Africa, it seems, is once again in the global spotlight, but in very different circumstances to those prevailing only a few years ago when the Commission for Africa Report and G8 thrust Africa onto the international centre stage in 2005. Changing geographies of geopolitical and economic power are being conspicuously played out in Africa. African resources are being re-evaluated, producing a set of economic logics that have complex consequences when interwoven with areas of concern such as ‘development’ and ‘security’ (Kraxberger 2005). Increasing attention in this regard has been directed towards the activities of the ‘Asian drivers’ (IDS 2006, Kaplinsky and Messner 2008). The bulk of this scrutiny has focused on China, given its astounding economic rise and, more generally, China's long-standing location as an ideological competitor to the West, despite its own particular engagement with the neoliberal world order. Although some good studies of China–Africa relations have appeared over recent decades (Snow 1988, Brautigam 1998), sustained scrutiny is still relatively new (Taylor 2006, Alden 2007). The Commission for Africa Report, which emerged from Tony Blair's (messianic and largely fruitless) African endeavours, barely mentioned China, a surprising oversight then, unthinkable after China's glitzy African jamboree, the third Forum on China–Africa Cooperation, in 2006.
Notwithstanding some excellent recent academic work, which seeks to unpack the complex relations emerging between different ‘rising powers’ and various African countries, sectors and interests,1 most policy and media analysis has been coloured by unsophisticated fixation with Chinese exceptionalism in the problematically labelled ‘new scramble for Africa’ (Mawdsley 2008). Chinese engagement has presented moral challenges, but obsession with Darfur especially (in public, if not academic, spheres) has often reduced China's profile to caricature, rather than engaged its increasingly constructive international roles. This is certainly not to excuse China's often deplorable human rights record or deleterious local effects of its investment projects in Africa. Yet parallel scrutiny must be placed on the many Western and other Asian firms/nations which take a ‘soft line’ with a plethora of authoritarian regimes with which they do business. Such examinations have simply not occurred to a great extent in light of the Chinese ‘threat’ and the ways in which this challenge shapes US (and indeed other Western power) self-imaginations (Pan 2004).
Analytical myopia has not merely related to contrasting spurious Washington or Beijing ‘consensuses’. Even within early ‘Asian drivers’ discourse there were tendencies to ‘hyphenate’ the two largest players – India and China, just as the term ‘BRICs’ – Brazil, Russia, India and China – obscured contested dynamics within global economic power transitions (Armijo 2007). Little space has been devoted to the range of supposedly ‘new’ players quietly engaging Africa. Paltry attention has been paid to Japan, for example, despite the constructive official Africa policies manifested in its four singularly multilateral Tokyo International Conferences on African Development since 1993 (Ampiah 2005). Indeed Ampiah has noted that Japan should be given credit for keeping African issues alive during the 1990s when Western donors faced apparent ‘aid fatigue’. As a rapidly industrialised non-Western power, Japan offers compelling alternatives to ‘donor’-led visions of ‘development’. Significant investments from Malaysian state firm Petronas in Sudan or development assistance channelled through the Korea–Africa Economic Conference have also been largely absent from media and policy documents (although see Kaplinsky and Farooki 2009). Furthermore, it is only until very recently that controversial African investments from the sovereign wealth funds of nations such as Qatar and Kuwait, particularly in the acquisition of real estate, have piqued concerns. The picture of ‘new’ foreign presence in Africa is thus skewed, driven largely by the ideological proclivities and more materialist anxieties of various Western actors.
This paper will analyse contemporary non-Western engagement with Africa through the lens of the second most significant, but surprisingly neglected, ‘Asian driver’ – India, and in fashions relatively absent from the existing historiography. The embryonic corpus of scholarship on India–Africa relations, in contrast to recent China–Africa work (Taylor 2007, Haglund 2008, Maryesse and Gennan 2009), has tended to be panoramic,2 focusing at length on nebulous concepts of ‘South–South’ cooperation often in ways relatively uncritical of continued Indian claims to the Nehruvian moral high ground in the developing world (Dubey 1989, Biswas 1992, Jamal 1992, Vohra and Mathews 1997, Jha 2001, Sheth 2008). This article will concentrate, by contrast, on critical ground-level realities of India's relations with a single country – Kenya, a country with which India has had ostensibly close links by African standards due to the historic presence of South Asian communities in the region and support for African liberation from the 1940s.
The article will, however, critique common, intuitive narratives claiming that these ties facilitate contemporary Indian economic flows. Rather, the paper will argue that a fractious history of race relations in Kenya, and the cynosure of ‘African’ homogenisation of ‘Asians’ within an ‘ethnicised’ post-colonial political economy, seem to partially impede Indian ambitions relative to other non-Western suitors devoid of such baggage. At the very least, the paper holds that ‘Kenyan Asian’ communities have little instrumental or lubricative influence on the designs of Indian actors at this early stage of resurgent interest in Africa. This contradicts much official rhetoric and a broader literature arguing that diasporic networks facilitate domestic entrepreneurship in creating avenues of local, idiomatic liaison and thereby establishing globally competitive transnational production networks. South Asian ‘diasporic’ communities, long-resident in East African polities, estranged from post-colonial India and asserting paramount local allegiances, actually appear to be remaining aloof from incoming Indian capital. Such realities might frustrate, rather than facilitate, what one report has speculated might be a ‘Tatafication of Africa’ as a result of Indian corporate engagement (CKS 2008).
Most importantly, this analysis within localised African contexts points to African agency in relations with the ‘Asian drivers’, a term implying a certain unidirectional power flow. Whilst some writing has focused on African ‘perspectives’ on Chinese investment (Manji and Marks 2007, Baah and Jauch 2009), less has highlighted the ability of Africans to influence agendas and outcomes. Bayart famously concluded that Africans have a long history of ‘extraversion’ in the utilisation of external influence in their own mechanisms of control (Bayart 2000). Alden noted that engagement with China affords choice – ‘an Africa that can say no’ (Alden 2005); indeed a recent Chatham House report highlighted impressive abilities of Angolan leaders to shape engagement with Asian state oil firms (Vines et al. 2009). African leaders now enjoy the capacity to take advantage of a range of suitors. The potential of such agency is to be celebrated. Yet, the opportunities presented by this competition can also reify divisive conflicts in which many African nations are mired. This paper therefore concludes with thoughts on resurgent Asian engagement and African ‘development’. In the 1970s, scholars debated ‘dependency’ in the ‘first Kenya debate’, while in the 1990s the ‘second Kenya debate’ contested the iniquitous influence of local ‘Asian’ capital on ‘African’ industrial development. With the energy of a new set of ‘external’ actors from Asia in twenty-first century Africa, perhaps an (as yet) ill-defined ‘third Kenya debate’ is emerging. This is a discussion often couched in familiar idioms of ‘neo-colonialism’, yet today's circumstances present a very different set of challenges.
This paper places India within these broad African brushstrokes and the specific case of Kenya, based on literature reviews and around 20 semi-structured interviews conducted in Nairobi in March–April 2009. Most informants hailed from the Indian High Commission and ‘Kenyan Asian’ business community. Some Kenyan officials were successfully targeted, while experts in local policy, media and academic organisations were also consulted. The returns from these latter quarters on India's specific dealings with Kenya were disappointing. Such conversations attested to a local preoccupation with China–Africa matters, one flagged more generally above. This paper hopes to partially redress the balance with an historicised and critical account of India–Africa relations.
India–Africa relations in the new millennium
India's relations with Africa have undergone a sea change in recent years. Bilateral trade for 2008 stood around US$30 billion, a nine-fold increase on 2000. The inchoate political links of Afro–Asian solidarity and ‘non-alignment’ have made way for more hard-nosed Indian strategic and economic assertiveness in Africa, a result of India's global ambitions (e.g. a permanent seat on the United Nations [UN] Security Council), energy demands and expansive private sector horizons. That is not to say that assertions of ‘South–South’ cooperation have been expunged from India's diplomatic vocabulary – far from it. India's ‘Pan-Africa e-network’, publications such as Africa Quarterly, and even the hosting of the cricketing Indian Premier League in South Africa during the 2009 Indian general election, attest to India's ‘cultural diplomacy’ with southern ‘partners’, while associations such as the India-Brazil-South Africa (IBSA) forum, instituted in 2003, represent more formal linkages.
The rhetoric of ‘partnership for mutual benefit’ pervading these developments was ubiquitous at the 2008 India–Africa Forum Summit and five high-level (and numerous regional) ‘India–Africa Project Partnership’ business conclaves organised by the Confederation of Indian Industry (CII) and India's Export–Import (EXIM) Bank since 2002. It cannot be denied, however, that there is now a more pronounced realpolitik to India's African endeavours, especially in the quest for resources – notably oil. We have therefore witnessed shifts in the locus of interest somewhat away from East Africa and Anglophone Commonwealth nations, with whom India had been relatively close by African standards during its early post-colonial South Asian introversion, to West and even Central Africa (Singh 2007a, Mawdsley and McCann 2010). South Africa has retained its centrality to India's Africa policies, as it did politically during apartheid and economically after 1994.
India's recent engagement has been energised largely by the private sector, a characteristic ostensibly representing the key differentiation from the ‘statist’ Chinese model. Such binarism is reductive. There is growing prominence of Indian state energy companies and RITES, the consultancy wing of the Indian Railways, throughout Africa. The Indian state also supports its private sector in more surreptitious fashions, much as Western governments offer largesse to entrepreneurial nationals overseas (Mawdsley and McCann 2010). China has been accused of exercising ‘soft power’ for extractive reward in the construction of party headquarters and stadia to create conviviality with African rulers. India has also begun to emulate such liaisons/tactics. In 2008 Ghana's new presidential palace, for example, was built thanks to a ‘soft loan’ from India. India and Ghana have historical links – Kwame Nkrumah visited India in 1961 – but it should be remembered that Ghana claims one of the largest offshore oilfields in West Africa, since the discovery and development of the Jubilee Field by UK-registered Tullow Oil and US-based Kosmos Energy in 2007/8. Indeed in July 2009 ONGC-Videsh Limited (OVL), the overseas arm of India's state energy firm, enacted due diligence on a US$3 billion bid to acquire a 30% stake in Jubilee owned by Kosmos.3
Nevertheless, a number of Indian-origin conglomerates have been independently stretching their wings in Africa like never before, although many had these wings clipped by the financial crisis. One such company, Mittal Steel (now Arcelor Mittal), renegotiated (but has now significantly downsized) a huge, and at times controversial, iron ore deal under the Johnson Sirleaf administration in Liberia, a country with which Indian public or private sectors had few links previously. In more familiar terrains Indian corporate giants Essar and Bharti Airtel have been penetrating telecommunications markets in Southern Africa since 2008, while Tata continues to expand its vehicle market share.
Historical India–Kenya relations
India's contemporary relations with Kenya broadly correspond to the ‘market-seeking’ private sector proclivities replicated in other non-resource rich African countries, despite the lauded presence of Indian ‘diaspora’ intuitively providing more profound linkages between the two nations. Kenya's historical relations with India or with ‘Indians’ paint more problematic pictures, however. Despite Nehru's assertions of the primacy of African ‘liberation’ over the concerns of Indian communities in Africa and the ‘nationalist’ sympathies of Apa Pant, the first Indian High Commissioner to East Africa, India–Kenya relations were not especially close.4 India did disproportionately patronise Kenya through its Indian Technical and Economic Cooperation (ITEC) aid scheme,5 yet its diplomatic activities in independent Kenya were relatively meagre.
In fact a fractious history of colonial and post-colonial race relations coloured many Kenyan leaders' impressions of India, despite the rhetoric of ‘non-aligned’ solidarity emanating from Delhi. It is well documented that many popular ‘African’ impressions of local ‘Asians’ (as Kenyans of South Asian origin were simplistically known) were fundamentally homogenising, with almost no disaggregation of diverse South Asian regional, religious or caste origins for instance. Many, if not most, ‘African’ impressions dwelt on sentiments of ‘Asian’ exploitation rather than friendship (Theroux 1967, Atieno-Odhiambo 1974, Furedi 1974, Balachandran 1981, Twaddle 1997). This tension had deep structural roots, based on the position of ‘Asians’ (especially as traders) within the colonial economy, and sites of Indo-African contact this created. African antipathy was not much assuaged by the key organisational roles of a few ‘Kenyan Asians’ in anti-colonial protest – much to the chagrin of the greater number who celebrated this heritage. Populist politicians such as Martin Shikuku made considerable political capital ‘scapegoating’ falsely essentialised ‘Asians’ for the continued economic malaise of the wananchi in the early decades of Uhuru.6 Relations remained uneasy.7 The depth of ‘African’ distrust provoked an array of responses amongst ‘Kenyan Asians’. Some created networks in Britain and North America, while the emanicipatory activism associated with Awaaz magazine has attempted to position ‘Asians’ within nation-building narratives to assert local legitimacy and patriotism (Interviews with Zarina Patel and Zahid Rajan). This range of reactions reflects profound historical diversity in East African ‘Asian’ communities.
Kenya's relations with India were partially viewed through the lens of this localised ‘Asian Question’, especially as even many elite Kenyans falsely believed local ‘Asians’ to have closer links to India than existed. Such opinions became increasingly inaccurate as Nehruvian diasporic dissociation from the 1950s provoked some sentiments of abandonment among the Indians of Africa. There were even occasional calls in the 1960s for ‘Indian repatriation’ from certain Kenyan politicians – a situation few Indian leaders or ‘Kenyan Asians’ desired. Such tensions and conflations were manifested during the 1962 Sino–Indian War, for example, when a bizarre public spat saw a number of Kenya African National Union (KANU) leaders openly supporting China (despite widespread suspicion of ‘communism’) while prominent ‘Asian’ party members defended India, but asserted their paramount local identity. At the height of ‘anti-Asianism’ in 1968 a diplomatic quarrel saw Indian Minister of External Affairs, B.R. Bhagat, denied an audience with Jomo Kenyatta on the grounds that India was interfering with Kenyan affairs.8 Such developments provide crucial context given the tenacity of ‘anti-Asian’ feeling in contemporary East Africa (as witnessed in Uganda's Mabira Forest in April 2007).
In international relations, one should, however, also note more general Kenyan political introversion as domestic concerns of Kikuyu enrichment under Kenyatta and graft under President Daniel arap Moi dominated affairs. Kenya's foreign policy, such as it was, was largely focused within eastern Africa or towards the west, rather than Asia or multilateral arenas (Interview with Patrick Mutahi). Moi was principally concerned with courting various Western donors. These powers certainly overlooked authoritarianism in Kenya (Brown 2001), but became increasingly exasperated by the 1990s and tried to coerce Moi into implementing promised political reform. Current foreign-policy interests (largely related to attracting investment) are, by contrast, shifting towards China and the Middle East (Mogire 2008). As shall be seen such embryonic developments are still ad hoc (Interview with Godfrey Mutisya) and controversial.
A profile of Indian investment in Kenya
India's contemporary activities in Kenya are primarily characterised by private sector investment activity, with ‘aid’ inflows and diplomatic exchanges scant. This prominence of capital at the frontier of India–Kenya relations has historical continuities, although capital was far more state-directed before India's liberalisation in 1991. In the 1970s perhaps half of India's meagre African foreign direct investment (FDI) was directed to Kenya (Personal communication with Stephen Gelb), although this tailed off in the next two decades. The majority funded manufacturing. One Indian firm in Kenya was Birla Group. Through a local subsidiary, Orient Paper, Birla entered into a joint venture with the Kenyan government and the World Bank International Finance Corporation in 1969. The result, Pan-Paper, in which Birla became the majority shareholder, became East Africa's biggest paper manufacturer. Despite such activity, India's South Asian foreign policy introversion, economic insularity before 1991 and dissociation from the ‘diaspora’ before 1998 actually dictated weak de facto Indian linkages to East Africa, except in rhetorical, kin and cultural senses, or through institutions such as the Bank of Baroda. Kenya's foreign policy reserve and tense local Afro–Asian relations compounded this aloofness.
With Indian diplomatic endeavours and diasporic engagement in Kenya still patchy, Indian companies are seeking opportunities largely without the aid of ‘Kenyan Asian’9 and Indian state networks. The most significant investment was made by Mumbai-based Essar Group in telecommunications, one of Kenya's most dynamic sectors, as witnessed in the initial public offering of Safaricom in 2008. After investment in South Africa-based Econet Wireless International, Essar purchased a majority share in Econet Wireless Kenya (EWK) in December 2007 and announced an investment of US$500 million over two years (International Herald Tribune 2008). Thanks to this capital, EWK opened Kenya's fourth mobile phone network – Yu – in November 2008, adding competitive pressure to an industry that had been dominated by two players for nearly a decade. EWK struggled with market penetration given the dominance of the innovative Safaricom behemoth. Despite its early woes, EWK rebranded itself as Essar Telecom Kenya in April 2009 (Daily Nation 2009a), more conspicuously marketing the company as an Indian addition to Kenya's corporate landscape and providing the confidence for a US$94 injection from Pan-African Infrastructure Development Fund, Africa's largest infrastructure equity fund, in July 200910 (The Financial Express 2009). With such backing Essar hopes to become a major regional sectoral player, to which end it entered into talks with Dhabi Group to secure equity to broaden its African portfolio.11
Essar also jostled for position in local petroleum markets. In July 2009 Essar Oil and Gas finally acquired a 50% share in Kenya Petroleum Refineries, the sole refinery in eastern Africa, and Essar's second such asset after the Vadinar refinery in Gujarat. Essar will invest US$400 million to upgrade the 40-year-old installation. The deal had been controversially contested. When Essar won the tender to acquire the share put on sale by BP, Shell and Chevron in 2007, the government invoked its pre-emptive rights and offered the stake to Tamoil, despite the fact the Libyan firm had declined to participate in the initial tendering process. Essar emerged victorious, however, as energy crises and a major oil scandal in Kenya dictated pressure for more transparent and efficient official deal making (Interview, Mutisya). The acquisition is not about securing oil for domestic consumption, as in the Gulf of Guinea or Sudan – indeed Kenya's natural resources are scarce, despite oil prospecting concessions for China's National Offshore Oil Corporation (CNOOC) in northern Kenya. Rather Essar's desire to retail fuel in Kenya and export to Tanzania, Burundi, Rwanda and even Uganda before its recent Lake Albert discoveries possibly spawn a new local refinery.
Indian companies have added to the plethora of local ‘Kenyan Asian’ manufacturing enterprises although, unlike local concerns in Nairobi especially, there has been little focus on light engineering. Since 2005 Tata has been producing soda ash at Lake Magadi.12 In July 2009 one of the world's leading cement producers, Sanghi Group, paid US$80 million for the right to mine limestone in West Pokot from 2012. Its local subsidiary, Cemtech, will build a modern plant in one of Kenya's least developed regions.13 Indian pharmaceutical companies such as Ranbaxy and Beta are interested in marketing affordable drugs in Kenya, which provides around 50% of the Common Market for Eastern and Southern Africa (COMESA)'s pharmaceutical needs (The Standard [Nairobi] 2008). Indian companies have also penetrated more controversial Kenyan sectors. In October 2007, for instance, Bangalore-based Karuturi Networks, India's biggest floriculture company, acquired the holdings of Dutch–Kenyan flower farm giant Sher Agencies on Lake Naivasha.14
As the Essar cases, and numerous interviews with local Indian and African businessmen indicated, Kenya is often viewed as a ‘gateway’ for investment in the wider eastern African region, due to its coastal position and relative infrastructural advantages (Interview with Olusanya Ajakaiye). In this sense, despite the mitigating issues to be described below, Kenya could remain a hub for initial Indian investment in Africa, especially as the fibre-optic cables reaching East African shores facilitate the ability to do business. That said, as other regional powers such as Rwanda and Ethiopia court Indian officials and entrepreneurs, and vice versa, Kenya's graft issues and the cultural baggage of historical ‘Asian’ presence might push Indian investors elsewhere. One such destination looks to be Uganda with its newly discovered oil and a president who has engaged expelled ‘Asians’ since the 1990s and now sets his sights further afield. Another might be ‘South Sudan’ after 2011.
The following sections of the paper analyse the effects of Kenya's historically ‘ethnicised’ political economy and, secondly, the consequences of cleavages within the elite political sphere on the relatively large investments of corporations with origins in various ‘rising powers’.15 These business developments have been at the forefront of ‘India's’ engagement with Africa, and Kenya, in the new millennium. This is not to say that India–Kenya trade (as unbalanced as it is) is not important,16 rather that such economic activity has not been at the heart of recent dynamism and was less easy to penetrate in Kenya. Furthermore, given limited time in the field and opaque data, the article will shy away from consideration of the burgeoning activities of small-scale traders and businesses from India. Like recent China–Africa work, as India–Africa scholarship develops, so hopefully will analysis of the effects of India's energetic small and medium enterprises, which were praised at the 5th CII-EXIM Africa conclave.17 Future researchers might also consider how Indian companies use Kenya as an export platform – for example to take advantage of African Growth and Opportunity Act access to US markets (Kaplinsky and Farooki 2009) – given Kenya's established trading links with India.
The next sections do not suggest that mitigating factors of historical relations and ‘ethnicised’ political economy in Kenya are totalising for Indian actors, as Essar's activities demonstrate. They merely propose that localised African socio-historical factors and political influences have contemporary consequences for competition between investors from Asia. It is important not to fall into the trap of intuitively concluding that certain factors (‘diaspora’ for example) provide innate advantages to selected economic actors, rather to historicise dynamics within the context of local polities. Such issues are often not sufficiently factored into quantitative analyses of Africa's relations with Asian ‘rising powers’. Qualitative social factors do, however, influence political risk and the decision making of investors. Commentators should not shy away from examination of their impacts. Such analysis also crucially elevates consideration of African agency in international encounters. This is to be universally welcomed.
‘Asians’ and the political economy of Kenya
The tragedies following the December 2007 elections and the continued failures of the coalition government have demonstrated the continued centrality of ‘ethnicity’ – however imagined, simplistically conceptualised and cruelly exploited – in Kenyan politics and to the development of the economy. The ‘ethnicisation’ of Kenya's political economy gained momentum under Jomo Kenyatta, who stood accused of patronising his Kikuyu support base with land and advantage in the industrialising economy. Despite his early rhetoric, Kenyatta's presidential successor, Daniel arap Moi, set about dismantling Kikuyu dominance to shore up his own political base (especially following the 1982 coup attempt) and boost material opportunities. Of relevance to this paper was Moi's skilful mobilisation of ‘Kenyan Asian’ (and some Indian) capitalists to his ends within a political economy where ‘Asians’ and emergent Kikuyu capitalists sat uneasily together.
During the 1960s–70s, Kenyatta had attempted to protect ‘indigenous’ capitalists from ‘Asian’ competitors in certain sectors, facilitating credit to ensure Kikuyu trading monopolies in certain commodities, forcing ‘Asians’ out of petty commerce and into manufacturing (or indeed out of the country altogether). Nevertheless, some ‘Asians’, though restricted, continued to compete with Kikuyus from whom they were supposed to be sectorally separated. In the relative absence of non-Kikuyu capital in the same urban environments as elite Kikuyu business, it seemed that utilisation of an historically unpopular, but economically astute, minority provided Moi with a means for aggrandisement, while cleverly diverting blame for economic failure and graft from the KANU machine. Certainly ‘Kenyan Asians’ became ‘typed’ as close to Moi,18 and were perceived to impede the advance of Kikuyu capital as Moi erected obstacles to certain Kikuyu endeavours (such as banking start-ups) in the 1980s.19 The fall of KANU in 2002 altered the ethnic politico-economic playing field. The power of resurgent Kikuyu capital and its proximity to the National Rainbow Coalition (NARC) and later the Party of National Unity (PNU) became notable, as exemplified by scrutiny of the ‘Anglo-Leasing’ scandal for example (Wrong 2009). Many Kikuyu elites have not forgotten enforced competition with ‘Asian’ economic malfeasants under Moi. It may be that Kibaki and his allies have a posture to India conditioned by the highly competitive position of historical ‘Asian’ vis-à-vis Kikuyu capital.
The conditioning of such ‘external’ alliances arguably continues today with Raila Odinga perceived to be close to a number of ‘Kenyan Asian’ capitalists, an impression no doubt buttressed by the presence of Raila and Orange Democratic Movement (ODM) ministers Musalia Mudavadi, Henry Kosgey and Chris Obure at the ‘Vibrant Gujarat Global Investors Summit’ in January 2009. ‘Asians’ had made contributions to the political ventures of Oginga Odinga, Raila's father, whose relations with Kenyatta became increasingly acrimonious in the late 1960s. Certainly there was little economic competition between Odinga's Luo cohorts or ethnic groups to whom Moi appealed, in contrast to Kikuyu enterprises. The fact that these older ethnicised issues of competition and collaboration are entering into ODM/PNU rancour could well affect investment from Asian nations. Given the homogenising imperatives of ethnic/racial conceptualisation locally, informants indicated that the fallout from this political economy might partially affect perceptions of actors from India too, despite the very localised nature of acrimony. As interviews revealed, there is a surprising conflation of older ‘Kenyan Asian’ business with new Indian concerns even among elite Kenyans (Interviews with Godfrey Mutisya and Hirji Shah). This negative posture of Kikuyu capital to ‘Asians’ may transfer to India itself, despite distant de facto links between India and its diaspora in Africa.
It seems clear that local ethnic politics has indeed shaped foreign investment. Kenya has witnessed a recent capital influx from China, Libya, Qatar and elsewhere (Interview with Jaindi Kisero); revenue which is allegedly flowing into the coffers of PNU leaders. The Grand Regency debacle, which saw one of Nairobi's luxury hotels sold to a Libyan consortium by the Central Bank of Kenya at a fraction of its true value, caused uproar (and considerable acrimony within the fledging coalition government) over the clandestine and seemingly corrupt means by which the deal was apparently pushed through by PNU leaders. The episode ultimately necessitated the resignation of then finance minister Amos Kimunya.20 It was even rumoured that Kimunya and Kibaki himself might have received an oil tanker from Gaddafi as thanks for convivial Kenya–Libya relations.21 With such liaisons bearing fruit for Kikuyu and allied politico-business leaders, Indian competitors might themselves be struggling to attain advantage, a situation partially exacerbated by Kenya's historical race relations and the ethnic politics of the post-colonial state.
The ‘brown face’ of corruption
The controversial impressions of prominent ‘Asian’ roles in Kenya's corruption scandals are linked to these dynamics. Such perceptions recurred throughout interviews carried out with Kenyan officials, businessmen, journalists and academics. Beliefs about ‘Asian’ corruption in Kenya have a long genealogy, based on Afro–Asian trade and labour relations, as well as broader paternalistic colonial ideologies of the corrupting influence of foreign ‘middlemen’ on ‘natives’. For instance, the shady actions of certain ‘Asian’ contractors in securing work from the Nairobi City Council to build African housing in Nairobi's Eastlands was flagged in the 1955 Rose Commission, which investigated corruption in Nairobi's construction industry (Anderson 2002). The poor quality of the work undertaken on these estates compounded negative judgements on the rectitude of ‘Asian’ firms.
Broader essentialised sentiments of ‘Asian’ exploitation and corruption gained traction during the 1980s–90s given supposed ‘Asian’ complicity with Moi's ethnic politicking and grand corruption. When a number of banks headed by controversial figures such as Ajay Shah crumbled in the 1990s, having apparently received forced deposits from fragile parastatals (funds allegedly utilised to bankroll Moi's electoral campaigns) it was initially the ‘Asian frontmen’ who shouldered much of the public blame in the context of historical impressions of Indian avarice. The fact that many of these supposed ‘crooks’ fled Kenya grated on citizens desperate for justice. Alnoor Kassam, architect of the infamous Trade Bank, accused of obtaining KSh1.2 billion from the Central Bank of Kenya through falsified documents, fled for Canada in 1993 and even stood for Mayor of Calgary. The spectacle of Kamlesh Pattni publicly explaining his centrality to the ‘Goldenberg Scandal’, the complicity of the Kamanis in ‘Anglo-Leasing’, or the culpability of Yagnesh Devani in the 2009 Triton oil scandal compounded (unfair and essentialised) historical impressions of ‘Asian greed’ (Interview, Mutisya). This is not to say that ‘Asians’ were exclusively blamed for graft in Kenya, merely that their organisational centrality became unfairly exaggerated in the context of historical antipathy (Interview, Shah).
Although applicable principally to local ‘Kenyan Asians’, these spurious conceptions of ‘Asian’ duplicity came to colour partially impressions of businesses from India itself (even when not conflated with ‘Kenyan Asian’ concerns), despite meagre Indian engagement in Kenya until recently. A 1990s scandal involving Indian firm Mahindra and Mahindra hit the headlines when a number of its jeeps were bought by the Kenyan police at rates well above market value in a contract secured by Chamanlal Kamani. The jeeps were popularly characterised as defective despite the high price tag, tainting impressions of the quality of Indian goods, despite the budget specifications to which Mahindra was instructed to work by avaricious dealmakers (Interviews, Shah, Kisero).
Notions of the disingenuousness of businesses from India became even more salient during the Pan-Paper debacle. The aforementioned Pan-Paper joint venture, of which India's Birla (through its Orient subsidiary) became a majority shareholder, was put into receivership in early 2009 after years of chronic financial strife, despite an unparalleled and controversial series of protectionist government concessions. Blame was firmly placed on the ineptitude and ‘greed’ of the exclusively Indian expatriate management. It was claimed that managers were able to repatriate millions to India despite the fact Pan-Paper had not been profitable for 15 years, not least as apparently huge fees were based not on profits, rather turnover – a result of supposedly deceitful negotiations in the 1980s–90s (Daily Nation 2009b). Conclusions that Birla had leeched off the Kenyan state, but voraciously pocketed the rewards for India, appeared frequently in Kenya's public sphere in early 2009. Whilst official public-private venture negotiation skills were called into question, devious Indian methods employed to acquire the majority sharehold were also noted.22 Other commentators disagree with the line taken in the Kenyan press, stating that the uproar was more about Kenyan politicians applying pressure for a more advantageous settlement in upcoming renegotiations of the joint venture, which the Indians merely resisted.23 In any case, despite apparent hyperbole, there was manifest public fear that Indian capitalists, in the mould of the Orient, could recruit managers with no knowledge of, or interest in, the wellbeing of Kenya, rather merely capital flight.
Some believe that such outcry, informed partially by the local politics of race, had subtle impacts on the ability of Indian firms to gain contracts in Kenya in the context of growing international competition. India has been famously beaten by China to oil concessions in Angola and Nigeria of late, yet the ideological biases of much reporting has dictated little light being shed on unsuccessful bids in sectors less geopolitically contested than African resource extraction. Indian diplomats interviewed were almost exclusively preoccupied with discussion of ‘South–South’ cooperation, while Indian businesspersons focused on positive impacts on human resource development in Africa. One leading Nairobi businessman, however, raised the example of the refurbishment of the Rift Valley Railway. In 2006 South Africa's Sheltam was awarded a 25-year concession, but was expelled in 2007 after chronic non-performance, with familiar rumours of political irregularities and poor Kenyan due diligence reported.24 Shelton had edged out an Indian-led RITES consortium in a hotly contested bid. Such decisions are informed by many things: the strength of presentations, capital outlay or the opportunism of aspirant politicians. Yet, in the view of the businessman, poor impressions of Indian goods, services and honesty, a legacy of such encounters with Mahindra and Pan-Paper, and more general aloof relations with ‘Kenyan Asians’, were also salient to some extent (Interview, Shah). Controversy over RITES' management of the Tanzanian Railways may well have also affected official decision makers, but RITES certainly had far more experience than Shelton in overhauling such infrastructure. This is not to suggest that Indian businesses are intrinsically disadvantaged, as Essar has proved, rather that socio-historical factors might play a role in the economic development of Africa's ‘rising powers’ nexuses – notions which should be probed.
The political mechanics of foreign investment
The emotive issues discussed above are linked to controversial assessments of perception and its inherent analytical biases. They do nevertheless provide social context for a more tangible set of factors which undermine the notion of India's supposedly advantageous historical and ‘diasporic’ links. We must also place developments within a critical international relations crucible and conclude that the animated encounter with competing Asian actors is increasing the potency of African elite agency – concurring with the views of Alden (2005) and many others. Such an optic dictates placing greater importance on organisation in Kenya's previously lethargic and ad hoc diplomacy outside Africa (Interview, Mutahi). Indeed, in August 2009 the Foreign Ministry announced the impeding publication of Kenya's first foreign policy document.25 This new direction has initially focused on conviviality with China26 and the Middle East, with news in July 2009 that Kenya is opening ‘strategic’ missions in Rabat, Qatar and Dubai for business development.27 These liaisons are situated within the ethnicised mechanisms of governance and accumulation in Kenya.
Despite aforementioned large Indian investments, it seems that particularly Chinese, but also Libyan, Qatari, and perhaps soon Iranian, actors are representing a larger and faster growing quantum of (often highly visible) investment in terms of capital intensity and project number, despite relatively distant historical relations with Kenya. Any visitor to Nairobi sees the proliferation of Chinese-built roads, while in 2008 state-owned construction firm China Wu Yi began construction of a road between Isiolo and Moyale, transforming Kenya–Ethiopia transportation capacity. Small Chinese industrial and service companies continue to spring up. In December 2008 Kibaki entered into talks with the Emir of Qatar for a US$3.5 billion deal to construct a port in Lamu, while in 2009 Kenya entered a 99-year lease agreement with Doha to lease 40,000 hectares in the Tana Delta for food production.28 In March 2009 a deal between the Kenya Airports Authority and a number of Qatari businessmen (perhaps linked to a sovereign equity fund) to build a luxury hotel near Jomo Kenyatta International Airport also created controversy. Libya too has been proactive in controversial deals, with alleged affinity to PNU particularly. In 2007 Tamoil, in which the Libyan government has a controlling stake, bought Mobil Kenya assets (now Oilibya) for US$200 million. As mentioned, the share in Kenya Petroleum Refineries was initially awarded to Tamoil after government (widely believed to be PNU) intervention. It was thought that the eventual victory of Essar in the deal was largely pushed through as pressure mounted (particularly on under-fire energy minister Kiraitu Murungi) for transparent deals as the dust was settling on Grand Regency, and oil and maize scandals created unrest and shortages.
Dynamic Kenyan relations with China and many Arab countries, relative to India, can be somewhat placed against tense relations between ‘black’ Kenyans and ‘Kenyan Asians’, their effects on perceptions of India, and historically aloof relations between Kenya and the Indian state. It is also, more crucially, related to the mechanics of foreign investment and politico-corporate liaison in Kenya. The methods of large deal making in Kenya are often conducted in markedly opaque, clandestine and extremely elite state-to-state arenas. The monetisation of Kenya's post-colonial politics and the intertwining (even similitude) of political and business elites are important in this regard. India's domestic polity and economic profile, however, render access to these controversial avenues of economic advantage sometimes problematic. Despite a degree of state stewardship, its largely private-sector-led African initiatives (and therefore responsibility to shareholders), diplomatic proclivities/abilities and transparency pressures from vibrant domestic ‘civil society’ organisations have consequences within African contexts. This is often telling relative to state-led bids from China or Middle Eastern countries, which frequently enjoy higher liquidity and capital intensity than Indian interests (Interview with Manu Chandaria OBE). These ‘newer’ actors have, in short, quickly developed more statist access-led styles, which are more effective within the existing contexts of rentier statehood in much of Africa. The ascendance of Kikuyu capital under President Mwai Kibaki, and the willingness of Libya and China to create convivial relations with PNU leaders particularly, exacerbates India's disadvantages in the context of Kenya's historical political economy, as outlined above.
Moreover, the statist biases of much corporate liaison further disadvantage Indian players even if they were willing and able to utilise ‘Kenyan Asian’ networks, which are themselves often distanced from the state. It is perhaps for this reason, as much as recognition of distant local African–Asian relations and post-colonial ‘diasporic’ estrangement from India, that few Indian firms have utilised such an apparently intuitive instrumentalist asset as ‘diaspora’ in Africa. That said, this aloofness is not rooted in competition. Local ‘Asian’ enterprises, deeply embedded at various levels of the Kenyan economy (especially in manufacturing) do not directly vie for position with aspirant capitalists from the Indian subcontinent who target different sectors (Interviews, Shah, Chandaria).
Equally, the Indian state has done little to aid Indian investment in Kenya at this stage, in contrast to resource-rich nations in West Africa. Renewed Indian diasporic engagement after the election of the Bharatiya Janata Party (BJP) government in the 1990s29 (a reversal of Nehruvian dissociation) was initially targeted at attracting FDI and remittances to India from the West and Gulf. Such engagement even then was perhaps too late – a ‘missed opportunity’ (Lall 2001). Only lately has the remit of this diasporic conviviality extended to Africa (and principally South Africa) to catalyse FDI from India. Kenya is a low priority in this regard as energy spent there appears to yield fewer returns than other regions of Africa.
More important within the context of Kenya's statist investment mechanisms is the evident lethargy of India's diplomatic architecture in Nairobi. It was apparent in several visits to the Indian High Commission (HC) in 2009 that India's official mission in Kenya appears to be a poor conduit of state-to-state relations and an ineffective propagator of the economic imperatives that increasingly characterise India's new African initiatives. This is in marked contrast to the Chinese Embassy (Interview, Kisero). It is argued that the HC has been hitherto driven by personalities articulating concepts of traditional ‘South–South’ cooperation, rather than institutionally energised by the economic ambitions that preoccupy a younger generation of New Delhi technocrats (Interviews, Shah, Chandaria, Mutisya). This is slowly changing, although Nairobi lags far behind sister missions in Johannesburg, Dakar and even Addis Ababa for instance. These cities each now boast a branch of India's EXIM bank, an increasingly influential institution in moulding India's African policies. India's diplomatic energy in some African nations has indeed appeared somewhat driven by energetic individuals such as ex-Ambassador Gurdit Singh in Ethiopia, and India became the largest investor there in 2008. This is a country with a regime of highly authoritarian proclivities, yet India has managed to leverage official contact to its advantage (arguably because of African Union presence in Addis, as well as market opportunities). This goes to show that India is not necessarily disadvantaged in liaison through statist channels in Africa – merely that its modest resources dictate selective engagement according the opportunities and obstacles apparent in various destinations. Further studies in different African contexts are therefore in order.
Future debates and conclusions
Critiques of ‘external’ influence on African ‘development’ are not new. Such terrain provided the liveliest early post-colonial economic debates in Africa, especially related to Kenya. A rich body of work from the 1970s–80s, initiated by Colin Leys, contested ‘dependency’ on ‘neo-colonial’ capital – the ‘first Kenya debate’ (see Schatzberg 1987). A less weighty historiography in the 1990s – the so-called ‘second Kenya debate’ – revolved around the relative inhibitive influence of ‘Kenyan Asian’ presence on African industrial and economic development (see Himbara 1994, Chege 1998, Vandenberg 2006). Now, perhaps, we are emerging into another, as yet ill-defined, discussion. This potential ‘third Kenya debate’ concerns the role of ‘new’ Asian engagement on Kenyan, and more general African, economic development and governance.
As Bayart asserts in broad historical senses, and Chris Clapham argues for renewed China–Africa relations, foreign powers engaging with African societies face resilience to, and incorporation of, their external influences. Like others before them, Asian actors will necessarily broadly conform to long-established patterns of Africa's external engagement rather than fundamentally transmogrify them (Clapham 2008). The danger is, however, that such competitive engagement can reify divisive ethnic and socio-political conflicts in which many African nations are mired. This is arguably pertinent to Kenya, as it appears that PNU sympathisers have more greatly benefited from the rewards of recent foreign ‘partnership’ than competing ODM cadres. This was implied by Prime Minister Raila Odinga himself in April 2009 after visits of the Turkish and Iranian presidents to Kenya. These meetings, during which economic deals and diplomatic memoranda were agreed, were held at Kibaki's State House without Odinga's inclusion as prime minister in the coalition government (Sunday Nation 2009).
As Angola's oil diplomacy and Liberian renegotiation of the Mittal iron ore deal has shown, the influx of new ‘partners’ has strengthened African international agency, especially in the development negotiation skills. Again the reinforcement of divisive existing political conditions is a danger. In some parts of Africa, the nature of patronage necessary to retain power continues to propagate a certain short-termism in negotiations with economic partners. This engenders continued castigations of governmental transparency. It cannot be denied that in most oil-rich African nations that have courted new Asian investment, the health of official coffers has had little ameliorative effect on the wellbeing of most citizens. Cognate accusations appear in Kenya. Following the Grand Regency scandal, Kibaki was openly charged with ‘selling’ Kenya to China, India, Libya and even Iran by ODM opponents.30 They stated that his ‘Look East’ policies were reinforcing Kikuyu cronyism, rather than forging national development. The aforementioned deal to sell land near Jomo Kenyatta International Airport to Qatari developers was negotiated by George Muhoho, head of Kenya Airports Authority and one of Kibaki's closer allies. One newspaper stated that ‘clearly, the Qataris are no ordinary investors. That they managed to easily clinch such a big deal is a statement about the amount of political clout they wield within the corridors of power.’31 The comparative presence of diverse suitors and their liaisons with African elites is at the core of the ‘third Kenya debate’.
On more overtly economic levels, it seems that few ‘Asian drivers’ in Africa are proactively catalysing vitally important local manufacturing – thereby possibly initiating a so-called ‘flying geese model’ of development (Brautigam 2008). Scrutiny should also be placed on comparative labour relations, and consequences for local production and trade. For example Indian firms, like Mahindra in Ghana, claim that their products (in that case tractors) are more suited to local conditions and do not endanger African production in contrast to China's ‘dumping’ of low quality goods on African markets. Such avowed contrasts must be soberly analysed with empirical fieldwork. China's financial abilities dictate that it has stolen a march on the field in terms of infrastructural development (Foster et al. 2008), the crucial initial step towards sustainable development in the opinion of diverse African bodies, the United Nations Conference on Trade and Development (UNCTAD) and the World Bank.32 Other Asian actors, including India, are, however, increasing the thrust of such activities. Indian state firms such as RITES and OVL are developing African railways and oil installations. Indian firms are involved in rural electrification in Ethiopia thanks to ‘tied’ lines of credit from India's EXIM bank, while Indian conglomerates are diversifying African telecommunications. One ‘Kenyan Asian’ informant believes that India must ‘think big’ and avoid its natural timidity in infrastructure development, despite problems of competitiveness with China, to make an impact in Africa (Interview, Chandaria). A myriad of endeavours indicate such confidence is tentatively forthcoming from a range of Asian suitors. Yet, domestic economic imperatives, pressures from international and local ‘civil society’, and, above all, the strategic thinking of African ‘partners’ provide a complex and challenging geopolitical and economic canvas. Such concerns must also take centre stage in any debate.
So for India, despite necessary circumspection given certain constraints, there are fashions in which it constructively engages in Africa, utilising its own particular strengths. One notable contribution has been in peacekeeping, including the training of African troops (Singh 2007b). Much of India's engagement has been articulated in terms of Indian skill transfer within the rhetoric of ‘South–South’ partnership, not least in information and communications technology development. Such linkages are slowly growing through the ‘Pan-Africa e-network’ and technology transfer centres in Ghana and Senegal. Such nascent institutions might not engender the immediate dramatic impacts of infrastructure, but could have sustained effects as submarine fibre-optic cables now hook Africa to the global digital regime. India's position as a leading producer of generic pharmaceuticals and biofuels, or legacies of India's ‘green revolution’, are also beginning to manifest themselves in Africa. Such developments could have the most significant human impacts of all, although commentators should avoid complacency in such analysis as events are very much in their infancy. It can be argued that some work on India's ‘unique’ relationship with Africa, certainly in comparison with China and the west, makes reductive ideological assumptions on the ‘progressive’ versus ‘reactionary’.
Whilst Mahatma Gandhi was partially correct in his assertion that ‘the commerce between India and Africa will be of ideas and services, not manufactured goods against raw materials after the fashion of Western exploiters’, public and private sector engagement is dictating Indian adherence to less idealised contact in extractive and market-seeking environments. This is dictated by changing geographies of India's African ambitions and abilities, but, as importantly, by localised dynamics of politico-economic liaison within different African contexts. These are factors that the initial volley of ‘Asian drivers’ scholarship did not sufficiently articulate. Within Kenya we see that salience of local race relations and the methodologies of economic liaison within Kenya's specific political economy as crucial to shaping the investment climate. Capital is entering the country on certain roads, for better or worse, and factors such as ‘diaspora’ could actually partially undermine India's supposed advantages of historical conviviality with Kenyan ‘gatekeepers’ relative to other aspirant partners. Hopefully, future work will similarly disaggregate specific African contexts to complement more panoramic discussions of twenty-first century dynamism in the developing world.