Asia Africa Growth Corridor: Project, Objectives, Challenges and Way Forward

Asia Africa Growth Corridor is a joint initiative of India and Japan. It was launched in May 2017. Its detailed roadmap has been prepared by three agencies viz. Research and Information System for Developing Countries (RIS) New Delhi, the Economic Research Institute for ASEAN and East Asia (ERIA) Jakarta, and Institute of Developing Economies (IDE-JETRO) of Tokyo.

The basic endeavour of this project is to rediscover ancient sea routes and creating new sea corridors which link African continent with India and countries of South Asia and South-East Asia. The prime focus of this project are on four areas as follows:

  • Development and cooperation projects
  • Quality infrastructure and institutional connectivity
  • Capacity and skill enhancement
  • People-to-people partnerships.

The ultimate objective of this corridor is to build a robust institutional, industrial and transport infrastructure in growth poles among countries in Asia and Africa. India will contribute by modernizing its own sea ports under the Sagarmala Project and also helping economies of Africa in development of sea ports. Japan will contribute to the project through its state-of-the-art technology and ability to build quality infrastructure.

Strategic Reasons

There are several reasons for growing interest of India and Japan in connecting the African countries.

  • First is to access economic opportunities in mineral and resource rich Africa; second is to make efforts to counter balance the OBOR initiative of China { AAGC project will be a sea corridor, linking Africa with India and other countries of South-East Asia and Oceania against the Chinese land network which connects China to Central Asia, Europe and Middle East}.
  • Third, few African countries on eastern coast of Africa fall within India’s maritime strategic neighbourhood; and have great importance for India’s international trade. This reason has been marred by conflict, civil war, terrorism, Somali pirates etc. and active participation by India and Japan can strengthen the security of Sea Lanes of Communications (SLOCs) in this region.
  • Fourth, China has emerged as a leader in Greenfield investment in Africa, investing almost 20 times to that of India’s investment in Africa. The “Asia Africa Growth Corridor” can act as a gateway for India to succeed in a continent where China’s influence is so dominant.
  • Last, Japan is rich in manufacturing industries; it lacks natural resources and minerals. So Japan is also interested in reaping Africa’s mineral wealth to sustain its industry, and beat China with the help of India.

Comparing AAGC and OBOR

While China’s One Belt One Road endeavours development of a land corridor, AAGC envisages development of sea corridors. While OBOR is based on the “government-funded model”, AAGC would involve large participation from the private sectors of India, Japan, and African countries.

Key Challenges

There are two major challenges for any such kind of gigantic project for India and other countries. First, beating China in terms of trade and investment in Africa is not easy. Currently, China is Africa’s largest trading partner and also its biggest source of export with trade value almost four times to that of India with Africa. Second is issue of political stability in Africa. Most of the African nations are still fighting against relics of colonialism and imperialism, and are subject to political turmoil at any time. Such issues can act as major impediments in India’s engagement with Africa.

Conclusion

Though Asia Africa Growth Corridor (AAGC) is still in the nascent stage, but it can enable economies in Asia and Africa to further integrate and collectively emerge as a globally competitive economic bloc. It can also prove to be of great potential in developing capacities of the India as well as African nations, increase the labour skills, to set up pan Africa E-network, easy access of technology for resource utilization, disaster management, etc., and thus making India the next manufacturing destination for the Western countries.

Model Question for GS Mains

What are the key strategic reasons behind India’s support towards Asia Africa Growth Corridor (AAGC) Project. What are the major challenges? Critically discuss.  [answer here]

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