However, as the blue economy concept narrowly refers to the economic importance of ocean resources and ocean-related sectors in a given economy, it excludes the full breadth of economic activity that takes place in the 28 Indian Ocean economies and could be affected by the knock-on impact of a deterioration in maritime security. More recently, Cordesman and Toukan (2014) comprehensively assessed the key strategic issues facing the Indian Ocean, as well as the implications of these for international politics and the global economy. the site you are agreeing to our use of cookies. Sign in here to access free tools such as favourites and alerts, or to access personal subscriptions, If you have access to journal content via a university, library or employer, sign in here, Research off-campus without worrying about access issues. Find out about Lean Library here, If you have access to journal via a society or associations, read the instructions below. The discrimination is something which depends on community and country discrimination as well. Some MICs also lack the requisite technical knowledge to build institutions for fostering trade-led growth such as world class ports and bodies for negotiating comprehensive free trade agreements (FTAs). For example, the IMF produces a bi-annual World Economic Outlook report as well as several Regional Economic Outlook reports, including for the Asia-Pacific, Sub-Saharan Africa, the Middle East and Central Asia (IMF 2018a, 2018b). Login failed. While some economies are excluded, the World Bank’s Services Trade Restrictiveness Index suggests that services trade barriers in the Indian Ocean economy (36.7) are generally high relative the OECD (19.5), though there are variations between sub-regions and countries (see Table 2 and Figure 8). Focus on the Global South For more information view the SAGE Journals Sharing page. The Indian Ocean region’s economy—henceforth the ‘Indian Ocean economy’—is in the international spotlight. Emphasis is placed on opening markets, eliminating trade barriers a… The EAC seems to be the most vibrant Regional Economic Community (REC) in the Southern hemisphere and is tremendously advancing in its integration process: however, crucial issues remains to be addressed. Sharing links are not available for this article. While there is no agreed definition of this concept (Doyle, 2018, p. 1), environmental sustainability is a central focus. The rest of the world is not discriminated 6. The idea of the blue economy emerged at the United Nations Conference on Sustainable Development held in Rio de Janeiro in 2012 (UNCTAD, 2014, p. 2). The World Bank Group helps its client countries to promote regional integration through common physical and institutional infrastructure. For instance, in 2025 South Asia is likely to account for 12.1 per cent of global GDP, East Asia and the Pacific for 7.1 per cent, and Africa and the Middle East for 2.9 per cent. Despite the numerous efforts by African states to form regional trading blocs, existing Regional Economic Communities (RECs) in Africa have not been successful achieving their intended objectives of poverty reduction and economic development. Advances and Challenges in Regional Integration Jointly organized by Hitotsubashi University and the IMF Regional Office for Asia and the Pacific. Other developments and challenges: looking beyond the Customs Union. However, inter-country comparisons of the quality of port infrastructure are difficult due to measurement problems, statistical gaps and the inherently subjective nature of such evaluations. See, ADB (2010) and Wignaraja (2014). About 35 per cent of the world’s total population live in the Indian Ocean economy, with the majority living the South Asian sub-region (20.9 per cent). Let me mention some of these challenges to contemporary regionalism in Latin America and other parts of the South. RCEP has an open accession clause that means other economies can join the agreement at a later date. A large amount of research in this area is focused on the growing strategic and economic rivalry between India, the largest Indian Ocean littoral state and China (Bastos, 2014; Brewster, 2014; Chaudhury & Basu, 2016), though Mohan (2017) and Mendis (2012) have also considered the strategic importance of the Indian Ocean for Europe and the United States, respectively. However, realising this outlook will depend on tackling several pressing challenges to regional integration, including improving port quality and logistics, lowering barriers to trade and investment, narrowing development gaps, and strengthening the regional economic governance. However, some of the more prominent ones have either not moved beyond a primitive stage, as in the case of SAARC in South Asia, or have been based on neoliberal principles, like ASEAN in Southeast Asia. Political motives, geography, and the uneven distribution of gains trumped the traditional efficiency gains across Africa’s Regional Economic Communities (RECs). Source: Compiled by LKI based on World Economic Forum (2018). As Figure 6 shows, there is considerable variation between Indian Ocean economies in this area too. Posted by admin | Jul 26, 2009 | Alternative Regionalisms, Deglobalisation, Philippines, Trade and Investment, By Akbayan Representative Walden Bello* (Speech at the Conference on “Regional Integration: an Opportunity Presented by the Crisis,” Universidad de Deportes, Asuncion, Paraguay, July 21-22, 2009.). With trade playing a lesser role in economic activity than before, regional growth has also slowed. A growing international relations and security studies literature proceeds along three lines: (a) the geo-political risks that threaten the Indian Ocean’s security and its economic prosperity (Cordesman & Toukan, 2014; Cordner, 2010), (b) the concept of the ‘blue economy’ and the sustainability of natural resources (Mohanty, Dash, Gupta, & Gaur, 2015), and (c) the role of regional institutions in fostering regional cooperation (Dabee & Reddy, 2000; Kelegama, 2002). Deepening of democratic government systems. This video was developed for a Form Four Social Studies Class to discuss the challenges facing the Caribbean Region. 1 States may want to come together for economic reasons or even further to form a political alliance or union. The bulk of NTMs initiated in 2017 were technical barriers to trade (59.9 per cent) and sanitary and phytosanitary measures (32.2 per cent). By Akbayan Representative Walden Bello* (Speech at the Conference on “Regional Integration: an Opportunity Presented by the Crisis,” Universidad de Deportes, Asuncion, Paraguay, July 21-22, 2009.) The RCEP is the only agreement to include three economies which are among the seven biggest economies of the world—China, Japan and India. The EPA negotiations revealed important gaps between political ambitions and economic reality in African regional integration. The second is how to ensure that building complementarity among economies does not reproduce the old, unequal division of labor between stronger and weaker economies. It has given nations the options of cooperation and competition. It includes small island states, such as the Comoros and the Maldives, as well as some of the world’s most populated economies such as India and Indonesia. Daily Trust (Abuja) opinion By Abubakar M. Sambo. A third strand of research examines the possibilities for regional economic cooperation primarily through the IORA, which counts 21 littoral states as members. The period 1960-1980, however, witnessed the emergence of the major regional integration schemes that pushed forward the Continent’s economic integration agenda. He is the author of 15 books, the latest of which is The Food Wars (New York: Verso, 2009). challenges of African regional integration. The global financial crisis has stimulated a broad reassessment of economic integration policies in developed and developing countries alike. History shows that many states across the globe enter into regional agreements for economic purposes. However, this research seems relatively dated. This is the most basic form of economic cooperation. 2. Regional Integration is a process in which neighboring countries enter into an agreement in order to upgrade cooperation through common institutions and rules. Encouragingly, the share of aid to LDCs increased from 37.5 per cent to 50.2 per cent over the same period. The concern for regional cooperation and integration in Africa predates independence. Box MP167 Mount Pleasant Harare, Zimbabwe. In East Asia and the Pacific, intra-sub-regional has fallen slightly from 22.1 per cent to 21 per cent, though based on this indicator, it is still the most integrated sub-region in the Indian Ocean. Trade volumes in the Indian Ocean grew by an annual average of 9.4 per cent from 2000 to 2008, though growth settled at a slower average of 4.8 per cent from 2011 to 2017 after the global financial crisis. Further complicating matters, 52 bilateral investment treaties between countries in the Indian Ocean formalise rules for bilateral investment, as well six additional bilateral FTAs or economic cooperation agreements that contain investment provisions.1515Based on UNCTAD’s international investment agreement database. This paper examines the challenges and prospects of African regional integration with the focus on Southern Africa. Furthermore, RCEP addresses the special needs of less-developed ASEAN economies through early elimination of tariffs on products of interest to them and through the provision of development assistance to narrow development gaps. … However, these competing large-scale initiatives and donor programmes may also present some challenges to recipients, including a lack of coordination between competing donors, differing social and environmental standards, insufficient progress on the domestic regulatory reforms needed to maximise the benefits of new infrastructure and risks to debt sustainability in recipient economies (see Hurley, Morris, & Portelance, 2018; Yoshimatsu, 2017). That said, several risks could tilt the regional economic outlook to the downside, at least in the short term. Similarly, the Indian Ocean economy’s share of global GDP (at purchasing power parity [PPP] exchange rates) is expected to rise from 18.5 per cent to 22.1 per cent between 2017 and 2025. In the wake of its historic anniversary, many have reflected on the Community's past achievements and future prospects. Simply select your manager software from the list below and click on download. Please read and accept the terms and conditions and check the box to generate a sharing link. These divisions are a constraint to economic growth, especially in developing countries. Regional integration has a final non-economic disadvantage. Contact us if you experience any difficulty logging in. Only time will tell whether this is a blip in an upswing growth cycle or a longer lasting change leading to new normal growth. 1Estimated from the World Atlas. The challenges confronting us today cannot be met by either neoliberalism or the old developmentalist model. Example is the West African Gas Pipeline. Overall Indian Ocean container traffic was equivalent to 22 per cent of global container traffic in 2017. Focus more on South-South Trade. After establishing a single market in the early 1990s, the integration culminated in 1999 with the introduction of the euro in initially 11 EU Member States, which were joined by Greece in 2001, and … These regulatory barriers also deter FDI, and add to a range of additional statutory restrictions on FDI in the Indian Ocean economies. Beach sands rich in heavy minerals and offshore placer deposits are actively exploited by bordering countries, particularly India, South Africa, Indonesia, Sri Lanka, and Thailand. This article examines the global rise of the Indian Ocean economy and the challenges to building greater economic linkages within this region. Regional integration refers to the unification of nation states into a larger whole. He goes so far as to call IORA ‘a regional non-starter’ as its members are too diverse and geographically scattered for any meaningful integration to take place. The Indian Ocean has also become of substantial interest to major powers beyond the region and has increasingly become a theatre in which global geo-political rivalries play out. Bellish (2013) estimated that Somali piracy cost the global economy US$ 5.7–6.1 billion in 2012 due to the additional cost of items such as security, insurance and re-rerouting of ships. These are (a) port and customs quality, (b) barriers to trade and investment, (c) development gaps, and (d) nascent regional economic governance. A conscious effort to expand economic and political space as well as the needed instrument to strengthen integration in Africa. Integration timeline West Indies Associated States of Ministers • 1966 to 1981 (Eastern Caribbean Common Market) • Support the Windward and Leeward Islands in their progress towards independence OECS • 1981 to 2010 (Treaty of Basseterre) • Economic integration and cooperation in: external relations, human and social development, and defence Trade has fundamentally shaped the Indian Ocean economy throughout history, but this has been especially true since the turn of the 21st century. This article examines increasing regional economic integration in the Indian Ocean, along with the region’s rising importance in the global economy and outlines the challenges to greater regional integration. Another response, complementary to this, has been to build regional associations or regional blocs. Research has also looked at the specific economic cost of non-traditional security threats in the Indian Ocean, particularly piracy off the coast of Somalia. Note: As share in sub-region’s total trade (%). Dealing with all the challenges facing such a vast region, including issues as diverse as climate change, maritime security threats and poor national governance is beyond the scope of this study. The economic integration in Europe has already quite some history. Meanwhile, the importance of trade within sub-regions has remained largely static. This is linked to the growing importance of trade between sub-regions in the Indian Ocean, rather than deepening integration within these sub-regions (see Figure 3). LKI calculations based on UNCTAD (2018); World Bank (2018c). At a sub-regional level, the quality of ports in South Asia (4.2) and Africa and the Middle East (4.2) are slightly ahead that of East Asia and the Pacific (4.1). For example, the World Bank (2017, p. 6) has defined it as the ‘range of economic sectors and related polices that together determine whether the use of oceanic resources is sustainable’, and Smith-Godfrey (2016, p. 3) suggested an even broader definition where the ‘“Blue Economy” is the sustainable industrialisation of the oceans to the benefit of all.’ In practice, it has generally been measured by combining all sectors of the economy that rely on the ocean directly or indirectly, including the use of ocean resources such as fish and minerals as well as trade and tourism. The details of the activities of these organisations suggest that this network of regional institutions covering the Indian Ocean is at a nascent stage of institutional development compared to those in the Americas or Europe.1111A full assessment of regional organisations in the Indian Ocean is available in Wignaraja Collins, and Kannangara (2018). Our projections suggest that the Indian Ocean economy is likely to play a larger role in the world economy with rising prosperity by 2025. The policy of economic integration is purely commercial, and it takes place in order to make sure that certain trade barriers are reduced in the best way so that some nations can be unified together. Lean Library can solve it. For many of us from outside Latin America, the dynamics of ALBA hold particular interest. Currently, regional integration processes are being adopted through market processes that are independent of the government. Source: Created by the Lakshman Kadirgamar Institute (LKI) using mapchart.net. Regional economic blocs are not new. The third is how to promote a development process that does not reproduce social inequalities at the regional and national levels in the name of capital accumulation. These divisions are a constraint to economic growth, especially in developing countries. Most existing research on the Indian Ocean economy has been conducted through the lens of international relations and strategic studies. This is based on the notion that greater demand for maritime security will trigger increased investment in these security capabilities and therefore drive economic activity. However, the Indian Ocean’s existing hub and spoke network of regional institutions and FTAs could be strengthened. The region is on course to account for around 20 per cent of world GDP in 2025 and its per capita incomes may double to US$ 6,150 between 2017 and 2025. Free trade area. Tel: +66 2 218 7363 A., Alam, M. K. (, Mohanty, S. K., Dash, P., Gupta, A., Gaur, P. (, Pandya, A., Hebert-Burns, R., Kobayashi, J. Regional Integration and Challenges of Africa’s Development 7 V. Regional Economic Communities - The Capacity Challenges 8 VI. Unfortunately, a consistent indicator—the OECD FDI Restrictiveness Index88OECD, FDI Restrictiveness Index. The multiple spokes include several mostly smaller sub-regional institutions that count Indian Ocean economies among their membership. Regional integration helps countries overcome divisions that impede the flow of goods, services, capital, people and ideas. These agreements are usually made between nations with smaller economies in order to promote trade within the region. Available at: http://www.oecd.org/investment/fdiindex.htm, accessed on July 2018. Table 2 provides one such evaluation from the World Economic Forum’s Global Competitiveness report based on a survey of global business leaders’ perceptions and available hard data on ports. The book … Similarly, intra-sub-regional trade in Africa and the Middle East has nudged up from 8.4 per cent to 11.1 per cent of total trade between 2000 and 2017. Source: LKI calculations based on Ad Valorem (2016), UNCTAD (2018), World Bank (2018c). A trade upswing has driven rapid economic growth that has reduced poverty and increased per capita incomes. Regional ... regional integration efforts address multiple challenges at a time. of the world’s total land area, extends a distance of 10,000 kilometres from Southern Africa to Western Australia. It evaluates the challenges and prospects of integration in West Africa. 1. Furthermore, despite IORA only being established in 1997, Kelegama (2002) discusses how the interest of many of the major players was already fading by the early 2000s. The emerging collection of mega-regional infrastructure initiatives—such as China’s Belt and Road Initiative, Japan’s Partnership for Quality Infrastructure, the Africa–Asia Growth Corridor, the EU Investment Plan and Association of South-East Asian Nations’ (ASEAN) Master Plan for Connectivity—and international financial institutions can also facilitate investment in ports and trade facilitation. (, Voyer, M., Schofield, C., Azmi, K., Warner, R., McIlgorm, A., Quirk, G. (, Wignaraja, G., Collins, A., Kannangara, P. (, Wignaraja, G., Tyson, J., Prizzon, A., Velde, D. W. te. LDCs are thought to be vulnerable to economic and environmental shocks and have low levels of human development. New global and regional risks are clouding the region’s economic horizon that are likely to impinge on the near-term economic outlook. One response to this crisis has been to dump export-oriented industrialization and reemphasize the primacy of the national market in sustaining economic growth. Available online: http://investmentpolicyhub.unctad.org/. Significant economic progress over recent decades notwithstanding, development disparities and capacity gaps remain between Indian Ocean economies (see Figure 10). Challenges to regional integration: the case of SADC By Henning Melber∗ At the beginning of the 21st century, Swedish authorities drafted and ultimately adopted (on 27 June 2002) a “Swedish Strategy for Support for Regional and Subregional Development Cooperation in Sub-Saharan Africa” as a framework for the period until 2006. Regional trade arrangements also played a role. One step would be to undertake the appointment of an Eminent Persons Group (EPG) from member states tasked with developing a plan to strengthen IORA’s role in regional economic governance. And while analysis has tended to point to substantial potential for regional cooperation in the Indian Ocean (Dabee & Reddy, 2000), it has also highlighted the major challenges of progressing a regional agenda due to the diversity of the region’s littoral states. It focuses on the strategic risks that threaten the economy’s security and, therefore, could ultimately undermine its economic prosperity. of the earth’s total water and its land area, covering 17.5 per cent22Authors calculations based on data from the Food and Agriculture Organization. Source: LKI calculations based on IMF (2018d). The near-term outlook for the Indian Ocean economy also appears more favourable than the for the world economy as a whole. The authors declared no potential conflicts of interest with respect to the research, authorship and/or publication of this article. Note: Data not available for Comoros, Iran, Somalia and the Maldives. Assessing Regional Integration in Africa II, (ARIA II),Rationalising Regional Economic Communities. These includes gaps in port infrastructure and onerous customs procedures, NTMs, barriers to services trade and restrictions on FDI. Asia’s mega-regional trade agreement—the Regional Comprehensive Economic Partnership (RCEP)—seems a reasonable candidate (Wignaraja, 2018). The EAC seems to be the most vibrant Regional Economic Community (REC) in the Southern hemisphere and is tremendously advancing in its integration process: however, crucial … This will place it in the league of other major players such as China, the USA and the EU. The Indian Ocean Economy’s per capita GDP (current US$) is likely to almost double from US$ 3,200 to US$ 6,150 between 2017 and 2025. Access to society journal content varies across our titles. Tackling these challenges requires a combination of coherent national and regional policy measures. Amidst fiscal constraints, many Indian Ocean economies need to undertake public investment in port development and customs modernisation. I propose these as some of the key questions to guide our discussion of regional integration over the next two days. aspects of the Trade Protocol in some detail, as it is the heart of regional integration and ends with the cooperation between SADC and the International Cooperating Partners. Looking ahead, the Indian Ocean’s economic rise is also susceptible to several challenges that could yet undermine further economic integration and the region’s prosperity. There are four main types of regional economic integration. Regional economic integration has enabled countries to focus on issues that are relevant to their stage of development as well as encourage trade between neighbors. 3According to the 2017 Lloyd’s List Top 100 Container Ports Rankings. But in terms of trade-led growth and the potential for greater regional economic integration, four challenges appear most pressing. Furthermore, while IORA and regional institutions without a trade agreement, promote cooperation on trade facilitation and other forms of technical cooperation, multiple priority areas and limited resources mean the scope of these activities varies significantly. If you have access to a journal via a society or association membership, please browse to your society journal, select an article to view, and follow the instructions in this box. In the Indian Ocean, it takes an average of 65 hours for border compliance (see Table 2). Chulalongkorn University, Phayathai Road If you have the appropriate software installed, you can download article citation data to the citation manager of your choice. Fostering public-private partnerships for port development and better targeting to countries with rising inequality and fragile situations are essential to more effectively utilise scarce external assistance. of the integration process, and the current challenges. 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