By Devanshee Dave
In November 2016, Indian Prime Minister Narendra Modi visited Tokyo, Japan to attend the annual Prime Ministerial meeting with Japan’s Prime Minister Shinzo Abe. That meeting was the beginning of the Indian-Japanese joint effort, the Asia-Africa Growth Corridor (AAGC). The vision documents for this ambitious project were unveiled at the 52nd annual meeting of the African Development Bank (AfDB,) which was held in Gandhinagar, Gujarat on Tuesday, the 23rd of May. Under AAGC, four sectors have been developed: health, agriculture, disaster management, and skill development. These sectors were chosen to concentrate investment on efficient development.
Insight into the AAGC
India’s Research and Information System for Developing Countries (RIS), Japan’s Institute of Developing Economies– Japan External Trade Organization (IDE JETRO), and the Economic Research Institute for ASEAN and East Asia (ERIA), have been given the task of documenting the plan for the AAGC. The AAGC uses Geographical Simulation Modeling. This strategy is based on a framework of cooperation between Japan and India.
In an interview given to the Swarajya magazine, the Director General of RIS, Sachin Chaturvedi, described the outline of the AAGC project. The first phase emphasises the eastern coast of Africa. The seven countries- Ethiopia, Somalia, Kenya, Uganda, Tanzania, Mozambique and South Africa- are likely to show early support. In the second phase, Cote D’Ivoire, Ghana, and Gambia will receive greater focus. The Island countries in the Western Indian Ocean- namely Madagascar, Mauritius, Seychelles and the Comoros- will also benefit from the AAGC.
The Indo-African bond
India has had strong political ties with Africa from even before Mahatma Gandhi started his non-violence campaign in South Africa in 1893. In the last twenty years, India has become the fifth largest investment country globally, with $54 billion of that going into different countries in Africa. India’s commodity trade with Africa has doubled in the past five years, reaching $72 billion. This is even more than India’s commodity trade with the U.S. Further, India offered grant assistance worth $600 million to African countries during the 3rd India-Africa Forum Summit in 2015.
At the recent meeting, as a part of AAGC cooperation, India extended 152 credits through its Export-Import (EXIM) Bank to 44 African countries. In addition to that, Narendra Modi’s speech for the inauguration of the AfDB meeting reflected a healthy bilateral relationship between India and Africa.
With the help of JETRO, developing infrastructure, and improvising telecommunication and information technology, RIS will give assistance for economic growth in African countries. It’s obvious that with the progress of these sectors the employment rate is likely to increase. This will help those countries to prosper and maintain stable economic growth.
India denied joining China’s ambitious One Belt One Road (OBOR) project. This venture has similar goals of interconnectedness but focuses more on Eurasian countries and increased trade cooperation. Now, India has instead divulged its AAGC plan in collaboration with Japan. China is still hoping to get greater market access in Africa through OBOR. However, India has great trade and network experience in Africa, and Japan has very advanced technology. This combination will give China tough competition for market share.
A win-win situation
The model of AAGC stresses on developing countries by investing in those countries’ priority issues. Such investment creates a win-win situation for all: it’s about gaining advantages by aiding other countries.
India’s stance on the Regional Comprehensive Economic Partnership (RCEP) has proved obnoxious to the international community. Tthe AAGC will provide a great chance for India to improve its position in the global market. Additionally, as the Chinese economy is facing a slowdown, India will hopefully be on the upswing with the AAGC vision.
As of now, all the three regional research agencies are planning continual improvements to make the AAGC project better. Further insight to the plan will be discussed when the Japanese Prime Minister Shinzo Abe visits India this upcoming September. But sooner or later, this plan will surely set into motion a new phase for India of competition within the global economy.
Featured Image Source: Pixabay
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