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ASIA with AFRICA Opportunities and Challenges

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ASIA with AFRICA Opportunities and Challenges ASIA WITH AFRICA Opportunities and Challenges EDITED BY URVASHI ANEJA CONTENTS INTRODUCTION 4 Urvashi Aneja A Closer Asia-Africa Partnership is an Opportunity for All 11 Ben Shenglin Africa, China and India: A Promising Trilateral Partnership for Africa’s Industrialization 18 Mao Keji Africa-Asia Economic Partnership: Unlocking Mutual Resurgence 23 Manish Chand Cheap Energy, Manufacturing and ‘Backing the Winner’: Why African Leaders Should Listen to Asian Economists and Ignore Western Experts 30 Michael Shellenberger Building Mutually Beneficial Partnerships for Energy and Natural Resources 36 Gareth Price A Blue Ocean Partnership in the African Littorals 41 Abhijit Singh Technology and Developement in Africa and India: Need for a New Politics 46 Vikrom Mathur Deconstructing India’s Peacekeeping Role in Africa 54 Kudrat Virk Policy Convergence in Global Governance 59 Sanusha Naidu NOTES ON CONTRIBUTORS 65 INTRODUCTION suggests that the success of Asian economies economic growth and wealth creation, rather can be explained by the central role played than direct poverty-reduction through aid.4 URVASHI ANEJA by Asian governments in promoting national The road map for financing the Sustainable industry and managing external aid around this Development Goals (SDG) developed in Addis objective.2 For Shenglin, connectivity, or the lack Ababa in July 2015 reflected this shift towards of it, in terms of trade, technology and finance, development effectiveness. While aid will explains a significant part of the divergence continue to play a role, a large portion of the between Asian and African economies. In financing for the SDGs is expected to come contrast, most African states have been heavily from non-aid sources such as trade, export reliant on western aid for their development. credits, private sector investments, domestic tax Despite trillions in aid money to Africa, poverty revenues, and ‘smart aid’ that blends aid with levels remain high and growth rates remain low.3 innovative financial instruments to maximize its The past two decades have witnessed rapid The Time is Now While the reasons for the divergent economic potential.5 The growing acceptance of this model economic transformation in Asia. Asian Asia and Africa have a long history of trajectories of Asia and Africa are naturally as the new ‘development normal’ gives renewed economies, particularly India and China, are cooperation. While the first Asian-African more complex, there are perhaps lessons from legitimacy to the economic model followed by a increasingly looking to Africa to support their conference was held in 1955, the nature of the the Asian experience around the centrality of number of Asian states, particularly in East Asia, economic growth and strategic interests. engagement has broadened and deepened over industry, infrastructure, and trade, in a state-led and reinforces their potential contribution to Asia’s growing footprint has the potential the past 6o years. The outcome documents model of economic growth, than can be applied African development through trade, finance, and to contribute to African development and of the 2015 India-Africa and China-Africa to Africa. Shellenberger takes a clear stance on private sector investment. security. African states are also looking to summits are a testament to this, with ambitious the issue, arguing that the western model of Asia for new sources of investment and commitments made by both India and China aid for Africa has worked nowhere, not even in Third, there is a growing expectation that development partnerships. Asia and Africa are towards African development. Three macro- Europe and North America; African leaders, he south-south cooperation will play a critical role thus well positioned to build mutually beneficial trends make this an opportune moment to argues, should pay attention to the lessons of the in global development. At the Financing for partnerships based on the principles of south- analyze how Asian economies can support Asian growth story rather the solutions offered Development conference in Addis, northern south cooperation.1 Asia and Africa also face African development. by the west. donors made no new ODA commitments; comparable challenges of creating equitable and ODA has in fact been declining since the early sustainable growth, strengthening governance First, despite similar starting points, Asian Second, growing skepticism of the contributions 2000s.6 Two alternatives put on the table were and institutions, and negotiating a similar range economies have sped ahead of Africa in the of ODA combined with high growth rates domestic resource mobilization and private of traditional and non-traditional security past few decades. Fifty years ago, South Korea in Asia, is leading to a shift away from ‘aid sector investments. Both these options work threats. The rhetoric of southern cooperation and Sub-Saharan Africa were at a similar stage effectiveness’ to ‘development effectiveness.’ well for middle income countries, but look less also obscures divergent, sometimes conflicting of economic development; today, as Michael Where the former refers to organizational inputs rosy from the perspective of the least developing interests. This collection of policy-oriented Shellenberger notes in this volume, South Korea and the internal coherence of aid instruments, countries (LDC) and fragile contexts, many of opinion pieces by leading scholars from around has a standard of living comparable to England the latter shifts attention to how non-aid which are in Africa; many of these LDCs do not the world examines how Asia’s recent and and the United States. Ben Shenglin’s article instruments such as trade, investment, private have a broad enough tax base to fund necessary emerging outreach to Africa can contribute similarly notes that in 1970, Africa’s GDP per sector engagement, and global policy in areas economic and social sector investments and are to African development and security - how capita was similar to Asia’s and more than two such as taxation and migration, can contribute also likely to find it difficult to attract sustained opportunities can be capitalized upon and times that of China; today, Africa’s average is to actual development outcomes. Development private sector investments. The role of south- challenges negotiated. less than 30 percent of China’s. Shellenberger effectiveness also includes a renewed focus on south cooperation is particularly relevant in this 4 Asia with Africa Introduction 5 context - southern cooperation not just around the principle of mutual benefit, though there oil and minerals. For equitable development, facilitate this, as are plans for Chinese established trade and investment, but also for technology are a number of points of conflict as well. the building of domestic capacity and industry, special economic zones (SEZ) and industrial transfers and knowledge and skill building, can Trade between Asia and Africa, for example, and African peace and security, it is necessary parks in Africa. These SEZs and industrial play a critical role in meeting the post 2015 has primarily been concentrated in the primary to diversify this trade base. Manish Chand’s parks are intended to address two of the main development agenda. Over the next 15 years, the commodities sector, which while contributing piece in this volume suggests incentivizing bottlenecks to African development – backward developing world is also expected to dominate to African growth can also perpetuate Africa’s African non-commodity exports through duty infrastructure and inadequate skilled personnel. global savings - by 2030, developing countries resource curse.8 The volatility of a primary concessions and preferential access. Chand also Shenglin’s piece similarly notes that OBOR is will hold 62 percent of global savings.7 The commodity-led growth model has only become notes the potential for Asian investment to intended to facilitate connectivity, in terms of newly formed New Development Bank (NDB) clearer in the context of the current global address the infrastructure deficit in Africa. Such trade and investment, infrastructure, technology and the Asian Infrastructure Investment Bank economic slow-down.9 Negotiating these infrastructure investments, Chand argues, should and people. OBOR has attracted some (AIIB) have been created to direct these savings tensions requires not just political principles, be supported by investments in human resource misunderstanding, Shenglin notes, but it is an towards infrastructure development projects in like those of south-south cooperation, but also development - such as in higher education and opportunity not just for China, but also for the the south. These new regional banks can play a programmatic frameworks and operational skill development institutions. These investments world to advance its integration with Africa. critical role in financing infrastructure and other guidelines. acquire particular significance in the context of sectors neglected by the traditional Bretton Africa’s demographic composition, the world’s At the Third India Africa Forum Summit (IAFS), Woods institutions in the global south, including Papers in this volume consider these youngest continent. As Vikrom Mathur argues in India similarly pledged to contribute to the Africa. opportunities and challenges across multiple his chapter, Africa’s biggest strength is its youth - development of African manufacturing capacity. sectors including trade and investment, energy education and skilling
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