alongside, Indian pharma comp anies should collaborate and bid for Government tenders in Africa to set up units to stave off competition from the MNCs.

    4. On potential collaboration in IT sector, training institutes like NIIT and Aptech were doing reasonably well in many countries. As such, missions in Africa were being directed to explore the scope for hardware export in all coun tries and the software market in the more prosperous countries of the region

    5. Around 75 Indian companies have received investment licenses worth $2 billion for investment in the agriculture and floriculture sector[xvii].With investments in the tea industry also holding promise, India's Kanan Devan Hills Plantations is looking at investing $9 million in developing 10,000 hectares of tea plantation in Ethiopia.Besides, Indian private companies have identified Ethiopia's leather industry as a promising area for investments. Indian companies are now studying the prospects of sourcing semi-processed leather and establishing joint ventures with their Ethiopian counterparts. Tata International had already opened an office in Ethiopia to explore fresh opportunities in this area. In the field of information technology (IT), an area of considerable interest to Addis Ababa, India's IT heavyweight Wipro has completed a detailed feasibility study on establishing an IT park in Ethiopia.

    6. India announced a duty-free tariff preference scheme for exports from 50 least developed countries (LDCs)[xviii]. Of these, 34 are in Africa. , Prime Minister Manmohan Singh also said that credit assistance to Africa would be more than doubled for five years from the next fiscal. India planned to enhance the Foreign Office's Aid to Africa budget to execute human skills improvement projects. Over the next 5-6 years, it proposed to undertake projects against grants in excess of over $ 500 million. Dr. Singh said India would double the number of long-term scholarships for African students and affect a 50 per cent increase in technical assistance training slots. He also proposed the setting up of an India-Africa Volunteer Corps to undertake development works in public health, informal education and women's empowerment. The scope of activities could be widened with the experience gained through the projects in these areas Dr. Singh said the preferential market access scheme would cover 94 per cent of India's total tariff lines and 92.5 per cent of the global exports of all LDCs.

    7. Noting that in the last five years, India extended a line of credit (LoC) worth $ 2.15 billion, he said, "Over the next five years, we will more than double this amount and offer an additional LoC amounting to $ 5.4 billion, both bilaterally and to the regional economic communities of Africa." Dr. Singh said the lines of credit and other initiatives were aimed at improving Africa's railways and information technology, telecom and power sectors, besides strengthening physical connectivity. In this task, India would reach out to the private sector and make full use of public-private partnerships. He spelt out the kind of partnership India wished to pursue with Africa. It would be a departure from the approach of the West, which in the pre and post-colonial eras, focussed on draining the continent of its mineral resources. India was keen on utilising Africa's energy resources but it visualised a partnership "anchored in the fundamental principles of equality, mutual respect and mutual benefit ... the objective is to cooperate with Africa in its efforts to achieve economic vibrancy, peace, stability and self-reliance." Dr. Singh hoped the Delhi Declaration and the India-Africa Framework for Cooperation would provide the blueprint for engagement in the coming years.

    8. SUDAN IS in the media limelight over India's planned entry in its oil sector through the Oil and Natural Gas Corporation (ONGC)[xix]. Its subsidiary, the ONGC Videsh Ltd, has decided to buy a 25 per cent stake in the Muglad basin of the Nile Oil Project, after having covered the risk through the World Bank's unit MIGA (Multilateral Investment Guarantee Agency).

    9. With the aim of rapidly developing the nascent petroleum sector, the Sudanese Government identified 15 blocks for exploration and production. The largest and most important of these the UNITY and HEGLIG are in the Al Muglad basin, some 800 km south west of Khartoum. The Muglad basin measures 1,200 km x 300 km with sediments reaching a depth of 16,000 m. The Melut basin, with an area of 65,000 sq.km. and a sedimentary thickness of up to 13,700 m, is still grossly under-explored. The third system Blue Nile basin has a total area of 66,000 sq.km and a sedimentary cover of up to 9,144 m.

    10. The other prospective areas are in the country's northwest bordering Egypt and Libya as well as the Red Sea coast and ONGC Videsh Ltd has thus an opportunity in this area where as many as 10 out of 15 blocks are available for concessions to any investor/agency around the globe. Moreover, there are also huge quantities of natural gas, discovered in the coastal areas of the Red Sea region bordering oil-rich Saudi Arabia. ONGC Videsh has apparently shown some interest in this area, given its presence in Yemen across the Red Sea. Human resource development is supported by 40-odd universities, training institutes and research centres. India, whose involvement in Sudan goes back to the 1950s when the latter gained Independence, can contribute in a significant manner for the further development of these resources. India's Election Commission conducted the first elections in Sudan and the first Prime Minister, Jawaharlal Nehru, had a special affection for the Sudanese people. The decision to invest in the development of Sudan's oil sector has opened an important opportunity for India in Africa.

    11. Vedanta Resources, an FTSE 100 Indian metals and mining group, which, with impeccable timing, bought 51 per cent (recently upgraded to 79 per cent) of Konkola Copper Mineswich which was running in huge losses in 2004 and has them now up and running; a major expansion, to be ready by 2010, should bring up production to 500,000 tons of finished copper[xx]. Tata Steel has a $1.5 billion joint venture in an iron project in Cote d'Ivoire, and Tanzania has become a magnet for Indian companies, attracting some $825 million in investment since 1990. These companies are making up for time lost until the early 90s, when Africa's economic difficulties and India's inward-oriented development had kept them apart. Trade between India and Africa has gone from $961 million in 1991 to $30 billion in 2006-2007. The continent's fastest growing region is East Africa, with the oldest links with India, and the largest Indian-origin communities. India's high growth rate, averaging eight per cent for the past four years, in what is now a trillion-dollar economy, is gobbling up all the raw materials it can get, be they iron, copper, gold or oil. Africa's enormous natural resources, many of them lying fallow because of economic mismanagement or outright civil wars, are precisely what India needs.

    12. New Delhi is not quite in Venezuela's or China's category in its Africa programmes, but it is moving in the right direction. In addition to its flagship, $200 million Nepad project to provide digital connectivity throughout the African continent by means of a Pan-African satellite and fibre-optics network, India is setting up cooperation programmes in Ethiopia and Botswana to improve agricultural productivity, in Ghana in poverty alleviation, in Benin, Senegal and elsewhere.

    13. FDI from India to Africa is set to increase, as the Indian conglomerate Tata Motors has identified South Africa as the next frontier in its globalization policy. It plans to use South Africa as its gateway to Europe by expanding its automotive operations there, taking advantage of South Africa's favorable trade regime with Europe.

    CHAPTER V

    CHANGES REQUIRED IN INDIA'S FOREIGN AND ECONOMIC POLICY

    1. India's foreign policy in the emerging world will need to be formulated under broad parameters of economic growth, pro-active diplomacy, demography and security.

    2. On the economic front, it would be prudent and appropriate that in the process of achieving dynamic economic growth, we draw in our immediate neighbours. Whereas in the case of the rest of the world, economic moves are largely driven by market forces, the immediate region is influenced by a number of local issues that need to be factored in our calculations. As an incentive for positive economic integration at the regional level, India may well have to make a number of concessions in the initial stages to build confidence. India should engage other trade blocks like the ASEAN, BIMSTEC in free trade and other economic agreements to ensure continuous economic progress and access to capital technology, expertise, markets and draw materials.

    3. If we are to play any significant role in regional affairs and be taken seriously at the global level, Indian diplomacy will need to take into account the fact that in pursuing international relations there is no place for righteousness and moral posturing. We should evolve working relations with our neighbours on two planks; one, an appreciation of their needs and sensitivities; and two, a clear enunciation of our security sensitivities and their non- negotiable status. It should be made clear that where our security interests are concerned no compromises will be made. That we will go the distance to ensure this, even to the even to the extent of application of economic and military power. This process will take some effort. Primarily because we have to first undo the present lack of credibility in regard to our determination to use comprehensive national power in pursuit of vital security interests[xxi].

    4. On the security aspect our foreign policy should ensure:-

    • Facilitating of the environment for our continued economic growth.
    • Maintaining adequate defence capability and an enunciated national security strategy
    • Developing strategic and technological partnerships.

    5. As things stand today, no country can manage conflict scenarios that have international dimensions, on its own. There is an imperative need to engage other nations in the shape of strategic arrangements and coalition forces. This is an inescapable development that we must factor in our security strategy and diplomacy. It is essential that India develop and strengthen partnerships and arrangements at the strategic and technological levels with as many international players as possible; the African continent with its growing relevance could be involved in our security equation by churning out provision of bases for own forces as also possibility of training and conduct of joint exercises with the defence forces of various countries of African continent.

    6. Soft Power Diplomacy. The soft power of a nation manifests in different spheres and domains which are unique to that nation. Such areas and capabilities must be viewed as leverages that exist and can be exploited to further our strategic interests. The areas where India's soft power has the potential to reap tangible diplomatic dividends in furtherance of our security objectives are:-

    (a) Geo Economics. India is an emerging economic power with it having joined the trillion$ club. India's financial institutions are relatively stable and growth is based on domestic consumption. India is expected to be a major economic power by 2025and is likely to be $20 trillion economy by 2050. India will be able to apply considerable

    Leverages both regionally and internationally.

    (b) Technology. India has second largest pool of scientist and technological trained manpower in the world. It has a varied manufacturing base spread across the technology spectrum. It has abundant intellectual capital. India is also emerging as a research and development base and is gradually shedding its image of destination for low end out sourcing. Technology is a very powerful tool to create interdependence and provide leverages.

    (c) The Power of Democracy. India has the largest democracy in the world. Despite its flaws, it is vibrant healthy and meets the aspirations of the people. It has tremendous attraction and appeal worldwide.

    (d) Social Matrix. India's societal strength has been its pluralism, tolerance, non violence, secularism and a thriving democracy. It stands out especially in contrast to the failing democracies and military governments in our neighbourhood.

    (e) Culture and Ethnicity. India shares a common history with almost all its neighbourhood. This has great potential in people to people contact. Track two diplomacy has considerable potential. This should be nurtured further and spread to other countries with aim of reducing the fear of 'big brother'. Culture can become a diplomatic tool and impact in the long term.

    (f) Indian Diaspora. The Indian Diasporas, in the African continent popularly referred to as envoys of enterprise generate an annual income which adds considerably to the Indian foreign exchange. We have a diaspora which has considerable leverages in their areas of work, but we don't have a focussed strategy on how to utilise their influences.

    7. Finance. Recognizing the importance of the financial sector, cooperation in the following policy changes would be desirable:-

    • Sharing of experiences and capacity-building on policy and regulatory frameworks in the financial sector including the microfinance sector.
    • Sharing of experiences in mobilization of domestic savings.
    • Capacity-building in development of automated trading systems for stock exchange and development of cross border stock-exchange, such as Pan America exchanges.
    • Mobilization of financial resources to fund the various projects envisaged in the areas of cooperation.

    8. Information and Communication Technology (ICT). Recognising that Information Technology is emerging as one of the major vehicles of economic growth and has become fundamental part of infrastructure and improvement of myriad sectors of socioeconomic activities, Africa and India should take the following steps:-

    • Cooperate closely to ensure quick and effective implementation and roll out of the Pan-African E-Network Project being funded by India. The project will be a major step forward in removing the digital divide,
      ensure connectivity of all African countries and provide much needed telemedicine and tele-education to the masses of African countries.
    • Cooperate in the implementation of the digital solidarity mechanism developed within the framework of NEPAD.
    • Development of Information and Communication Technology tools and applications aimed at improving public administration at different levels of government, taxation management, public financing and delivery
      of public services.
    • Promotion of cooperation in the range of non-material knowledge-based human resources such as technology, organization, information, education
      and skills development.
    • Cooperation in setting up Community Information Centres using IT to accelerate socio-economic development, with a view to providing rural connectivity and bridging the digital divides.

    9. Infrastructure, energy and environment. Recognizing that energy and infrastructure is fundamental to the economic growth of developing countries and acknowledging that infrastructural development and environmental sustainability are some of the priority areas of NEPAD, Africa and India should take measures to place energy, infrastructure and environmental sustainability as one of the key areas of cooperation and commit to the following areas:-

    • Development of public-private partnerships in infrastructure development.
    • Cooperation in the development of transport and telecommunications networks.
    • Cooperation in the field of exploration and exploitation of natural resources, as well as value addition.
    • Creation of enabling environment for investment and development of renewable and non-renewable energy sources.
    • Cooperation and capacity-building in best practices and adaptation on the impact of climate change and desertification.
    • Exchange of experiences on recent advances on alternative energy sources and sustainable land management.
    • Development of cooperation in fibre optic cables construction around and within Africa for broadband access network specifically for landlocked countries.
    • Technical cooperation for Clean Development Mechanism (CDM).

    CONCLUSION

    The western countries in general have been exploiting Africa for its natural resources for ages. In recent years a new scramble for Africa has been witnessed. China has taken the lead by investing heavily, providing soft loans and making the best of the huge market for its goods. China has been ensuring that its energy and food security requirements are guaranteed in the long run. US has recognized the growing significance of the African continent and has established a dedicated Africa command .India and Africa have shared a historical relationship based on mutual interest and on basis of equality. With India poised be a global power and Africa developing at a rapid pace , it is pertinent that adequate measure are taken to ensure that the bilateral relationship gets a fresh impetus . India's fast paced development demands a burgeoning requirement of natural resources to sustain the growth, being one of the largest consumers of hydrocarbons, India will require to ensure that its energy supplies are diversified and guaranteed .Africa also offers a huge untapped market for the Indian manufacturing and services industry. India's attitude towards the continent has resulted in India losing out to other major global powers in the last decade of the twentieth century. In the first decade of the twenty-first, India has taken several steps to boost its relationship with the African countries but unless an aggressive policy is pursued, in foreign policy, economic policy and the defence policy, India would miss the bus in securing its national interests of energy security, food security and achieving the status of a global power.

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    [i] Security Environment in 2025:India's Interests and Strategies Air Commodore Jasjit Singh,AVSM,Vrc,VM, (Retd) USI JOURNAL JANUARY- MARCH 07

    [ii] Africa's silk road - Harry.G.braodman.

    [iii] United Nations Economic Commission Report on Africa, 2009

    [iv] CHENOY Kamal Mitra, CHENOY Anuradha M * From Economic and Political Weekly September 1, 2007.

    [v] World Bank Report, "Can Africa Claim 21st Century",2000.

    [vi] Released on March 18, 2008 Source: U.S. Department of State, Bureau of African Affairs

    [vii] SABA- RWENGABO MAY 2007

    [viii] Africa policy institute paper on new scramble for Africa- July 2009

    [ix] Dancing with the giants L ALAN WINTERS.

    [x] Letter dated 23 October 2003 from the Secretary-General addressed to the President of the Security Council on illegal exploitation of resources from DRC

    [xi] Harry G Broadman, "Africa's Silk Road", The World Bank, 2007.

    [xii] The Hindu 16 July 2005.

    [xiii] The Frontline 09 May 2008.

    [xiv] "India's Foreign Policy in 21st Century", Confluence Magazine.

    [xv] Source: Alan Bullion, India and UN Peacekeeping Operations. International Peacekeeping.

    Spring 1997, 4 (1) 113-114. See also www.un.org/dpko/dpko/co_mission/co_miss.htm.

    [xvi] Th E:\africa desertation\India_Africa_should_maximise_trade_potential_experts-nid-40537.htmle Silicon India 20 March 2008.

    [xvii] The Hindu 07 October 2008.

    [xviii] The Hindu 09 April 2008.

    [xix] The Hindu 08 July 2002 C G Balakrishnan (The writer is former Associate Professor, Faculty of Economics and Social Studies, University of Khartoum.)

    [xx] Jorge Heine is CIGI Professor of Global Governance at Wilfrid Laurier University and a Distinguished Fellow at the Centre for International Governance Innovation in Waterloo, Ontario. He serves currently as Vice-President of the International Political Science Association.).

    [xxi] COMPREHENSIVE NATIONAL POWER- AN INDIAN PERSPECTIVE:- Lt Gen CKS Sabu,AVSM,VSM, WAR COLLEGE JOURNAL AUTUMN 2007.

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