EDITORIAL : THE HINDU, INDIA

    

 

India in Africa

The second India-Africa summit at Addis Ababa has set the stage for a comprehensive re-engagement between the world's largest democracy and an emerging continent. The Africa-India Framework for Enhanced Cooperation and the Addis Ababa Declaration adopted at the summit envisage economic and political cooperation, and also cooperation in a host of other areas including science and technology, social and infrastructure development, tourism, culture, and sports. Africa and India recognise the opportunities they bring to the table for each other; both are now better positioned to use these opportunities in ways that can give substance to the old political slogan of ‘South-South cooperation.' As a leading player in the global economy, it is natural for India to seek participation in a resource-rich continent that Prime Minister Manmohan Singh has described as the “new economic growth story.” His announcement of a $5 billion credit line over the next three years was the eye-catcher of the summit, but clearly, African nations are interested in enhancing their own skills and capabilities. India, with its substantial technology knowledge pool, is well placed to contribute to such capacity-building. This will also help in better utilisation of Indian financial assistance — of the committed credit line, unused funds from a previous financial package comprise $3.4 billion.

Following the first summit in 2008, India initiated several such efforts, including the Pan-African e-Network Project across 43 countries, which drew appreciation from the beneficiary countries. That new proposals for capacity-building discussed at this summit cover fields as diverse as information technology, textiles, food processing, and weather forecasting underscores the needs of a continent seeking to stabilise itself economically and politically. As important, it highlights Africa's recognition of rising India's capabilities to assist other developing countries. The India-Africa relationship is not new; it draws on a long, shared history of struggle against European colonialism, and a determination to ensure equality in the post-colonial world order. Africa has played host to a large Indian diaspora, and independent India was among the first to take a firm stand against apartheid in South Africa. Reducing India's ties with Africa to a ‘rivalry' with China is to take a narrow view of history. Given the realities, it is also meaningless — China's $126 billion trade with Africa is way ahead of India's $ 46 billion. It is best for New Delhi to use the present momentum to build its relationship with Africa in ways that will be of optimal benefit to both sides.

Figuring out the textile crisis

By downing shutters for a day this week, cotton spinning mill units may not have reduced the huge glut that has built up in yarn stocks. But they have succeeded in turning the spotlight on the complex web of public policy the central government has woven in the years since Independence. Few will quarrel with the objective of securing for cotton growers a remunerative price. Where the government has gone wrong is in simultaneously taking upon itself the burden of ensuring that high cotton prices do not result in high yarn prices for handloom weavers or for power looms. In this effort at squaring the circle, it has ended up creating a tangle of quantitative and tariff controls on cotton as well as yarn interspersed with duty drawback incentives, concessional lending to units engaged in the value chain of the textiles industry, and so on — in short, a bureaucratic process of Kafkaesque proportions. Much of this was supposed to be calibrated in real time in line with changes in global and domestic demand and supply. What is clear is that this policy framework is badly in need of a reality check in many crucial respects.

For instance, the continuous capacity addition in yarn manufacture ought to have tempered official fears of yarn shortage for weavers and knitted garment manufacturers while formulating policy. That has not been the case. Similarly, it is well recognised that as an approach to cloth-making hand weaving is now more expensive than mass manufacturing. It is no surprise that the poor of the land have found cheaper alternatives in fabrics woven by machine. Another anomaly is that while the law reserves several varieties for the handloom sector, these mass consumption fabrics whose parity depends on yarn prices are actually made by power looms. Yet official policy maintains the pretence that this mandated reservation is for the benefit of millions of handloom weavers — who are the poorest members of the value chain after farmers. Indeed, so out of tune with reality is official policy that the proportion of the total output a yarn manufacturer must compulsorily wind in a coil form (hank) so as to be amenable for use by handloom weavers has remained the same despite the substantial changes in mass clothing habits. Nothing in the track record of governance witnessed over the last six decades gives room for any optimism that the government can handle this complexity and deliver on desirable policy outcomes. It is time a comprehensive nation-wide enquiry was conducted into the economics of the cotton textile sector, covering all its constituents and seeing how they have fared. Appropriate policy changes can follow.