Since Ancient times, the Indian Ocean has been a nexus of trade with networks of Asian traders in dhows and sailboats operated between East Africa and India, and from Eastern India to Indonesia. Today, the Indian Ocean has expanded in economic and strategic importance and is flourishing as a new global hub linking Asia, the Middle East and Africa.
Globalisation and technology developments have dramatically changed world economic development, creating challenges and opportunities for IORA countries. Harvard University’s Atlas of Economic Complexity unequivocally highlights the Indian Ocean Basin as being the hottest spot on the planet in terms of where economic and productivity growth is likely to be highest in the coming decade. The latest trade data indicates that countries such as India, Kenya and other Member States of the IORA are leading international markets.
Trade is a driver of growth and sustainable development, promoting inclusive economies by developing inclusive enterprises, empowering small and medium enterprises, creating jobs, providing goods and services, generating income and profits, and contributing to public revenues, which are critical to increasing countries' self-reliance and decent livelihoods. Regional economic cooperation will promote an inclusive and conducive investment climate in line with the United Nations Sustainable Development Goals (open, fair and rule based international trading system). Member States can harmonize trade practices in line with international norms and adopt measures consistent with their WTO obligations to stimulate growth and development.
IORA is a platform that can be leveraged by Member States to build regional value chains and competitive businesses, promoting trade diversification and removing barriers to trade. The region represents a huge market with enormous potential of which most remains untapped. The latest trade and investment data indicates that Member States are developing the region to a leading international market. The combined GDP of IORA Member States is estimated at around $9 trillion and 20% of global exports. Half of world’s container shipments, one-third of the bulk cargo traffic, two-thirds of the oil shipments and more than 50% of the world's maritime oil trade pass through the Indian Ocean. Some of the world's most important strategic chokepoints, such as the Straits of Hormuz and Malacca which transports more than 50% of the world's maritime oil trade are found in the Indian Ocean Region, creating a region of strategic importance to trade and investment opportunities.
IORA is strengthening cooperation with the business community in order to accelerate intra-regional trade and increase Foreign Direct Investment (FDI) flows. Hence, expanding cooperation with the business community which addresses key trade and regulatory challenges that impede the global competitiveness of Member States.
The IORA Business Forum (representing the private sector and chambers of commerce in the region) and the Working Group on Trade and Investment (representing government trade experts) are vital bodies which promote trade facilitation, exploring options for trade policy coordination, the harmonisation and simplification of procedures, dissemination of information through appropriate arrangements, including trade fairs, business-to-business and business-to-government meetings and capacity-building workshops.
Several initiatives are underway to facilitate interaction between the Chambers of Commerce, Industry and Trade and Investment Promotion Agencies of Member States.
Key areas have emerged in the IORA’s economic agenda: