Indian Ocean Rim Association: New Developments and China’s Engagement

China International Studies (English) - - Contents - Wei Hong & Li Ciyuan

The IORA, as the most representative multilateral mechanism in the region, features inclusiveness, equality, openness and flexibility. With the advance of the Belt and Road Initiative, China needs to deepen cooperation with the IORA while properly handling various contradictions and challenges.

The Indian Ocean Rim Association (IORA)1 is the most representative multilateral cooperation mechanism covering the Indian Ocean Rim region, and as such has an important impact on the region’s development. With the advance of the Belt and Road Initiative, strengthening ties with the IORA has become an important part of China’s efforts to deepen cooperation with the region. This article discusses the characteristics of the IORA’S development, and puts forward some policy proposals on how China should strengthen cooperation with the IORA.

Developments of the Indian Ocean Rim Association

Since its founding, the IORA has made continuous breakthroughs in the scale of its membership and the areas and mechanism of cooperation. In 2017, the first IORA Leaders’ Summit was held in Jakarta to commemorate the 20th anniversary of the organization. The summit adopted the Jakarta Concord and the IORA Action Plan 2017-2021. Looking back on the 20 years of its history, the IORA has demonstrated the following characteristics.

Inclusive and equality-based membership

With 21 diversified and heterogeneous member countries, the IORA has a rather extensive geographical distribution, which reflects the organization’s high level of inclusiveness.

First, the member countries are different in economic development level and there is a big gap in their comprehensive national strength. Australia, India, South Africa and Indonesia belong to the G20, with relatively strong economy. Energy-producing countries in the Middle East and developed countries such as Australia and Singapore have higher per capita income: the highest per capita income registered among the member countries is nearly 70 times the lowest.

Second, the political systems of the member countries are diversified. There are parliamentary republics, parliamentary monarchies, monarchies and presidential republics – far more diverse than most regional international organizations.

Last, there are great differences among member countries in terms of ethnicity, religion and culture. There are hundreds of ethnic groups in the IORA, all with their own cultures and religious beliefs. Indonesia, Malaysia and some Middle East countries possess majority followers of Islam. Of the African members, Christianity, Islam and traditional religions coexist. India is mainly a Hindu country, while Thailand is predominantly Buddhist.

The IORA provides a platform for all these countries with different comprehensive national strengths and diversified political and cultural backgrounds to speak out, express their interests and demonstrate their stances. Although there are large gaps in national strength and prominent differences in culture, all the mechanisms of the IORA are designed for equality. The Charter of the IORA clearly stipulates that “co-operation within the framework of the Association will be based on respect for the principles of sovereign equality, territorial integrity, political independence, non-interference in internal affairs, peaceful co-existence and mutual benefit; and decisions on all matters and issues and at all levels will be taken on the

basis of consensus.”2 The principle of consensus helps the weak countries express their views effectively and safeguard their own interests, so as to maintain equal status with stronger countries. The Jakarta Concord adopted in 2017 noted that the “historical and cultural bonds among our peoples and the diversity of the peoples in the region … offer vast opportunities to enhance various areas of economic cooperation.”3

Highlighting sustainable socio-economic development

The emergence of the IORA was mainly due to the rise of a large number of regional blocs and the stimulation of economic benefits they had brought about.4 Therefore, the initial position of the association was to promote the free flow of various production factors, such as commodities, technologies and human resources, so as to facilitate regional trade liberalization, strengthen economic ties among member countries and achieve sustained economic growth.

However, with the gradual increase of non-traditional security threats, the IORA has accordingly extended cooperation to the area of non-traditional security. For the first time, the 11th Council of Ministers meeting held in India in 2011 put maritime security-related issues into the agenda, such as counter-piracy, protection of sea route safety and disaster relief.5 The meeting also identified six priority areas of cooperation, namely maritime security, trade and investment facilitation, fishery management, disaster risk management, academic and technological cooperation, and tourism and cultural exchanges, thus greatly expanding the organization’s scope of cooperation. Since then, the IORA has held multiple meetings and seminars, focusing on non-traditional security issues such as terrorism,

piracy, drug smuggling, transnational crime, illegal fishing, climate change and cyber security.6

In addition, the IORA also puts into its agenda issues of women empowerment, blue economy, democracy and good governance.7 Starting from 2014, the IORA has held many seminars on women’s economic empowerment; at the Council of Ministers meeting held in Indonesia in October 2016, the Declaration on Gender Equality and Women’s Economic Empowerment was adopted, reaffirming and stressing women’s important role in regional economic development and social prosperity.8 The blue economy issue has also become one priority of the IORA, with two ministerial meetings and multiple seminars held since 2014. During this period, the Marine Spatial Planning, the Somalia and Yemen Development Program and the Jakarta Declaration on Blue Economy have been successively formulated and adopted.

The expansion of cooperation areas is aimed at promoting inclusiveness, sustainability and balanced development in the Indian Ocean Rim region, and at pushing forward the IORA’S transformation from a simple trade liberalization platform to a multilateral organization that embraces cooperation in terms of economy, security and society.

Combination of openness and flexibility

The IORA is not a closed-off bloc, nor is it bound by strong mechanisms. The organization shows great flexibility and openness in promoting cooperation in various fields.

First, there is no rigid institutional constraint on the realization of

objectives. As the IORA’S main goal, trade liberalization aims to implement non-discriminatory treatment to all member states, promote intra-regional liberalization, gradually reduce tariff barriers in the region, and achieve the goal of zero tariff by 2020.9 However, for the realization of such an objective, there is no fixed agenda by the IORA and no timetable for member states, which shows the organization’s flexibility.

Second, there is no constraint on the accession of new member states or external actions by member states, which shows openness. The IORA has set no conditions for the accession of new members. All countries can apply for membership so long as they are geographically situated in the Indian Ocean Rim and willing to abide by the IORA Charter.10 The IORA members are also free to join other sub-regional organizations in the Indian Ocean Rim. For example, India and Sri Lanka are core members of the South Asian Regional Cooperation Association (SARRC). The United Arab Emirates and Oman are main members in the Gulf Cooperation Council (GCC). Mozambique and Tanzania are members of the Southern African Development Community (SADC).

Third, countries and organizations outside the region are not excluded. The IORA keeps an open attitude toward its dialogue partners, countries outside the region, other international mechanisms and forums, and engages in exchanges and cooperation with different international actors.11 At the same time, the IORA also takes the initiative to enhance interactions with other international organizations. In 2015, the IORA became an observer of the United Nations General Assembly and the African Union, thus further elevating its status in the global arena.12 In the Action Plan 2017-2021, the IORA proposed establishing a cooperative relationship with other regional

bodies such as the African Union and ASEAN.13

Functional cooperation without super-state ambitions

The IORA Charter clearly points out that the goal of the association is to “promote the sustained growth and balanced development of the region and of the Member States, and to create common ground for regional economic co-operation.”14 Therefore, in addition to the Council of Ministers, the Troika, and the Committee of Senior Officials, which provide institutional guarantees for IORA operations, there are also many professional groups within the IORA, such as the Indian Ocean Rim Academic Group, the Indian Ocean Rim Business Forum, the Working Group on Trade and Investment, the Sub-committee of Finance, the IORA Special Fund, the Blue Economy Conference, and various special workshops. These mechanisms focus on specific fields and have become important carriers for the IORA to engage in functional cooperation. For example, the IORA Special Fund, founded in 2004, provides financial support and technical assistance to specific projects and meetings in economic cooperation. The Indian Ocean Rim Academic Group serves as a regional and institutional arrangement and a think-tank in policy analysis, project formulation, information sharing and theoretical research.

The IORA has also set up the Regional Centre for Science and Technology Transfer in Tehran and the Fisheries Support Unit in Muscat. The IORA in its Action Plan 2017-2021 calls for the establishment of following cooperation bodies: a working group on maritime safety and security, a core group for tourism, a working group on the blue economy, and a working group on women’s economic empowerment.15 In addition, the IORA has held a variety of workshops to promote cooperation in all fields. In terms of fisheries management, the IORA held a workshop on seafood products safety and quality, where consensus was reached on practical

measures and information sharing to ensure seafood safety and quality.16 Concerning disaster risk management, the first IORA Water Science and Technology Core Group Workshop was held in South Africa in 2014, where the participants discussed risk assessment and utilization of Indian Ocean marine resources and environmental protection. In 2015, the IORA hosted a workshop on “Exploring Preemptive Disaster Risk Management Measures to Ensuring Human Security,” and carried out an international training on disaster risk management.

Realization of objectives under multiple challenges

After over two decades of development, the IORA has achieved some progress. As of 2014, eight free trade agreements were signed among the member states,17 with an overall rising trend in trade, foreign direct investment, and flow of personnel and services despite ups and downs.18 However, there is a big gap between the desired goals and practice and the actual results achieved so far. For example, the IORA’S objective to achieve zero tariff in the region by 2020 thus far seems overambitious. In fact, since 2011 the proportion of the IORA’S internal trade in the world’s total trade volume has been declining year by year.19 As with blue economy, which is attached importance to by the IORA, more attention has been given to conceptual design, with slow progress achieved in practice.

The diversity and differences among member states, especially the competing perceptions among major members, have brought about multiple challenges to the IORA. India tries to utilize the IORA to enhance its influence and leading role in the Indian Ocean Rim region.

Taking neighborhood as its priority, India actively “goes west” in the Middle East and Africa while pursuing the “Act East” strategy,20 and shows signs of exclusiveness in the IORA. South Africa, out of economic considerations, sees the Indian Ocean as a medium and the IORA as an effective mechanism for connecting Africa, the Middle East and Asia, and intends to build closer economic ties with Asian countries.21 Australia is mainly motivated by ensuring unimpeded maritime passage, maintaining maritime security and exploring new markets. On the other hand, small countries in Africa, with a low level of economic development, obvious internal differences and divergent interest orientations, have difficulty playing a role because of limited practical capacity. As pointed out by Devdasslall Dusoruth, then Director for Regional Cooperation of Mauritius’ Foreign Ministry, the IORA is confronted with the adverse factor of geographical vastness and dispersion of members, which hinders the realization of its objectives.22 In addition, due to excessive flexibility and lack of strict binding mechanisms, phased agendas and specific timetables on various objectives, the IORA’S progress in advancing its goals has been slow with limited results.

Foundations and Challenges of CHINA-IORA Cooperation

With the emerging strategic position of the Indian Ocean Rim, the IORA’S importance is on the rise for China to promote the 21st Century Maritime Silk Road and maintain its interests in the Indian Ocean Rim. While there are certain foundations for strengthened CHINA-IORA cooperation at the

present stage, China is also faced with various challenges.

Necessity of strengthened CHINA-IORA cooperation

First of all, from an economic point of view, China has great interests in the Indian Ocean region. The IORA includes almost all countries surrounding the Indian Ocean. With abundant natural resources, human resources and open waters for navigation, the Indian Ocean region has great potential to become a center of world economic and trade activities in the future.23 As a dialogue partner, China has witnessed its trade with the IORA growing year by year. In 2016, the trade volume between China and the IORA reached US$620.48 billion, accounting for 16.8% of China’s total foreign trade.24 With huge economic and energy security interests in the region, it is of vital importance for China to strengthen ties with the IORA and its member states to ensure energy security, keep sea lines of communication unimpeded and expand the international market.

Second, from a security perspective, China shares many concerns with countries in the Indian Ocean region. In its Maritime Cooperation Declaration in 2014, the IORA resolves to “support and strengthen regional cooperation in accordance with universally recognized principles of international law, to address maritime challenges such as illegal unreported and unregulated fishing, piracy, irregular movement of people, marine pollution, drugs trafficking, illegal trafficking in wild life, disasters and climate change.”25 China is also highly concerned about piracy and terrorism in the Indian Ocean and seeks to safeguard the passage of Chinese vessels in the region and create a favorable environment for advancing the 21st Century Maritime Silk Road.

Third, cooperation with the IORA helps China establish the image of a responsible major country. With the development of the 21st Century

Maritime Silk Road, China’s cooperation with countries along the Indian Ocean has brought about misunderstandings from some. The “China threat” rhetoric is again on the rise. In the opinion of a foreign scholar, “Although China has long claimed that its interests in the Indian Ocean region are purely economic, it’s increasingly clear that the MSR (Maritime Silk Road) could have a major impact on the strategic balance in the Bay (of Bengal).”26 This perspective, to a certain extent, reflects the fear about China’s entry into the Indian Ocean. Given this, China has been strengthening cooperation with the IORA in the spirit of win-win outcomes, to expose and clarify the distorted reports and negative voices, and shape the image of a responsible major power with practical actions.

Foundations for CHINA-IORA cooperation

There are certain foundations for China’s cooperation with the IORA. First, rich experience in cooperation. China has been actively participating in various IORA activities since it became a dialogue partner in 2001. China has attended all Council of Ministers meetings from the 3rd to the 17th and has been continuously expanding cooperation with the organization. During the 14th Council of Ministers meeting in 2014, a memorandum of understanding on establishing the Coordination Center for Desalination Technologies was signed between the IORA Regional Centre for Science and Technology Transfer and the Tianjin-based Institution of Seawater Desalination and Multipurpose Utilization under the State Ocean Administration. In May 2015, the Coordination Center was launched in Tianjin, and the first International Expert Meeting / Workshop on Desalination Technologies was held under the IORA framework. In July 2016, China successfully hosted the second IORA Blue Economy Core Group Workshop. China expressed its willingness to carry out cooperation with the IORA in blue economy to meet each other’s needs, and achieve shared development with mutual benefits. The workshop was the first such

meeting co-held by a dialogue partner and the IORA, thus playing a guiding and exemplary role in this respect.27

Second, similar cooperation concepts. The principle of consensusbased, embraced by the IORA, embodies the spirit and value of equality and consultation. This is similar to the concept of “wide consultation, joint contribution and shared benefits” reflected in China’s initiative of the 21st Century Maritime Silk Road. Similar values, concepts and openness help China deepen its cooperative relations with the IORA, and make the IORA an effective platform for China to promote the joint building of the 21st Century Maritime Silk Road.

Last, suitable cooperation fields. The IORA lists maritime security, trade and investment facilitation, fisheries management, disaster risk management, academic and scientific cooperation, blue economy, tourism and cultural exchanges as its development priorities, while the China-initiated 21st Century Maritime Silk Road focuses on infrastructure construction, marine economy, people-to-people and cultural exchanges, and trade liberalization. The many similarities shared by the two enable China to strengthen cooperation with the IORA.

Challenges facing CHINA-IORA cooperation

First, the pluralism of IORA member states presents a high demand for China to strengthen relations with different members. The IORA member states show a huge diversity in language, culture, religion, economic level and development pattern. They also have different strategic positions in the region and within the international community. It is crucial that China properly handle its relationships with different member states.

Second, India remains wary of China. As the concept of “Indo-pacific” emerges and becomes part of international strategic discourse in recent years,

the Indian Ocean’s strategic importance has continuously grown, and India has been increasing its strategic investment in the region. The Narendra Modi government, in particular, has paid more attention to the Indian Ocean, making India’s intention to play a leading role in the IORA all the more obvious. The proactive activities in the IORA indicate that India, as a core member, tries to lead the agenda setting and utilize the organization as a platform to implement its national strategy, so as to further expand its leading role in the IORA and increase its influence in the Indian Ocean region. Moreover, some in India hold the view that the direct strategic intention of China’s 21st Century Maritime Silk Road is to counterbalance the United States and challenge India’s dominance in the Indian Ocean by boosting influence in the Indian Ocean, so it can establish regional hegemony.28 Therefore, India is keeping a watchful eye on China’s activities in the Indian Ocean. China enhancing its ties with the IORA will naturally put India on high alert.

Finally, some other major powers also hold negative perceptions of China. For example, some in Indonesia think that the 21st Century Maritime Silk Road is a manifestation of neo-colonialism.29 Australia has also been concerned about China’s actions in the Indian Ocean. In the face of domestic controversies over China’s Maritime Silk Road, the Australian government has remained an equivocal position. On one hand, it has common interests with China in terms of trade, investment and technology. On the other, almost all Australian strategists agree that it should remain vigilant about China’s military modernization.30 Therefore, China, while stepping up cooperation with the IORA and advancing the 21st Century Maritime Silk Road, must cope with the mistrust and vigilance of major

regional countries.

China’s Cooperation Strategy

In order to maintain and expand its interests in the Indian Ocean region, China needs to deepen cooperation with the IORA while properly handling various contradictions and challenges.

Offering Chinese wisdom and solution

The IORA has repeatedly stressed its willingness to strengthen cooperation and exchanges with dialogue partners in the priority development areas, believing that participation of dialogue partners in the construction of the organization is of great importance. China, as a dialogue partner, is able to offer advice on specific issues of concern to the IORA. China has proposed the concept of a community with a shared future for mankind, which could help break through the dilemma in IORA cooperation and promote regional common development.

At the same time, the China-initiated concept of common, comprehensive, cooperative and sustainable security has guiding significance for security governance in the Indian Ocean region. It could provide a Chinese solution to non-traditional security issues such as navigation safety, maritime crime and environmental protection.

Synergy of Maritime Silk Road and IORA cooperation areas

The IORA’S priority cooperation areas have much in common with China’s 21st Century Maritime Silk Road. As indicated by Director of the IORA Secretariat Firdaus Dahlan, both China and IORA member states attach great importance to the economic opportunities brought by the sea. The China-initiated 21st Century Maritime Silk Road and the Ioraproposed Master Plan on the Blue Economy are closely connected.31 As

Chinese President Xi Jinping has stressed, “To develop the Belt and Road is not to replace existing mechanisms or initiatives for regional cooperation. Much to the contrary, we will build on the existing basis to help countries align their development strategies and form complementarity.”32 Cooperation between China and the IORA can be synergized in two aspects.

First, strengthening cooperation with the IORA in maritime connectivity. The IORA, in its Sustainable Development Program, clearly proposed that member states should promote sharing of information and knowledge and exchange of experience in port services and management, as well as shipping and port logistics for improved maritime connectivity in the Indian Ocean Rim region.33 Therefore, maritime connectivity can be an important cooperation field which is of common interests to both China and the IORA. The cooperation can thus focus on those closely relevant areas such as marine trade, seaport construction and maritime shipping.

The second aspect is to strengthen cooperation on sustainable development. Most IORA member states are backward in economic and technological development, with poor management. China can cooperate with these countries and provide technical support in the area of sustainable social development, which is also a focus area of the IORA. At present, China and some IORA member states have established a number of research bodies in fisheries management and disaster risk management, such as the China-indonesia Center for Ocean and Climate, the Chinathailand Joint Laboratory for Climate and Marine Ecosystem, and the China–sri Lanka Coastal and Marine Joint Research and Development Center. China needs to step up cooperation with more IORA member states in order to promote sustainable development in the Indian Ocean

Rim region.

Differentiated cooperation with IORA members

Due to heterogeneity among the IORA member states, China, while carrying out cooperation, should take into full consideration different national conditions, social context and business environment, and pursue diverse policies and engage in differentiated cooperation with the countries concerned.

As core countries in the IORA, India, Australia, South Africa and Indonesia enjoy greater discourse and influence in the IORA as well as in the Indian Ocean region. China can intensify cooperation with these countries in strategic coordination, maritime connectivity, maritime security, and economic and trade relations. To be specific, China and Indonesia can carry out in-depth dialogues on synergy of China’s 21st Century Maritime Silk Road and Indonesia’s Global Maritime Fulcrum. China and Australia can enhance communication and coordination in political, economic and financial fields as well as in regional maritime security. Cooperation with South Africa can focus on mineral energy, investment, technology and economic ties.

Most IORA member states are small and medium-sized countries with less developed economies. For China to carry out cooperation with these countries, a deep understanding of these countries’ specific needs and development goals is necessary, to make economic cooperation more targeted. For example, tourism is very important for the economies of Mauritius, Madagascar and Seychelles. Revenues from the industry account for 21% and 11% of the total national income of Seychelles and Mauritius respectively.34 Therefore, China can focus on people-to-people cultural exchanges and tourism development, and promote relevant infrastructure construction and sustainable development in these countries. On the other hand, countries such as Kenya, Mozambique and Tanzania urgently hope

to shake off economic backwardness and achieve national industrialization. China can focus on industrial infrastructure construction, technological development and financing of specific projects in cooperation with these countries.

Participation in and innovation of IORA mechanisms

Mechanisms guarantee cooperation. China needs to actively participate in various cooperation mechanisms of the IORA, and on this basis branch out into new mechanisms to realize mutual benefits.

First, China should take an active part in Council of Ministers meetings, professional workshops and other exchange activities held by the IORA. For example, the IORA’S Indian Ocean Dialogue is a Track 1.5 discussion involving scholars, experts, analysts, and policy makers from governments, think tanks and civil societies on a number of crucial strategic issues of the Indian Ocean Region.35 This dialogue provides another way for China to participate in the IORA. At the same time, the IORA has launched a sustainable development program with the aim of strengthening regional cooperation and deepening partnership between member states and dialogue partners.36 China should take advantage of these opportunities to further its relations with the IORA.

Second, China should take the initiative to create new cooperation models. So far, China’s cooperation with Southeast Asian and Central and Eastern European countries have been institutionalized, reflected in CHINA-ASEAN “10+1” and China-cee “16+1” mechanisms. China can summarize relevant experience and construct a new multilateral cooperation model between China and the IORA. For example, the two sides can establish a CHINA-IORA “21+1” mechanism to strengthen cooperation and coordination of interests in the region. At the same time, cooperation between China and the IORA should not be confined to the economic

field and can be expanded to security. China can push forward maritime security cooperation, such as setting up a mechanism on fighting piracy and maritime crimes, and establishing a maritime disaster risk information and emergency system.

Properly handling relations with India

India intends to dominate the IORA affairs, and is on high alert to China’s increasing cooperation with the organization. Therefore, properly handling the relationship with India is essential for China to strengthen its interaction and cooperation with the IORA.

China should fully utilize the IORA platform to promote strategic coordination and maritime cooperation with India. In addition to mechanisms such as the G20 and BRICS, the IORA provides a favorable platform for the two countries to step up communication. On one hand, China needs to strengthen coordination with India in regional strategy and work to synergize the 21st Century Maritime Silk Road with India’s Project Mausam.37 On the other hand, concerning the IORA’S proposed maritime cooperation, since India lags behind China in capacity of maritime infrastructure construction,38 China can give full play to its capabilities and technological advantages in this area, and advance cooperation with India in ship building, port construction, sea water treatment and application, and maritime equipment manufacturing. More efforts should be made by China to enhance mutual trust and dispel misgivings. More frequent political visits and people-to-people cultural exchanges can help deepen mutual understanding, reduce suspicion and boost mutual trust, thus consolidating the cooperation basis between the two countries and between China and the IORA.

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