Transfer of technology and “building capacity” in countries that needed them were two themes that came up repeatedly
A free-trade area in the Indian Ocean may be a vision too far, but the big idea to emerge from a two-day regional conference was that economic co-operation in the littoral cannot be inward looking and must become a springboard for connecting with existing trade communities in Asia and Africa for its full potential to be realised.
The Indian Ocean Rim Association for Regional Co-operation (IORARC) has 20 members as diverse and far apart as Iran and Australia. As Commerce and Industries Minister Anand Sharma, who represented India at the conference, put it, the group embraces five distinct regions, and with them distinct regional economic communities — ASEAN in South East Asia, SAARC in South Asia, GCC in the Gulf, SADC and COMESA in southern Africa, to mention just a few.
In keeping with this, the communiqué at the end of IORARC’s first Economic and Business Conference committed the group formally to the concept of “open regionalism”.
That means that while member countries will be encouraged to bring down barriers to doing trade with each other, they can continue to be part of other regional trade groups with different arrangements. In turn, IORARC can leverage this connectivity for engagement with these organisations.
For instance, Mauritius, a founding member of IORARC, and an enthusiastic driver of Indian Ocean economic co-operation, is also a member of COMESA and SADC. Next week, it hosts a trilateral these two organisations and the East African Community.
Several speakers at the conference underlined the potential for connectivity between IORARC and regional economic communities, including Mr. Sharma, Mauritius Prime Minister Navinchandra Ramgoolam and Minister for Foreign Affairs, Trade and Regional Integration Arvin Boollel.
But IORARC is an unwieldy organisation of countries at different levels on the economic development scale. Four of its members are in the LDC category. Though this was a ministerial level conference that also brought together business representatives, several countries were represented only by officials, and several countries were conspicuous for not sending any business delegations.
According to the communiqué, a Work Program in Trade Facilitation has been initiated by member states, through which it is hoped that intra-IORARC trade and commerce will pick up.
Minimising trade barriers
Besides urging members to “minimise” trade barriers to facilitate intra-IORARC trade, it also urged member states to harmonise trade practices in line with international norms.
Some key areas in which the IORARC members hope for co-operation from each other are in tariffs, the food sector, standards, in setting up regional value chains, mining, pharmaceuticals and traditional medicine, and co-ordination among its EXIM banks.
This was the first time that the IORAC was bringing business delegations together and according to Ficci head Naina Lal Kidwai, there were more than 150 B2B (business to business) interactions. The big news of the day was that a Mauritius company tied up a $ 1 m transfer of technology contract with an Indian pharma company in the course of these interactions.
Indeed, transfer of technology and “building capacity” in countries that needed them, were two themes that came up repeatedly.
IORARC also hopes that member-states will soon identify areas in which they co-operate to harness the Indian Ocean’s resources. One of the sectors that was earnestly discussed was energy security. Minister Sharma underlined how the 57,000-km coastline that IORARC countries together could boast, was conducive for harvesting wind energy.
But, as the Mauritius foreign minister pointed out, what was required was uninterrupted energy supply, and there was no better model for this than agreement for supply of petroleum products to Mauritius by India’s Mangalore Petroleum Refineries Limited, which ensured “predictability of supply”. “This is an example of what IORAC can do,” Mr. Boollel said.