A political economy approach of India in Senegal. A “win–win” partnership?

Abstract

BRICS are on the rise in the world economy, and indeed this fact has a reflection on Africa in terms of growing engagement with the region. The effects of these increasing trade, investment, and aid flows on the development prospects of Africa are a key issue in the political economy of the continent. This article pays attention to a specific case of this growing presence: India in Senegal. Based on fieldwork in Senegal, we present and analyse the features of the Indian presence in the country, and assess the possible developmental impact in terms of contribution to economic development.

Résumé

L'ascension des BRICS dans l’économie mondiale se reflète dans leur présence croissante en Afrique. Les effets de l'augmentation des échanges commerciaux, des investissements et de l'aide sur les perspectives de développement de l'Afrique constituent un enjeu majeur pour l’économie politique du continent. Cet article se penche sur le cas particulier de l'Inde au Sénégal. Il analyse les caractéristiques de la présence indienne dans le pays et évalue sa contribution éventuelle à son développement économique.

Keywords:

• India
• Senegal
• Africa
• South–South co-operation

Acknowledgements

An earlier version of this paper was presented at the VIII Iberian Congress of African Studies, 14–16 June 2012, Madrid. We are extremely grateful to the people in Senegal who agreed to be interviewed. Without their contribution, this research would not have been possible. The usual disclaimer applies.

Funding

We are grateful for the financial support received from Foundation Món-3 (http://mon-3.org) and the Government of Catalonia (2009SGR1042).

Notes

1. From a general point of view, see Kragelund (2008), UNCTAD (2010 & 2011), OECD (2011), Shaw, Cooper, and Antkiewicz (2007), Shaw (2012), Modi (2011), and Martin (2008).

2. Among many, see Alden (2007), Bräutigam (2009), Rotberg (2008), and Guerrero and Manji (2008).

3. We can highlight Cheru and Obi (2010a), Mawdsley and McCann (2011), Price (2011), Hugon (2011), Goldstein et al. (2006), and Sidiropoulos (2011).

4. The dynamism of the emerging countries is reflected in the external domain of the world economy. In fact, this external growing prominence explains their raison d'être from the perspective of the global economy dynamics (Cairó-i-Céspedes and Martínez-Peinado forthcoming).

5. In fact, the share of Asian countries of total African FDI inflows has grown from 6.7 per cent in 1995–1999 to 15.2 per cent in 2000–2008 (UNCTAD 2010, 81)

6. It is also the case of the $750 million investment of Indian oil company (OVL) in Sudan in 2002 which represented 84 per cent of total Indian foreign investment in SSA. In the case of Mauritius the portfolio nature of this investment distorts foreign investment analysis when considering country-wise destination. It is due to the fact that Indian data on approvals of foreign investment by destination country are aggregated foreign direct investment and portfolio investment under the aggregated category of “foreign investment”.

7. As for traditional aid partners, France remains the largest donor in terms of allocated money, being Canada the fourth among bilaterals (OECD data, see http://www.oecd.org/dac/stats/SEN.gif, accessed April, 17 2013). For Canada, Senegal is one of the seven African “countries of focus” defined by Canadian International Development Agency (see http://www.acdi-cida.gc.ca/acdi-cida/ACDI-CIDA.nsf/eng/JUD-51895926-JEP, accessed April 17, 2013).

8. For a more comprehensive view of the economic exchanges and cooperation frameworks existing in Senegal with emerging countries, see Colom-Jaén (2013).

9. Data contained in this section regarding ICS were provided by the company unless otherwise stated.

10. In 1996, the SICS absorbed CSPT, creating the currently existing Groupe ICS.

11. To get a general view of the process of adjustment in the whole industrial sector in Senegal, see Guèye (1997) and Boone (1991).

12. The GoS also had to bailout ICS in February 2006, as a payment default would put the entire financial system of the country at risk, since the majority of the creditors were Senegalese banks (African Development Bank and OECD 2006, 450).

13. Archean Group is a holding of Indian companies based in Chennai (Tamil Naidu state), and focused on chemical industry.

14. This 85 per cent is divided into 18.54 per cent for IFFCO's own resources, 66 per cent for the Archean Group, which participates in the consortium through Senfer Africa Ltd, and 0.46 per cent for the Indian government.

15. In the international markets, the price of phosphate rock has multiplied six-fold between the end of 2007 and mid-2008, reaching almost US$300 per tonne. Between February 2011 and June 2013, the price seems to have stabilised in the range from 165 to 202.50 dollars per tonne (data from the “Pink Sheet”, World Bank Commodity Price Data).

16. IFFCO started its activities in 1967 with the aim to produce fertilisers to fill the gap observed in the country between supply and demand of fertilisers. Nowadays, IFFCO is registered as a multistate cooperative society, with its headquarters in New Delhi, and has around 40,000 member cooperatives all over the country. IFFCO has been ranked number 37 by Fortune magazine in the India 500 List corresponding to 2011, which portrays the biggest companies in India (see http://www.iffco.nic.in, accessed April 19, 2013).

17. Formally established as Tata Africa (Senegal) SARL, this branch depends on Tata Africa Holdings, based in Johannesburg. At the same time Tata Africa Holdings is a branch of Tata International (see http://www.tatainternational.com, accessed April 25, 2013).

18. SIFI is mainly owned by Senegalese cadres from SOCOCIM Industries, the biggest cement manufacturer in West Africa. SIFI also owns the local popular oil stations network Elton.

19. The regional projection of Senbus is displayed by the fact that at the inauguration of the factory in September 2003, the president of the country, Abdoulaye Wade, was present, and some other high representatives of neighbouring countries, like Presidents OuldTaya (Mauritania), Compaoré (Burkina Faso), Pires (Cape Verde), and even El Bechir (Sudan). Wade underlined in his speech that Senbus “must be a regional enterprise oriented to the entire ECOWAS” (Afrik.com 2003). In fact, these buses were called “les bus de l'intégration” by local media (Amath 2004).

20. As a follow-up of the renewal program, another contract was awarded to the Chinese company, King Long, with funding from China Eximbank in September 2009. Senbus set up a separate factory in Thiès for assembling these 406 King Long buses.

21. As a HIPC country, Senegal is eligible for Exim Bank loans with an annual interest rate of 1.75 per cent, refundable in 20 years with a five-year grace period included.

22. Own calculations from PSD On-line (US Department of Agriculture), see http://www.fas.usda.gov/psdonline (accessed 25 July 2013).

23. The price of imported rice increased around 47 per cent between 2007 and 2008 (Ministère de l'Agriculture 2009, 99).

24. CII promotes, since 2005, an annual conclave that gathers the key actors, public and private, of the Indian presence in SSA. With the support of the Exim Bank and the GoI, there is an annual meeting in New Delhi, called CII–EXIM BANK Conclave on Africa Project Partnership. Besides these continental meetings there are regional conclaves. Between 2005 and 2011 there have been 13.

25. The Pan-African e-network takes advantage of a system of submarine fibre cables already working. This system splits in two tranches. The first one, called SAFE (South Africa-Far East), goes from Kochi (Kerala, Southern India) to Melkbosstrand in South Africa, near Cape Town. The main stakeholders of SAFE include Tata Communications, AT&T (US), Telkom (South Africa). The second tranche of the system links Melkbosstrand and Sesimbra (Portugal), all along the West African Coast, which lands in several coastal countries, including Senegal. RASCOM stands for Regional African Satellite Communication Organisation, and is a pan-African intergovernmental organisation. RASCOM was established in 1992 with the mission to establish and exploit a pan-African satellite communications system, overcoming the dependence on the Western communications infrastructure.

26. Actually, the pilot project was set up in Ethiopia and consisted in 26 students successfully completing an MBA program at the Indira Ghandi National Open University (IGNOU) in New Delhi. Significantly, the educational programs offered by the Indian universities are mainly focused in the area of business administration and ICT.

Additional information

Biographical notes

Gemma Cairó-i-Céspedes is a Senior Lecturer at the Economic Policy and World Economy Department at the University of Barcelona. She has been a Research Associate at the Jawaharlal Nehru University (New Delhi). She has written on Indian economy, development economics and emerging economies in Asian Survey, Feminist Economics and the Revista de Economía Mundial among others, as well as in contributions to collective books.

Artur Colom-Jaén is a full-time Postdoc Researcher at the Universitat Autònoma de Barcelona and Research Associate at SOAS (University of London). His most recent works include “Mozambique's Emergence as an Exporter of Natural Resources: A Window to Resource Curse?” in S. Scholvin and G. Strüver (ed.), A New Scramble for Africa? The Rush for Energy Resources Southwards of the Sahara (Ashgate, forthcoming 2014); and “La cooperation Sud-Sud au Sénégal: De réelles opportunités de développement?” in Momar-Coumba Diop (ed.), Sénégal (2000-2012). Le Sopi à l'épreuve du pouvoir (Karthala, 2013).