Old ties, new hopes
Africa is India Inc’s exciting, new frontier. But, as the collapse of the Bharti-MTN deal shows, humility is important, says Samar Halarnkar.columns Updated: Oct 06, 2009 14:02 IST
‘When Adam left heaven and came to earth, he came to India.’
I heard this grand declaration six years ago, just one of many made by delighted members of parliament in Khartoum, capital of the war-wracked central African State of Sudan. India’s former President, the charismatic A.P.J. Abdul Kalam (or Abubakr Zainabdeen Abu Kalam, as his name was Sudanised in the local press) listened to these outpourings with a bemused but growing smile.
It was also the only time I heard Kalam — ever the politically correct missile scientist — begin a speech with the Muslim greeting of Assalaam Aleikum, after being greeted with roars of Allah-o-Akbar when he stepped up to address MPs.
In the somewhat ramshackle galleries of the stadium-like Sudanese parliament, cooled ineffectively by industrial fans, a 30-something MP called Medina Mustafa turned to me and softly started singing a 1960s Bollywood hit: “Meri man ki Ganga… (the Ganga of my mind)”
Another MP in a flowing white robe and turban turned to me and said: “Mera naam Mohammed hain, aapka naam kya hain (My name’s Mohammed, what’s yours)?”
It started with Gujarati settlers who arrived in the horn of Africa more than 150 years ago. Bollywood’s happy influence has helped, as has the sponsorship of a local football team by State-owned oil giant, the Oil and Natural Gas Corporation. India is indeed beloved in Sudan, the same country that gave the world a synonym for starving children and the brutality of civil war: Darfur.
I remembered my experiences in Sudan as I listened with disquiet to some of the knee-jerk deepest-Africa-type reactions when the South African telecom company MTN pulled out of a proposed $23-billion (Rs 110,000 crore) merger deal with India’s largest telecom company, Bharti Airtel. It would have created a behemoth with the third-largest number of wireless subscribers in the world.
Some reactions from India Inc:
"I don’t know who will want to touch MTN with a 10-foot pole.”
“Indian industry is quite disappointed… in future Indian companies will be over-cautious.”
“They (the South African government) could have said they will make an exception in their law in terms of dual-listing norms.”
Let’s not be hypocrites. The Bharti-Airtel deal was called off because of national interest. India’s national interest prompted Prime Minister Manmohan Singh to call President Jacob Zuma last week and push the deal. South Africa’s national interest pushed its treasury, which must clear multinational deals, to refuse permission (Interesting aside: the South African government’s interlocutor on this deal is of Indian origin, their respected Finance Minister Pravin Gordhan).
I can understand why the South Africans might be wary of being overshadowed by India’s aggressive, globalising business community. If South Africa wants to keep MTN South African, so be it.
In 2002, national interest drove ONGC to a great deal in Sudan. ONGC paid a Canadian company $650 million (Rs 3,120 crore) to buy out its stake in the Greater Nile Oil Project. Threatened by a US and Canadian blacklist, the Canadian company wanted out, one of the few times morals eclipsed national interest.
Oil revenues provided — and still provide — Khartoum’s Islamist government finances for a bloody war against Christian and Animist rebels in southern Sudan. For Sudan’s dictator, Lt Gen Omar Hassan Ahmed al Basheer, a man once accused of sheltering Osama bin Laden, that was a great vote of confidence.
For India, the deal was in the national interest, damn Basheer’s repugnant government and dubious morals. Today, despite strong competition from the Chinese — who, like Indians, have few qualms about working with murderous regimes — ONGC is flourishing in Sudan.
Business opportunity and personal morals have been, are, and always will be second to national interest. Let’s understand this, and let’s move on to the opportunities Africa presents.
As Africa tackles health and social problems that bedevil India equally, there are indications that the future is full of possibilities.
Since 1994, Africa’s economy has grown at an unprecedented pace. Between 2005 and 2015, 27 of 32 African economies are creating ‘a window of opportunity’ by going through a demographic transition — societies are getting richer and having fewer children, argues a recent Harvard University paper. Urban India with its one- or two-child families has undergone demographic transition, the poorer parts of India have not.
These African societies may well be lucrative markets for Indian companies, masters of squeezing profit from Re 1 shampoo sachets (pioneered by Chennai’s Cavin Care, which now has plans to enter Africa).
Africa can hone India Inc’s model of slim margins, high volumes, low costs and big profits.
Indian mobile companies flourish despite earning $6.5 (Rs 312) from every user. They could do better: in Kenya, a market not dissimilar to India, each mobile user generates $9.8 (Rs 470), according to data from Telegeography, a communications consultant.
In some African markets, MTN drops call rates frequently during the day, even every hour. If network use drops, so do call charges. These rates flash on telephone screens.
But if India is to make headway in Africa, the opportunity cannot be about India. The discomfort — rarely echoed in public — many South Africans feel with Indians is maybe why they did not want to change their rules for Bharti. In South Africa, Indians are known for some racial arrogance and clannishness. The T20 World Cup didn’t help. We treated the country like a private holiday resort.
We have strong emotional bonds with many parts of Africa. Let’s build on those — and learn some humility.