Lessons from Tanzania

Of liberalized and fast growing economies

MANOJ JOSHI
Srinagar, Publish Date: May 21 2018 10:24PM | Updated Date: May 21 2018 10:24PM
Lessons from Tanzania

The oceans both unite and divide countries. Take Tanzania, at one level, across the Indian Ocean it is a neighbor, on the other, the  physical distance that separates the two countries remains vast. India’s relations with Tanzania go back in history to the days when Arab traders plied to Zanzibar. In the 1960s, Pandit Jawaharlal Nehru and Mwalimu Julius Nyerere  to the hoary days of non-alignment when both sought to develop their “socialistic” societies.

Today, both have liberalized and are among fast growing economies with their GDP averaging 7 per cent growth and enjoy a vibrant business and commercial relationship.  India accounts for 18 per cent of the Tanzanian trade with a huge potential for further growth in the area of minerals, agricultural products, as well as engineering goods and services. Reportedly, Tanzania possesses the highest known deposits of minerals and hydrocarbons in the East African region. 

The peripatetic Narendra Modi was the last high-level visitor from India to the country in 2016. Though, New Delhi has paid steady, if low key, attention to the country through the decades. Tanzania is a major beneficiary of India’s cooperation programmes  receiving some 350 trainees from the countries in a variety of areas from technical training to academic fellowships.

 

With Indian telecom companies being big players in the country, it is not surprising that Information and Communications Technology training is a major area of focus. Indian credit lines are helping set up water supply and distribution projects in the country. They also helped in providing trucks and other vehicles to the Tanzanian People’s Defence Force in 2013-2014 and tractors and agricultural equipment. 

India’s great asset is the diaspora—mainly from Kutch and Kathiawad region--  some 60,000 strong which is largely concentrated in the major urban centres of Dar-es-Salaam, Arusha, Mwanza, Dodoma, Morogoro, Zanzibar and Mbeya. There are also over 10,000 Indian professionals who work in companies like Tata Africa Holdings, Kamal Steel, Airtel, Cotton Greaves, Bajaj Auto, Ashok Leyland, and Wintech Elevator. Besides public sector banks, the National Minerals Development Corporation and WAPCOS (water resources) are active in the country.

But India now has tough competition from China which has been big in Africa for decades.  Tanzania was the site of China’s first big Africa venture—the 1,860 km Tanzam railway—linking Dar-es-Salaam to Zambia that was completed in 1975. The Tazara Railway, as it is now called, was aimed at helping land-locked Zambia to export its copper ore, even while avoiding white regimes in Rhodesia, South Africa and Namibia. It also played a significant role in promoting agricultural trade  and migration through its route. But now the rail line is in bad shape, despite help from the Chinese who see it as a symbol of their Africa commitment.

China’s investments in Tanzania have surged in recent years, reaching about $ 2.5 billion in 2017, but it is still number two to India in its trade. Not surprisingly, while it imports $ 1.6 billion of Chinese goods, it is exporting only $ 354 million to China.  But the Chinese have been coming big, especially in the area of infrastructure construction and mining.

The big Chinese bet is on a mega port to be built at Bagamoyo some 30 kms away from Dar es Salaam. Originally, the port and a special economic zone was to be a three-way partnership between Oman, China and Tanzania. But that project was cancelled because Tanzania could not raise the money for its share which was essentially to compensate the land owners. So now, a  new contract will be signed next month with  the China Merchants Holdings International and the Oman Investment Fund, with the former taking the responsibility of running the port. 

Bagamoyo should focus Indian minds on the role of Tanzania as an Indian Ocean country. Indian naval ships are regular visitors to the Tanzanian ports, but though located at a strategic point in the Indian Ocean, it does not seem to be of much interest to the strategic planners in New Delhi. India has been focusing on Mauritius, Seychelles and the Maldives, but a look at the map will tell you that Tanzania is no less important. After the Modi visit, India has begun sending six officers to the Combined Command and Staff College  in Arusha, but is not sending any to the National Defence College in Dar-es-Salaam which has a Chinese course participant and a faculty member.  

China is, of course, majorly interested in the Indian Ocean where it established its first overseas base in Africa in Djibouti in 2017. It has huge economic interests in the countries of the Indian Ocean littoral and is dependent on its sea lanes for its energy security. Its ships, including a huge navy hospital ship, Peace Ark, regularly visit the ports in the region.

In the future, we are likely to see more Chinese bases, perhaps in Jiwani, near Gwadar and the Maldives. In themselves, these bases should not concern India since it is a strong resident power of the Indian Ocean with a favourable geographic location.

 

The writer is a Distinguished Fellow, Observer Research Foundation, New Delhi

 

 

 

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