CHINA’S INTERVENTION IN THE HORN OF AFRICA

Investment across the African continent has been increased by China throughout the last decade with special emphasis on raw materials. Recently China concluded “The China-horn of Africa peace, governance and development conference” in which for the first time China aims to play role in the area of security in the African continent.

PROJECT OF CHINA IN AFRICA

• The four major areas of China’s interest are natural resources, maritime interest, financial assistance and infrastructural projects and infrastructural investment.
• China is also funding $200 million for the construction of the African Union’s headquarters in Addis Ababa
• It has also made a significant investment in railway building, the Addis-Djibouti railway line connecting the land-locked country with Eritrean ports in the Red Sea.
• With respect to financial assistance, Ethiopia is one of the top five African recipients of Chinese investment. China has also promised to provide $15.7 million in assistance to Eritrea.
• China’s interest in Africa is due to the presence of natural resources like oil and coal. It has invested $400 million in the Mombasa oil terminal.
• China is also interested in metallic minerals such as gold, iron ore, and precious stone along with chemicals, oil and natural gas in Ethiopia.
• In maritime interest, China has its military base in Djibouti and is also willing to develop the Eritrea coast which would connect to China’s investment in landlocked Ethiopia.

INDIA’S VIEW ON CHINA INVESTMENT IN AFRICA

• India had promised a more inclusive and transparent development model for the African countries where empowerment of African nations is the aim whereas the Chinese investments end up in a debt trap and militarization of the region.
• India had consistently supported anti-colonial and anti-racist liberation struggles in Africa
• India and Africa’s economic relations are modest compared to China. India has numerous advantages including proximity, a common language, the popularity of Indian culture and the appeal of democracy

India’s Developmental Projects in Africa

India Africa trade grew from US$ 6.8 billion in 2003 to US$ 76.9 billion in 2018, and now Africa is India’s third-largest trading partner.

• To promote South-South Cooperation India launched the Indian Technical and Economic Cooperation (ITEC) in 1964, a programme to provide technical assistance through human resource development to African nations.
• In 2003 India initiated the Concessional Line of Credit (LOC) based on the principle of mutual benefit which is demand-driven, to fund the construction of irrigation projects, railway lines, electrification, farm mechanization projects etc in African nations.
• For instance India’s irrigation project in Senegal led to a six-fold increase in rice production and now the country’s 30% consumption is covered by domestic production.
• The Pan African e-Network launched in 2009, helps to extend India’s IT expertise in the field of healthcare and education in 53 African countries. E-ArogyaBharti and E-Vidyabharti, the second phase of the programme provide tele-education to 4000 African students.
• India also provides scholarships to African students for five years under the “Study in India” initiative and also aims to set up higher learning institutions in Africa.
• India has pledged LoC worth US$ 2 billion to Africa over five years for the implementation of off-grid solar energy projects and is developing solar power systems across the Sahel region, which would provide electricity to approximately 300 million Africans who are currently off-grid.

Issues

• India is not an attractive destination for the education of African students due to its poor quality of higher education. On the other hand, China is emerging as the second most favourable destination for education among African students after France.

• India also has a poor track record when it comes to project delivery and implementation. There is a lack of clear strategy and synchronization between different development instruments.
• India is also viewed to be slow in delivering on its development partnership commitment, especially in comparison to China.

• Loc supports are mainly used to fund small individual development projects like roads, bridges, power transmission, water supply systems etc which although benefits the small African regions but fails to aid the larger developmental challenges like food insecurity, poverty, and health insecurity in African countries.

To make impactful developmental cooperation with Africa, especially after the pandemic where poverty, unemployment and hunger are on the rise, India must:

• Prepare a clear and focused African strategy with timely completion of projects.
• Harness the expertise and resources of Indian Civil society organizations, NGOs and Indian Diaspora to implement developmental projects in Africa at low costs, like Pratham and Barefoot Collage are playing an exceptional role in education in Africa.
• India should also try to support private Indian companies making investments in developmental projects in Africa for mutual benefits.

PGII to counter China's Belt and Road Initiative

In the recent G7 summit in Germany, the ambitious Partnership for Global Infrastructure and Investment (PGII) was unveiled, with the aim of collective mobilization of $600 billion by 2027 for transparent investment in infrastructure projects in developing and middle-income countries.

It’s a G7 initiative to counter China’s multi-trillion-dollar Belt and Road Initiative which the West considers China’s strategy to increase its geopolitical influence in Asia and other developing and low-income countries in the disguised identity of connectivity, infrastructure, and trade projects.

What is PGII?

• In 2021 the G7 partners along with European Union launched the Build Back Better World (B3W) intending to fill the $40 trillion infrastructure gap in the developing world. PGII is the relaunch and better version of B3W.
• It is a value-driven, high-impact and transparent infrastructure partnership to narrow down the infrastructural needs of low and middle-income countries including India.
• Under this, the US has pledged to mobilize $200 billion over five years, through grants, public finances, and private capital for PGII, while the European Union has pledged 300 billion euros for the partnership for the same period.

Kinds of Projects undertaken by PGII

PGII projects for investment will be driven by four priority pillars:

• To tackle climate crises and ensure global energy security through clean energy supply chains.
• To boost digital information and communication technology (ITC) and adoption of technologies such as 5G and 6G internet connectivity, and cybersecurity.
• Projects that aim to work for gender equality and equity.
• To build and upgrade Global health and infrastructure.

Projects that are set to begin under PGII

• The US along with G7 countries and European Union are disbursing a $3.3 million technical assistance grant to build a vaccine facility with a yearly capacity to manufacture millions of doses of COVID19 and other vaccines in Senegal.
• European Union supporting mRNA vaccine plant in Latin America and a fibre optic cable linking project, linking Europe to Latin America.
• In India, the US is will invest in a venture capital fund (Omnivore Agritech and Climate Sustainability Fund 3), which invests in startups and entrepreneurs working in the field of agriculture, food security, climate, and rural economy in India.

PGII in comparison to China’s BRI

• PGII on the other hand unlike China is a value-based plan to help countries meet their infrastructural needs and aims to build projects through grants and investments.
• It focuses on climate action and clean energy, unlike China’s BRI which also built large coal-fired plants.
• While PGII pledges a $600 billion investment by 2027 on the other hand as per Morgan and Stanly estimates, China’s overall funding by that time would reach $1.2 to $1.3 trillion.
• Under PGII large private capital will be mobilized while China’s BRI is mostly state-funded.
• PGII projects will be based on transparency while China’s BRI has been criticized for signing confidentiality agreements with countries leading to countries indebted to China, often referred to as neocolonialization. For Instance, Pakistan owes a large proportion of its foreign debt to China due to the CPEC project.

India’s Stand

India opted out of China’s BRI initiative due to China’s increasing influence in the Indian Ocean Region and its neighbourhood, but a PGII project has been announced in India which shows India to be the beneficiary of this partnership.