Economics Current

Asia-Africa Growth Corridor

Asia-Africa Growth Corridor
What is the Asia-Africa Growth Corridor? The AAGC, or the Asia-Africa Growth Corridor is an agreement of economic co-operation between India, Japan, and numerous African nations. It is a sea corridor which links Africa with India and other countries of South-East Asia and the Oceania region. On the 25th of May 2017, India had launched a vision document for the Asia-Africa Growth Corridor at the African Development Bank meeting in Gujarat. What are its objectives? The objective of the AAGC is to develop infrastructure and enhance digital connectivity in African countries through Indo-Japan collaboration. It focuses on sustainable growth strategy by engaging the people of Africa and various stakeholders. Health, pharmaceuticals, agriculture, agro-processing, disaster management and skill enhancement are the basic areas of focus for this project. The main aims can be summarized as: •Enhancing skills •Infrastructural development •Sustainable co-operation and connectivity •Partnership for development What is the significance of AAGC? The Asia-Africa Growth Corridor will help in creating new production channels, expand existing trade and commercial ties, lead to economic growth and productivity, ensure better communication between the countries and also help in achieving the Sustainable Development Goals. Asia and Africa are home to rapidly expanding economies with a large supply of manpower, which is a source of great potential in relation to achieving goals related to growth. The presence of Indian banks and companies in Africa is quite significant. The EXIM Bank is the leading institution for the purpose of development credit tasks. India has provided affordable and appropriate technical knowledge and project execution to many African nations. Japan has been at the forefront of providing technical assistance and promoting research and development in Africa through developmental infrastructure. Both Japan and India have common interests in this enterprise, which include putting a check on Chinese hegemony over developmental projects in Asia and Africa, sustained economic growth, control over sea routes and achievement of Sustainable Development Goals. What are the benefits of AAGC? The highly skilled technical and non-technical personnel of both India and Japan can be used to provide developmental assistance in African nations. Since Africa has prospective developed countries, investment in sustained development will be beneficial to both India and Japan. The initiative will also increase and industrialize the bulk of exports to and from African nations. African nations would minimize their dependence on Europe and America and lessen their debts to these developed nations. The AAGC has been seen by some scholars as a response to the Belt and Road Initiative of China. India has very close links to ASEAN, and through its diverse cultural relations, has a powerful position of influencing trade patterns. However, scholars have also expressed apprehension about the possible weaknesses in the AAGC. India is largely a developing country with numerous internal conflicts and although it has a diverse resource base, she is still largely dependent on international organizations such as the IMF and World Bank for credit needs. Thus, India can offer incentives only to an extent. Structural changes and domestic issues must first be resolved in both countries before they can become beneficiaries of a group of countries in Africa.

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