India-Africa Forum: A win-win situation for both countries

In this episode, we bring some moments from the Focus Africa Seminar which was held as a part of the India-Africa Forum Summit, 2015 in New Delhi. This event provided opportunities to discuss how to strengthen Indo-African ties, especially trade and commerce links.Below is the verbatim transcript of Arun Jaitley and Bashir M Ifo’s interview with Shereen Bhan on CNBC-TV18.Q: If I can start by asking you about what we can expect in terms of the future of the India-Africa partnership. India has been absolutely clear that we would like to model this partnership on a development compact. We are absolutely clear that we are committed to a more people centric approach. The foreign minister has also categorically stated that we do not believe in merely extracting resources from Africa and that is not going to be the model that India follows. If you can give us specifics in terms of what we can expect. For instance, USD 9 billion in low-cost credit over the last 20 years, we have supported 140 projects in Africa, 60 of those projects are today complete. You have said that we will be pledging more lines of credit to Africa. If you can give us some specifics because that seems to be an area of opportunity, also an area of disappointment perhaps as far as the Africans are concerned.Jaitley: India and Africa are both poised for a significant economic growth. Even in the midst of a global slowdown, the potential for growth in both these areas is much higher. India of course, is one of the fastest growing emerging economies in the world, Africa because of its natural resources and for the long distance it still has to cover, it certainly has a huge potential for growth, it has potential for investment.As your question very rightly pointed out, India on account of traditional historical ties, has a natural affinity with Africa. So, the lines of credit which we have issued and these can obviously be worked upon and improved further, expanded further. Our potential for our service sector growth in Africa and this can extend from our capacity at building highways our capacity at building ports, our capacity at building new townships where we are learning ourselves. Our telecommunications sector which is fairly developed and therefore, these are all areas in which Africa has a long distance to cover.Therefore, when you speak in terms of an Indo-African partnership, I think these are all areas and not necessarily looking at the resource rich Africa from that point of view. Of course, all these will be a part of a mutual trade advantages to both of them, but the very object of this engagement is to carry forward this cooperation and also cooperation in nourishing the human resource there.Q: Often times, the comparison is made between how much the bilateral trade between China and Africa is and where Indian stands. At this point in time, while China is trying to move towards a domestic consumption economic model, it is also furthering its aspirations and pushing the cause of infrastructure diplomacy if I could call it that. How critical is that going to be because you spoke about how one area of strategic importance is going to be capacity building especially on the infrastructure side. Infrastructure diplomacy, is that going to be a strategic imperative as India tries to engage with Africa?Jaitley: It would be and it would also depend on our own domestic capacities improving. For instance, let us take areas like telecommunication. Now, over the last two decades, this is where our capacity building took place and therefore, our capacity of our industry to go elsewhere in the world has increased. Ports is one area where our industries capacity now has shown a lot of potential. It is going to increase. Renewable energy is one area where our own potential has increased and therefore, our industry is going to go outside and invest in those areas. During the period which we are now trying to revive are highway programmes itself.So, these are all areas in which our own capacity building has significantly improved. Both government, public sector and private sector industries have gained a huge amount of experience in this and whether you call it infrastructure building or an infrastructure diplomacy, this is inevitably going to happen.Q: What about energy security and how critical is Africa going to be from an energy security point of view, because again, China is significantly ahead when it comes to engaging with Africa, when it comes to looking at acquiring assets in Africa form an energy security point of view. There has been a lot of talk about the likes of ONGC, OBL and so on and so forth scouting for assets, looking at acquisitions. From an energy security point of view, what kind of opportunities and challenges do you foresee?Jaitley: Of course, there are going to be opportunities and I think all our organisations again both in the state sector and the private sector have to look for these opportunities. After all, your own potentials are also defined and those potentials would be fully used and exploited and therefore, for your own energy security to look elsewhere in the world, we have been slow movers over the years in this direction.Q: Do you see the pace picking up now?Jaitley: I think so. As the health of the economy grows, as the global economy improves, as investable surplus with institutions increases, I think both for the purposes of investment and scouting for opportunities, the geographical limits will not matter.Q: In terms of what your expectations are, form both the Indian government, from the Indian private sector and what would you say could be the opportunities that India could look at when it comes to investing in Africa?Ifo: Let me say that our expectation is one of really cooperation between India and Africa and that is what we have been working on for a very long time now. Specially, if you look at the West-African region for instance, efforts have been made to develop relationship between India, Africa and West Africa where I come from. A lot of that was going on during Africa that I get was enhancing this co-operation. One, democracy. African countries are now becoming more democratic. Two days ago there was a election in Côte d’Ivoire, very peaceful people went freely and voted and now are waiting for the outcome. Two weeks ago, in Guinea, there was another democratic election, very peaceful, the elections are out, we are waiting for the polls to continue. In Nigeria, as you know, in March, there was another election.So, the environment has been prepared really for investment and we expect Indian companies, Indian businessmen to really exploit these opportunities. We have not just come into India for a line of credit. That is not the issue. The issue is that we have seen lines of credit, we have seen how they also enhance development. These are some of the impacts of these lines of the credit but there are ones that go beyond that. One of them as I mentioned is capacity building, setting up institutions to train and assist us in exploiting the resources that take a country like Niger, the Gambia, like Senegal. That has a lot of resources in terms of winds. But then we need to exploit these winds to generate energy, renewable energy. And that is what India is helping us to develop some of these opportunities that are there.We do not see them as coming just to exploit resources. I think the issue is beyond exploitation which goes beyond. We are now talking of capacity building, we are talking of how do we now create institutions. India has helped Rwanda to set up - yesterday we were discussing. These are the kind of institutions that should be created, should be developed so that the next 2-5 years Africa can also exploit some of these resources on its own. And the minister had just also mentioned something which is very important. India has opened up importation of African goods from 34 countries, you mentioned this. So, it shows also that there are opportunities for us here in India. Unfortunately our businessmen are not aware. So, once there is a situation where Indian companies can even go to African countries for some these goods, and export them to India, why not, because the opportunities are there.Q: Well hopefully at the end of this summer they will be much more aware of the opportunities that India presents as well. But if I can ask you in terms of specific areas of opportunity because we were talking about capacity building, institutional reform, building institutions and so on and so forth. Beyond agriculture and healthcare as well as infrastructure, which are the obvious sort of choices; which are the other sectors that you would like to see private sector participation from India, and what is it that Africa can actually offer?Ifo: I want to see emphasis on public private partnerships (PPPs). Because if you look at agreements today the resources are getting limited. So all this is to get the private sector private joining with the African private sector on PPPs and African financial institutions to develop on. Like Sharma said today, even in areas like health sectors. Health sector for instance, now people believe that it is a social sector, that we can develop PPPs in that sector. So these are the kind of opportunities that we think we can come together to develop in the interest of India and Africa.Q: We have seen significant changes as far as this partnership is concerned, the forum itself is now in its third year. This year the largest contingent of African leaders in India, engaging with our leaders and of course engaging with the private sector. What would be the outcomes that you would like to focus on at the end of this? What would be the specific objectives that you would like addressed at the end of this summit?Jaitley: At a diplomatic level, the government certainly is going to cooperate and develop and advance that relationship. As far as the economic relationship is concerned, it is going to be trade and investment. And therefore as we have already discussed in the course of the last one hour on all sides, this is one area because both Asia and India in particular, has huge growth potential and Africa of course is the continent of the future with all its resources and a lot of distance to cover and therefore, I think we can go as far as possible and literally plan long strides as far as Indo-African relationship is concerned.