CPP warns against 'New scramble for Africa'
http://www.africanews.com/site/list_messages/17377
CPP warns against 'New scramble for Africa'
Francis Ameyibor, AfricaNews reporter in Accra, Ghana, photo: Bertil van Vugt A Ghanaian political movement, the Convention People's Party (CPP), has followed with absorbing interest the India-Africa Summit of 8-9th April 2008 in the Indian capital of New Delhi, which followed one held by China in Beijing in 2006 and a number of others between Africa and the European Union. At the end of the Indian Summit, a 'Delhi Declaration' and 'Africa-India Framework for Cooperation' were issued ostensibly to the satisfaction of both parties. In a working document made avaliable to the Africanews.com in Accra, Mr Kosi Dede, Chairman of the CPP's Publicity Committee said while the CPP fully supports cooperation between peoples and nations of good-will from all over the world, we are also worried that unless these “declarations” and “frameworks” are jointly developed to take proper account of the varied and sometimes even conflicting interests of the parties involved, African leaders may end up being unwitting participants in a new Scramble for Africa to the detriment of our people
In the original Scramble for Africa, the continent was carved up into competing spheres of foreign economic influences and its natural resources used to fuel Europe’s industrial revolution at the expense of Africa’s own development. We don’t want history to repeat itself.
In the case of the India Summit, the Delhi Declaration appears designed primarily to facilitate India’s quest for rapid industrialisation and development while implicitly seeking to cement Africa’s position in the global economy as the provider of raw materials for the industrialisation of other economies. Under the Delhi Declaration, India promises a US$5.4bn credit facility for African countries to import a range of industrial products from India, including tractors, water pumps, transportation equipment, and communication gear. In return, India offers Africa “duty free” access to its market for the following: “cocoa, cotton, cashew nuts, sugarcane, ready-made garments, fish-fillets, copper and aluminium ore, as well as non-industrial diamonds.”
With the exception of “ready-made garments”, which in any case may face resistance from India’s apparel industry, all the products for which Africa is seemingly being granted preferential access are the kinds of primary commodities whose concentration in Africa’s exports has contributed immensely to the continent’s economic and social stagnation. Indeed, India already has negligible tariffs on most primary commodities from Africa, but maintains high tariffs on processed exports from the continent. This has the effect of promoting India’s industrial development through the conversion of raw materials into finished goods while retarding that of Africa because raw materials are exported unprocessed. For example, in order to promote its leather goods industry, India imposes only 0.1% tariff on raw hides from Africa but charges 14.7% and 15.0%, respectively, on leather and leather products from Africa.
Indeed, an Indian-owned cashew company in Tanzania cannot export processed cashew to India due to high tariffs because India wants to protect the cashew processing industry in India. Numerous examples abound. By proposing “duty free” access for African raw materials, whose tariffs are already very low, India is effectively offering nothing to Africa, while it uses low-interest government-subsidised loans to lure Indian finished products into Africa without offering reciprocal access for Africa’s finished products. "We deem this unfair. It will lead to the collapse of African industry, create high unemployment, and worsen poverty on the continent", a CCP spokesperson said.
"We, therefore, call upon the African Union to scrutinise the Delhi Declaration carefully before giving it its full blessing. Specifically, the AU must ensure that the industrial goods from India are of the highest quality and can complement Africa’s own efforts at industrialisation and development. The AU should also ensure that India make explicit pledges to reduce not only tariffs on raw materials but also finished products from Africa."
"Lastly, parallel to these attempts at global cooperation, we urge the AU to accelerate efforts at expanding trade among African countries. We believe that the 8.4% of Africa’s GDP that is traded among Africans, compared to 50.6% with the rest of the world, is unacceptable and leaves Africa vulnerable to all sorts of global trading enticements that may not always be to our benefit," a CCP spokesperson said.
http://www.foreignaffairs.org/20080301faessay87208/harry-g-broadman/china-and-india-go-to-africa.html
China and India Go to Africa New Deals in the Developing World
Harry G. Broadman
From Foreign Affairs,
March/April 2008
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HARRY G. BROADMAN, Economic Adviser for the Africa Region at the World Bank, is the author of Africa's Silk Road: China and India's New Economic Frontier (World Bank, 2007), from which this essay is drawn. The views expressed here are his own.
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Economic activity between Africa and Asia is booming like never before. Business between the two continents is not new: India's trade with Africa's eastern and southern regions dates back to at least the days of the Silk Road, and China has been involved on the continent since it started investing there, mostly in infrastructure, during the postcolonial era. But today, partly as a result of accelerating commerce between developing countries throughout the world, the scale and pace of trade and investment flows between Africa and India and China are exceptional. (Throughout, Africa is used as a shorthand for sub-Saharan Africa.) Africa's exports to China increased at an annual rate of 48 percent between 2000 and 2005, two and half times as fast as the rate of the region's exports to the United States and four times as fast as the rate of its exports to the European Union (EU) over the same period.
Much of this activity is concentrated in a handful of African countries and in the extractive industries, such as oil and mining. But increasingly, businesses from China and India are also pursuing strategies in Africa that are about far more than natural resources: in addition to rapidly modernizing industries, both countries have burgeoning middle classes with rising incomes and purchasing power whose members are increasingly buying Africa's light manufactured products, household consumer goods, and processed foods and using its back-office services, tourism facilities, and telecommunications.
Fundamental differences in the resource, labor, and capital endowments of Africa and Asia make them complementary business partners -- meaning that the trend will likely be sustained. This is good news, because the boom is a potentially pivotal opportunity for African countries to move beyond their traditional reliance on single-commodity exports and move up from the bottom of the international production chain, especially if growth-enhancing opportunities for trade and investment with the North continue to be as limited as they have been historically.
To be sure, there are several complications and obstacles. Africa's exports to and investment in Asia remain limited in scale and scope, Chinese and Indian companies in Africa sometimes displace African companies in local markets while creating few jobs there and sometimes even taking some away, and certain of these companies' activities are perceived to complicate already difficult political situations on the ground. What is more, fully realizing the prospects created by Chinese and Indian business is contingent on the implementation of demanding reforms. African governments must adopt policies that enhance African companies' international competitiveness, foster better governance, improve their countries' financial and labor markets, and attract investment in infrastructure. China and India, for their part, must eliminate their protectionist trade policies and allow the import of competitive high-value-added goods and services from Africa.
But if all sides do their share, China's and India's dramatically expanding commercial interest in Africa -- home to 300 million of the world's poorest people and a region that presents the world's most formidable development challenge -- could be an unprecedented opportunity for ..
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http://www.centralc hronicle. com/20080422/ 2204301.htm
Friday, April 25, 2008
Wooing Africans, countering China
India played host to the maiden and landmark two-day India-Africa Forum Summit in New Delhi this April 8-9, with a call for an increase in tangible measures to forge closer economic engagement and political representation between the two countries. The Summit inaugurated by Prime Minister Manmohan Singh had critical significance as it was viewed clearly as an effort by India to build systemic ties with the African continent. Particularly at a time when the burgeoning Indian economy is losing no opportunity at building contemporary partnerships in vital arenas such as trade, investment and energy ties.
As a matter of fact, India and Africa have shared a notable relationship in the past decades, which ultimately grew into a sustainable partnership. The sentiment was deftly displayed in a statement issued by the Ministry of External Affairs ahead of the Summit. It read: "From our struggle against colonialism and apartheid, we have emerged to jointly accept the challenges of a globalizing world. Whether we have to deal with threats to international peace and security, international terrorism or the scourge of poverty, we believe that India and Africa traverse the same path, share the same values and cherish the same dreams."
"We have a vision for a partnership with Africa for the 21st century. This vision will take us beyond our strong bilateral relationships, our close ties with regional economic communities and develop a new paradigm of cooperation which will take into account Africa's own aspirations for pan-African institutions and development programmes," the statement added.
Amidst this backdrop, Manmohan Singh made decisive announcements as he addressed the visiting leaders of 14 African nations. The conference shed light on significant areas including technology, agriculture, human resources and energy ties.
Many African countries that have had long-standing ties with India attended the meet. These included Nigeria, India's second largest source of imported crude petroleum, South Africa, the fourth-largest source for India's gold imports, and Morocco and Senegal, that are leading sources of India's global imports of inorganic chemicals, along with Kenya, Egypt, Tanzania, Ghana and Algeria.
In his inaugural address, Manmohan Singh called for turning the 21st century into a 'century of Asia and Africa' and described Africa as the "land of awakening". Furthermore, he showered a number of munificent incentives such as a pledge that India would double financial credit to African countries and regional economic groups to $ 5.4 billion in the next five years.
Crucially, the Prime Minister also promised to provide more than $ 500 million over the next five years in grants for development projects in the areas of railways, information technology, telecom, and power in Africa. This in fact, is a testament to India's commitment for overall development and progress so as to see Africa find its rightful place in the world. "The objective of our partnership is to cooperate with all the countries of Africa, within the limits of our capacities and capabilities, in the efforts towards achieving economic vibrancy, peace, stability and self-reliance. Towards this end, it is our intention to become a close partner in Africa's resurgence," he stressed.
In addition, India would also allow duty-free imports and provide preferential market access for exports from all the 50 least-developed countries, with as many as 34 from the African continent. Products covered by the plan include aluminum and copper ore, cotton, cocoa, ready-made garments, non-industrial diamonds, cashew nuts and cane sugar.
Importantly, the two-way trade between India and the African continent has increased by 285 per cent and totals about $30 billion a year. Consequently, this has raised Africa's share in India's global trade from 5.8 per cent in 2002-03 to nearly 8 per cent in 2006-07.
African Union Commission (AU) Chairperson Alpha Oumar Konare, representing the AU at the Summit earmarked "infrastructure, health, education, science and food security were areas where we want Indian know-how." He also urged Africa to shed its image of being a 'mere market for raw materials, purchased at low prices.'
The Summit adopted two documents, the Delhi Declaration and the Africa-India Framework for Cooperation, with a sincere aim to augment the "true partnership" to achieve the Millennium Development Goals. The former covers issues of bilateral, regional and international interest to India and Africa, including their common positions on UN reforms, climate change, WTO and anti-terrorism measures.
At the same time, India saw it as an opportune moment at deriving political benefits, by seeking crucial African support at its bid to stake claim for permanent membership of UN Security Council. This political move is an apparent measure by New Delhi to match its growing economic clout in Asia and beyond.
India and African countries agreed to "further strengthen cooperation towards revitalizing and enhancing the role of the General Assembly and reform and expansion of the Security Council. Africa takes note of India's position and its aspirations to become a permanent member with full rights in an expanded UN Security Council", the Framework for Cooperation stated.
Notwithstanding the above, India's hosting this Summit appears as an attempt to shore up its presence in the continent and counter the mounting Chinese influence in the region. Apparently, Beijing often has been touted as New Delhi's economic competitor and has already invested billions of dollars in Africa when it hosted a similar Summit in November 2006 that brought together leaders from as many as 48 African nations.
Incidentally, China's involvement in Africa is driven by both oil and diplomacy. Today, imports account for 40 per cent of China's oil consumption and are expected to reach 60 per cent by 2020. In response, Chinese oil companies have embarked upon a global search for new suppliers. In Africa, they have found them in nations such as Angola, Chad, Congo, Libya and the Central African Republics.
China became the world's second-largest consumer of petroleum products with its imports of natural gas, copper, cobalt and other key sources rising by as much as 20 per cent annually. This search for resources takes China to commodity-rich Africa that is home to major oil producers, including Nigeria, Sudan, Angola and Gabon.
Chinese interest in the African continent amply illustrates that its galloping economy is spurring Beijing to make every possible attempt to deepen its African ties and adopt a higher global profile.
Albeit in case of India and Africa, both regions are looking for opportunities to invest in each other's nations, with New Delhi especially keen to gain access to African oil. It is estimated that Africa has $ 30 billion worth of untapped oil and gas assets.
This Summit noticeably exhibits India's desire at making an attempt towards balancing the growing influence of China in Africa, while simultaneously exhibiting political influence and economic clout far from its borders in Asia and beyond.
Dr Monika Chansoria, -INFA