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African Challenge, African Hope: Resource-seeking by the Indian State

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Authors: Suresh George & Andrew Amayo

This paper attempts to analyze how the Indian state is managing its institutional strategy in the midst of inter-state competition for energy resources in the African continent. On its way to becoming the third largest economy globally, India is expected to import 61% of its energy resources, while the demand for energy resources by India is expected to outpace that of China by 2035 (BP 2014).

The Prime Minister of India, Narendra Modi, visited key energy-rich states in the first six months of his election, proving that India is no longer content with playing ‘catch-up’ to other resource-seeking states (Saritha 2014) and is redefining its state-driven energy security strategy.

Energy security is one of the Indian state’s chief strategic and political issues as it seeks to consolidate its economic success over the recent decade. Dadwal and Sinha indicate that over 70% of India’s crude oil demand was met through imports using a mixture of short-term policy mechanisms built on relationships with international oil companies (IOC) and to seek preferential terms from these IOCs. Today, the state is seeking to acquire energy assets overseas and competing with IOCs and National Oil Companies (NOC) within a formal resource-driven approach. India’s growing oil demand has forced the Ministry of Petroleum and Natural Gas to ‘acquire acreages abroad for exploration as well as production.’ (Ministry of Petroleum and Natural Gas 1999). A new institutional approach that has been enshrined in the state’s ‘India Hydrocarbon vision 2025 report’ clearly points to a more aggressive resource-based approach from the Indian State. This new energy security approach indicates that the state is using multiple approaches to drive resource-seeking, especially in the African context.

These strategies can be broadly classified into the following:

1.A market-based approach of energy security

2. An institutional-based approach using all state and non-state assets to seek and obtain access to energy sources

3.A security-based approach that offers a security umbrella to resource-rich actors.

Some of the specifics of these approaches are:

(i)The Indian state has begun to leverage India’s energy “Buyer Power” to access quality E&P projects abroad or what we would like to define as a market-based energy security approach.

(ii)Diversification of Energy Supply: The Indian state is also considering several diversification options to ensure supply security; hence the need for diversification into new supply sources as well as securing new routes of supply.

(iii)The inclusion of the private sector through the Confederation of Indian Industry’s energy division that has been holding seminars and conferences, increasing the visibility and uptake of the state’s new approach.

(iv)The creation of a specialised energy security cell within the Ministry of External Affairs (MEA) that is staffed with career diplomats who have expertise in specific and strategic markets that India would like to access as well as defense and industry experts in the field of energy asset acquisition.

(v)The use of diplomatic and political strategies for the import of energy resources from geographically close states has become an instrument of state policy enshrined in its institutional-based approach. For years, policy mandarins have indicated that state inertia combined with a lack of coordination amongst several ministries prevented the Indian state from competing with China. This is no longer the case apparently.

(vi)Indian foreign policy and its execution by the Foreign Service are of prime importance in this new scenario. The Indian state is moving aggressively to increase the diplomatic corps as well as language /geography specialists.

(vii)The policy of the state to encourage the transportation of crude oil through Indian flag vessels was proposed as a form of its security-based approach. An example of this approach has been the very recent political engagement India is seeking with Indian Ocean states. According to Chatterji (2015) the security-based approach is a response to protect the sea-lanes of communication (SLOC) that transport India’s energy resources as well as to increase the state’s ability to extract resources from newer distant markets.

(viii)The new reality of geostrategy within Asia, with China acting aggressively in both the Indian Ocean and South China Sea, is forcing India to abandon its traditional non-aligned approach and move to aggressively engage its immediate neighbourhood.

The importance of the African continent and renewed focus on East Africa in particular has been visible in the political and economic engagement of the Indian state. In 2011 India imported over 21% of its total oil and gas imports from 8 African countries, with India’s national oil company OVL planning to invest $12 billion, focusing primarily on African connections. (Pradhan 2012) In addition, a joint-venture with ONGC and the Mittal group announced a $6 billion investment in Nigeria to set up a refinery, power plant, and railway infrastructure. (Pradhan 2012)

The Chief Executive of the world oil and gas assembly, Narendra Taneja, has been quoted in Pradhan (2012), stating that ‘today’s growth story is India and in 15 to 20 years the growth story will be Africa. India wants to be in Africa as a strong partner.’ There is a renewed focus on East Africa due to historical connection and the influence of the Indian diaspora within the economic sector of several African states. In addition, the Indian state feels that governments in East Africa are becoming more transparent and willing to do business with Indian firms. Several Indian companies have already been engaging with East Africa for export markets as well as to provide new segments for products and services. As an example, one of India’s largest telecom providers, BHARTI Telecom, is currently one of Africa’s biggest telecom service providers. But in spite of Africa’s potential, India has been slow to engage due to the perceived inability of the state to compete with China in resource-seeking on purely commercial terms as well as the political difficulties of engaging with fairly unstable states in the region.

We attempt to look at this issue through an analysis of India’s involvement in Kenya. The state of Kenya in Africa was chosen partly due to its historical connections to India and the researchers access to key political and economic elite within the Kenyan state. Consideration was also given to Kenya’s status as a new oil producer state, the role of the Indian diaspora in its development, and its recent key engagement with Asian powers. India’s NOC, the Oil and Natural Gas Commission (ONGC), through its overseas exploration subsidiary ONGC Videsh (OVL), has been reported to be considering the takeover of Tullow Oil PLC in Kenya. (Verma 2014) By taking over the company, the Indian state through OVL will have access to existing oil fields in the Turkana region of Kenya as well as the Jubilee oil field in the offshore waters of Ghana. (Verma 2014) This study focuses on three key aspects: the resource-based view approach used by firms; the institutional context of how firms deploy a mixture of resources and institutional capabilities to obtain the best possible competitiveness advantage; and how the state creates and fosters specific policy and institutional environments that support these strategies.

Figure 1 :Author Analysis of existing state owned Oil Assets

Some of the resource-seeking activities of the Indian state in key African markets from (Pradhan 2012) are:

africanmarkets

(i)Nigeria- ONGC and the Mittal group. Another private firm, the Essar group, is reported have procured exploration and production blocks in Nigeria as well. The Gas authority of India Ltd (GAIL) is also looking to invest in a liquefied natural gas plant in Nigeria.

(ii)Egypt – The Gas authority of India Ltd (GAIL) is reported to have entered into a joint venture with Egyptian natural gas (NATGAS) to distribute gas in Egypt.

(iii)Mozambique- Reliance industries and the Essar group have sought official government permission to bid for new exploration and production blocks.

(iv)Sudan – ONGC Videsh (OVL) was expected to invest $200 million in a 741 km pipeline that would link Port Sudan with the capital, Khartoum.

(v)Mauritius – In March 2006 India signed an MoU with Mauritius for the exploration of its offshore waters

(vi)South Africa- India’s negotiating to set up a compressed natural gas network.

(vii)Kenya – ONGC Videsh (OVL) plans to take over Tullow Oil PLC. By taking over the company, the Indian state through OVL will also have access to the offshore waters of Ghana.

Despite historical closeness to the continent as well as geographical proximity, the Indian state has not deployed any of its diplomatic assets or soft power because of the lack of institutional will to truly engage the African continent. The geographical proximity of Africa is one of the key reasons why there was renewed interest in Africa as a market and also due to the resources available in offshore waters. The African continent provides India with a wealth of opportunities in an ocean that the Indian state has dominated. Most of the African states around the Indian Ocean, like South Africa, Mozambique and Tanzania, have historically attracted Indian investment and trade partnerships. In addition, India has been working to nurture relations with other oil-producing states like Nigeria, Ghana, Equatorial Guinea and Cote d’Ivoire. For example, in 2011 India signed a uranium agreement with Namibia and has also used state-owned companies like ONGC Videsh, private owned firms like the Tata group, and Vedanta resources to buy stakes in key resource assets. The potential of Africa as an alternative to dependence on the Middle East was also pursued by the Indian government through special government-to-government supply contracts as well as through special lifting quotas of oil resources. There is still much to be done to see the full realization of Indian development on the African continent. But progress is being made and the future will likely only see more intensive engagement and pursuit of mutually beneficial activities. Much of the literature today focuses on China’s presence in Africa. May this be the first step in making more realize how important a player India will be there as well.

(*) Andrew Amayo is a member of the faculty at Birmingham City University in the UK.

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South Asia

The efficiency of German contribution in the Afghan peace process

Ajmal Sohail

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Germany is heavily involved in the afghan affairs since 9.11.2001; the country has brought in to being the modern Afghanistan thru launching the international Bonn conference “Bonn 1” in December 2001, the said conference toke place right after the collapse of the barbaric regime of Taliban in Afghanistan. Furthermore, it paved the way to engage several rival groups to establish an interim administration under the leadership of pro-American figure “Hammed Karzai”. Albeit the conference was a turning point in the Afghan modern history, but it encompassed numerous shortcomings because Taliban, Haqani Network and Hikmatyar band, who had been the main adversaries to the acting Government, were excluded from the process, which opened Pandora’s Box. Moreover, the national interests and apprehensions of the regional countries were not taken serious, which in turn caused destabilization and gloominess in Afghanistan.

Consequently, Pakistan and Iran who have been pursuing strategic depth in Afghanistan began to regroup, fund, train and outfit the Afghan government antagonists, which unfortunately incited a proxy war in the country. 

The second Bonn conference

Germany hosted the second Bonn conference in December the 5th 2011 to celebrate the 10th anniversary of the first Bonn conference, in order to renew the so-called mutual commitment to a table, democratic and prosperous future for Afghanistan.

In addition, the participants of the conference ought to shed lights on some issues such as governance, security, economic developments, regional cooperation, peace process and the way forward. The participants called for a political solution to achieve peace and security in Afghanistan, in order to ensure durable stability.

Additionally, it was discussed to promote capacity building in the country to uphold   a political process, to endorse negotiation and reconciliation. Unfortunately, the conference primarily focused on economic developments and continuation of democratization in the country, so that the peace process was sidelined and the root-cause of the instability and insecurity was not identified. Which ended up with further destabilization and blood-shed in addition, sparked fears and violence in Afghanistan.

Doha conference

In July the 7th 2019 Germany and Qatar hosted a conference in Doha Qatar, which was labeled intra-afghan dialogue. The hosting countries endeavored to bring about a framework in order to support the peace process in Afghanistan. In accordance with the joint statement, that the country is at a central crossroad to snatch the chance to accomplish peace, so the shortest concord linking the afghan adversary groups could be one of the essential factors of any process leading to such an objective.

It was also expect, that the conference would contribute to confidence-building amid chief rivals to hold up peace and constancy in Afghanistan. Although the conference did not have a tangible agenda, but at the end a resolution was released calling for reducing violence, avoiding to assail public institution and bringing civilian causalities to “zero”.  Despite the efforts of the conference hosting countries, the conference comprised inadequacies; the Afghan government, which ought to be the main party, was excluded from the direct-intra-afghan-dialogue.

Not only the ceasefire, which has been the only wish of the Afghans, was not sincerely addressed, but also no-part of the outlined resolution has been implemented. Regrettably convening of the conference did not put into practice the expectations of the Afghan people, so that the security situation fundamentally deteriorated.  

The third Bonn conference

Subsequent, to the walk out of the US president from the Afghan peace deal, Germany wants to jump in exerting its leverage to bring the Afghan rivalry bodies to the negotiation table. Germany is really concerned, if the US troops withdrawal will take place Kabul government would collapse and the positive developments have so far came about would be lost. Thus Markus Potzel Germany’s special envoy for Afghanistan and Pakistan, since some times endeavors to hold meetings with the representatives of both Taliban and the Afghan government, in order to initiate another round of peace talks.  

 Consequently, If Germany genuinely put forth its efforts, it will help to avoid political vacuum in Kabul, let the democratization process to flourish, women rights to thrive and the economic prosperity to boom. Germany enjoys full-scale leverage in the entire region and beyond, because Germany stationed the second largest troops in Afghanistan, the country is one of the main initiator of the NATO Resolute Support Mission for Afghanistan and it is one of the top 10 contributors to the reconstruction process and humanitarian assistance in the country.

Germany has very good diplomatic relations with almost all of the surrounding countries of Afghanistan; it has influence on all of the gulf countries including Qatar, Saudi Arabia and UAE, which are supposed to be the major patrons of Taliban.

In addition, Germany leads the EU commission and it is the number one economy in Europe and number 4 economy in the world. If it will put in 2% of its GDP to the NATO annual budget, Germany would be the second leverage enjoyer within NATO following the United States of America. So Counter Narco-terrorism Alliance Germany (cnt-alliance) express the need for the initiation of the third Bonn conference, which should include all opponents to be brought to the negotiation table, in order to form a framework of lasting peace, continuation of the political process, stability, Good and lean governance, economic prosperity, revival of democratic norms and revamping of human and women rights as well as confidence building amongst regional countries.   

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Popularity-Graph of PM Imran Khan has not dropped down

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Although the economy of Pakistan has deteriorated, price hike, increase in utility bills, food prices and consumer prices of daily used items has grown up, the job market has deteriorated. According to a survey, mostly people are complaining about price-hike and the unavailability of jobs. Some people are complaining about the bad practice of nepotism and especially targeting “hired electable and technocrats”. It is a fact that the PTI government has failed to meet the expectations of its voters. PTI workers and supporters have been cornered and ignored.

What so ever the government is presenting economic parameters, to defend themselves. What so ever reasons or logic and explanation are provided by the Government to defend themselves? How much blame is put on previous governments, but the failure of the PTI government cannot be justified. The common man in Pakistan is a victim and suffering.

Yet, the popularity of Prime Minister Imran Khan has not deteriorated. According to a small scale survey, the public will vote for Imran Khan in the next general election. As per Survey, no one was willing to accept Maulana Fazl-u-Rehman, leader of JUI-F, as prime Minister of Pakistan. The popularity of PPP and PML-N has also deteriorated sharply.

Strange! It is really very strange, while people are complaining about the performance of PTI Government, but still, praise PM Imran Khan. Some people blame his team, while other analyses as the nature of issues inherited by the previous government are so complex that no one can manage quickly. It might take more time to reach any conclusion and favors that the PTI government should complete its term of 5 years and wait till 2023, for the general election.

Pakistan is a democratic country and the constitution of Pakistan protects the right of every citizen to protest, express his/her opinion, criticize the government and its policies, can organize any procession, demonstration or Dahrna – sit-in.  “Azadi March” is permissible in our system and legal, and the government has not offered any resistance in it. The government will not disturb them as long as they stay within the law and peaceful.

Such agitations are part of the Pakistani political system and has a long history. Whenever some of the political parties lose in the election, they blame the winner party or ruling party for rigging and asks them to resign and dissolve assemblies. Even the currently ruling party PTI has been protesting the Government in 2014 and so on. But history has witnessed, no Prime Minister one prime Minister resigned or assemblies dissolved in past as a result of opposition pressure. It is expected, that this time also the PM will not resign, and not dissolve the assemblies.

However, the opposition always gains millage and concessions through negotiations and deals. This time is also no exception and it is guessed that some way out will be explored soon.

But there is a lesson for PM, to pay more attention to the issues of the common man in Pakistan. He has to give due importance to PTI workers and supporters. He must respect the merit and create opportunities for qualified people.

There are 1.5 million fresh graduates every year entering the job market, but the creation of jobs is not in accordance with it. As a result, youth are desperate and unfortunately may involve in negative activities. It is worth mentioning that the biggest vote bank and political force for PM Imran Khan were “Youth”. Pakistan’s demography consists of 70% of youth under the age of 40.

It is suggested that PM may take serious notice of the ground situation. Realize the problems of the common man in Pakistan. May initiate major structural changes and deep reforms in all dimensions.

Pakistan possesses huge potential for growth if enabling environments are provided and right policies are implemented, there is no reason that Pakistan’s economy take-off rapidly.

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South Asia

Pakistan,a Victim of Vicious Circle: The Container Politics

Asad Ullah

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It’s pretty tough to comprehend Pakistan’s politics or the behavior of Pakistan’s political leaders. The example of Pakistan’s political system and politicians can be tacit with Robert Jervis’s astounding words. “When you pick up one piece of this planet, you find that one way or another, it’s attached to everything else-if you jiggle over here, something is going to wiggle over there… We need this sense of the continuing interconnectedness of the system as part of the common knowledge so that politicians feel it and believe it, and so that voters feel it and believe it, and so that kids feel it and believe it so that they’ll grow up with an ethic.”

Since 1947 Pakistan is trapped in a vicious circle, and it’s hard to get rid of this wicked circle with the current political system. Immense tension with neighbor countries, internal political instability, high inflation rate, massive unemployment, poverty, discrimination, corruption, human rights violation, economic problem, low level of domestic and foreign direct investment, energy shortage, wrecked infrastructure, weak and self-centered political leader ruined the country. Now we are witnessing a massive number of lessening faiths on the institutions of almost all kinds. People don’t trust the government; they don’t believe any corporation and virtually no political leader — the reasons why people’s trust is declining in government. The govern leaders do not fulfill their promises, they always raise different slogans spreading fake news to convince the voters for votes, but things are not still the same after elections; all the obligations remain broken. Thus, people certainly don’t believe politicians.

After 71 years of a bumpy hard and tough journey, the people of Pakistan in 2018 elected a new prime minister with much new hope, to fight against corruption and other serious challenges. This hope was up to the greatest extent achieved when the supreme court of Pakistan took action against the corrupt leaders and imprisoned them. With such enormous weight, the oppositions are now vindicating a mean to get rid of the present administration; the adversaries have started a long march called Azadi-March, with the aim to takeover Khan’s (Imran Khan Niazi current Prime minister of Pakistan) government. The majority of the people are against the so-called Azadi-March, as they are aware of situations. To sidetrack Imran Khan’s consideration, these opposition leaders have started Azadi-March, where thousands of protestors are marching to the capital city Islamabad, calling on prime minister Khan over the weak and fragile economy and corruption.

Some religious groups organized the Azadi-March and political rivals, Jamiat Ulema-i-Islam-Fazal (JUI-F) party prearranged the protests, almost all parties have used the march to show their complaints throughout what they call the Azadi March (or Freedom March).The main aim of the Azadi-March, calling Imran Khan to resign, they believe that the current government ruined to satisfy their promises, and the administration is amateurish, inexpert, and doesn’t distinguish how the state-run. While addressing the people, Fazal said all Pakistani, from Karachi to Islamabad, want that prime minister Imran Khan should resign, further stated that prime minister still has time to deferentially submit his resignation because the Pakistani will not give him also time to do so.

The purpose behind such Azadi-March isn’t only that they want to overthrow the prime minister, but they want him to stop disparaging the adversaries. The opponents, according to most of the local people, are corrupt and crooked, and they are responsible for the country’s weak institution and corruption. Since now, Khan is taking legal actions against the oppositions with the support of millions of Pakistani people, thus permit the opponents formed a coalition to stand against Khan. With the help of millions of people Khan isn’t against their Azadi-March, but it’s something everyone knows, the country is going through tough time, skirmishes with India and recently with Afghanistan, ongoing economic reforms, working to encourage tourists and foreign direct investment, and many other developmental projects, such actions or the so-called Azadi-March will ruin the hope of the current administration and people. The immediate adverse consequence of the Azadi-March is also on the recent Kashmir issue. Currently, the prime minister and his administration are working to find a solution for IOK,by voicing on a different medium, such domestic scuffle will not only hamper the objective but will instead encourage the neighbor states to take advantage of domestic unrest.

The time being Khan is dealing with massive problems, the oppositions should stand with Khan, instead of creating other domestic violence and discontent. The continues Azadi-March will do nothing more than internal turbulence and other dangerous predicaments that will hit the country with more severe difficulties. Democracy means the government of the people, by the people, for the people, which specify that the people of Pakistan elect the current government. Pakistan is a democratic country where people can choose any leader they trust. To make it more vibrant, Pakistan is not the legacy of some elites to govern all the time.

A country with more than 200 million people ought to decide their future; they should stand with Khan and support his campaign of fighting against corruption and corrupt people to bring peace, political stability, economic development, and employment opportunities. Fora very long time, we have experienced different government and their fake promises; they have tumble-down the state’s institutions, nepotism, favoritism, and cronyism, all were the hidden agendas of the previous government. Thus, it is clear that the present government is fighting against all the above problems.

Finally, let us begin anew — recalling the current Azadi-March, which is not a sign of being active or reliable, but rather a sign of weakness. Sincerity is always subject to proof, and when you don’t have a single proof, you are lucky enough to have needles in your chopsticks. Let us never negotiate with these political leaders who are involved in the march out of fear. But let us never fear to negotiate.

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