While China was celebrating the launching of its ambitious “One Belt, One Road(OBOR), as its flag ship project of this century, India quietly made the pitch for developing an Asia- Africa Growth Corridor with the partnership of Japan. As India,Japan also is not humoured by the aggressive attempts made by China to throne itself, as the supreme power in Asia. On May 24, both the nations together presented a “Vision Document” for the project at Gandhinagar, capital of Gujarat. The project envisaged to propel growth and investment in Africa, by curtailing the ever- increasing presence of the Chinese on the African continent. Further development of this project will be decided when our PM Modi and his Japanese counterpart Shinzo Abe meet later this year.
AAGC( Asia- Africa Growth Corridor) in a nut- shell
The AAGC is an attempt to create a “free and open Indo- Pacific Region “by rediscovering ancient sea routes and creating new sea corridors that will link the African continent with India and countries in South- Asia and South- East Asia. The project stake holders hope the sea corridors will be low-cost and have “less carbon footprint” when compared to a land corridor. For instance , in the blue print of AAGC there is a plan to connect ports in Jamnagar (Gujarat) with Djibouti in the Gulf of Eden. Similarly ports of Mombasa and Zanzibar will be connected to ports near Madurai, and Kolkata will be linked to Sittwe port in Myanmar. With this intention India will focus to build ports under the Sagarmala Programme. Apart from building ports to develop sea corridors, the AAGC also proposes to construct robust institutional , industrial and transport infrastructure in growth poles among countries in Asia and Africa. The whole emphasis will be to enable economies of these two continents to further integrate and collectively evolve as a globally competitive economic bloc.
Japan’s contribution to this ambitious project is to provide state- of- the-Art technology and its tremendous ability to build quality infrastructure, while India will bring in its expertise of working in Africa. Both national governments are expected to invite the private sector companies to play big role by coming together to form joint – ventures, consortiums to take up infrastructure, power generation or Agribusiness projects in Africa.
This proposal for AAGC, was first mooted in the joint declaration issued by both Prime Ministers in Nov 2016.
AAGC- Vision Document
A 30 Page booklet, AAGC vision document was unveiled by the Indian and Japanese governments at the African Developmental Bank (AfDB ) annual general meeting held at Gandhinagar. In the first phase of the project the Corridor attempts to link Africa with India and countries in South- Asia including Bengladesh, Myanmar, Cambodia and Laos.
Apart from India and Japan, South Africa, Mozambique, Indonesia, Singapore and Australia send their representatives for the consultation process. China is supposed to be invited to join the project since the Jakarta based ERIA ( Economic Research Institute for ASEAN and East Asia) Director General Anita Prakash stated that all ASIAN ( including China) are supposed to be stake holders to AAGC.
OBOR versus AAGC
OBOR(One Belt,One Road) is operating on the ” government- funded model” whereas AAGC intends to have a collective consortium of private companies.
Unlike OBOR which entails development of a land corridor, incurring multi billion dollars investment, AAGC is essentially a sea- corridor incurring moderate cost of construction. AAGC is being presented as a “distinct initiative” borne out of a process of mutual consultation, which would be profitable and bankable where as OBOR lacks transparency and collective decision making.AAGC, as the name implies focuses on the centrality and growth of people of Africa rather than excessive emphasis on trade and economic relations alone.
Chinese presence in Africa
China is the major consumer of African goods, accounting for 27% of Africa’s total global exports. China also is a leader in green-field investment in Africa. In 2015-16 China invested a whopping USD 38.4 billion( 24% of green-field investments) whereas India during this period only invested USD 2.2 Billion( only 1.3%).
India and Japan expect to become major players to boost the African economy in the near future and outsmart China by the formulation of AAGC.
Future Aspirations of AAGC
AfDB President Akinwumi Adelina welcomed the initiative taken by India and Japan to create this sea corridor. More studies will be undertaken to list the current demands and challenges of economic, socio- cultural and political partnership pertaining to AAGC. It will bring out the existing challenges and barriers to this project and will make recommendations to the governments in Africa, South Asia, South East Asia, East Asia and Oceania.
Africa is an unexplored huge potential market and AAGC if implemented, can bring inclusive growth in both these great continents. When our PM, Modi meets Japanese PM, Abe on the sidelines of G20 meet at Hamburg ( Germany) in July or when India hosts Japanese PM in September, more clarity will be given to the draft blue print of AAGC. Its nice to see that India is in the roll along the path of growth and development.