Trade within IOR-RAC only 25% of Indian Ocean’s total

Tuesday, 8 October 2013 00:33 - - {{hitsCtrl.values.hits}}

‘IOR RAC’s two billion people a huge labour resource’: Rishad at first IOR Summit
‘Immense scope for IORs to diversify the trade basket’: Mauritius PM Dr. Ramgoolam

Trade within the IOR-RAC (Indian Ocean Rim Association for Regional Co-operation) is still low in comparison to many other regional groupings such as EU and NAFTA. “Trade within the IOR-RAC stands around $ 1.1 trillion which is about 25% of the total trade of the region. However, this remains relatively small, when compared with other regional groupings such as the EU and the NAFTA- stands around $ 1.1 trillion which is about 25% of the total trade of the region. However, this remains relatively small, when compared with other regional groupings such as the EU and the NAFTA, whose intra-regional trade stands at about 55% and 52% respectively” said Minister of Industry and Commerce Rishad Bathiudeen on 4 July in Mauritius. Minister Bathiudeen was addressing the first IOR-ARC Economic and Business Conference (EBC) held at Le Meridien, Mauritius. The event was co-hosted by India and Mauritius.

No less than 370 delegates including Ministers, government officials, business persons and entrepreneurs from the 17 IOR-ARC Member States; Australia, Bangladesh, India, Indonesia, Islamic Republic of Iran, Kenya, Madagascar, Malaysia, Mauritius, Mozambique, Sultanate of Oman, Seychelles, Singapore, South Africa, Sri Lanka, Tanzania and United Arab Emirates, took part in the Conference. Also in attendance were the Dialogue Partner States; the People’s Republic of China, France, Japan and the United States of America. The objective of the events were to create a platform for continued engagement and dialogue among the policymakers of the association and to take forward the roadmap that will be developed in consultation with the business community. The theme of the conference was ‘Deepening Economic Linkages for Balanced, Inclusive and Sustainable Growth.’ “The lower level of trade within our region could be attributed to several reasons. They include the nature of economic policies pursued by the member governments, lower level of connectivity between our countries, poor infrastructure, and other similar constraints such as low income levels and lack of trade complementarities. However, with the gradual change in economic policies, particularly with the liberalisation of economies in the region and implementation of PTAs and FTAs, the pattern and composition of trade among the region has been gradually moving from primary commodities to manufactured products. “We all can be happy that the IOR-ARC has been taking initiatives to achieve regional integration through enhanced cooperation among our governments and stronger linkages among our private sector business, who are engaged in agriculture, manufacturing industries and services. “It is very important that we work hard to reap the expected benefits of these initiatives and, thereby, bring our nations closer, both economically and politically. With the progressive liberalisation of economic policies among the IOR-ARC members, I am confident that our region can realise the true potential of a wider economic cooperation as envisaged in our regional objectives. “With a cumulative population of about two billion people, the IOR-ARC is a region, which is blessed with abundant human resources. We need to seek ways and means to employ this huge labour force in an efficient and productive manner, so that our goods and services will be competitive in the global market. “Lower labour costs are one of the key determinants in attracting foreign investments. However, we are fully cognisant of the fact that cheap labour alone would not suffice to attract investment into our region. There are many other factors, which impact on trade and investment, either directly or indirectly. Improved infrastructure facilities such as air, sea and surface transport, modern telecommunication, uninterrupted power and energy, efficient banking and insurance services etc., play an equally important role in influencing investor decisions. “Also, we should not forget the importance of maintaining political and economic stability in our region, both nationally and regionally, if we are to facilitate smooth trade and investment flows in a sustainable manner,” Minister Bathiudeen said. Prime Minister of Mauritius Dr. Navinchandra Ramgoolam, addressing the event said: “The event has come at an opportune time wherein the world is witnessing unprecedented changes and a tectonic shift in the global geo-political and economic landscape. Since most of the member states are experiencing positive growth, the challenge is how to make this growth sustainable and inclusive and, more importantly, how to make the most of the available opportunities through joint and coordinated action. “There is an immense scope among IOR countries for diversifying the trade basket to value added products for achieving more balanced outcomes in trade both global and intra-regional. We acknowledge the tremendous efforts that India has made in last two years and also the significant contribution made to the fight against piracy.”