Indian companies have been unable to keep up with the rate at which their Brazilian and Chinese counterparts are setting themselves up in Mozambique, a country whose mining resources are piquing the interest of international powerhouses, according to researcher Loro Horta.
In an article published recently in Indian magazine Pragati, entitled The Elephant Stumbles in the Savannah, Horta says that the Indian authorities have been not been able to take advantage of the strength of their private sector, which includes large groups such as Tata and Reliance, preferring unsuccessfully to reproduce Chinas approach.
Mozambiques coal, oil and gas reserves are considered to be significant and, according to the Financial Times, in the near future the country may collect around US$10 billion per year in revenues from natural gas alone.
Trade with China has increased over the last few years from US$285 million in 2007 to US$690 million in 2012 and investments by Chinese companies have increased, the highlight of which was a US$1 billion investment by Wuhan Iron and Steel in the coal sector.
Chinas Kingho plans to invest US$5 billion in the coal sector in Tete province, according to Rádio Moçambique and Chinese state banks plan to offer loans at favourable rates in the amount of US$2.3 billion to build dams.
India on the other hand is struggling to build a strong presence in this emerging resource rich nation, Loro Horta said.
A credit line of US$500 million, announced in 2009, has been used very slowly, and the Mozambican authorities have even called for the release of the funds to be expedited.
Coal India was granted the concession of two coal blocks in Tete province in the same year, but progress has been slow, leading to other requests for licenses being denied by he Mozambican authorities, Horta said.
The project by the Ricon consortium, made up of state groups Rites and Ircon, to rebuild the Sena railroad, with funding from the World Bank, was marred in controversy with allegations of poor quality standards and corruption, leading to a fiasco, he said.
Indian officials cited by Horta explained the difficulties, as compared to China, with the fact that India is a democracy with a separate parliament and civil society, which makes it difficult to approve projects, but the researcher said that Brazil has been more expedite in similar circumstances.
Brazil too is a democracy and Brazilian companies like Vale are well ahead of China and India for Mozambican resources, he said.
The problem, he noted, is that many Indian companies that are having difficulties are state-owned and known for the inefficiency in India, whilst groups such as Reliance or Tata have successfully entered the Latin American market.
In eagerness to catch up with China, India has been emulating its strategy in Africa in the hope that it will bring similar rewards. Perhaps India should look at the success of the Brazilian and Australian companies in Africa, said Horta.
According to Horta, the alternative is to encourage private Indian groups to move into Africa, through trade deals and other arrangements.
The neglect of many African countries by the international powerhouses has allowed China to build an impressive presence in Africa over the last few years, although competition is expected soon to increase in resource rich countries, that are smart enough to attract diverse sources of investment.
While a lot has been said about China and India in Africa, the dragon and the elephant are far from being alone in the savannah. Whether Mozambiques new found wealth will bring prosperity to its people or whether a small elite and foreign interests will prosper remains to be seen, Horta said.
In an article published recently in Indian magazine Pragati, entitled The Elephant Stumbles in the Savannah, Horta says that the Indian authorities have been not been able to take advantage of the strength of their private sector, which includes large groups such as Tata and Reliance, preferring unsuccessfully to reproduce Chinas approach.
Mozambiques coal, oil and gas reserves are considered to be significant and, according to the Financial Times, in the near future the country may collect around US$10 billion per year in revenues from natural gas alone.
Trade with China has increased over the last few years from US$285 million in 2007 to US$690 million in 2012 and investments by Chinese companies have increased, the highlight of which was a US$1 billion investment by Wuhan Iron and Steel in the coal sector.
Chinas Kingho plans to invest US$5 billion in the coal sector in Tete province, according to Rádio Moçambique and Chinese state banks plan to offer loans at favourable rates in the amount of US$2.3 billion to build dams.
India on the other hand is struggling to build a strong presence in this emerging resource rich nation, Loro Horta said.
A credit line of US$500 million, announced in 2009, has been used very slowly, and the Mozambican authorities have even called for the release of the funds to be expedited.
Coal India was granted the concession of two coal blocks in Tete province in the same year, but progress has been slow, leading to other requests for licenses being denied by he Mozambican authorities, Horta said.
The project by the Ricon consortium, made up of state groups Rites and Ircon, to rebuild the Sena railroad, with funding from the World Bank, was marred in controversy with allegations of poor quality standards and corruption, leading to a fiasco, he said.
Indian officials cited by Horta explained the difficulties, as compared to China, with the fact that India is a democracy with a separate parliament and civil society, which makes it difficult to approve projects, but the researcher said that Brazil has been more expedite in similar circumstances.
Brazil too is a democracy and Brazilian companies like Vale are well ahead of China and India for Mozambican resources, he said.
The problem, he noted, is that many Indian companies that are having difficulties are state-owned and known for the inefficiency in India, whilst groups such as Reliance or Tata have successfully entered the Latin American market.
In eagerness to catch up with China, India has been emulating its strategy in Africa in the hope that it will bring similar rewards. Perhaps India should look at the success of the Brazilian and Australian companies in Africa, said Horta.
According to Horta, the alternative is to encourage private Indian groups to move into Africa, through trade deals and other arrangements.
The neglect of many African countries by the international powerhouses has allowed China to build an impressive presence in Africa over the last few years, although competition is expected soon to increase in resource rich countries, that are smart enough to attract diverse sources of investment.
While a lot has been said about China and India in Africa, the dragon and the elephant are far from being alone in the savannah. Whether Mozambiques new found wealth will bring prosperity to its people or whether a small elite and foreign interests will prosper remains to be seen, Horta said.
