Nations in the vast littoral are seeking to harness common stakes to enhance ties
Seeking to leverage the growing strategic importance of the Indian Ocean and give new purpose to their 15-year-old regional association, countries in its littoral spanning three continents have launched an ambitious effort to find a common economic agenda.
Despite the challenges inherent in this task, ministers, officials and business delegations from the 20 countries of the Indian Ocean Rim Association for Regional Cooperation, who began a two-day meeting in Mauritius on Thursday, were optimistic that their common stakes in the region could lead to successful economic cooperation.
The spirit of what they had set out do was perhaps best captured by Taira Masaaki — Parliamentary Vice Minister for Economy, Trade and Industry in Japan — who is a dialogue partner of the IORARC. He gave the example of his country’s automotive industry working through a supply chain that transcends national borders and promotes integration in its own way.
“The parts and components manufactured in Thailand and Indonesia are assembled in India and Australia and sold in Africa and the Middle East,” Mr. Masaaki said as he highlighted Japan’s interest in the IORARC’s agenda.
The reality checks came from Ficci’s Naina Lal Kidwai, who is leading the Indian business delegation. Tariffs, import restrictions on particular products, and the absence of a clearing mechanism for trade in local currencies, were some of the challenges for increasing trade in the region, she noted.
Ms. Kidwai also spoke about the need to diversify and expand the exports basket for better trading opportunities.
Minister of Commerce and Industry Anand Sharma, who is leading the Indian delegation, spoke of how the balance of world economic growth had shifted from the “North-West axis” to the global south, particularly the Asia-Pacific region.
This put the IORARC countries, with their combined GDP of $6 trillion (in 2011), in an advantageous position to create new pathways of cooperation not only among member-states, but with other regions, for the “shared benefit of economic development”.
Mauritius Prime Minister Navinchandra Ramgoolam, who was a founding member of the IORARC back in 1997, also sounded a note of urgency about the need for the IORARC, whose members range from Australia to countries in Africa and Asia, to take up the challenge.
Pointing to the proliferation of free trade agreements across the world — the trans-Pacific Partnership, and the recent decision by the EU and the United States to negotiate a Trade and Investment Partnership — Mr. Ramgoolam warned of being sidelined by the new economic map of the world.
“Can we afford to be marginalised within the emerging trade and economic configuration that will characterise the 21st century global trade and economic architecture? Of course not. Going on as before is not an option,” he said in his inaugural speech.
The uneasiness among some member-countries about an IORARC free-trade area, as some were already in such agreements with other countries, Mr. Ramgoolam said, should not prevent the group “from exploring the best possible arrangements” to foster trade and investment “in a structured manner and with clear commitment”.
He urged the group to explore the possibility of adopting “a variable geometry approach”.
Mauritius — the co-host of the event along with the IORARC chair India — is particularly keen to position itself as the main platform for the increasing financial investment in Africa. Foreign Minister Arvin Boolell spoke of a proposal to set up trade and investment promotion agencies on the IORARC platform.