Indian Ocean Rim Association for Regional Cooperation (IOR-ARC)

Indian Ocean Rim Business Centre: jbc@bol.net.in

Office in South Africa:

The IOR-ARC has no Office in South Africa. The Focal Points representing the three tiers of the Association in South Africa are:

National Focal Point: Dr A Sooklal, Deputy Director General, Branch Asia and the Middle East, Department of Foreign Affairs, Private bag X152, Pretoria, 0001.
Academic Focal Point: Dr J Mare: Fax: +27 12 665 1842,E-mail. jhemare@worldonline.co.za
Business Focal Point: Mr James Lennox, South African Chamber of Business, PO Box 213, Saxonworld 2132.
History and Present Status

The IOR-ARC was launched in Mauritius on 6-7 March 1997.

Members are Australia, Bangladesh, India, Indonesia, Iran, Kenya, Madagascar, Malaysia, Mauritius, Mozambique, Oman, Singapore, South Africa, Sri Lanka, Tanzania, Thailand, the United Arab Emirates, and Yemen. The Seychelles announced its withdrawal from the Association in July 2003.

China, Egypt, France, Japan, and the United Kingdom are dialogue partners of the IOR-ARC. At present, only the Indian Ocean Tourism Organisation (IOTO) has observer status.

The Indian Ocean Rim defines a distinctive area in international politics consisting of coastal states bordering the Indian Ocean. It is a region of much diversity, in culture, race, religion, economic development, and strategic interests. The countries vary in the size of their populations, economies, trade, and technological development and in the composition of their GDP. A number of sub-regions are evident, for example Southern and Eastern Africa, the Horn of Africa and the Red Sea, South Asia, Southeast Asia, and Australasia. It also includes a number of regional organisations, such as ASEAN, GCC, SAARC, and SADEC.

For many centuries, the countries, economies and peoples of the Indian Ocean have been bound together in an informal cooperative economic community. Traders, seamen, fishermen, and pilgrims traversed the Indian Ocean and its numerous ports, enabling a vibrant trading network to emerge.

After the Second World War, the decolonisation process ended British hegemony in the Indian Ocean. Superpower rivalry in the region escalated due to the strategic importance of the area. The common historical experience of European imperialism had left a lasting impression on the leaders of states in the Indian Ocean region - a sense of shared identity. The rediscovery of the past littoral economic, social and cultural community, of an ocean-centric regional co-operative grouping serving as a bridgehead between Africa, Asia, and Australasia, seemed only natural.

In 1995, during a visit to India, President Nelson Mandela stated that " the natural urge of the facts of history and geography…should broaden itself to include the concept of an Indian Ocean Rim for socio-economic co-operation and other peaceful endeavours." "Recent changes in the international system demand that the countries of the Indian Ocean shall become a single platform."

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, 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 control of the major sea-lanes. The Indian Ocean Rim constitutes between a quarter and a third 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. It has abundant agricultural wealth in terms of the variety and mass of arable land and has significant human resources and technological capabilities. Many countries of the Rim are becoming globally competitive and are developing new capacities, which can be jointly harnessed through regional co-operation efforts.

On 29-31 March 1995, the Mauritius Government convened a meeting to discuss the enhancement of economic co-operation 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. 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 co-operation. Activities would focus on trade facilitation, promotion and liberalisation, investment promotion and economic co-operation."

A tripartite Working Group (government, academic and private sector) met in Mauritius on 15 –17 August of 1995. This meeting decided to create a second track process as complimentary to an inter-governmental movement. A later meeting during September 1996 in Mauritius finalised a Charter for the creation of the IOR-ARC, and expanded the membership to include Indonesia, Malaysia, Sri Lanka, Yemen, Tanzania, Madagascar and Mozambique – known as the M-14.

The IOR-ARC was formally launched at the first Ministerial Meeting in Mauritius on 6 – 7 March 1997. This meeting adopted the IOR-ARC Charter, and determined a number of administrative and procedural matters.

The second biennial Council of Ministers Meeting was held in Maputo, Mozambique in March 1999. This meeting was critical for the future of the IOR-ARC, and Ministers agreed to a realistic, outcomes focused trade and investment agenda based on trade facilitation, trade liberalisation, and economic and technical co-operation. It was agreed to establish a Working Group on Trade and Investment (WGTI). The Ministers also decided to invite Bangladesh, Iran, Seychelles, Thailand and the UAE to join the Association, and to invite Egypt and Japan to participate as dialogue partners.

An extraordinary meeting of the IOR-ARC Ministerial Council took place in Muscat, Oman, in January 2000, designed to formally welcome the new members and dialogue partners in the IOR-ARC. This was also the first time that the WGTI met. At this meeting, the Ministers adopted a trade and investment plan of action, which included agreement to compile compendia on customs regimes, quarantine and food inspection and investment regimes, to be completed before the next Ministerial Meeting in Oman in April 2001. The meeting also approved applications for dialogue partner status from China and the UK.

The third Ministerial Meeting of the IOR-ARC was held in Muscat, Sultanate of Oman, on 7 and 8 April 2001. This Council of Ministers (COM) meeting was immediately preceded by meetings of the Committee of Senior Officials (CSO), the Indian Ocean Rim Academic Group (IORAG), the Indian Ocean Rim Business Forum (IORBF) and the Working Group on Trade and Investment (WGTI). At this meeting France was admitted as a dialogue partner. During its meeting, the COM decided to endorse the recommendation of the CSO to establish a High Level Task Force (HLTF) to study the future direction of the Association, as well as a number of issues that had been hampering the Association in the achievement of its set goals.

The HLTF met on 22-23 October 2001 in Colombo, Sri Lanka, and presented its first report to the CSO meeting in Oman in May 2002. The High Level Task Force Report was considered and commended for approval to the COM. It was agreed that in order to expedite Ministerial approval of the HLTF report, an Extraordinary COM meeting could be held on the margins of UNGA57 in New York in September 2002. However, due to unforeseen circumstances, the New York meeting was not able to approve the Report.

South Africa has been very active in the WGTI, CSO and IORBF – Dr Sooklal serving on both the HLTF and the CSO. South Africa was also a friend of the Rapporteur during the CSO meeting held on 7-8 May 2002 in Muscat, Oman. Together with India, Australia, Kenya, Oman and the Secretariat, South Africa drafted the Report of the CSO that was adopted by all participating IOR member states.

The South African delegation included representatives from the departments of Trade and Industry, Arts, Culture, Science and Technology, the National Ports Authority (NPA) and the South African Chamber of Business (SACOB).
South African representatives participated in all scheduled IOR meetings and committed themselves to a number of IOR-ARC projects in the IOR Business Forum.
The 2003 meetings of the various components of the IOR-ARC were initially scheduled for March-April in Colombo, Sri Lanka, but they had to be postponed because of unexpected international developments. New dates for the meetings will be set by the incoming Chair, Sri Lanka, in consultation with Oman, the current Chair.

PRINCIPLES OF THE IOR-ARC

The Charter declares that the IOR-ARC seeks to build and expand understanding and mutually beneficial co-operation through a consensus based, evolutionary and non-intrusive approach. There are no laws and binding contracts. Compliance with consensus based decision remains without any rigid institutional structure to specify any rules and regulations.

Co-operation is based on principles of sovereignty, equality, territorial integrity, political independence, and non-interference in internal affairs, peaceful coexistence, and mutual benefit.
Membership is open to all sovereign states of the Indian Ocean Rim willing to subscribe to the principles and objectives of the Charter. The IOR-ARC is firmly based on the principle of open regionalism, as encouraged by the WTO.
Decisions on all matters and issues and at all levels, will be taken on the basis of consensus.
The IOR-ARC explicitly excludes bilateral relations and other issues likely to generate controversy and be an impediment to regional co-operation.
Co-operation within the Association does not prejudice the rights and obligations of the member states within the framework of other economic and trade co- operation arrangements and will not apply automatically to member states of the Association. It does not seek to be a substitute for, but to reinforce, be complementary to and consistent with, the bilateral, plurilateral and multilateral rights and obligations of member states.
Within the framework of the Association, member states will pursue measures to promote the achievement of its objectives, and will not take any action likely to prejudice its objectives and activities.
The work programmes of the Association will be undertaken by member states on a voluntary basis.
IOR-ARC OBJECTIVES

The main focus of the IOR-ARC is on economic co-operation and particularly on trade and investment. It is primarily an outward looking forum for economic dialogue and co-operation. The open regionalism of the IOR-ARC has four components:

TRADE LIBERALISATION

Non-discriminatory basis towards members
A 2020 deadline to reduce tariffs to zero for all member countries of the IOR-ARC
TRADE AND INVESTMENT FACILITATION

Sharing of information on trade finance, investment regime, intellectual property, procurement procedures, customs regulations, quarantine requirements, etc.
Harmonisation of standards.
ECONOMIC AND TECHNICAL COOPERATION

Identifying specific areas for economic and technical cooperation.
Building capacity for trade and investment cooperation
TRADE AND INVESTMENT DIALOGUE

Regular meetings of government officials, businessmen, and academics from the member states.
According to the Charter, the objectives of the Association are:

To promote the sustained growth and balanced development of the region and of the Member States and to create common ground for regional economic cooperation;
To focus on those areas of economic cooperation which provide maximum opportunities to develop shared interests and reap mutual benefits. Towards this end, to formulate and implement projects for economic cooperation relating to trade facilitation, promotion and liberalisation; promotion of foreign investment, scientific and technological exchanges, and tourism, movement of natural persons and service providers on a non-discriminatory basis; and development of infrastructure and human resources, as laid down in the Work Programmes of the Association:
To identify other areas of cooperation as may be mutually agreed;
Towards promoting liberalisation, to remove impediments to, and lower barriers towards, freer and enhanced flow of goods, services investment and technology within the region;
To explore all possibilities and avenues for trade liberalisation with a view to augmenting and diversifying trade flows among Member States;
To encourage close interaction of trade and industry, academic institutions, scholars and peoples of the Member States, without discrimination among Member States and without prejudice to obligations under other regional economic and trade cooperation arrangements;
To strengthen cooperation and dialogue among Member States in international fora on global economic issues, and, where desirable, to develop shared strategies and take common positions in the international fora on issues of mutual interest: and
To promote cooperation in development of human resources, particularly through closer linkages among training institutions, universities and other specialised institutions of the Member States.
IOR-ARC STRUCTURE/INSTITUTIONAL MECHANISMS

The IOR-ARC combines officials, business and academics as an integral part of its functioning in a unique tripartite structure. It involves a co-ordinated endeavour of Officials (CSO), Academics (IORAG), and businesspeople (IORBF) of the member countries, ensuring that officials alone will not be responsible for its functioning.

The IORBF and the IORAG have both been actively involved in the consideration, formulation and implementation of the projects in the work programmes of the IOR-ARC, as well as the conceptualisation of the Association itself.

Council of Ministers (COM)

The highest authority of the Association rests with the Council of (Foreign) Ministers (COM), which meets once every two years (or more often as mutually decided). The COM formulates policy, reviews progress on co-operation, makes decisions on new areas of co-operation and on the establishment of additional mechanisms or matters of general interest.

Committee of Senior Officials (CSO)

The Committee of Senior Officials (CSO) is composed of government officials of Member States. It meets as often as mutually decided (but at least once a year). It reviews the implementation of the decisions taken by the COM, and, in co-operation with the IORBF and the IORAG,

Establishes priorities of economic co-operation
Develops, monitors and co-ordinates work programmes
Mobilises resources for financing work programmes.
The CSO submits periodic reports to the COM, and refers policy matters to the COM for its decision.

Indian Ocean Rim Business Forum (IORBF)

The IORBF may meet together with the COM and the CSO, or as often as mutually decided. It interacts with the CSO and the Secretariat in the consideration, formulation, and implementation of the policy and work programmes of the Association. The IORBF may draw upon other non-governmental regional business networks, as necessary.

The IORBF was seen as part of a unique structure, created as an opportunity to build bridges and increase networking between the three tiers within the region.

Indian Ocean Rim Academic Group (IORAG)

The IORAG may meet together with the COM and the CSO, or as often as mutually decided. It interacts with the CSO and the Secretariat in the consideration, formulation, and implementation of the policy and work programmes of the Association. The IORAG may draw upon other non-governmental regional academic networks, as necessary.

The IORAG was seen as part of a unique structure, created as an opportunity to build bridges and increase networking between the three tiers of government, private sector and academia, within the region.

Financial constraints faced by Universities worldwide, have hampered participation by academics in the IORAG. This issue has featured at all the meetings of the IORAG, and they have consistently called on member states to facilitate the participation by members of the academic group.

At the first meeting of the IORAG in March 1997 in Mauritius, the IORAG identified the following projects:

Chair and Associate Fellows in Indian Ocean Studies
Investment Facilitation and Promotion (jointly with the IORBF)
Trade Promotion Programme (jointly with IORBF)
Development, Upgrading and management of Seaports: Maritime Transport Insurance and Re-insurance (jointly with IORBF)
Human Resource Development Cooperation (jointly with IORBF), and
Tourism promotion and Development.
At the second meeting in Mauritius in March 1998, as well as at the third meeting of the IORAG in Mozambique in March 1999, a number of new projects were added to the list. At the fourth meeting of the IORAG in Mozambique in July 2000, the meeting identified a list of impediments, operational matters, and suggestions for consideration by the COM.

The latest meeting of the IORAG took place in Oman in April 2001, immediately preceding the COM meeting, also in Oman. Since then, several academic projects have been proposed by IOR-ARC members, including: "Repair, Rehabilitation and Strengthening of Coastal Reinforced Concrete Structures by Polymeric Materials" (Iran) and "Creation of a Customs Union for the North West of the Indian Ocean" (Iran).

Working Group on Trade and Investment (WGTI)

At the second biennial COM meeting in Mozambique in March 1999, the IOR-ARC Ministers agreed to a realistic, outcomes focused, trade and investment agenda. The basis for this agenda would be trade facilitation, trade liberalisation, and economic and technical cooperation.

In order to proceed with this agenda, the Ministers adopted a resolution for the establishment of a Working Group on Trade and Investment.

The Inaugural meeting of the WGTI took place in Oman in January 2000. A second meeting of the WGTI took place again in Oman in April 2001, immediately prior to the COM meeting of April 2001.

IOR-ARC CO-ORDINATING SECRETARIAT

The IOR-ARC Charter determines that the Secretariat of the association will coordinate, service and monitor the implementation of policy decisions and work programmes, as laid down.

The Secretariat is based in Mauritius. The current Director of the Secretariat is Mr D Dusoruth.

Address: Soreze House, 14, Angus Road,

Vacoas, Republic of Mauritius.

Tel: (230)698 3979/ 0300/697 7046

Fax: (230) 697 5390

E-mail: iorarchq@intnet.mu

Web Site: iornet@intnet.org

IOR-ARC NATIONAL FOCAL POINTS

Each member state of the Association is obliged, in accordance with the Charter, to set up a tripartite National Focal Point for Indian Ocean Rim co-operation, to co-ordinate and advance implementation of its activities and achievement of its objectives.

IOR-ARC MEMBERSHIP

The IOR-ARC is an Indian Ocean Rim Regional Association. All Sovereign States of the Indian Ocean Rim are eligible for membership. To become members, States must adhere to the principles and objectives enshrined in the Charter. Member states can decide on the expansion of membership of the association.

IOR-ARC OBSERVERS

Currently IOR-ARC Observer status is limited to the Indian Ocean Tourism Organisation (IOTO).

IOR-ARC DIALOGUE PARTNERS

Currently China, Egypt, France, Japan and the UK are official dialogue partners of the Association.

An application for dialogue status by Turkey was deferred pending clarity on the issue of criteria for the participation of dialogue partners, which is but one of the issues that was referred to the HLTF for its consideration.

IOR-ARC High Level Task Force

The COM, at its third meeting in Oman in April 2001, endorsed the recommendation of the CSO to establish a High Level Task Force (HLTF) to study the future direction of the Association, as well as a number of issues that had been hampering the Association in the execution of its set goals. The mandate of the HLTF was the following:

The future direction of the IOR-ARC and the strategic plan for the medium term.
The Organisational structure of the co-ordinating Secretariat and rules and procedures for the appointment of the Director and staff.
Funding of the co-ordinating Secretariat.
Other financial arrangements to support the organisation.
To examine the idea for the creation of a "special fund" for the implementation of projects and programmes of the IOR-ARC.
The modalities for interaction between the Member States and the dialogue partners and observers.
The possibility of establishing additional criteria for the granting of dialogue partnership status, if required.
Modalities for greater interaction between the Working Group on Trade and Investment (WGTI), the Indian Ocean Rim Academic Group (IORAG) and the Indian Ocean Rim Business Forum (IORBF).
Modalities for strengthening co-ordination between the Council of Ministers, the Committee of Senior Officials (CSO), the Co-ordinating Secretariat, WGTI, IORAG, and IORBF.
Raising the international profile of the IOR-ARC.
List of on-going projects.
The HLTF met on 22-23 October 2001 in Colombo, Sri Lanka, and presented its first report to the CSO meeting in Oman in May 2002. The report was commended for approval by the COM. It is hoped that the COM will approve the Report during an Extraordinary Meeting at the margins of the 58th Session of the United Nations General Assembly (UNGA58) in September 2003.

SOUTH AFRICA’S INVOLVEMENT IN THE IOR-ARC

Current Status (membership)

South Africa is a member of the core group of states, also known as the M-7, involved in the establishment of the IOR-ARC.

Other South African Departments and Co-operating Organisations

Department of Trade and Industry
Department of Transport
Department of Science and Technology
CSIR
University of Pretoria, Dept. Human Resource Management
University of Durban Westville
National Ports Authority
Relevant Treaties/Protocols

The Charter of the IOR-ARC creates rights and obligations, including financial, for South Africa. The Charter is considered a treaty in terms of the Constitution of the Republic of South Africa (Act no. 108 of 1996), and Parliament has ratified the Charter in terms of Section 231 of the Constitution.

General Comments

In the past few years, many of the countries in the IOR-ARC have made improvements in their economic policies, though they may still differ widely with respect to the policy instruments used and the magnitude of reform. These changes include reductions in tariff rates, removal of exchange controls, implementation of market oriented economic policies, and removal of price controls. These have provided an impetus for intra-regional trade co-operation within the region.

The Indian Ocean Rim contains a number of large and expanding markets, including India and South Africa, which are undergoing steady economic liberalisation and growth. The evolving economic structures of these Indian Ocean countries should drive much of the future trade growth in the region.

There is a large degree of variation in the levels of economic development among the member countries. While Australia and Singapore rank among the high-income category countries of the world, Malaysia, Mauritius, Oman and South Africa are normally classified as middle income countries. The IOR-ARC moreover encompasses a number of low-income countries like Mozambique, Kenya, Madagascar, Tanzania, Sri Lanka, and Yemen. Trade statistics reinforce this view. Close on 77% of average world exports and imports of the IOR-ARC involve Australia, Indonesia, Malaysia, and Singapore. The other countries make up for the remaining percentage.

The IOR-ARC is based on the principles of open regionalism, which is a flexible arrangement that is more member-friendly than other neo-liberal regional arrangements such as preferential trading arrangements, free trade areas, customs unions, common markets, etc. Decisions are made by consensus, and compliance remains without any rigid institutional structure to specify any rules and regulations.

During the past four years the Association has been putting its house in order. It has been dealing with internal issues such as formulating Rules of procedure, an Instrument of Accession for new members, a Headquarters Agreement with the Government of Mauritius, formulating criteria for membership, Dialogue Partner and Observer Status, establishing a Co-ordinating Secretariat and determining its yearly budget. The decision therefore by the COM to appoint a High level Task Force seems most appropriate and timely. The mandate of the HLTF was broad and inclusive of most of the teething problems being experienced by this youthful Regional Association.

South Africa was one of the founding members of the IOR-ARC, and was a signatory to the Charter in March 1997. This was during a time when regionalism had become widespread, and South Africa’s alignment with major trading economies of the South, outside of the Southern African Customs Union (SACU) and the SADC grouping, was an attractive option.

South Africa served on the High Level Task Force, enabling government to make a direct input into the process of re-organisation of the Association at the coalface. In view of the importance for South Africa of ensuring the success of the IOR-ARC, our participation in the HLTF also entails a special responsibility.