No Resting On Oars On Indian Ocean

Our long-time neglect of the maritime economy, in particular of ship-building and ports, will have to be reversed if we have to derive any of the benefits arising from the creation of IOR-ARC. Considering the historic link between the fortunes of peninsular maritime links with the Indian Ocean, little attention has been given to the maritime economy in recent years. Running an inward-looking economic regime from the plains of north India, the Delhi durbar never worried about the decline of shipping and maritime activity. Defence analysts argue that this lack of interest in sea-faring even extends to the neglect of the Navy and the Coast Guard. Many believe India is not adequately equipped to defend its economic and strategic interests in the ocean.

 

Apart from the decline of the ship-building industry, Indian ports have hardly kept pace with modernisation and have lost business to rival ports all along the Indian Ocean rim. The IOR-ARC will mean little if the neglect of ports and shipping continues. There is a real danger of some in the external affairs ministry viewing IOR-ARC as a purely political or strategic initiative. Some might even view it in more narrow terms as yet another smart maneouvre against Pakistan, which is not a member of the core group of seven nations, namely, Australia, India, Kenya, Mauritius, Oman, Singapore and South Africa. After all, the initiative to form IOR-ARC came first from the strategic policy community, which was concerned about India getting left out of all the regional economic groupings, than from Indian business or economic policy-makers. This group was joined by those who worried about Indo-Pakistan bilateral problems dogging India at every international forum and wanted a group where Pakistan couldnt play

its usual games.

It is, therefore, satisfying to note that economics has come to the fore in the launch of IOR-ARC, and bilateral or regional security issues have been set aside, at least for now. The charter of the group adopted at the IOR-ARC ministerial meeting in Mauritius is clear about its priorities and is focussed on those areas of economic co-operation which provide maximum opportunities to develop shared interests and reap mutual benefits including trade facilitation, promotion and liberalisation, investment promotion, scientific and technological exchanges, tourism, development of infrastructure and human resources and movement of natural persons and service providers on a non-discriminatory basis.

At least one reason why the IOR-ARC initiative has taken off is the keen interest shown in the group, apart from India, by Australia and South Africa, since participation of these three countries is vital for the ARCs success. While many others are not yet clear what IOR-ARC is all about and if it can deliver anything at all, no one wants to miss the bus. Hence, the quick entry of another seven, namely Indonesia, Madagascar, Malaysia, Mozambique, Sri Lanka, Tanzania and Yemen. Others knocking on the door include Bangladesh, Iran, Myanmar, Pakistan and Somalia.

There are, without doubt, the sceptics. At two recent seminars on the Indian Ocean region, one organised by the Indira Gandhi Memorial Trust in Mumbai, several Australian and Indian commentators wondered if there was enough cross-country trade and investment possible within the IOR to warrant an ARC. The fact is that in 1994, trade between the 14 members of IOR-ARC was only 9 per cent of their trade with the rest of the world. Intra-region trade accounts for more than three to four times that share in other major trade blocs like the EU and Apec.

Clearly, Australia and many of the South Eats Asian countries are too pre-occupied with the various Pacific groupings to have time for the IOR, though they will make sure they dont miss out on any action, if and when there is. What everyone realises, however, is that the IOR will be an important region of maritime activity with the new engines of growth in East Asia, including China, depending increasingly on Wets Asian oil, and Asia-Europe trade through the IOR continuing to be an important component of global trade.

What can India do to get out of this action? Clearly, a lot. To begin with, it could offer ship-handling facilities at Indian ports. It could take some of the load off Singapore by developing East Coast ports and allowing facilities to be set up in the Andaman and Nicobar islands. The time has come to close down the upstream Calcutta port and to build a new one closer to the sea so that maritime activity can be revived here. The privatisation of cargo handling and construction of new ports all along the coastline is also warranted to speed up the pace of maritime development.

In a paper on the prospects for economic and scientific co-operation within the Indian Ocean region, Prof V R Panchamukhi, director of the Research and Information System for the Non-aligned and Other Developing Countries (RIS), has called for a sectoral approach, in which countries identify areas where greater co-operation is feasible and desirable. Agriculture and rural development, food security, regional joint ventures, S&T missions, and IOR clearance arrangement and entrepreneurship development are some areas he has identified.

The starting point, however, will have to be a change of mindset from viewing the ocean as a boundary to viewing it as a bridge.