11/25/2014

Evernotesharednotebook:newspaperindia'sneighbours

IndiaAfrica
Thursday,November32011,1:44AM

DPAofMEA
LinesofCredit(LOCs),whichare
essentiallyconcessionalloanswitha
grantelement,areadministeredbythe
governmentownedEximBankofIndia
whichwassetupin1982tofinance,
facilitateandpromoteIndiasinternational
trade.LOCsareextendedto
developingcountriesonconcessional
termsontheconditionthatrecipients
importIndianequipment,technology,
projects,goodsandservicesondeferred
credittermsforaminimumof75%of
thecontractvalue.These,therefore,
functionasinstrumentsoftraderather
thanaid.AsofOctober2011,approximately
70%oftheLOCssupportedbythe
Indiangovernmentwereextendedto
Africancountries,totalling$3.78billion
(EximBank2011).Twoofthetopfiverecipients
ofIndianLoCswereAfrican
governments:theSudanesegovernment
with$350millionandtheEthiopian
governmentwith$122million

IndiaCongo
InternalDynamics
1. Itisfacingprospectsofacivilwarlike19982003astheoppositionhasrefusedtoacceptthepolls.
TheelectionshavebeenwonbytheincumbentpresidentKabilabutthepollshavesufferedfrom
manydrawbacksincludingviolenceandpoorinfrastructure.
2. Congo faces another problem of international powers manipulating the warring factions to gain
controloverCongo'svastmineralwealthlikecopper,diamonds,hardwood.
IndiaZambia
InternalDynamics
1. Thisisapeacefulanddemocraticcountry.Thereisabsenceofracialissuesanditsvicepresidentis
awhite.Itisacopperbasedeconomy.
2. Itssocietyismadeofmainlytheimmigrantswhofledfromthewarsintheneighboringcountries.
3. ThenewPresident,MichaelSatahasdecidednottofollowablindproChinapolicy.
https://www.evernote.com/pub/crazyphoton/neighbours

1/6

11/25/2014

Evernotesharednotebook:newspaperindia'sneighbours

IndiaSomalia
AlShebab
1. TheKenyan,EthiopiansandAUarefightingAlShebab.
2. Ethiopians have been traditional enemies of Somalians as while most of Ethiopia is christian,
Somaliansaremuslims.Asaresultbothcountriesfoughtwarin1960and2006.In2006,Ethiopia
occupiedSomaliawhichledtothebirthofAlShebab.
Puntland
1. LyingatthehornofAfrica,thisprovinceinSomaliaismoreorlessanation.Ithasoilreservesand
isinterestedinsellingittoIndia.IthasinvitedIndiancompaniesforoilexplorationthere.
2. Apartfromoil,itseeksIndia'sinvestmentsintraininghumanresourcesinfisheries,MSMEsand
piracyissues.
IndiaNigeria
InternalDynamics
Fighting
1. Thepopulationis5050Christians(dominatingsouth)andMuslims(dominatingNorth).
2. The crux of the problem is poverty as the oil revenues (south based) have been scalped by a
handfulonlyandthattooinChristiancommunity.
3. TherewerebombingsaroundchristmastargetingchristiansnearthecapitaAbuja.Followingthis
theMuslimgroupBokoHaram(meaningwesterneducationisevil)hasaskedallchristiansinthe
northtosouthandalsotoimposeshariatinentirecountry.
LeadPoisoning
1. It started in 2009 with the surge in gold prices which drove the villagers into gold mining often
followingunsafepractices.Theycouldsellonegramofgoldfor$23(percapitaincomeinNigeria
is$2aday).Leadpoisoningleadtodeathofhundredsand~4000beingsick.
EnergyRelations
1. Nigeriahasprivatizeditselectricitytransmissionanddistributionsector.Indianfirmsareinvesting
inthedistributionsector.
IndiaNiger
InternalDynamics
1. Nigerformsapartofthe"Sahel"beltwhichrunsfromMauritianaandSenegalintheAtlanticto
ChadinCentralAfrica.Thisentirebeltissufferingfromacutemalnutrition.
2. The Niger government has decided to ask for international aid and is building up food reserves.
UKandEUaretopdonors.
3. The"foodforwork"initiativelaunchedbyWorldFoodProgrammeisactiveintheregionbuilding
agriculturalcapabilities.
IndiaBotswana
EconomicRelations
1. IndiacanhelpBotswanaintheMSMEsectorbothintechnologyaswellasskilldevelopment.
https://www.evernote.com/pub/crazyphoton/neighbours

2/6

11/25/2014

Evernotesharednotebook:newspaperindia'sneighbours

IndiaEthiopia
EconomicRelations
1. IndiacanhelpEthiopiadevelopitstourismsector.
IndiaMali
InternalDynamics
1. The rebel group Tuareg in N Mali were fighting as mercenaries in Libya against Qadafi. They
returned with advanced weapons and began to use those to defeat Mali Army. These rebels are
hardlineSunnisandadvocateSharia.
2. Mali is an important center in the international drug trade as cocaine from latam passes through
saharaonitswaytoEurope.
3. MaliArmygotdisgruntledandstagedacoupinBamako(capital).TheTuaregrebelshavesince
then declared an independent nation of Azawad but it didn't get any international support. They
(alongwithIslamists)controlmuchofNMali.
4. Islamist militant groups now control about twothirds of Mali after hijacking the secular
rebellion then seized more territory after the military coup. The Islamists then imposed
SharialawinthenorthofMaliwhichwasonceararedemocracyintheregion.Itisnowin
dangerofbecomingasafeheavenforterrorists.
PactBetweentheRebelGroups
1. After declaring the independent nation the two rebel groups Azawad which fights for
independenceandAnsarDinewhichfightstoimposeextremeformofShariatsignedapact.But
thepactcrackedovertheShariatissue.
InternationalIntervention
1. West African bloc ECOWAS is pushing for the deployment of a force in Mali to restore
stability in the capital and then improve Malis defeated military to help it retake the
north. ECOWAS, an umbrella group of 15 countries aimed at promoting regional
cooperation,hasintervenedmilitarilyinpastAfricanconflicts,suchasthewarsinLiberia
and Sierra Leone. The UN Security Council endorsed political efforts by West African
leaderstoendtheunrestinMali,butstoppedshortofbackingforce.
EconomicRelations
1. BothcountrieshavesignedaMoUonmineralexplorationandIndiaalsograntedalineofcreditof
$100mmtoMali.
IndiaSouthSudan
InternalDynamics
1. S Sudan fought a long civil war with Sudan and won independence in 2011 after a peace
agreementin2005.Indiawasoneofthefirstcountriestorecognizeit.SSudanischristianwhileN
Sudanismuslim.
2. But it continued to have tensions with Sudan as it claimed that Sudan was charging high transit
fees for its oil. It then attacked and captured Sudan's city of Heglig and Sudan in retaliation
conductedairraids.UNhascalledforanendtoallhostilities.
3. NowbothcountriesareinAUsponsoredtalksbeingheldinEthiopiaandfightinghasstopped.
https://www.evernote.com/pub/crazyphoton/neighbours

3/6

11/25/2014

Evernotesharednotebook:newspaperindia'sneighbours

DisputeResolution
1. AdealhasbeenreachedonoilwhereJuba(SSudan'scapital)wouldpayaweightedaverageof
under$10perbarrel(vs$1offeredand$32demandedearlier).Ithasalsooffereda$3.2billion
packagetocompensateSudanforthelossofmostofitsoilreservestotheSouth.Ithadpreviously
offered$2.6billion.
EconomicRelations
1. IndiaisinterestedinconstructingoilpipelinesandsmallrefinerytotakeoutitsoilviaEthiopia.
IndiaAfrica
EnergyRelations
1. IndiaisspeciallyinterestedinLibya,Nigeria,EgyptandAlgeria.India'soilimportsfromAfrica
amountto22%oftotaloilimportsandIndiaisconsciouslytryingtodiversifyitsimportsources.
2. IndiacanalsodevelopAfricanhumanresourcesdeployedinpetroleumindustry.
3. IndiaiskeentodevelopgasprojectsinEAfricainMozambique,Kenya,Tanzania.
EconomicRelations
1. Indiahasextendeda$5biocreditlinetoAfrica.Chinapledged$20biolineinJuly2012($5bioin
2006,$10bioin2009).
2. IndiaAfricatradewas$60bioin2011andtargetisfor$90bioin2015.Ithadcomeupfrom$1
bio in 2001. India is Africas fourthlargest trading partner behind the European Union,
ChinaandtheUS.ThepaceofgrowthinAfricaIndiatradeandinvestmentoverthepast
decadeisrivaledonlybyChinaAfricatrade
3. India is setting up textile clusters in Africa. India will take up the cause of LDCs in DDA. In
2006,Indiagranteddutyfreestatuson94%ofIndiantariffstothe33LDCsinAfrica.
4. IndiafocusesontechnologyandinvestmentsaddressedattheSMEsectorandgrassroot
innovationsaimedtowardsimprovinglivelihoodsofthepoorinAfrica.Thesetechnologies
arenothighendbutarewelltestedandscalableinIndia.
5. UnlikeChina,India'sinvestmentsareprivatesectorbased.MajorsuchinvestmentsareBharatiand
ApollotyreinSAF,VedantaincopperinZambiaandTatain12countries.

IndiaAfricatrade
BilateraltradebetweenIndiaandAfricagrewatamuchfasterrateof32.4%comparedtooverall
ChinaAfricatradethatroseby27%during20082011.DuringtheperiodIndiaemergedasthefastest
growingexportmarketforAfricagrowingby41.8%whileChinagrewby28%,commodityexports
fromAfricaandtechnologyexportsfromIndia.
AsfarasAfricanexportstoIndiaisconcerned,crudeoilandLNGcomprisesnearlytwothirdsof
exportsbasket.Duetothepersistentriseinglobalcommoditypricesbetween2005and2011,valueof
Africa'sexportstoIndiahaverisenfasterthanthevolumeofcommodityexports,thusexposingexports
toglobalcommoditypriceshocks,thereportstated.
Accordingtothereport,AfricanexportersfacemajorproblemsanddelayaccessingclientsinIndia,
https://www.evernote.com/pub/crazyphoton/neighbours

4/6

11/25/2014

Evernotesharednotebook:newspaperindia'sneighbours

tradefinanceandhightransactioncosts.Thusbothsidesshouldlookattradefacilitationwhichwillbe
aimedatcuttingredtapeandcrossborderregulations.ItalsorecommendedfordiversifyingAfricas
servicesexportsforthebenefitofAfricaneconomy.
ackoffinancingandpoorinfrastructurefacilitiesarethetwomajorconstraintsinenhancingtradeand
investmentbetweenIndiaandAfrica,areportsaidtoday.Ontheotherhand,transportandlogistics
costsandpoorbusinessenvironmentsarecitedasmajordifficultiesbyIndiantraders.
TherehasalsobeenasurgeinIndianprivateinvestmentinAfricawithbigticketinvestmentsinthe
telecommunications,IT,energy,andautomobilessectors.

SharmaisinJohannesburgforthethirdIndoAfricaTradeministersmeet.TheSouthernAfrican
CustomsUnion(SACU)consistsofBotswana,Lesotho,Namibia,SouthAfricaandSwaziland.
IndiahasbeenwaitingfortheresponsefromtheAfricansideonitsproposalofanaveragemarginof
preferenceof70%.ThismeansimportsfromSACUwillbesubjecttoatariff70%lowerthanthemost
favourednationrate.
Thebilateraltradetargetof$100billionby2015and$200billionby2020isamodestoneandis
certainlyachievable,Sharmasaid.Airconnectivityandvisarelatedissueswerethetwootherconcerns
raisedatthesecondIndiaAfricaBusinessCouncil(IABC)meethere,cochairedbyBhartigroup
chairmanSunilMittal.IndianbusinesschamberFICCIistheinstitutionalpartnerofthecouncil.
SharmaassuredthattheairconnectivityissuehasbeentakenupatthehighestlevelandthatAirIndia
willresumeitsflightstoAfricafrom2014onwards.
"Theissueofairconnectivityhastobeaddressed.Thematterhasbeenlookedintoattheprime
ministers'level,andatmylevel.YouwillsoonseeresumptionofflightsbyIndiancarriersbothIndian
privateandpublic",Sharmasaidaddressingthecouncil.Onliberalisationofvisaregime,Sharmasaid
thatbothsidescanidentifytheapexindustrychambersthatcanhelpinthisprocess.
HealsostronglytookupthecaseofIndianpharmaceuticalsindustrysayingthatIndiaisasupplierof
qualitylowcostgenericsdrug.
"Thereisaconcertedcampaignbyvestedinterestgroupsandmultinationalcartelstoconfusethe
discoursewhichquestionsthecredibilityandefficacyofIndiangenerics.Wemustremainvigilant
againstsuchvoices,"hesaid.Indiaexportslowcostgenericdrugstoover230countriesintheworld
and1/5thofthemaredirectedtowardsAfrica.
Industryleaderscollectivelyidentifiedpharma,agri,mineralsandminesandoilasprioritysectorsof
privateinvestmentandintegrationandpresentedareporttothetradeministers.
IndiaalsosoughtsupportfromtheAfricannationsaheadoftheninthWTOministerialinBaliin
Decembertosafeguardinterestofthedevelopingnations.
IssuesinIndianInvestment
1. Decliningreturns
https://www.evernote.com/pub/crazyphoton/neighbours

5/6

11/25/2014

Evernotesharednotebook:newspaperindia'sneighbours

1. ReportsofdecliningratesofreturnmaypaintthepicturethatAfricamaynotbethe
attractiveinvestmentdestinationitistoutedtobe.
2. Issueoflandacquisition
1. RightsactivistsbrandIndianinvestmentsasinstancesoflandgrabthatthreatenthe
livelihoodofcommunitiesinAfrica.
2. Landisinformallydividedamongthecommunityandtitledeedsareabsent,creating
issuesregardingownershipandcompensation.
3. Issueofcommitment
1. Therehavebeencasesofcompanies,underthepretextofoverseasexpansion,
acquiringthousandsofacresoflandinAfrica,raisingcapitalbasedonthatlandin
EuropeanandNorthAmericanfinancialmarkets,andneverimplementingthe
project.
4. Lackofscientificprojectassessment
1. MostcountriesinAfricadonothavedetailedtopographicalandlandusemaps.
2. Often,Indianinvestorsenterhastilyintoagreements,especiallyrelatedtoland
acquisition.Theydosowithoutconductingadequateduediligenceandscientific
analysestoascertaintheirsuitabilityforcropproductionormineralavailability.
ChinaFactor
1. FDIinAfricagrewfrom$10bioin2000toover$60bioin2008andexpectedtobe$150
bioby2015.China'stradewithAfricawas$166bioin2011andexpectedtobe$300bio
by2015. The majority of this figure comes from Africa's $93 billion of exports to China most of which is
raw materials, especially petroleum and copper. African imports from China consist largely of consumer and
electronic goods. According to Beijing, the past decade has seen $15 billion worth of Chinese commercial
investmentinAfrica.In2009ChinaovertooktheUnitedStatestobecomeAfrica'sNo1tradingpartner.

2. China's investment strategies in Africa are longterm, based on national security needs,
notshorttermcommercialprofit.
3. In2006ChinaprovidedaninterestfreeloantoGhanatorebuildroadinfrastructureandin
2010theEXIMCHprovidedanadditionalloanforinfrastructure.In2011Chinafundedthe
a hydroelectric project. In 2012 CDB provided $3 bio loan for joint venture in oil and
naturalgas.
4. EXIMCH undercut the IMF in Angola, providing a 17year $12 bio infrastructure loan at
1.5% interest for a railroad across Angola to copperrich Zambia. Angola is a bigger oil
suppliertoChinathanSArabia.
5. In1999,Chinabuilta1,600kmoilpipelineacrossSudan.By2002,Sudanwassupplying
over9%ofChina'soilimports.By2009,13ofthe15largestforeigncompaniesinSudan
wereChinese.
6. SimilarlyChinahasinvestedinoilsectorinTanzaniaandUganda.
7. But Chinese investments are not just oil. In 2007 ICBC took a 20% stake in Standard
Bank of South Africa. It has bought stake in Tanzania in iron ore mining, obtained
exploration rights in Madagascar. China has major investments in iron ore mines in
Guinea,Gabon,CameroonandtheDemocraticRepublicofCongo.
8. In 2007 EXIMCH provided $8.5 bio loan to the Congo for infrastructure projects in
exchangeforcopperandcobalt.Westernminingcompanieswere'outraged'attheChina
stateenterpriseundermining'freemarket'capitalism.
https://www.evernote.com/pub/crazyphoton/neighbours

6/6