Largesse with agenda

Published: Monday 30 June 2008

Down to Earth
In the last week of April, India announced a us $5.4 billion credit to African countries for developing their infrastructure and meeting other development goals. This five year package also included duty free imports from 50 Least Developed Countries, of which 34 are in Africa. The government also announced a grant of us $500 million to African countries and doubled the number of fellowships given to students from African and Asian countries.

The largesse was startling news, especially because India has for long being among the largest recipients of foreign aid in the world. Even in 2006-07, government of India received us $1.83 billion in net external aid--this is not counting the amount received by non-governmental bodies in assistance from outside the country. According to some estimates, India's annual aid to other countries equals us $1 billion.This includes loans and other credit instruments.

India's engagement with Africa is historical and multi-faceted. From trade in expensive goods to slaves and indentured labour, India and Africa have for centuries shared strong economic links. But in the past few years, there has been a qualitative change in the economic relations between India and Africa. India is increasingly becoming an exporter of capital to Africa and this capital is being used to buy up natural resources, primarily oil.

India's biggest investment is in Nigeria where the Oil and Natural Gas (ongc) in partnership with the L N Mittal group has chalked out investments of over us $6 billion on two oil blocks. ongc's investment in Sudan, in collaboration with Chinese and Malaysian firms, is also well known. Oil remains the single largest interest for India in Africa with ongc and other Indian firms active in Algeria, Libya, Nigeria, Sudan, Chad, Angola, Namibia, Gabon, Sao Tome and Principe, Equitorial Guinea and Cote'd Ivoire.

In industry's footsteps
India's aid programme for Africa closely follows the footsteps of these investments. In Nigeria, apart from gaining control over two rich oil blocks, ongc and the Mittal group have promised to build railways, roads and a 2,000 mq power plant as well as social infrastructure like hospitals and schools. In Angola where ongc, in partnership with the Brazilians and Portuguese, is trying to break the Chinese stranglehold, it has promised a research centre on petroleum. In Angola and Namibia, India has won contracts to modernize and build railways and 300 mw power plants. India has offered help with Jaipur Foot to Angola's landmine-injured and the government has offered to train Namibians in civil aviation.

Down to Earth
Apart from this, many forms of India's aid to African countries is as much an aid to Indian industry. A us $110 million loan to Western African countries also funded the purchase of 500 Tata buses to augment Senegal's public transport. Much of the us $40 million given to Angola to upgrade its railway system was actually paid to rites (a government of India company under the railway ministry) as consultancy. A steel billet and rolling mill plant in Chad was again built using Indian capital goods. The aid package to Chad also included Tata heavy vehicles, Bajaj three wheelers and Mahindra four wheelers. Similarly an agro-processing factory in Mali, built with Indian support, bought many Indian capital good and vehicles.

It is not that India has solved its problems with regard to poverty, malnutrition, health, shelter, education and public infrastructure. In fact, with about 700 million people who earn less than us $2 a day and close to 300 million earn less than one dollar, India ranks a lowly 128 in the undp's Human Development Index.

That the Indian government still finds the excess cash to dole out as sweeteners for capturing economic resources in other countries is but one indicator of the changing structure of the Indian economy and its state. Unfortunately, there is almost no public scrutiny of the aid that India gives to other countries, especially those in Africa. Unlike in established donor countries of the North, in India civil society groups, left-wing movements and public institutions do not question either the ethics or the necessity of India's foreign aid programme, which is so closely tied up with its economic and foreign policy interests.

Aniket Alam is a columnist with the Pakistani newspaper, The Post

Subscribe to Daily Newsletter :

Comments are moderated and will be published only after the site moderator’s approval. Please use a genuine email ID and provide your name. Selected comments may also be used in the ‘Letters’ section of the Down To Earth print edition.