The political economy of Indian and Chinese foreign direct investment and multinationals in sub-saharan Africa

Messaris, Byron (2012-03)

Thesis (MA)--Stellenbosch University, 2012.

Thesis

ENGLISH ABSTRACT: Africa’s rising international profile and geopolitical significance as well as the continent’s relatively ‘under-exploited markets’ have been pull factors for many emerging economies. Globally, the developing and emerging economies of the world for the first time captured more than half of all global FDI in 2011. Changes in the global investment regime are a clear indication of the changing dynamics in the global economy. Since India and China’s FDI liberalisation processes began to gather steam in the 1990s, they have been amongst the most aggressive of the emerging economy investors. This study appraises the role of the government in facilitating investment by Indian and Chinese firms abroad, specifically Sub-Saharan Africa. The study analyses the motivations for such outward foreign direct invest flows, the sectoral trends, and the entry mode differences of Indian and Chinese firms’ investments in Sub-Saharan African markets. Yet, there is a lack of studies that focus on both Indian and Chinese investments in Sub-Saharan Africa. Drawing from theoretical constructs from political economy, International business /economics and International Political Economy - a framework is provided to assess the influence of these investments. The methodology is interpretive and qualitative and draws largely on secondary material from international organisations, government agencies, academic literature and the media. The study finds that the role of New Delhi and Beijing in facilitating and financing outward investments is strategic and pragmatic. These policies greatly influence firms, and the locations and types of their investments. South-South cooperation provides India and China with a framework for long-term political and economic investments and development cooperation with African states. India and China’s engagements in Sub-Saharan Africa share similar and dissimilar forms and motivations for FDI. Markets and resources are primary motivations for these two countries’ firms to invest in the region. India and China’s growing commercial activities in Sub-Saharan Africa provide the region with opportunities for further international market integration and development.

AFRIKAANSE OPSOMMING: Afrika se ontluikende internasionale profiel en geopolitieke belang tesame met die vasteland se relatief ‘onderbenutte’ markte is ’n trekfaktor vir baie ontluikende ekonomieë. Terwyl vloeie uit buitelandse direkte investering (BDI) na Afrika, wat ’n hoogtepunt in 2008 bereik het, in 2010 steeds afgeneem het, was die ontwikkelende en ontluikende ekonomieë van die wêreld vir die eerste keer in besit van meer as die helfte van alle wêreldwye BDI in 2011. Veranderings in die internasionale beleggingsregime is ’n duidelike aanduiding van die veranderende dinamika in die wêreldekonomie. Sedert Indië en China se liberaliseringsprosesse met betrekking tot BDI in die 1990’s begin ontwikkel het, is hulle van die aggressiefste beleggers onder opkomende ekonomieë. Die gebrek aan streekstudies wat op Indiese en Chinese beleggings fokus, verg egter verdere aandag. Die doel van die studie is om die rol van die regering in die fasilitering van Indiese en Chinese maatskappye om in die buiteland te belê te ontleed. Die fokus val veral op Afrika suid van die Sahara, en op die motiverings vir hierdie BDI-vloeie, die sektortendense en wyse van toetreding van Indiese en Chinese maatskappye se beleggings in Afrikamarkte. Bestande uit teortiese konstakke uit internasionale sakestudie, internasionale politieke ekonomie en politieke ekonomie, word ‘n raamwerk waarin die invloed van hierdie beleggings op wat assesseer word is interpritiet en kwalitatiet en stan op sekondêre materiaal en data van regeringsagentskappe, akademiese literatuur en die media. Die gebruik van ’n veelsoortige teoretiese raamwerk wat ekonomiese en politieke beleggingsverskynsels uitbeeld, illustreer die versoenbaarheid van politiek, ekonomie en sakegebaseerde akademiese gebiede en die moontlikheid om grondliggende uitkomste uitkomste vir navorsing oor beleggingstendense en -strategieë in ontluikende ekonomieë te bied. Die studie bevind dat die rol van New Delhi en Beijing in die fasilitering en finansiering van buitelandse beleggings strategiese en pragmaties is, en dat beleide maatskappye grootliks beïnvloed ten opsigte van waar hulle belê en watter soort beleggings hulle maak. Verder, verskaf Suid–Suid-samewerking, ‘n raamwerk vir verbintenis langtermyn- politieke en ekonomiese beleggings en ontwikkelingsamewerking met Afrikastate. Indië en China se betrokkenheid in Afrika toon ooreenstemmende en verskillende vorme en motiverings vir BDI, en markte en hulpbronne is primêre motiverings vir hierdie twee lande se maatskappye in die streek te belê.

Please refer to this item in SUNScholar by using the following persistent URL: http://hdl.handle.net/10019.1/20117
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