The Indian Ocean Rim Association for Regional Cooperation (IOR-ARC) is yet to exploit full potential of intra-region trade and investment, said Minister for Commerce and Industry Anand Sharma.
This was mainly because of lack of a formal platform for doing business, insufficient infrastructure, scant information sharing, and lack of proper logistics.
A similar view was voiced by other member countries as well at the IOR-ARC Economic and Business Conference in Port Louis, Mauritius on Thursday.
“Despite the establishment of a Working Group on Trade and Investment, not much progress has been made for achieving substantial outcomes based on the promise that this region holds out and the potential that has largely remained unharnessed,” the Minister said while addressing the session on ‘Enhancing Trade and Investment in the IOR-ARC Region’.
The fact that this region as a whole managed to maintain a trade surplus in most years of the last decade even when the economies elsewhere were hit by subdued global demand and contracting growth in the West is an indication of growth prospects, he said.
“We have identified the key areas and our business leaders are keen to take it forward,” Sharma stated.
The Minister pushed for exploring institutionalised mechanisms for building regional cooperation for trade and investment, as in other regional groupings like the ASEAN, SAARC, COMESA, GCC and SACU.
“It is important to take forward the momentum of our pan-Indian ocean regional cooperation to the next logical level by creating an institutionalised mechanism for an interaction of our businesses by defining areas of cooperation,” he added.
The two-day conference proposes to bring together the Ministers of Commerce and Industry of the 20 IOR-ARC Member States – Australia, Bangladesh, Comoros, India, Indonesia, Iran, Kenya, Madagascar, Malaysia, Mauritius, Mozambique, Oman, Seychelles, Singapore, South Africa, Sri Lanka, Tanzania, Thailand, United Arab Emirates and Yemen – and the six Dialogue Partner States (China, Egypt, France, Japan, the UK and the US).
Some of the issues raised by the industry and other member countries included peak tariffs, trade concentration, close coordination between the Exim Banks of the region, and absence of clearance mechanism for conducting trade in local currencies.
On tariff rates, Naina Lal Kidwai, President of FICCI, said, “We see that while average tariffs have come down over time, businesses still have to deal with peak tariffs and diverse trade policy regimes within member states.”
(The correspondent is on a trip sponsored by Mauritius Tourism Promotion Authority)