The Indian Ocean Rim : what kind of region is in the making?

Louw, Abraham Johannes Petrus (2003-04)

Mini-study project (MBA)--University of Stellenbosch, 2003.

Thesis

ENGLISH ABSTRACT: The processes of regionalism and regionalisation, of which a relatively high level is evident in the Indian Ocean Rim (lOR), that characterise today's global economy offer opportunities for economic growth and development to the mainly developing countries in the Indian Ocean Rim. The lOR has achieved the status of regional society which contributes towards the region actively articulating the interests of the member nations. The lesser-developed countries may well use this developing regionalisation in the lOR to combat its risk of marginalisation in the global order. Great diversity and disparity exist amongst lOR countries on levels of economic development, growth and openness, resulting in few countries achieving the major portion of the region's economic activities. This may complicate the development needs of the nation-states resulting in a low level of development uniformity. Such diversity poses a risk of polarised and unequal investment and development amongst member nations, and ultimately marginalisation in the global order. This does not support economic integration, but calls for economic co-operation to assist with economic development of the lOR. The lOR, as part of the global trading process, comprises a significant portion of the world's trade arising from the region and it presents a large market in the global economy. The lOR is further predominantly developing under the framework and rules of the WTO. Comparing the lOR-ARC with other regional organisations involving main global trading nations, it is evident that in trade volume and economic impact it is not comparable. However, the strategic importance of its energy resources and its locality in particular raises the prominence of the region in the global order. A low level of regional trade exists in the region resulting in the lOR countries being poor candidates for regional integration. However, it is significant to note that intra-regional trade in the lOR has over recent years grown significantly higher than its trade with the world. SA, as hegemon in Southern Africa, may gain development opportunities from its prominence in the lOR. The emerging African Union and NEPAD, however, are expected to receive higher priority amongst political decision makers than the lOR. The country's existing trade focus is with the developed North and it appears that the broader focus in the immediate future will be with mainly non-lOR countries. Variable geometry amongst the nations is common and developments amongst the region's numerous sub-regional groupings are leaning heavily towards economic integration into the future. A high level of institutionalisation has developed out of the role and activities of the lOR-ARC in the region. The IOR-ARC's principle of open regionalism promotes integration. The lOR-ARC, originally aimed at multi-sector cooperation as part of its focus on economic co-operation, is therefore expected to move towards economic integration into the future. When considering a broader perspective, it is evident that the lOR's readiness to embrace economic integration at this point is relatively low. Overall the focus within the lOR although currently focussing on economic cooperation, is expected to move towards economic integration, or neo-functional integration, into the medium to long term.

AFRIKAANSE OPSOMMING: Die prosesse van regionalisme en regionalisasie wat die hedendaagse globale ekonomie kenmerk en hulself manifesteer op relatiewe hoë vlak binne die Indiese Oseaan Randgebied (lOR), bied geleenthede vir ekonomiese groei en ontwikkeling aan die hoofsaaklik ontwikkelende lande in the lOR. Die lOR het die entiteit status van streeks-gemeenskap bereik wat dit in staat stelom by te dra om die lidlande se belange te artikuleer. Die minder-ontwikkelde lande mag egter hierdie ontwikkelende regionalisasie uitsluitlik gebruik om hul risiko tot marginalisasie in die globale orde te beperk. Hoë vlakke van diversiteit en dispariteit bestaan tussen die lOR lande in areas van ekonomiese ontwikkeling, groei en toeganklikheid, wat aanleiding gee dat 'n paar lande die oorgrote meerderheid ekonomiese aktiwiteite en bydrae lewer. Hierdie tendens mag egter lidlande se ontwikkelingsbehoeftes kompliseer wat lei tot 'n lae vlak van ontwikkeling-eenvormigheid in die streek. Hierdie diversiteit skep 'n risiko van gepolariseerde en ongelyke investering en ontwikkeling by die lidlande, en gevolglik 'n risiko van globale marginalisasie. Hierdie aspekte ondersteun nie ekonomies integrasie nie, maar eerder ekonomiese samewerking om by te dra tot die ekonomiese ontwikkeling van die lOR. Die lOR, as deel van die globale handelsproses, maak 'n noemenswaardige gedeelte uit van wêreldhandel, met oorsprong in die streek, en die streek bied 'n groot mark binne die globale ekonomie. Die ontwikkeling van die lOR in hierdie aspek vind hoofsaaklik plaas binne die raamwerk en reëls van die Wêreld Handelsorganisasie. 'n Vergelyking tussen die Indiese Oseaan Randgebied Assosiasie vir Ekonomiese Samewerking (lOR-ARC) en ander streeksorganisasies, wat die hoof globale handeldrywende nasies insluit, toon duidelik dat die lOR-ARC in handelsvolume en ekonomiese impak nie vergelykbaar is nie. Die strategiese belangrikheid van die energiebronne en die streeksligging in besonder, verhoog egter die belangrikheid van die streek in die wêreld orde. Die huidige lae streekshandel in die lOR dra daartoe by dat die lOR lande nie sterk kandidate vir streeksintegrasie is nie, alhoewel merkwaardige groei die afgelope jare op intra-streekshandel in die lOR voorgekom het. Sulke groei was aansienlik hoër as groei in lOR handel met die wêreld. SA, as hegemonie in Suider-Afrika, mag baat by ontwikkelingsgeleenthede wat mag uitvloei uit die land se prominensie in die lOR. Die Afrika Unie en NEPAD sal na verwagting egter hoër prioriteit by politieke besluitnemers geniet as die lOR. SA se gevestigde handelsfokus is gemik op die ontwikkelde "Noorde", en dit blyk asof die onmiddelike breër handelsfokus hoofsaaklik op nie-lOR lande gaan mik. Wisselende geometrie is algemeen by lOR lande en verdere verwikkelinge tussen die streek se veelvuldige sub-streeksorganisasies neig sterk na toekomstige ekonomiese integrasie. 'n Hoë vlak van institusionalisering het ontwikkel uit die rol en aktiwiteite van die lOR-ARC in streeksverband. Die lOR-ARC se beginsel van ope regionalisme bevorder integrasie verder. Die verwagting is dat die lOR-ARC, met sy oorsprong in multi-sektor ekonomiese samewerking, in die toekoms gaan beweeg na ekonomiese integrasie. Vanuit In breër perspektief gesien is dit duidelik dat die gereedheid van die lOR om ekonomiese integrasie aan te gryp tans relatief laag is. In die geheel gesien word die lOR, met die huidige fokus op ekonomiese samewerking, verwag om te beweeg na ekonomiese integrasie of neo-funksionele integrasie in die medium tot langtermyn.

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