India, Gulf ties now look beyond oil, gas

DUBAI: Energy is not the sole area driving India's ties with the Gulf countries, trade and investment relations are also set to multiply, seeing the response of two high-level visits from India to the region in the last fortnight.

From free trade agreement being negotiated with the six Gulf Cooperation Council (GCC) countries to easier visas for their corporate chiefs, the two sides have begun to recognise that their bilateral potential remains to be fully tapped.

If Indian External Affairs Minister Pranab Mukherjee's visit to Saudi Arabia got assurances that business leaders of the two sides will get multiple-entry visas fast, Commerce Minister Kamal Nath's meetings here got entrepreneurs interested in India's infrastructure that needs $500 billion over the next few years.

"I requested that the relationship be transformed from buyer-seller level," said Mukherjee after meeting Saudi King Abdullah Bin Abdul Aziz, in what was clearly a paradigm shift in New Delhi's thinking even in energy ties with the oil-rich Gulf nations.

"We want to participate in exploration and exploitation and development of gas-based and petrochemicals-based industry in Saudi Arabia," Mukherjee said during what has been hailed as the highest-level visit from the Indian side to Saudi Arabia since King Abdullah's historic visit to India in January 2006.

The focus of this partnership had been stressed in the Delhi Declaration signed by King Abdullah and Indian Prime Minister Manmohan Singh two years ago, where they agreed to build on strategic ties based on their respective strengths.

The highlights of the declaration include cooperative joint ventures in upstream and downstream oil sectors, both in their respective countries and outside third countries and Indo-Saudi gas-based fertilizer ventures in Saudi Arabia.

The idea was to take the ties to greater heights that has seen India emerging as the fifth largest trading partner of Saudi Arabia with bilateral trade of $3.67 billion in 2006-07, and the Gulf country becoming the 12th largest market for India, accounting for 2.05 percent of its exports.

"Our economy is growing at over eight percent and we require huge investments. Our infrastructure sector particularly can absorb $500-600 billion more," said Mukherjee, seeking to take the growing ties beyond India' quest for energy.

When Kamal Nath visited the UAE, he picked up from where Mukherjee left off and even sought to take the level of engagement to another scale - he not only spoke of the specific projects in infrastructure but also on the free trade pact.

"UAE investors are very keen on the Indian market," he told reporters here after meetings with Vice President and Prime Minister of UAE and Ruler of Dubai Sheikh Mohammed Bin Rashid Al Maktoum.

"We would like to have them investing in infrastructure," said Kamal Nath, who also met UAE' Minister for Economy Sultan Bin Saeed Al Mansouri. "We would like to draw investments, particularly in the Delhi-Mumbai Industrial Corridor."

Stating that $92 billion was proposed for the corridor, the Kamal Nath said it would include six mega investment regions of 200 sq km each, in Delhi, Uttar Pradesh, Haryana, Rajasthan, Gujarat and Maharashtra.

He also gave his personal assurance on the free trade pact with the GCC nations - comprising UAE, Saudi Arabia, Kuwait, Oman, Bahrain and Qatar. "We will push this forward. We expect to make substantial progress this year."

The UAE side was equally enthused. "We currently maintain very healthy relations with India," Al Mansouri said in a statement after Nath's visit, while giving a rundown on the quantum of bilateral trade between the two sides.

"Bilateral trade between our countries, excluding India's crude oil imports, is currently at 69.78 billion dirhams ($19 billion) and is expected to grow further by 30 percent in 2010," said the Saudi minister.

"Both our countries are witnessing rapid economic growth - so forming a strong partnership to leverage our unique strengths will help us attain our mutual goal of sustainable development."

In fact, some Indian industry chambers like the Associated Chambers of Commerce and Industry (Assocham) feel India's total trade with the GCC countries that is estimated at $28 billion during 2007-08, could top $40 billion by 2010.

The feel that the GCC - already the third largest trade partner for India after European Union and the US - has the potential to attract more exports from India after the free trade agreement.

China, India can rewrite Asia-Africa unity story

While we followed the progress of the Beijing Olympic Games torch relay earlier this month, the first India-Africa Summit was held with great fanfare on April 8-9 in India's capital, New Delhi. Heads of state from 14 African countries, including South Africa, Algeria, Uganda, Ghana and Tanzania, attended the inaugural gathering. They passed 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.

It has been said that India's decision to hold this African summit was inspired by the China-Africa Summit of 2006. Indeed it is not hard at all to see the link between the two summits. The Indian academic community and the media have made no efforts to deny the link.

Some Indian and other media organizations made no bones about comparing the New Delhi summit to the one held in Beijing two years ago. Quite a few foreign media channels gave prominence to the view that India is competing against China to influence Africa, stepping up efforts to corner more African resources and market before China does, and so on.

There is no denying that fast economic growth of both the Asian giants and their growing influence in Africa gave rise to comparative studies on the development patterns of the "Chinese dragon" and the "Indian elephant" and on their impact on Africa's development.

The Organization of Economic Cooperation and Development published a study in May, 2006, titled The Rise of China and India: What's in it for Africa. The World Bank followed with a similar report - Africa's Silk Road: China and India's new economic frontier - the next year.

Both papers are considered authoritative and professional. And they both agreed the rise of Chinese and Indian economies is having a positive impact on Africa's development. They argued that the fast economic development of China and India is boosting that of Africa much quicker than most people expected and has helped Africa maintain unprecedented and close contacts with the world economy through exports of resources and raw material.

Of course, apart from numerous analyses and commentaries, there have been painstaking efforts by ill-meaning people who see things through tinted glasses to play up China-India rivalries and conflicts as well. Such writings invariably try to sow distrust between the two Asian neighbors by flattering India, while belittling China.

Some Indian observers pointed out publicly that such mentality is born of a desperation prompted by the fast-approaching end of Western colonial influence in Africa as well as by the fear of and objection to the reality that rising nations such as China and India are changing the world order Western powers prefer. And, by sowing discord between China and India, the detractors wish to see the two Asian neighbors fight till they are both too hurt to react when the West takes control of Africa.

As a matter of fact, it is not important to know which summit inspired the other. What is important is the fact that emerging Asian economies such as China and India and Africa's rising economic potential and international clout have been drawing the two developing continents closer in the past 10 years or so. We should hail the coming tide of Asia-Africa cooperation, because it is fueling what we call South-South cooperation and contributing to the international cooperation that will help Africa attain the United Nations' Millennium Development Goals.

Africa has been drawing the world's attention in the past decade as the situation on the continent gradually improved and its resources and market potential showed growing significance. Take a closer look and one will see that the "Africa fever" was not the result of its own rising status alone but of increased cooperation with emerging Asian economies and its "look-east" policy as well.

Since the end of the colonial era in the 1960s, Africa has largely remained a supplier of raw material for developed Western countries, while Western nations' aid for Africa has failed to lift the continent out of poverty and backwardness.

That is why African nations have come to the consensus to "look east" for development models in Asia.

African countries seem to identify with India's development pattern, which combines democracy organically with its developing country status - very different from the patterns in Western nations. African nations are also interested in India's experience in handling conflicts between castes and clans and preventing the gap between rich and poor from worsening.

The eastward movement of African countries not only helps them learn from Asian countries' advanced experiences but also raises their stakes in South-North talks and negotiations. Such engagements should help them protect their natural resources, while developing the economy, emphasize environmental protection.

Thus, when we look at the India-Africa Summit, which has been billed as "India's top event in foreign affairs", it is necessary to recognize the relationship of mutual example and certain amount of competition between China and India in their cooperation with African nations. Even more important is that we need to see from a broad human development point of view the mutually-complementary nature of the two Asian giants' assistance to African development and Africa's absorption of different "nutrients" from Chinese and Indian development patterns.

The roles that China and India play to strengthen Asia-Africa unity and South-South cooperation are of historic significance. There is no reason why the world's top two developing nations, with matching populations, cannot play joint catalysts in taking Asia-Africa cooperation into a new era.

The author is a researcher with the Institute of West Asian and African Studies of the Chinese Academy of Social Sciences