September 13 promises to be a busy day in the diplomatic calendar with two back-to-back events of high developmental and strategic importance for India. First, prime minister Narendra Modi and his Japanese counterpart Shinzo Abe will lay the foundation stone of the rail line for the proposed high-speed Mumbai-Ahmedabad bullet train. Second, they will unveil ‘work plan’ for the proposed Asia-Africa Growth Corridor (AAGC), seen as India and Japan’s answer to China’s One Belt One Road (OBOR) initiative.
These two events will take place in Ahmedabad which had also hosted the 52nd annual meeting of the African Development Bank (AfDB) on May 22. It was during the first annual meeting of the AfDB in India that Modi had released the ‘Vision Document’ of the AAGC, which is predominantly a sea route-based project.
To make the AAGC successful, according to sources, Japan has agreed to pump in $272 billion largely for the construction of “quality” ports and other infrastructure in the countries situated along Indian and Atlantic oceans. Loans will also be taken from Asian Development Bank (ADB) and AfDB to fund the project to be completed in 20-25 years. India will invest resources for the development of institutional and capacity building in Africa. Though officials of the ministry of external affairs refused to disclose the amount India would spend in fulfilling institutional and capacity building goals in Africa, they agreed to say that New Delhi would make a “significant contribution” to the overall implementation of the AAGC. Yet what is more interesting with this India and Japan-led initiative is that while America and some European countries have expressed their concerns on the lack of transparency around OBOR, Germany is said to be very much enthusiastic about the AAGC “mainly because it is not shrouded in any controversy nor it is pushy or will violate sovereignty of any country like OBOR”, a source observed.
During his July 6-8 visit to Germany to attend G-20 summit, “Prime minister Modi raised the issue of the AAGC with chancellor Angela Merkel and she was found to be quite optimistic about our initiative”, says Sachin Chaturvedi, director general of Research and Information System (RIS) for Developing Countries, a Delhi-based autonomous think-tank, which works under the MEA. Significantly, RIS together with Jakarta-based think-tank Economic Research Institute for ASEAN and East Asia (ERIA) and Japan’s Institute of Developing Economics: Japan External Trade Organisation (IDE:JETRO) had prepared AAGC’s vision document in consultation with African think-tanks.
These three institutes have also been behind the drafting of AAGC’s work plan, effectively a master plan that focuses on implementation aspect of the multi-billion project.
Though no major details of the work plan were revealed to Governance Now, the RIS official didn’t stop from providing hints on the number of countries to be covered under the flagship project. “More than 50 countries would be part of the AAGC, but in the initial phase countries like Mauritius, Madagascar, Tanzania, Kenya, South Africa and Mozambique of Africa; India and Sri Lanka of South Asia; Japan, Malaysia, Indonesia Vietnam, Thailand, Myanmar of Southeast Asia and Iran, Oman and the UAE of the Middle-East will be covered,” says Chaturvedi, adding that a “debriefing session with heads of missions of African countries on AAGC would be held in New Delhi before the launch of the project’s work plan next month [September].”
Such measures are part of the AAGC’s consultation process and this is what differentiates it from China’s OBOR, which is criticised by experts for being opaque in its agenda. When China organised a three-day conclave on OBOR in May, of the total 64 countries identified for this mega project, only 20 countries were represented by their top leaders while the other nations had sent their ministers to it. “Certainly AAGC is different from OBOR on several fronts. I feel this important initiative of India and Japan will bring Asia and Africa very close to each other than this one [OBOR]. I see it as an extension of India and Japan’s policy towards Africa,” Ruchita Beri, a senior research associate of the Institute for Defence Studies and Analyses (IDSA), remarks. Her views received a support from the RIS official who admits that New Delhi’s “structured” engagement with Africa through India-Africa Forum Summit (IAFS) programme and Japan’s linkages with the continent through its programmes like Tokyo International Conference on African Development (TICAD) have helped them design this initiative called AAGC.
As per this maritime project, India’s Enayam (Tamil Nadu), Kandla (Gujarat) and Mumbai ports developed under the Sagarmala project as deep sea ports will be linked with Sri Lanka’s Trincomalee and Colombo ports, Myanmar’s Sittwe port and Iran’s Chabahar port, which is under development. For Chabahar deep sea port, India Ports Global Limited (IPGL) has recently finalised procurement of equipment like rail mounted gantry crane and is about to finalise order related to procurement of rubber tyre mobile crane, container handlers, truck and tractor trailers containers. In the meanwhile, Indian officials during their meeting with Iranian authorities in Tehran asked them to submit an application for $150 million loan before EXIM Bank of India. Sources say Iranian authorities have agreed to soon submit the application for loan needed to build Chabahar port. India has also a plan to connect the Chabahar port by rail with the International North-South Corridor (INSC), a 7,200-km long ship, rail and road network that will terminate in Moscow after passing through Central Asian nations.
In fact, the port development and connectivity plan in Asia will go in tandem with the proposed growth corridor taking into account Mauritius, Mozambique, South Africa, Madagascar, Tanzania, and Kenya. In land-locked African nations such as Ethiopia and Ivory Coast, both India and Japan will develop industrial clusters and special economic zones, and they will be in turn connected with the nearest African ports. The overall aim of developing these industrial clusters and units is to encourage local production of goods like apparel, fertilisers and cement.
“No attempt will be made to dump finished goods from India and Japan in the African market. Nor will there be any move to ruin locally produced goods. Only those goods will be supplied which they (Africans) require,” the RIS official says, adding that India itself has been a victim of dumping of goods by offshore agencies. “You know it well how the market of chairs and other goods produced with bamboo has been destroyed by bringing in China-made cheap plastic chairs and table via Myanmar in the northeast and how our thriving apple market has been destroyed by Australia dumping its apple here. We don’t like to follow these examples while pursuing our growth agenda with Africa,” says Chaturvedi. He, however, hinted that the Delhi-Mumbai Industrial Corridor and Chennai-Bengaluru Industrial Corridor would be part of the Asia-Africa Growth Corridor. Being developed in assistance with Japan, these corridors will have the presence of Japanese automobile and electronics companies and they will produce goods which suit the requirements of African markets. “Only after talking to our African partners, these goods will be shipped. I should say that it will not be one-way traffic; everything will be transparent and only after due consultations with African countries electronic, automobile or pharmaceutical goods will be transported,” he says.
It will write a “new chapter” in Asia-Africa relations, says professor Tribhuwan Prasad of University of Delhi’s department of African studies. “The plus point here is that while Japan has money and technology, India enjoys centuries-old cultural relations with Africa. India has also a reputation of having close association with Africa under South-South cooperation. This apart, communication through English language is another factor behind closer India-Africa relations,” he says. True, it is the reason why India doesn’t like the AAGC to be merely a maritime project. Knowing it well that food and health are two key needs which are sorely missed by Africans, India has made these things an essential part of the proposed growth corridor. Under this programme, the two countries will not only invest money to achieve food security in countries like Chad, Uganda and Male, they will also jointly fund the construction of hospitals in Africa, which is waiting to write its own growth story despite facing a financial crisis.
(The article appears in the September 1-15, 2017 issue of Governance Now.)