So far, Western investment firms have demonstrated a cautious approach to investing on the African continent. Asian nations, on the other hand, have been ambitiously developing trade and investment ties. China is the continent’s biggest trading partner and Chinese construction companies are extremely involved in recent infrastructure developments. The Asia Africa Growth Corridor (AAGC), an economic cooperation agreement between the governments of India and Japan, is perceived by some as a counterbalance to China’s One Belt, One Road (OBOR) initiative.
India’s Prime Minister Modi and Japan’s Prime Minister Abe released a 30-page vision document for the AAGC at the annual general meeting of African Development Bank. Increased investment in Africa through the AAGC will be joined by the revival of ancient sea routes and a trading system that could include ASEAN countries such as Singapore and Indonesia. Talks of the AAGC began in 2016 and further details are expected during Prime Minister Abe’s visit to India in September.
The Vision Document outlines four pillars: Development and Cooperation Projects, Infrastructure and Institutional Connectivity, Enhancing Capacities and Skills and People-to-People partnership. According to the AAGC, priority will be given to development projects in health and pharmaceuticals, agriculture and agro-processing, disaster management and skill enhancement. The architects of the AAGC recognize the diversity of the continent and aim to take into account the different development priorities of African nations and sub-regions. Promising an intellectual as well as economic exchange, the Vision Document was developed with input from Asian and African think-tanks.
Increased investment in Africa brings benefits for all involved in the AAGC. The AAGC Vision Document places an emphasis on sustainable and people-centric development. The combined efforts of the interested South Asian, Southeast Asian, Oceanic and East Asian countries offers a great deal of experience in development models and strategies for African nations to engage with.
Contributed by Hannah Juge.