TMCnet News
My Desire Is for Kenya and India to Grow Together - Varma(AllAfrica Via Acquire Media NewsEdge) Yogeshwar Varma, the Indian High Commissioner to Kenya, arrived in Nairobi in April from Panama. the affable, charismatic electrical and mechanical engineer-turned-diplomat is only one of the top three Indian envoys in the continent. Varma spoke to news editor joseph olweny and deputy business editor james waithaka on india-kenya relations and bilateral trade at his modest office on the second floor of Jeevan Bharati house on Harambee Avenue. Excerpts from the interview: Your career began in 1980 in Tokyo, Japan, and you have worked all over the world save for Africa. Do Indian diplomats look forward to working in Kenya? Nairobi is considered a senior assignment. There are 30 senior postings, this is one of them, and in the whole of Africa there are only three countries where officers of this seniority are sent. That is Nigeria, South Africa and Kenya. Officers in these countries are what we call deputy minister of foreign affairs. It is a very important assignment for India. In 1963 then India Prime Minister Indira Gandhi came for Kenya's Independence celebrations and was back in 1981, after that we haven't had a high level representative of the Indian government in Nairobi. Does that signify something? No. No. No. It's just that both sides have been quite busy in their own respect. In fact, the present Prime Minister Narendra Modi came here in 2008 when he was Chief Minister of Gujarat. He knows Kenya very well and he has a great desire to visit Kenya. This year, there is a visit which is likely to take place by the Kenyan President Uhuru Kenyatta. We have invited him for the India-Africa Forum Summit in Delhi from December 1-5, 2014. The invitations have already been sent and we are awaiting confirmations. We would also welcome President Kenyatta to make a bilateral visit whenever he feels he has time to help strengthen our relations. How do you describe your tour of duty so far both personally and diplomatically? I came in April from Panama and I was in Delhi in March and did consultations with several chambers of commerce and confederation of India industry. I know our trade is expanding in a big way. India is Kenya's largest trade partner. Last year 2013, our trade was $4 billion (Sh340 billion). Kenya's trade last year with China was $3.3 billion (Sh225 billion). Our trade is not very evenly balanced, but we are very keen to promote Kenya exports to India. We look forward to products from Kenya in which Kenya can be a long term supplier. One or two of these categories can be in the export of beans, palsies, lentils and a variety beans like sweat peas. Kenya is fortunate to have plenty of fertile land and good irrigation. Kenya can also export edible oils like corn oil, mustard oil, rape seed oil because we have a big shortfall. We import $20 billion dollars worth of edible oils and $25 billion of beans and palsies and green grams from Malaysia, Indonesia, Mozambique and Argentina. Kenya being close, is a very appropriate case for expanding our trade on a long term basis. What deliberate effort is being made to increase Kenyan exports to India? I am working with the Kenya National Chamber of Commerce and Industry, the Export Promotion Zone and Kenya Association of Manufacturers and Kenya Private Sector Alliance to encourage Kenyan farmers to convert their crop patterns towards commercial production of vegetables I have mentioned. India has a trade deficit of over $100 billion between imports and exports. We import $450 billion goods and export $340 billion goods. In the case of Kenya, there is a surplus in favour of India. There are no negative measures that have been taken. But KNCCI have to do road shows and marketing efforts in India. The High Commission is dedicated to encourage business delegations to meet our chambers of commerce and already I have circulated the importers of edible oils and oil seeds to the KNCCI. The best thing that can happen is a join India-Kenya joint trade committee which meets every year and this year the meeting is going to take place in Delhi and we are waiting for Kenyan government's confirmation so that the minister of trade of Kenya and a business delegation can visit and sign agreements between India and Kenya. Kenya has been hosting thousands of Indian nationals who have become Kenyans. They are a very important bridge between India and Kenya. They import household goods, machinery and building material from India. Indian products are good quality and low cost and are as good as any product from the Western world, but prices are much lower. We have a rising number of medical tourists from Kenya who travel for low cost, but very high quality medical attention. Indian doctors are renown all over the world. We are working to bring some of the important hospitals to set super specialty units in Kenya. We are giving medical visas to Kenyans at very short notice, sometimes same day. If they set up here, patients will not have to travel all the way. The Chinese are into big infrastructure contracts in Kenya. How would you describe India's approach to doing business with Kenya? Indian companies have been working here for quite some time. Top 45 Indian firms are already in Kenya. Kenya has been a great source of business opportunity for the whole of east Africa. Kenya was far-sighted to adopt pro-capital economic growth from independence unlike Tanzania and Ethiopia where socialism was preeminent. Kenyan government has always encouraged private investment. Kenya does not have restriction on profit repatriation and has embraced technology. M-Pesa money transfer is a great success as well as investments into solar energy and geothermal power. Energy generation is happening in a big way. There is encouraging signs of power costs coming down per unit. Government has recently announced that it will be reduced by 20 per cent. Garment industry and making of textiles and fabrics is encouraged. Kenya has also taken advantage of AGOA which has been extended by 15 years. Countries like Bangladesh export $14 billion of textiles to the United States, Kenya being the largest exporter of textiles in Africa exports only $300 million. There is huge potential for growth. The labour is skilled and the wages are low. Indian firms look at Kenya as the most advantageous place to start business then expand to the whole east Africa. We do look forward to expand Kenya's growth and as you mentioned about China, their investments are backed up and supported by their government's soft loans, Indian government is also providing soft loans. We are finalizing a $303 million (Sh25 billion) Arror hydro electric project in the Kerio Valley, about $200 million (Sh17 billion) of geothermal power project in Suswa and also we are negotiating a $100 million (Sh8.5 billion) soft loan to Rivatex for textile machinery. We have just started implementation for three Indian companies who have taken advantage of a $62 million (Sh5.2 billion) line of credit for electric power transmission towers and connectivity. Recently a firm obtained a tender to establish a $52 million oil tanks in Kenya under the open market bidding. We are also pleased with the method of awarding tenders because it is transparent with good checks and balances. Chinese approach to doing business is not the common way or regularly understood norm. They have their usual Chinese government support, but our main incentive or approach is to grow together. We want to do a lot of capacity building in Kenya. We are offering over 100 scholarships to Kenyan students. We are trying to bring Indian professors, about three or four in different subjects, and also get Kenyan medical students who want higher study to go to an Indian university. Every year 55 scholarships are used by Kenyan students. Indian education system is very good, the universities have high level of competence and it is not very expensive, I would welcome more students to study engineering, medicine, IT and humanities We want to encourage India software firms to set up business processing outsourcing in Kenya. Kenyans speak good English and they are smart and the wages are not very high. They meet global market requirements. Kenya government agencies should lead delegations and meet chamber of commerce and computer software firm managers to open up similar facilities in Kenya. In cash terms, how much Kenyan goods does India import? Yes. Last year, it was $127 million (Sh10.7 billion) which is very low. We want to expand this to two billion dollars. Kenya has large mineral resources. Cement can be produced in a big way and exported to India as well as steel. Indian market would welcome Kenyan products. We import gas and oil and machinery and lots of raw material. Kenyan economy can get hooked up with the Indian economy which is going to grow fast and because of the pro-business policy of the new government, we will soon hit eight per cent economy growth. We have the desire to take Kenya with us, as India grows. My request would be to combine and connect Kenyan economy to Indian economy so that both can grow together. You mentioned some of the projects where the Indian government is making plans for soft loans. Please quantify the cash involved in some of the projects? There are about $665 million that we are about to finalise, but we are not sticking to only these. In my meeting with the minister of finance, industrialisation and energy, we said we are open to provide even higher amounts of government to government soft loans from the Indian Exim Bank and many of these would reach a figure once we know the project. We are looking at Lamu-Nairobi electric transmission project, there is Ethiopian border and Suswa electricity transmission project, there is road building between the Maasai Mara and Kisumu. Besides the soft loans, Indian private sector is involved in a big way. Indian companies have invested about $4 billion in Kenya cumulatively. Many of the projects can be done with the help of Indian and Kenyan banks. Exim Bank has its own scheme to lend money to any viable project. Exim has invested $6 billion in Africa, on its own. Kenya and Africa has been growing at average of 6 per cent a year and created a big opportunity. I know an Indian company doing Nairobi-Mombasa power transmission with a loan from Exim Bank. Kenyan commercial banks give 14-15 per cent rate of interest and Exim is much lower depending on the project and its viability. What is the interest rate for these soft loans? The interest is two per cent per a year. Ten years is the duration and there is moratorium or grace period of three years. These are the softest possible, even comparable to the IMF and many other countries. We are looking for good viable projects of priority to the government. India wants to extend as much funds as possible, but we want to do it at the comfort for both Kenya and India, where there is no pressure on the Kenyan project promoters. India is good in medical services and pharmaceuticals, which Kenya imports a lot. Is there is an opportunity for production or assembly of such medical equipment in Kenya? Yes of course. India has seen good growth of production of generic drugs at low cost and the growth of good hospitals. Many do not consider that they can assemble in Kenya, but if the market grows, when hospitals demand supplies, India firms will definitely assemble here. Many India firms like Tata Motors, Infosys, Airtel are already in Kenya. We are working on a plan to provide a soft loan to buy or bring from India 3,000 tractors which is what we discussed with the minister of agriculture Felix Koskei. This is good for Kenya farmers. India firms are looking to set up joint venture in heath care especially tele-medicine or e-medicine via internet. They are very low cost. Kenya has high concentration of mobile telephony for patients who need good consultants for medical advise. Three or four companies already and are in touch with health ministry to find how they can provide service. We have a new system of devolved government. What do you see are some of the big challenges we face in having the devolved system? I understand that Kenyan democracy is of great success and it is a role model in Africa and many countries, but what is happening is that devolution has been brought recently and ones the healthy debate between governors and senators come into a consensus then Kenyans will start getting development. There are new experiences faced by county governments and senators and there is a healthy debate, visible in the media. The debate, hopefully, will lead to a stage where consensus will be built for working in harmony. The bottom line is the people's development and that must happen at a faster speed. After sending troops to Somalia, Kenya has come under heavy terrorist attacks. India has faced a similar security challenge. What can Kenya learn from India? Terrorism is a global menace and threat to humanity and to global peace. It is a major threat to development. It is to be tackled globally in a collective manner. We have tried to raise our own internal security mechanism which is an essential requirement. If a country has a good functioning civil service, policing, intelligence gathering and strong society structure it can help manage well. Often many of the frustrations that lead to terror attacks are because of misled students and youth under ideological misinterpretation and causes unnecessary harm. A comprehensive approach in which economic development in areas affected and strengthening internal system with alert police can deal with the security challenges. There are geopolitical difference in every region, in south Asia we have our own difficulties and east Africa too. I believe collective approach through dialogue and meeting expectations and aspirations of the people is the best way. If Somalia gets support from the region, the challenges will be managed. Comprehensive approach to the grievances through economic liberalisation and education will end violence. Can you share some of the Indian contributions to peacekeeping in Africa? Yes. India has been the largest supplier of peace keeping troops under the UN peace keeping mechanism and many of these Indian peace keepers are now in South Sudan, Sudan and the Democratic Republic of Congo. The best way to resolve a conflict is to reach a stage of negotiations. Indian expatriates pay about Sh200,000 for a work permit, but for the Chinese pay about Sh30,000. Has this come to your attention? Yes. I have come to know about it. But possibly the Chinese low fees is linked to the Chinese government projects. That cost is also included in the Chinese commercial contract. Like I had said before, the way of doing business for China is very different from other countries and companies. India is a private economy and we have highly competitive private sector. In fact two-thirds of India's economy is run by the private sector. But many of China projects are funded by government and perhaps manpower is arranged under such contracts. But Indian firms have to go through normal Kenyan immigration procedures. We would like Kenya and India to smooth out the procedures so that immigration becomes a facilitator rather than an obstacle. India experts come, but do not want permanent stay, they work for two to three years, then go back. How many Kenyan students are on scholarship from the Government of India? About 55 students benefit from scholarships which are given by the government of India. We offer them tuition waiver and stipend, but air travel is to be met by the students. We have 350 university of high standard, we have started some private universities, but admissions in public universities is not easy, they are in high demand. These slots are created in many universities in India with the help of the ministry of foreign affairs. The scholarship programme has been on for the past 50 years. I have met many Kenyans who have fond memories of their stay in India. We welcome Kenyans to take advantage of Indian colleges because they are cheap and of high quality. How many Kenyan students are in India colleges in any given year? I believe it is more than one thousand students. Have you received appeals from county governments for scholarships? I have offered Indian Technical and Economic Corporation scholarships to the county governors and we are open to receiving applications. We will see if the students meet the eligibility requirements because some of the courses can be very intensive and difficult, you need good preparatory knowledge before you can successfully do some of the courses. We do want all the counties to benefit so that everyone has an opportunity. When there is a rape case in India, news channels like the CNN make a big broadcast worldwide. Do such reports worry diplomats like you who are representing India away from home? We are very proud of our democracy, we just come out of the biggest elections in the world in which 515 million people voted, out of 800 million voters. But we know that we have challenges, we have just completed 67 years of independence. We have matured as a great democracy as the ninth largest economy in the world. Social taboos and practices are not easy to do away with, but the best antidote for these social prejudices is education and economic growth. When one segment of society is moving fast economically and the other slower there must be social tension. Green revolution led to growth of agriculture production. We produce 365 million tonnes of grain, world third largest rice exporter, fifth largest wheat exporter, two million tonnes of wheat exported, last year, over three million tonnes of rice exported. In India if you have a smart idea you can have a bank give you seed money. And in industrial production, Indian goods are of higher quality than goods from other parts of the world. We have private water filter firms have reverse osmosis water filter and many are sold in Kenya, I was happy to see five or six brands of filtered water from India. Indian investors are into the Kenyan real estate market. How will India position itself as Kenya starts grow rapidly with the discovery of oil in Turkana and you import lots of crude oil? We will definitely be interested to import from Kenya as Kenya will have surplus. What is the most difficult part of your job? Seeking appointments with high level government officials. You have to wait for long. They are also busy, but in order to bring the two countries together, there should be more interaction with high level decision makers. Copyright The Star. Distributed by AllAfrica Global Media (allAfrica.com). |