Modi-Abe bonhomie gives China jitters
After winning the bullet train battle in Indonesia, China has become suspicious of Japan on the development of the African economy. It suspects that the real aim of the Indo-Japan joint partnership for the Asia-Africa Growth Corridor (AAGC) initiative is an attempt at disruption of the Chinese Belt & Road initiative (B&R). Neither Japan nor India is a member of the B&T. According to Chinese daily Global Times, "The two countries are trying to counterbalance the Belt & Road initiative with the AAGC plan."
During the visit of the Indian Prime Minister to Japan in November 2016, both Prime Minister Narendra Modi and Shinzo Abe committed to the joint development of Africa; while also promising to explore specific joint projects, in the areas of training, capacity building, health infrastructure, and connectivity.
China was not averse to a solo role for India in the development of the African economy. In fact, China lauded Modi's visit to Africa in mid-2016 and hailed it as a consolidation of India's influence in the region. It did not consider India as a foe or a competitor; instead, it recognised India's efforts as complementary. China saw Modi's Africa visit as having the potential for Sino–India cooperation in Africa. The Global Times said: "China can provide investment and technology, while India has been doing well in its people–to–people interactions". It further said, "If India's interactions with African countries can bring momentum to the local development, China will benefit from such moves."
Against this backdrop, China's provocation against Indo-Japan joint partnership for Africa is a surprise to many. Did the historical enmity between Japan and China underpin the provocation? Or is pushing Africa into the BRICS fold the main aim of China's provocation? China urged that three members of BRICS — India, South Africa, and China — have common interests in Africa, while Japan is not a member of BRICS. The Global Times said, "As members of the BRICS mechanism, China, India, and South Africa have been keenly pursuing economic cooperation and reconstructing global orders."
Till 2015, Japan's relation with Africa was promiscuous and Africa was peripheral to the Japanese growth trajectory of trade and investment. Japan's focus on African relations was merely to enlist African support for the UN Security Council reform and resist China's prowess in the South China Sea. The emphases on economic support and economic cooperation were at the backbench.
It was in 2016, when, the Sixth TICUD summit (Tokyo International Conference on African Development) took a turning point for Japan's focus in Africa. So far, it was a formal engagement and the conferences were always held in Tokyo. For the first time, the Sixth TICAD Conference was held in Nairobi in August 2016, under the initiative of Japanese Prime Minister Shinzo Abe, accompanied by over 100 Japanese business honchos.
In the Forum, Prime Minister Shinzo Abe pledged US$ 30 billion for the development of infrastructure in the continent over a period of three years. Abe's investment pledge demonstrated a broader shift in Japan's policy towards Africa. It connoted a shift from aid to trade and investment, thus reflecting economic partnership, according to the Council of Foreign Trade.
Japan's pledge was the biggest challenge to China as the Asian giant had already established a strong foundation of its economic might in Africa. At the Forum on China-Africa Cooperation in Beijing, in 2015, Chinese President Xi Jinping pledged more than US$ 60 billion towards investment in the continent. It topped the list of FDI capital investment in Africa, sharing 39 per cent of the total investments in 2016, as compared to merely 3 per cent by Japanese investors.
India has also upped the ante. Between 2011 and 2014, India invested some US$ 15 billion on ventures in Africa. Even though India's investments are much lower than that of China and Japan, India's leadership and its ethnic relation with Africa edge out the influences of Japan and China.
India has a special relation with Africa. It has established a long-term and non-controversial people-to-people relation because of its ethnic inhabitance. Nearly three million Indian ethnics and NRIs are inhabitants in South Africa, Tanzania, Nigeria, Kenya, and Ethiopia.
These Indians hold big stakes in the business operations of Africa and have become key drivers for African economic development. Interestingly, a large number of them are from Gujarat. Close people-to-people interactions between India and Africa and the charismatic leadership of Prime Minister Narendra Modi, who is himself a Gujarati, led the Japanese to tilt towards India for the joint partnership for AACG.
Historically, East and Southern Africa, have been the centre for Indian descendants. However, in terms of trade, five African countries (South Africa, Kenya, Egypt, Tanzania, and Nigeria) are the major trading partners of India. More than half of India's export to Africa is shipped to these five countries.
China might have been the biggest stake holder in terms of FDI in Africa, but it lagged in people-to-people proximity. Also, China's presence in Africa is not without controversy. Some African countries have alleged that Chinese business practices overpowered the local safety and environment standards and that the Chinese engaged in unfair business practices indulging in violation of the local labour laws. Criticisms were also levelled against Chinese investment practices, which were confined to extracting sectors, such as energy, without focusing on the development of the domestic economy. In 2013, the then Governor of Nigeria's Central Bank, Sansui Lamido Sansui, wrote in an article, "Africa must recognise that China- like USA, Russia, Brazil, and the rest — is in Africa not for African interests, but its own".
Prime Minister Narendra Modi's Look Africa drive and people-to-people affinity can be viewed as a star attraction for Japan for the joint partnership with India, with a view to escalating Japan's new outlook towards Africa. The Asia-Africa Growth Corridor (AAGC) initiative is the first such mandate for Japan's new initiative in Africa. Thus, India has become a pivot to Japan for its new-look to Africa policy and China for its attempt to bring Africa into the BRICS fold.
(The views expressed are strictly personal.)