The following article was part of The Gateway of India Dialogue 2016 compendium ‘Where Geopolitics meets Business‘. This piece has been published separately.
The Gateway of India Geoeconomic Dialogue will happen on 13-14 February 2017.
Economic diplomacy is the use of aid, trade, and investment policy tools to achieve a geopolitical objective. India’s geoeconomic diplomacy has so far focussed mainly on the use of scholarships, grants, and concessional lines of credit. New Delhi now has the capacity to move beyond those basics by using the strengths of India’s private sector in healthcare. Africa would welcome such an initiative, which will improve the health and thereby the development capabilities of African countries. This will also serve the geopolitical objectives of the Indian state.
A successful initiative in Africa can precede a similar healthcare rollout to other regions with homologation and scale.
The African continent, with a population of 1.1 billion and projected to reach 2.7 billion by 2050,  lags behind most of the world in health indicators. Africans live 11.4 years less than the average world citizen, and 16.8 years less than the average European. 
The gap has widened since the 1980s, when HIV/AIDS impacted the region. Plagues, like those cause by the Ebola virus, have worsened the problem. The maternal and child mortality rates in Africa are more than double the world average.  Sadly, Sub-Saharan Africa accounts for 11% of the world’s population, yet bears 24% of the global disease burden.  Thirty six of the 57 countries around the world, categorised as having critical shortages in healthcare services, are in Africa. 
According to the World Health Organisation, the African continent has about 930 registered hospitals (as of November 2015), compared with 650 registered hospitals in India alone.  A regular supply chain of affordable medicines and pharmaceuticals is also not in place because of limited indigenous production of drugs and scarce medical research facilities.
Aid currently provided by the World Bank and other institutions is often event-driven. For example, the ravages of Ebola were redressed by emergency aid directed at solving the basic disease. Even when multilateral funding is directed towards capacity-building and improvement of Africa’s health sector, it is well below the massive needs of the continent.
What India can do
So what can Indian economic diplomacy do to alleviate this dire condition? Much, much more. And there is an existing, successful base to build on: India’s Pan-African e-Network Project, set up by Telecommunications Consultants India Ltd. (TCIL), with financial support from the government of India. This project provides tele-medicine services by Indian medical specialists through on-line consultation to medical practitioners at the patients’ locations in Africa. These are regularly conducted from super-specialty hospitals from India to various African countries based on need. In addition, regular ‘Continuing Medical Education’ sessions are conducted from 11 Indian super-specialty hospitals on this network.  These inputs have been very well-received by African countries.
In such a context, the private sector has a significant role to play. Large Indian hospital groups like Apollo and Fortis already have an on-ground tertiary hospital presence in countries like the Democratic Republic of Congo, Nigeria, and Tanzania. For example, Dr. Agarwal’s Eye Hospitals are located across Madagascar, Mauritius, Mozambique, Nigeria, Rwanda, Seychelles, Uganda, and Zambia. However, these are isolated corporate initiatives and do not have a unifying strategy or theme. This can, and should, change.
At the third India-Africa Forum Summit in New Delhi in October 2015, where 41 heads of state and government were present, as were officials from 54 African countries, Prime Minister Narendra Modi announced that in addition to the on-going credit programme, India will offer concessional credit of $10 billion over the next five years and increased grant assistance of $600 million.  This will include a $100 million India-Africa Development Fund and a $10 million India-Africa Health Fund. 
This new funding—the $10 million India-Africa Health Fund and the $10 billion concessional credit—can be best deployed in a continent-encompassing ‘Madiba-Mahatma Initiative’ to improve the health and capability of the African people. It is appropriate to name it after two of the greatest Africans and Indians of our Independence eras: Mahatma Gandhi and Nelson Mandela. This initiative was conceived by the Exim bank of India, after detailed consultations with Indian industry.
A new template for the health sector
The initiative can work in the following way:
- The still-to-be utilised $10 million India-Africa Health Fund can be put to work to set up tertiary hospitals in six to eight African cities. To foster local ownership of the concept, New Delhi can consult the African Union to help identify the number and location of these hospitals. This will ensure a wide buy-in from the beneficiary countries and avoid any impression of a solution being thrust upon them. Indian consultancy firms can prepare the initial studies and the detailed project reports for the hospitals.
- However, hospitals cannot function in a vacuum. While the primary and secondary health centres can be the responsibility of the host governments, the proposed hospitals will need to undertake seeding activity by way of nursing colleges and, in due course, by medical colleges. This will help reduce dependency and promote local employment and expertise.
- Indian bilateral assistance is currently in the form of tied aid with a minimum Indian content by way of export of goods and services. It’s important to keep in mind that India is a capital-scarce nation with significant poverty and development challenges of its own. For the immediate future therefore, the practical aspects of economics and politics indicate a continuation of the tied-aid approach. It requires Indian expertise and experience in the areas of hospital design, construction, operation, and maintenance to be of the highest order. Fortunately, this is not difficult to establish.
Indian firms like Larsen & Toubro, Shapoorji Pallonji, and others have a track record in the construction of hospitals (at the high end in the GCC countries, as well as more budget-oriented hospitals in India and other emerging economies). Hospital groups like Apollo, Fortis and others have developed the skills, expertise, processes and vision for JCI certification in India. Twinning India’s hospital construction expertise with its hospital administration expertise will be a focused, win-win approach for the Africa-India bilateral.
- The success of the initiative will depend on an operation and maintenance (O&M) contract with the Indian private sector hospital group. Operating a tertiary hospital is a highly-skilled enterprise requiring professionalism, quality, and adherence to good practices. This cannot be learned overnight and must be evolved and internalised gradually. O&M contracts to Indian hospital groups will keep the Indian private sector interested, and prevent the hospitals from becoming white elephants due to a lack of adequate local expertise in administration, equipment maintenance and upkeep, and operational systems management. The contracts must be limited to three to five years, so that local skills can develop and take over.
Just as the people of Bhutan remember that Indian soldiers built their roads, so also Africans who benefit from treatment at these hospitals will remember that India helped in this healthcare endeavour. The Indian private sector, which already has $35 billion invested  in Africa in areas from consumer items to energy will develop goodwill and brand recognition at no capital cost. At the same time, the Indian government will achieve its strategic goals while attracting the reputed Indian private sector into its economic diplomacy agenda.
David Rasquinha is the Deputy Managing Director of the Export-Import Bank of India.
The Gateway of India Dialogue was co-hosted by Gateway House and the Ministry of External Affairs on 13-14 of June 2016. The 2017 conference, The Gateway of India Geoeconomic Dialogue will be held on 13-14 of February 2017.
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