Asia Africa Growth Corridor (AAGC)

  • Asia Africa Growth Corridor (AAGC)
  • Emergence of Idea: during the joint declaration issued by Prime Minister Narendra Modi and Prime Minister Shinzo Abe in November 2016
Asia Africa Growth Corridor:
  • The AAGC envisages a people-centric sustainable growth strategy
  • The AAGC is an economic cooperation agreement between the governments of India and Japan
  • It engages various stakeholders- governments, firms, think tanks and civil society
  • It would be raised on the four pillars of
  • Development and cooperation projects,
  • Quality infrastructure and institutional connectivity,
  • Enhancing capacities and skills, and
  • People-to-people partnership
  • The strengths of AAGC will be aligned with the development priorities of different countries and sub-regions of Asia and Africa
  • AAGC-led growth in Africa and Asia will be responsive to the collective commitment to Sustainable Development Goals (SDGs)
Trade Facilitation:
  • In a study conducted by the European Commission, it is found that the time taken for export and import activities is among the highest in Africa (excluding the northern region)
  • Moreover, the documents required to export and import are also on the higher side in Africa
  • According to OECD trade facilitation indicators, Asia and Sub-Saharan Africa are below the best practices
  • However, achieving the desired level of trade facilitation is a challenging task for Africa and Asia because of lack of technical know-how and skills
India’s role:
  • India has already made efforts through various initiatives to develop capabilities in other countries in Asia and Africa in the past
  • Although many of them are not fully developed due to paucity of resources
  • But we can re-energize such projects/initiatives through AAGC funding that could lead to promotion of imports and exports
  • India must evolve appropriate strategy to meet import and export requirements of partner countries in the medium term
Reasons for low level growth in Africa:
  • The low level of private investment in Africa is withholding high growth
  • Owing to risky projects on long gestation projects, there has been lukewarm response from investors
  • Possible Solution: Private investors may be attracted by using limited state funding using the European Investment Fund (EIF) Model
  • The EIF consists of subsidizing investment, loss protection, capital relief, reduced interest rate, low collateral requirements, lease and guarantee
Way forward:
  • Working closely with the international community, the Asia Africa Growth Corridor will be instrumental in realizing a free and open Indo-Pacific region
  • As a unique process, AAGC takes a multi-stakeholder as well as participatory approach towards development
Related Questions:
  • “Asia Africa Growth Corridor will help in developing institutional mechanisms and models for connecting people, think tanks and businesses” Discuss.



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