Opportunities from the Indian Ocean Rim

24th March 2017

By: Riaan de Lange

     

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Well, this certainly is a blast from the past. It was a long time ago. I had just joined the then South African Chamber of Business – on March 1, 1995 – and, within a few days, I was jetting off to Mauritius. I thought that I had hit the big time, and yes, the accommodation was the best business accommodation that I had ever experienced. Even as I think back now, it seems like a dream.

In 1996 (March again) and 1997 (March again), I jetted off to Mauritius again, with the 1997 meeting culminating in the formation of the Indian Ocean Rim Association for Regional Cooperation, or the IOR-ARC, as its members liked to refer to it.

The initiative was put in motion in early 1995, when then President Nelson Mandela, during a visit to India, reportedly said: “The natural urge of the facts of history and geography should broaden itself to include the concept of an Indian Ocean Rim for socioeconomic cooperation and other peaceful endeavours. Recent changes in the international system demand that the countries of the Indian Ocean become a single platform.”

The IOR-ARC, a regional cooperation initiative of the Indian Ocean Rim countries, had as its aim the promotion of economic and technical cooperation. It was the only pan-Indian Ocean grouping that brought together countries from three continents with different sizes, economic strengths and a wide diversity of languages and cultures. It aims to create a platform for trade and socioeconomic and cultural cooperation in the Indian Ocean Rim area, which has a population of about two-billion people.

According to its promotional material, the Indian Ocean Rim is rich in strategic and precious minerals, metals and other natural resources, marine resources and energy, all of which can be sourced from exclusive economic zones, continental shelves and the deep seabed.

The IOR-ARC’s current members are from Southern and Eastern Africa, namely the Comoros, Kenya, Madagascar, Mauritius, Mozambique, Seychelles, South Africa, Somalia and Tanzania; the Gulf, namely Iran, Oman, Yemen and the United Arab Emirates; South Asia, namely Bangladesh, India and Sri Lanka; and the South-Eastern Indian Ocean, namely Australia, Indonesia, Malaysia, Singapore and Thailand. The association is also supported by seven dialogue partners – China, Egypt, France, Germany, Japan, the UK and the US – and has observer status at the United Nations and the African Union.

So, have you heard of the IOR-ARC or has it made any difference to your life? Well, I sincerely doubt it. On March 5, the Presidency announced that President Jacob Zuma had arrived in Jakarta, Indonesia, to attend the association’s Business Forum and Leaders Summit, which was held from March 5 to 7, and to undertake a State visit at the invitation of President Joko Widodo. Zuma was accompanied by International Relations and Cooperation Minister Maite Nkoana-Mashabane, Agriculture, Forestry and Fisheries Minister Senzeni Zokwana and Environmental Affairs Minister Edna Molewa.

Indonesia served as vice chair of the association from 2013 to 2015 and is the current chair. South Africa served as vice chair from 2015 and will assume the chair from October this year to 2019.

The IOR-ARC summit was convened under the theme ‘Strengthening Maritime Cooperation for a Peaceful, Stable and Prosperous Indian Ocean’ to commemorate 20 years of the association’s existence. South Africa and Indonesia are both founding members of the association, which comprises 21 coastal member States bordering the Indian Ocean.

The Presidency states: “The Indian Ocean region is home to nearly one-third of the world’s population and is of great economic significance, due to its strategic location. Half the world’s trade travels through this region. In addition, the ocean that binds the Rim together possesses a variety of natural resources that are vital for the wellbeing of its inhabitants, safe trade and environmental stability. The [association’s] vast coastline holds two-thirds of the world’s oil reserves, carries half of the world’s container ships and one-third of the bulk cargo traffic and produces goods and services worth over $1-trillion, with intra-IOR-ARC trade amounting to some $777-billion.”

It is understood that Zuma used the opportunity to promote stronger economic cooperation among the IOR-ARC countries. South Africa also wishes to see enhanced interaction between the Southern African Development Community and the Association of South Eastern Asian Nations, to which many IOR-ARC member countries belong, in order to advance greater South-South cooperation, as was envisaged during the Bandung Conference in 1955, from which the Non-Aligned Movement emerged.

According to the Presidency, during the State visit, Zuma promoted stronger ties with Indonesia in business, trade and investment, and also promoted South Africa as a viable destination for Indonesian tourists, business and investment.

The President also promoted investment in the country’s ocean economy – in key areas such as marine transport and manufacturing, offshore oil and gas exploration and aquaculture – agroprocessing, mining and mineral beneficiation, renewable energy, finance and tourism.

According to the Presidency, South Africa’s major exports to Indonesia include chemical wood pulp, ferrous waste, iron-ore, aluminium, apples, pears and mechanical appliances. Indonesia’s main exports to South Africa include palm oil, rubber, coconut oil, automotives, original-equipment components, ceramic wares, chemicals and footwear. In recent times, South African companies have explored opportunities for investment in Indonesia. These include petrochemicals giant Sasol, Old Mutual, Sanlam, Denel and the Paramount group.

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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