EDITORIAL
As the world watched the progress of the Beijing Olympic Games torch relay earlier last month, the first India-Africa Summit was held with great fanfare in New Delhi on April 8-9.
Heads of state from 14 African countries, including South Africa, attended the gathering, which approved two documents of vital importance - the New Delhi Declaration and the Framework Agreement on India-Africa Cooperation - that will pave the way for the future development of India-Africa relations.
Addressing the 14 African leaders, Prime Minister Manmohan Singh said India will provide more than US$500 million over the next five to six years in grants for development projects. India would also double its lines of credit to African countries and regional economic groups to US$5.4 billion, up from US$2.15 billion in the last five years.
In addition, India will also allow duty-free imports from the world's poorest nations. Products covered by the plan include aluminium and copper ore, cotton, cocoa, ready-made garments, non-industrial diamonds, cashew nuts and sugar cane.
Some Indian and other media organisations made no bones about comparing the New Delhi summit to the one held in Beijing in 2006, suggesting that India's growing interest in Africa is part of an attempt to counter Chinese influence in the region.
There is no denying that rapid economic growth of the two Asian giants and their growing influence in Africa gave rise to much anxiety. But one cannot deny the fact that the rise of China and India is having a positive impact on Africa's development. This positive impact was endorsed by two reports issued by the Organisation of Economic Cooperation and Development and the World Bank in 2006 and 2007, respectively.
Economic activity between Africa and Asia 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.
Two-way trade between India and the African continent totals about US$30 billion a year, having grown sixfold in the last five years. In comparison, trade between China and Africa surged from US$55 billion in 2006 to US$73.3 billion in 2007.
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 more than natural resources. Both countries have burgeoning middle classes with rising incomes who 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, labour, and capital endowments of Africa and Asia make them complementary business partners, and the trend will likely be sustained. In this respect, there is no reason why India and China cannot play joint catalysts in taking Africa into a new, prosperous era.
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