The Indian Ocean Rim Association for Regional Cooperation (IOR-ARC) is a group of 18 countries located on the rim of the Indian Ocean. It defines a distinctive area in international politics consisting of coastal states bordering the Indian Ocean. The magnificent diversity in terms of culture, race, religion, economic development, and strategic interests marks the region distinct.

Members

Launched officially in 1997 in Mauritius, the main aim of the association is to facilitate trade and investment in the region. Australia, Bangladesh, India, Indonesia, Iran, Kenya, Madagascar, Malaysia, Mauritius, Mozambique, Oman, Singapore, South Africa, Sri Lanka, Tanzania, Thailand, UAE, and Yemen are the current members of the IOR-ARC. Earlier Seychelles was a member state but it withdrew the membership on 01 July 2003.

Common Platform

The formation of IOR-ARC has provided its member states with a vehicle for cooperative action to remove existing impediments in trade and investment within the IOR region. Many countries in the region have become globally competitive and are developing new capacities that can be jointly harnessed through regional cooperation efforts.

The member countries do vary in the size of their populations, economies, trade, and technological development and in the composition of their GDP. Sub-regions such as Southern and Eastern Africa, the Horn of Africa and the Red Sea, South Asia, Southeast Asia, and Australasia are part of this larger group. The region is home to a number of regional organisations, such as ASEAN, GCC, SAARC, and SADC.

Big Market

The Indian Ocean Rim constitutes nearly a quarter of the world’s population (close to two billion), which makes it a massive market. It is rich in strategic and precious minerals and metals and other natural resources, valuable marine resources ranging from food fisheries to raw material and energy for industries. The region also has abundant agricultural wealth in terms of the variety and mass of arable land and significant human resources and technological capabilities. Many countries of the Rim are becoming globally competitive and developing new capacities, which can be jointly harnessed through regional cooperation efforts.

Strategic Zone

The Indian Ocean is the world’s third largest ocean. It carries half of the world’s container ships, one third of the bulk cargo traffic, and two-thirds of the world’s oil shipments. It is a lifeline of international trade and economy. The region is woven together by trade routes and commands major sea lanes.

Structure

The Secretariat of the association is based in Mauritius and the current Executive Director of the Secretariat is TZA Samsudeen from Sri Lanka. The highest authority of the association is the Council of Ministers (COM), which organises meeting every two years or more often as mutually decided. The COM formulates policy, reviews progress in cooperation, makes decisions on new areas of cooperation, and on the establishment of additional mechanism and other matter of general concern.

The Committee of Senior Officials (CSO) is another key organisation in the association formed by the government officials of the member states. The committee organises meeting as often as mutually decided but at least once a year. It reviews the implementation of decisions taken by the COM in cooperation with other groups like Working Group on Trade and Investment (WGTI), Indian Ocean Rim Business Forum (IORBF), and Indian Ocean Rim Academic Group (IORAG).

Mauritius Initiative

On 29-31 March 1995, the Mauritius Government convened a meeting to discuss the enhancement of economic cooperation among countries of the Indian Ocean Rim. Representatives from the governments, business sectors and academia, from Australia, India, Kenya, Mauritius, Oman, Singapore and South Africa, subsequently referred to as the “core group states” or M-7, attended the meeting.

Objectives Outlined

In another meeting held in September 1996 in Mauritius, the council members finalised a Charter for the creation of IOR-ARC. And membership of the association was expanded to include Indonesia, Malaysia, Sri Lanka, Yemen, Tanzania, Madagascar and Mozambique, which later came to be known as M-14. After adopting the IOR-ARC Charter, the COM determined a number of administrative and procedural matters.

In a joint statement issued at the end of the meeting, the participants declared that they had agreed on “principles of open regionalism and inclusivity of membership, with the objectives of trade liberalisation and promoting trade cooperation. Activities would focus on trade facilitation, promotion and liberalisation, investment promotion and economic cooperation.”

Indian Ocean Tourism Organisation (IOTO) is an observer in the association and China, Egypt, France, Japan and the United Kingdom are main dialogue partners of the IOR-ARC.

Activities of the 18-member bloc include several ongoing topical projects and programmes conducted by the member countries with shared interests. All programmes and projects are implemented under the common umbrella of the association’s working groups WGTI, IORBF, and IORAG.

FDI Destinations

Australia, Malaysia and Singapore are the leading sources of FDI outflows from the IOR-ARC member countries. India, South Africa, Indonesia, and Thailand are emerging as new sources of FDI outflows in the region. Singapore has been the topmost exporter of FDI from the IOR-ARC grouping. FDI outflows from Singapore had risen from the US$652 million in 1980 to a peak level of US$6.2 billion in 1995.

South Africa among the African member countries of the association is the only significant source of outward FDI. With the establishment of the post-apartheid new South Africa since 1994, the country improved its importance in outward FDI to reach US$1.1 billion in 1999.

The key areas where such inflows can be mutually and profitably absorbed are agriculture and agro-processing especially for exports; setting up of small and medium enterprises; tourism; fisheries; labour-intensive manufactures for exports; human resource development, especially for higher education (including science and technology, management, computer education etc.) and most urgently needed upgrading and expansion of infrastructure (power, telecommunications, ports, airports, railways, roads, etc).