Africa and the Indian Ocean – I
by Ramtanu Maitra on 10 Feb 2009 0 Comment

At the time of writing, South African President Thabo Mbeki, backed by the African Union and supported by the 118-member Non-Aligned Movement (NAM) nations, is presiding over power-sharing talks between Zimbabwe’s ruling Zanu-PF and the opposition Movement for Democratic Change (August 2008). While the outcome of these talks is not the subject of speculation in this article, what is important to note is that India has brushed aside the western nations’ call to remove President Robert Mugabe and expressed full support to the negotiation process.

Beside the fact that India has no real reason to respond positively to the call for “regime change” pushed vigorously by Britain, the ex-colonial power in Zimbabwe (Rhodesia, when the British colonials ruled the roost deploying a tiny white minority in southern Africa), there are substantial reasons for not getting involved in Zimbabwe’s internal political turmoil and, instead, lending full support to the South Africa-initiated negotiations for a peaceful settlement of the dispute.

For a growing India, the southern African region is of great strategic importance. It provides the teeth to India’s need for a very strong presence in the Indian Ocean, as well as in eastern and sub-Saharan Africa. Further, a strong presence in southern Africa, and in the Indian Ocean that washes its shores, is a vital ingredient for India’s future relations with economically-powerful South American nations, such as Brazil, Mexico and Argentina, among others. It is strategic thinking along these lines in New Delhi that has kept the regime-changers at bay and entrusted President Mbeki with the responsibility to cool the heels of contesting groups.  

India’s decision not to take a partisan stance in any form or manner - either by lending its voice in favour of the anti-Mugabe, pro-democracy regime-changers, or by propping up President Mugabe statements of endorsement - is a well-calculated decision. There is no doubt that New Delhi fully realizes that the intervention by South Africa is the most-preferred alternative under the present circumstances. To begin with, the Western eagerness to remove President Mugabe is not entirely based upon the West’s much-trumpeted concern over abuse of human rights in Zimbabwe or the dilapidated economic situation due to ill governance on the part of President Mugabe’s ZANU-PF political party; the West aims to set up a government that will be its handmaiden in this highly-strategic southern African region.

The West’s policy in the region is dictated not by what President Mugabe did or did not do; rather it flows from concern over the growing presence of China and India - two powers that have begun to assert themselves in the Indian Ocean - and their growing trade and economic relations with South Africa, and beyond, conducted through the Indian Ocean sea lanes.

Regressing a step, it would be important to note that when Zimbabwe was liberated in 1980 and ZANU-PF was installed as the new governing party, the event was a source of inspiration to many in South Africa, emboldening them to enhance their efforts to defeat the barbaric apartheid policy. The liberation of Zimbabwe in 1980 also dramatically altered the balance of power in the region, denying the then-apartheid regime an erstwhile partner in the form of Ian Smith, the prime minister of Rhodesia (1965-79) who headed a white minority regime propped up from London.

ZANU-PF did not have it easy, either. Independent Zimbabwe paid a heavy price in the form of sanctions, economic exclusion, sabotage and direct military assault. The attack was orchestrated to intimidate the leadership and force it to withdraw its support for the anti-apartheid forces in South Africa. At the time, Zimbabwe did not balk, and that helped South Africans to dismantle that barbaric regime. What was important then is perhaps even more important today: if Zimbabwe yields now under the full-court pressure exerted by the regime-changers, the whole region would surely be adversely affected.

Asia and Africa

The recent and ongoing large Chinese investments in Africa have drawn the attention of the world. It is useful to review the historical context for this. The developed world, which set its feet on African soil in the colonial days with the primary objective of looting Africa’s mineral reserves, left Africa in tatters, economically and politically depleted. Because of their race-biased policies, the colonial rulers of Europe had turned much of the continent into violent and warring subgroups. This was the West’s contribution during the heyday of colonial rule in the 17th through the 20th centuries.

The Cold War period, which lasted about 40 years from 1950 through 1990, saw nothing better emerge in Africa. After World War II, the colonial powers moved out of Africa most reluctantly. But being in control of international commerce and trade, they were able to impose a kind of financial colonialism on the African continent.  

During this period, most of Asia had encountered similar treatment as well. Neither India nor China was in a socio-economic position to do anything more than defend its territory.  At the time, the Soviet bogey-man was scary enough for the Western powers to make an extra effort to keep Japan, another major Asian nation, in their fold. And, by contrast with India and China, that country underwent a metamorphosis from belligerent warrior to pacifist nation, willing and eager to utilize US-gifted technological and economic goodwill to become a massive economic power. Japan, however, showed no intent to be anything but a glad-hander to the West during the Cold War and stayed away from exerting any positive influence in Africa, lest it antagonize the West.

Though the civilization-based powers in Asia, such as China, India, and Japan, among others, were either economically or politically weak, they did not allow themselves to be broken up. As the political and economic environment began to shift in the post-Cold War days, China and India began to grow. Their growth was based upon agro-industrial development requiring a continuing supply of natural resources such as coal, oil, gas, iron ores and other minerals.

Both China and India began to look toward Africa for procuring some of these resources on a long-term basis. Suddenly, China appeared in Africa no longer as an “also ran,” but as a lead runner. The old colonial powers have not yet come to terms with this reality, and the Zimbabwe fiasco, aggravated by the colonial powers, is a case in point.

China-South Africa Engagement

While Chinese investment across the continent is now a potent force to reckon with, its relationship with South Africa, directly relevant to the Zimbabwe crisis, is particularly worth noting. The close diplomatic ties between China and South Africa have been matched by a growing economic interlinking. With two-way trade jumping from $800 million in 1998 to $11.2 billion in October 2007, and growing steadily since, economic cooperation is increasing rapidly. The once-low levels of Chinese investment in South Africa are finally catching up with the high profile of South African investment in China.

In particular, Chinese Foreign Direct Investment (FDI) in South Africa reached new heights with the announcement in November 2007 that the International Construction Bank of China would be purchasing a 20-percent stake in Standard Bank worth $5.6 billion. This is complemented by significant South African investment in China, which surpassed $200 million in 2006. Leading the charge are SAB-Miller, which owns 55 breweries in China; Sasol, which has a joint venture with Ningxia and Shenhua CLC to develop coal-to-oil plants in China; and other resource-based companies such as Anglo-American and Kumba Resources. In addition, with Chinese demand for foodstuffs growing due to its loss of a significant amount of arable land to industrialization and commercialization activities, the potential for further development of commercial links in the area of food grains has emerged.

China and South Africa are also engaged in a very significant collaboration in energy production, poised as they are to develop the world’s first commercially operated pebble bed nuclear reactors. Under President Thabo Mbeki, South Africa sought cooperation with China in the development of nuclear technology.  The Eskom-led joint venture was hoping to build its test commercial pebble bed reactor within 10 years. The Chinese energy consortium chose a site in the eastern province of Shandong to build a 195MW gas-cooled power plant. 

When successfully commercialized, the pebble bed reactor will be the first radically new reactor design for several decades. This will push China to the forefront of development of a technology that researchers claim offers a new “meltdown-proof” alternative to standard water-cooled nuclear power stations. High-temperature, gas-cooled reactors have for decades offered the theoretical promise of cheap, safe and easily scalable nuclear power, and China’s bold try at making them work will be closely watched.

Advocates of “modular” pebble bed reactors point out that they offer the hope of cheap, safe and easily expandable nuclear power stations, a strong appeal for China, which is struggling to meet huge growth in energy demand while avoiding environmental disaster.  The pebble bed reactor is so named because it is fuelled by small graphite spheres the size of billiard balls, with uranium cores. The reactor’s proponents say its small core and the dispersal of its fuel among hundreds of thousands of spheres prevents a meltdown.

Finally, it is interesting to note that South Africa has the largest Chinese community - with more than 300,000 Chinese in residence, many of whom arrived within the last decade - on the continent.

Collaboration for Africa’s Infrastructure

Beyond the strong bilateral engagement between South Africa and China, these two countries also recognize that there are considerable opportunities for co-operation in the rest of Africa. In this regard, the building of Chinese-backed infrastructure across the continent should be recognized for what it is: an unprecedented step aimed at addressing a key obstacle to African development, analysts point out. The lack of infrastructural development was the legacy of the colonial powers that robbed and pauperized Africa for hundreds of years. By building that essential infrastructure, China has not only opened up the developmental potential of the continent, but also won itself a secure place in the hearts and minds of Africa’s people.

The World Bank estimates that Africa has an infrastructure backlog of more than $32 billion. In reality, however, the number should be close to a trillion dollars. What is important to note is that China has addressed this issue and offers plenty of opportunity for others, including the South Africans, to play a significant role. Evidence from Ethiopia to Angola, where Chinese-financed firms have built transport and communication infrastructure, already links these initiatives to increased economic growth in those countries. Moreover, this opening of previously isolated or closed markets benefits not only Chinese economic interests but also provides an opportunity for South African (and other) exporters.

In this regard, the ICBC-Standard Bank arrangement is a compelling model of Chinese-South African private/public sector co-operation. It promises greater collaboration in the provision of financial services across the African continent through Standard Bank’s established presence in 18 countries, in giving the South African bank better access to the Chinese domestic market, and in providing a new source of capital for the continent. As Standard Bank Chief Executive Officer Jacob Maree puts it: “We will try to keep almost all the (Chinese investment) money that we can outside of South Africa, because it is earmarked for growth in Africa and growth outside of Africa.”

These developments, however, should not be construed as a Chinese ploy to “control” or “colonize” Africa.  Rather, the Chinese have understood what was necessary to realize the kind of long-term relationship with Africa that is necessary to support China’s own developmental process. At the same time, it would be naïve to believe that China will not encounter opposition within South Africa. A case in point is the opposition refusal of the South Africa’s largest transport workers’ union, SA Transport and Allied Workers Union (Satawu), to unload a shipment of Chinese arms in Durban bound for neighboring Zimbabwe in April this year. The situation could signal the South African trade unions’ capability to intervene on South Africa’s future foreign policy.

Still, a political agreement between China and South Africa has developed around some important international issues. For instance, since taking up the non-permanent seat on the UN Security Council in 2006, South Africa’s positions on international issues such as Darfur, Zimbabwe and Myanmar have mirrored those of China and are a clear indication of the two governments’ shared outlook on the key features of the international system. 

It should also be noted that Pretoria prioritizes its concerns for sovereignty over that of human rights and democracy - a much-used weapon of the “regime-changers” in the West -and thus is closer to Beijing’s perspective on these matters. Regarding the reform of international institutions, South Africa and China also share a common view on the need to transform the UN Security Council and the international financial institutions to better reflect developing country interests.

India: Old Ties and New Moves

In India, this Chinese economic march into Africa has been finally noticed. India has not yet indicated that it would be willing to share equal honours with China in Africa by doing what needs to be done, but  it has nonetheless made a beginning. This new Indian attitude is more noticed in colonial Britain than, perhaps, in India. 

Alex Vines of Chatham House (RIIA) points out in a recent article that India’s economic activity has now gone well beyond selling “Bollywood movies” to the Africans. He says Indian investment in just one country, Côte d’Ivoire, is expected to grow to $1 billion by 2011; that is 10 percent of total Indian foreign investment in the last decade. India’s state-run Oil and Natural Gas Corporation (ONGC Videsh) produces Sudanese oil and, over the next two years, Indian diplomatic missions will open in Mali, Gabon, Niger and Burkina Faso. Until 2003, the Indian Foreign Ministry had a single Africa division; it now has three: West and Central Africa, East and Southern Africa, and West Asia and North Africa. In addition to the list supplied by Vines, India has also announced its intent to build an oil refinery in the Niger delta of Nigeria.

Nigeria is India’s largest trading partner in Africa. Bilateral annual trade turnover exceeds $3 billion, with oil constituting more than 96 percent of Indian imports from Nigeria. India maintains a three-pronged strategy: term contract for crude purchase, participation in the upstream sector, and refineries. In addition, a study by Federation of Indian Chambers of Commerce and Industry (FICCI) identified five main sectors that can act as “engines of growth” to boost Indo-Africa trade: pharmaceuticals and the health sector, information technology, water management, food processing and education.

Despite the fact that both China and India are looking at Africa as a continent with vast reserves of natural resources of all kinds, the Indian investment pattern is quite different from that of China. According to the Chatham House report, India’s strategy is not limited to commercial ties but includes security concerns as well.

The report also asserts that India is taking steps to counter China’s influence. These include increased overtures toward nations such as Mauritius, the Seychelles, Madagascar and coastal African countries such as Mozambique, Kenya and Tanzania. “An Indian surveillance base was opened up recently in the northern part of Madagascar,” continued Vines. “It is mostly about protecting shipping. The surveillance is about keeping the sea lanes open and to ensure that Chinese expansionism is also checked.”

Vines observes that the trade links are nothing new at all, and they were deepened through colonialism. The Portuguese used Mozambique Island as a stopping-off point en route to Goa, the Portuguese colony that was set up in India. Under British colonialism, Vines states, for a while even what is now Kenya and bits of Uganda were administered from Bombay (now Mumbai).

It is true that India’s currency was used freely earlier in a number of countries along Africa’s east coast, and remains a legal tender though it is now known there as Seychelles and Mauritian rupees. A large Indian diaspora also exists in Mauritius, the Seychelles, Kenya and South Africa.

One could claim that India’s Africa and Indian Ocean policy is driven by the presence of this large Diaspora. With a Diaspora of about 3 million ethnic Indians in Africa, India is indeed taking advantage of these historic connections to strengthen its ties and to negotiate new energy supplies. Over the years, it helped establish Nigeria’s military academy, and almost all senior officers of Ghana’s military have attended Indian training courses. Flush with foreign exchange, as they look increasingly outward, the big Indian corporations, such as the Tata Group, Reliance and Ranbaxy Laboratories, have mostly focused on other countries that once were under British colonial rule - South Africa, Nigeria, Egypt and Kenya.

Yet when it comes to the dollar value of trade, India is no match for China. While the Africa-India trade has also surged significantly, from $5.5 billion in 2002 to $30 billion last year, Standard Chartered Bank’s statistics show that in the late 1990s China-Africa trade accounted for a little more than $5 billion annually, but has since grown almost twelve-fold. During that period, China invested $12 billion in Africa and built more than 100 food and raw material processing plants, 3,500 miles of highways, 1,600 miles of railways, eight power stations and three ports. More than 800 Chinese companies are currently operating in Africa, which now provides 28 percent of China’s oil. Moreover, to earn goodwill, in 2005 China announced cancellation of debts to 33 African countries. The country also said it will grant zero-tariff to many African exports, a move likely to benefit 30 less-developed African countries.

One major Indian move toward Africa as a whole in recent days was presented at the First India-Africa Summit that took place in early April 2008 in New Delhi. Speaking at the business luncheon held in honour of the African delegates on April 9, Indian External Affairs Minister Pranab Mukherjee talked about broadening Indo-African relations by charting new areas. He said: “Our decision at the Summit to strengthen cooperation in agriculture can help address the problem of food security. We have agreed to co-operate in this sector and have identified a number of areas for such co-operation. These include capacity building and sharing of experiences, transfer of applied agricultural technology and skills and enhancing market opportunities for African value-added agricultural products. India also remains ready to share its experience in agriculture extension, livestock development, fisheries, water management and measures to confront the growing threat of climate change. In addition, the Indian private sector should look for opportunities for joint ventures in Africa for production of cereals, oilseeds and pulses. This can be for local consumption, as well as for export to India and third countries…”

Although Zimbabwe was once a food surplus nation, it has now become a perpetually food-short nation. This has made the Mugabe government extremely vulnerable. Food security is essential to protect the nation’s sovereignty; any nation that cannot attain food security remains vulnerable to external threats. It must also be realized that only a handful of African nations have food self-sufficiency at this point in time. Hence, if the Indian initiative is pushed through rapidly and with a total commitment to making the African continent self-sufficient in food, India will acquire the entire African continent as a friend and a reliable partner in its quest for security.

To be concluded
(This article was written for Agni in August 2008, but retains a larger relevance for Indian strategic thinkers – Editor)
The author is South Asian Analyst at Executive Intelligence Review News Services Inc.

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