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India pledges $5bn to help African states meet the MDGs

25 May 2011 19:24 (UTC +04:00)

Baku â€“ APA. India says its interest in Africa is about more than trade â€“ so, its $5bn in aid, almost equal to India’s healthcare budget, will help states meet the MDGs, APA reports quoting â€œThe Guardianâ€.
India pledged $5bn in aid to Africa, an amount almost equivalent to its own annual healthcare budget â€“ around $5.9bn â€“ on Wednesday, the last day of the second India-Africa summit at Addis Ababa, Ethiopia. Africa, one of the weakest links in the realisation of the millennium development goals (MDGs), will also have a partner in India for capacity building and expertise sharing over the next three years. The Indian presence will not only enhance commerce and infrastructure but include other key development areas, such as education and training.
This was Africa Day, the day New Delhi pulled out all stops to cement its "historical links" with Africa and, possibly as some critics would argue, to rival China’s huge presence on the continent.
"A new vision is required for Africa’s development and participation in global affairs," said India’s prime minister, Manmohan Singh, before the summit, which opened on Friday. "We do not have all the answers but we have some experience in nation building, which we are happy to share."
The Indian delegation that showed up in Addis Ababa â€“ including the prime minister and trade minister, Anand Sharma â€“ was a clear sign that the South Asian nation considers the continent of Africa to be important, and a major "growth pole".
Apart from development aid, India will spend $700m to build institutions and establish training programmes and $300m to develop the Ethio-Djibouti Railway. In the offing are plans for an India-Africa virtual university and more than 22,000 higher education scholarships for African students. Apart from that, India will contribute $2m to the African Union Mission in Somalia (AMISOM).
India has doled out aid and investment in every sphere of Africa’s development â€“ from centres of excellence to disaster management â€“ which contrasts with China’s $126bn ties that have been largely about commercial and infrastructure investment.
"There’s no competition," said Brahma Chellaney, professor of strategic affairs at the Centre for Policy Research in Delhi and an arms control expert. "The Chinese are way ahead and the Indians are not even trying. India is not pushing for corporate ties as they are more interested in government-to-government ties, which is very different from the Chinese diplomacy, which is to push commercial interests upfront."
However, Gurjit Singh, joint secretary at India’s foreign ministry, said last year that the key features of India’s Africa policy revolve around trade and investment, capacity building and training.
India’s focus is on Africa’s development, but it is also looking towards fulfilling its growing energy needs from the continent â€“ and gaining support from African states in securing a permanent seat at the UN security council. It has massively increased its oil imports from Africa â€“ mostly Nigeria, Sudan and Angola â€“ as a way of reducing its dependence on Middle Eastern oil. But there are other commercial interests: India’s diamond-cutting industry, which is the largest in the world, imports stones from South Africa, Botswana, Namibia and Zimbabwe; and top industrial houses such as Tata and Bharti have invested billions of dollars across the continent, taking advantage of the growing consumer base.
As Sharma, India’s trade minister, said: "Economic and development cooperation between India and Africa is a cornerstone of their new age partnership."
Trade ties between India and the continent stand at $46bn a year, which the Delhi delegation wants to take to $70bn by 2015; and Africa-India bilateral investments reached $90bn in 2010. India is the largest foreign investor in Ethiopia, the host country, with investment of $4.78bn. Trade ties between the two countries grew from $83m in 2005-06 to $272m in 2009-10. And Bilateral India-Africa trade grew from $1bn in 2001 to $50bn by 2010.
India and China’s involvement in the region is beneficial for all concerned. New Delhi’s strategy in Africa will, however, always be more than mere commercial interest. Before leaving for the summit, Singh said the India-Africa partnership rests on the three pillars of "capacity building and skill transfer, trade and infrastructure development". And it is exactly in that order that the relationship will evolve in the coming few years.