David Rasquinha, 50, is one of the Deputy Executive Directors of the Export-Import (Exim) Bank of India who looks after the overseas lines of credit, structure trade finance and corporate finance groups of the Exim bank. David who earned a first class graduate degree in economics from Bombay University with a post graduation qualification in business management from XLRI, Jamshedpur, joined the bank in 1985. David sat down with Capital’s Solomon Bekele at the Addis Ababa Exim bank office. Below are excerpts:
Capital: India is now pushing hard and fast in to the continent of Africa through trade and other investments. How much money has Exim bank put into Africa?
David Rasquinha: In Ethiopia alone we invest USD 700 million and USD four billion in Africa. We have invested in almost every country in Africa except Namibia and Botswana and we hope our hand will reach there soon. We also have invested around USD 550 million in Sudan; in Tanzania close to USD 300 million; in other neighboring countries like Kenya and Djibouti the amount is smaller. There is investment in Senegal, Cameroon, and Democratic Republic of Congo and Central Africa. We have seven overseas offices and three are in Africa: Addis Ababa, Dakar and Johannesburg. We also are in Dubai, London, Singapore and Washington, D.C.
Our job is to finance, facilitate and promote Indian exports. One of the ways we do this is to provide alternative financing solutions and to try and help Indians compete internationally.
Capital: In the figures that you mentioned, Ethiopia has the highest share of your investment from the Eastern part of Africa.
David Rasquinha: Sure, India’s highest investment in the eastern part of Africa is in Ethiopia. Even continent wide Ethiopia is the largest single exposure country.
Capital: Why is Ethiopia attracting so much investment?
David Rasquinha: Ethiopia is a very important country for Africa and for India. It is advancing in many ways in terms of industrialization, in the field of agriculture, especially in floriculture. Plus Ethiopia has a strong and educated work force. Not only us but a lot of international organizations such as the European Union, the headquarters of the African Union and the World Bank are here. There is a consensus in the world that Ethiopia is the major leading country in Africa. Ethiopia is also special for India. We have a long, good relationship with Ethiopia going back for many years. And Ethiopia is one of the gateways for Africa.
Capital: The other emerging Asian power, the Chinese, are also heavily coming. For now they are far ahead of India in their involvement level in Ethiopia. Do you think India will shortly close in on the gap?
David Rasquinha: No, we don’t see this kind of competition or race with China. I mean China is China and India is India. China is doing well. There are lots of differences at the same time. First of all, China is much bigger than India in terms of GDP, in terms of foreign aid, its heavy involvement in Africa is far ahead. We have been a democracy for many years. We are looking at a partnership with African countries. Even in the line of credit, India doesn’t say I am giving money for this and that project. The government of India asks countries saying ‘we would like to work with you’. If the host nation wants to work with a transmission line, or industry we do so. For instance, we work at the transmission line and sugar industry as per the request of the Ethiopian government. In Mozambique they asked us to work on a transmission line, agricultural seed development project. DR Congo wants a cement industry and we work with that. In Tanzania they said we want tractors. It depends what the countries want. We have the capabilities to be involved in many industries. It is not the right for India to force others. That is what we would like to do. We are India and we don’t compare with anyone else.
Capital: India is engaged in the agricultural sector. There is a problem of land grabbing. How do you treat this issue in Africa and in particular in Ethiopia?
David Rasquinha: There are six or seven investments in the agricultural sector. The biggest one is floriculture. Nothing comes back to India from this. These are all exported to Europe and the foreign exchange is coming back to Ethiopia. The investment on the land is only to grow flowers. They do not own the land or they are not trying to grab the land. What the Indian companies will get from this is a small percentage of profit. The employment, the addition for the gross domestic product and the export revenue remain for Ethiopia. Even for the wheat, food grain cultivation project, nothing has been going back to India. It is cultivated for the people of Ethiopia and to export for neighboring countries. As Indians, we are very sensitive to the issue of land. We were ourselves were colonized for many years. We do not want to do the same thing to any other country. We did not fight for our freedom to colonize other countries.
Capital: These days’ big companies are engaged in what they call corporate social responsibilities. This is not known in rural areas in particular in African countries. How far are you engaged to carry out social corporate responsibility?
David Rasquinha: As Exim bank we are not directly involved in this. But there are many Indian companies that are doing this. Our mandate comes from the law passed by the Indian parliament. And our mandate is to assist our export from India. We can not go beyond this. Companies are doing it including those engaged in the agricultural sector. I know some of these companies who are setting up medical facilities and trying to organize schooling facilities. It is part of the development. It is good for the people in that area and it is good for India as well. If people of that area are not happy and not economically satisfied you can’t succeed. Unless people are happy, it will not work.
Capital: How do you respond to people who say that imported machineries from India are not high quality?
David Rasquinha: There are two ways of looking at it. If you look from the government line of credit which has been given, there is a specific arrangement. It is agreed that a minimum of 75 percent has to come from India. That even can be relaxed to 60 percent. There are countries who take only 50 percent. If for instance the Ethiopian government asks to reduce the Indian content, the Indian government can consider. But Exim Bank can’t consider. We do a lot of financing for private companies. When we work with them there is no requirement to import from India. They can purchase from any country they prefer goods. We don’t prescribe for them. For example, there is a blanket project we support in Ethiopia. They can take machinery from India or from anywhere else.
Capital: Do you think you send competitive materials?
David Rasquinha: If I sell steel from India and if it is poor quality why would people buy it? We have to provide really strong and standard materials to win the competition. The materials shouldn’t be expensive. If a bridge is made with a poor quality steel my name is also at stake. It is in my best interest to give good quality materials. So if the steel doesn’t help, it doesn’t benefit me either.
Capital: You have already invested USD 700 million in Ethiopia. Do you expect an increase or decrease to your future investment level?
David Rasquinha: I think we can grow. It is a government to government arrangement. From the government of India’s point of view if the request comes from Ethiopia it is welcome. The government of India will consider it positively. We see potentials from Ethiopia. I don’t see any problem in adding the amount. As for the private sector, they are growing every day.
Capital: When the Indian Prime Minister was here in Addis Ababa, he pledged to support the railway project with over USD 300 million. But the project is not moving fast. What is the problem?
David Rasquinha: Here there is a situation where 83 percent of the project is in Ethiopia while the remaining 17 percent is in Djibouti. So you have the governments of India, Ethiopia and Djibouti that are involved. When you have three governments working together, I think, it takes a little bit time to accelerate a certain project. There was a meeting of engineers in Delhi where representatives of Ethiopia and Djibouti were present. It is a huge project. The entire line of the railway has to be studied and the consultant has to say okay after seeing how much land is flat, how many bridges over the rivers are constructed, how many kilometers of land is unstable, and hence need a deeper foundation, etc. It is a very, very big task. We like things to move fast. But it requires a big engineering work. It is better to take time to do a proper job.
Capital: When do you think it will start?
David Rasquinha: I am sure a railway expert can answer that but what I know for sure is that the Indian side is ready.
Capital: Let me ask one personal question. Is this your first time to come to Ethiopia?
David Rasquinha: I’ve been looking for the chance to come to Ethiopia, and now I’m happy it has finally happened.