Indian Ocean countries largely isolated from major trading blocs
Tentative steps are being taken to strengthen
ties between some of the 18 countries that fall within the area, writes DON ROBERTSON
The report says the IOR countries have largely been isolated from the major trading blocs in Europe and North America and continuous progress to strengthen ties between them will be both time-consuming and bureaucratic.
As a result, the 240-page Reed report is an effort to encourage the private sector to initiate closer co-operation for two-way trade between these countries.
No one has satisfactorily defined which countries might fall within the IOR, but the report defines these as all countries located on the Indian Ocean or served by an Indian Ocean port.
Total population in the area is estimated at l.5-billion people.
Indeed, tentative steps have already been taken to strengthen ties between some of the 18 countries, including South Africa, which might qualify.
For instance, the Indian Ocean Rim Association for Regional Co-operation has been established recently and a number of working groups have developed from this association.
There is also the Indian Ocean Business Forum, and IOR Business Centre, an IOR Chair in Indian Ocean Studies as well as co-operation in standards, accreditation, human resource development and tourism.
In addition, smaller groups such as the Gulf Co-operation Council, the Association of South East Asian Nations and the Southern African Development Community have been formed, but have been of little actual economic importance until recently.
Other countries which would qualify are Mozambique, Tanzania, Kenya, Mauritius, Madagascar, the United Arab Emirates, Oman, Saudi Arabia, Pakistan, India, Sri Lanka, Bangladesh, Thailand, Singapore, Malaysia, Indonesia and Australia.
The report, Business Opportunities in the Indian Ocean Rim, consists of a comprehensive information list detailing each country's trade with other IOR nations, individual business opportunities, likely exports and imports that will be required this year, a list of trade exhibitions and a brief comment on the country.
For instance, India will require mining machinery and equipment worth $480-million this year, Pakistan wants telecommunications equipment worth $258-million, Sri Lanka needs power supply equipment worth $1.8-billion and the United Arab Emirates wants building products worth $1.5-billion.
South Africa has a trade surplus with the IOR countries with imports of $2-billion and exports of $2.7-billion for a two-way trade of $4.7-billion.
The surplus, though, is largely the result of favourable trading conditions with countries in the rest of Africa.
IOR trading, however, represents only 8.6% of South Africa's two-way trade total of R54.8billion.
This percentage, says the report, would increase if the various land-locked countries of Southern Africa were included within the definition of the rim.
"It should be remembered that South Africa's official trade with most of these countries is still relatively new, but is growing rapidly.
"It seems likely that the IOR's share of South Africa's total trade is set to increase."
The untapped market potential of the rim is enormous for South Africa, offering huge and real business opportunities.
It is possible that South Africa's two-way trade with the rim countries could reach 25%, says the report.
"The spin-offs of this ratio for every sector of the economy would be remarkable and the IOR would at last become one of the great trading regions of the world," it says.
Reed Business Information is part of the giant Reed Elsvier plc group in the UK and was formed after the unbundling of the SA Foreign Trade Organisation about two years ago.
It specialises in publishing - Kompass SA - and a variety of trade development research programmes on a commissioned or multi-client basis.