India’s interest in Latin America and the Caribbean
In the movie, The Life of Pi, when the protagonist’s father seeks to reinforce his argument for the family’s move to Canada, he proudly declaims, “We will sail like Columbus!” The teenage Pi wryly reminds him, “But Columbus was looking for India!” And we all know that is why our region is called the West Indies.
Almost unremarked, however, a curious inversion of the Genoese sailor’s geographically-challenged quest for the riches of the East has been taking place over the past 15 years. India is now reaching out to Latin America and the Caribbean, exploring possibilities for greater economic engagement with the region, beyond its traditional diaspora links with the Commonwealth Caribbean and Suriname and the presence of a fair number of Indian merchants in Panama.
In 1997, taking into consideration the potential for increased trade with Latin America and the Caribbean, India’s Department of Commerce launched an integrated programme called Focus: LAC, which has since been extended up to March 2014. The programme aims at encouraging the Indian private sector, as well as state entities, to develop stronger trade and investment linkages with Latin America and the Caribbean, at the same time as it focuses on enhancing India’s export of textiles, engineering products, computer software, chemicals and pharmaceuticals to the region.
India is the world’s second most populous country and tenth largest economy in terms of nominal GDP. Given its 20-year economic boom, which admittedly slowed in 2012, and the growing participation in world trade of the so-called BRICS (Brazil, Russia, India, China and South Africa), it is quite logical that India should have embarked on a policy of seeking new markets for its goods and services while also looking to source energy, raw materials and agricultural products, especially soy.
India’s interest in the region perhaps suffers by comparison with China’s high-profile expansion but, on the other hand, benefits from appearing to be less aggressive. According to Margaret Myers of the Inter-American Dialogue think-tank, in an article comparing the two countries’ engagement in Latin America, published by the New Delhi Foreign Policy Research Centre last year, Chinese trade with the region reached US$140 billion in the period 2000-2009, while India’s was approximately US$20 billion. Unsurprisingly, China’s growing political influence is commensurate with its economic clout. Nevertheless, in spite of India’s comparatively understated approach, Ms Myers makes a compelling case for taking more notice of India’s heightened interest, which she feels sure will continue to grow.
According to the Department of Commerce, India’s main trading partners in the region are Brazil, Venezuela, Chile, Argentina and Colombia. Of Caricom countries, Trinidad and Tobago makes the top ten primarily because of its petroleum exports to India.
The Bahamas, curiously, appeared to be the fourth-ranked destination for India’s exports in 2011-2012, but it is generally suspected that this is more reflective of financial transactions passing through that country’s offshore banking system rather than genuine trade.
A key aspect of the Focus: LAC programme is support for economic infrastructure facilities and the Indian EXIM Bank extends Lines of Credit (LOCs) to overseas financial institutions, regional development banks and governments “to enable buyers in those countries to import goods and services from India on deferred credit terms.”
The Department of Commerce lists 13 such LOCs extended in the region up to September 2012, two of which are to the Government of Guyana for the Providence cricket stadium (US$19 million) and a signalling system (US$2.1 million), and five to Suriname (totalling just over US$47 million).
Now, the government has in recent years shown signs of seeking to diversify our diplomatic and economic relations. China is, of course, an increasingly important player in Guyana (and even more so in Suriname). Notwithstanding India’s more cautious approach, the question arises whether enough is being done, under the Indo-Guyana Joint Commission say, to take advantage of India’s stated interest in developing institutional mechanisms, improving market access and boosting economic infrastructure. Shouldn’t the new Skeldon factory, for instance, have been sourced from India rather than China? Aren’t there still opportunities for Indian involvement in our ailing sugar industry?
One hopes that there is a strategy in place for closer engagement with India though not, mind you, with begging bowl in hand. Rather, this should be pursued on the basis of genuine partnership whereby we seek to build on our existing good relations and offer our natural resources potential, our proximity to hemispheric markets with particular emphasis on our opening up to Brazil and our closer ties with South America, our English language capability and our trainable workforce, among other things, to position ourselves as a gateway for India to Latin America and the Caribbean. In turn, we should be seeking to access Indian capital, transferable technology and skills for development projects with real impact.