14.08.2017 Author: Vladimir Terehov

On the ‘Asia-Africa Growth Corridor’

i09775674With the recent collocations and slogans representing various projects in the sphere of inter-state economic activity, at the end of May, a new “Asia Africa Growth Corridor”, AAGR, was added to the list. The appearance of this project was predetermined by the Joint Statement of the Prime Ministers of Japan and India on November 11, 2016, which summarized the visit of Shinzo Abe to Delhi at the invitation of Narendra Modi.

The fourth paragraph of the document states, inter alia, that the “improving connectivity between Asia and Africa, through realizing a free and open Indo-Pacific region, is vital to achieving prosperity of the entire region”. To this end, it was envisaged to establish “close coordination, both bilaterally and with other partners”.

Six months later, some of the most common considerations regarding the AAGR project were discussed on the sidelines of the annual (52nd) meeting of the African Development Bank, which took place at the end of May this year (which is notable) in the Indian city of Ahmedabad, located near the western coast of the country.

More than 3000 delegates from all 54 African member countries participated in the ADB regular forum. One of the key events held on the sidelines of the forum was the tripartite (Japanese-Indian-African) meetings of experts and officials, in particular the Ministers of Finance of India and Japan, as well as the ADB leadership.

A statement on the bank’s website states that during these meetings, officials from India and Japan, as well as from the private sector in both countries, discussed bilateral cooperation with the goal of creating the most appropriate conditions for the economic development of Africa.

The comments on the AAGR are rather stingy, since the project itself appears to have not yet gone beyond the format of the “intent agreement”. For us, it is interesting as a new, very remarkable element of the global political game in which the leading Asian powers China, India and Japan are increasingly participating with greater influence.

One of the main tools used by each of the players is the initiation of integration projects, with the apparent political aim of involving in the orbit of their interests the maximum number of “other” countries in Asia, Africa, Latin America and even Europe.

In the NEO, the motivation of China, India and Japan to focus on countries not only of their own continent but also of Africa has been discussed more than once. Moreover, there is a trend towards the formation of a Japan-India tandem, increasingly coordinated against China. This was demonstrated, in particular, by the most recent Japanese-Indian meeting of prime ministers mentioned above.

In today’s geopolitical game, this is one of the most alarming tendencies. However, its presence is beyond doubt, and the worst that any observer of the situation on the Pacific Rim can do is to try and ignore the negative realities associated with that trend. Nevertheless, one should not lose sight of any positive, (barely) emerging, results, for example in the Sino-Japanese relations.

The factor of confrontation with China of the Japanese-Indian tandem is undoubtedly one of the main motives for the project of creating the AAGR. This fact is clearly understood in Beijing, where Africa has long been seen as one of the main areas for the spreading of its own influence.

However, the Chinese newspaper Global Times expresses the hope that the AAGR could become a complement, rather than a competitor, to the project of the revival of the “Great Silk Road”, in which Africa is regarded as a major partner.

Once again, it should be noted that, for both regional opponents of the PRC, accession to the Great Silk Road (or agreement with the AAGR project) could be very advantageous. In particular, it would be much easier for India to implement its own projects for the construction of several transport and industrial corridors that are poised to cross the country from north to south and from west to east.

India and Japan, continues the Global Times, will find it much easier to operate in Africa in cooperation, and not in competition, with China which has long been the leader in trade and a leading investor on the continent. The volume of Sino-African trade in goods alone is approaching USD 200 billion, which is three times higher than that of India, which is the second largest in this indicator.

A recent study by McKinsey & Company, a well-known consulting company, examines all the aspects of China’s development policy on the African continent in detail. The main Chinese projects listed in it (already implemented and planned for implementation), the volume of financial investments and other aspects of cooperation between China and Africa are indeed impressive.

There are over 10,000 Chinese companies currently operating on the continent, with the assistance of which about 30% of all African products are manufactured. Chinese business is present in 90% of African private companies. By 2025, the volume of the bilateral trade could reach USD 440 billion.

Neither India nor Japan can boast of anything even close. Therefore, the appeal of the PRC for cooperation, rather than competition, in Africa to the first two should look very attractive.

However, as has been pointed out in the NEO on more than one occasion, there are serious political challenges to the mutually beneficial cooperation of the Japanese-Indian tandem with China. And, as recent events have shown, they are only being exacerbated in the Sino-Indian relations.

It is therefore difficult to expect a positive response to the Beijing proposal to Tokyo and New Delhi to align the AAGR project with the Silk Road.

Vladimir Terekhov, expert on the issues of the Asia-Pacific region, exclusively for the online magazine New Eastern Outlook.”

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