Catching a wave

Indian Ocean countries turn to the 'blue economy' for growth.

The states along the rim of the Indian Ocean aim to make the vast body of water a focus for future economic growth by pursuing a "blue economy" that emphasises inclusive and sustainable development of the ocean's natural resources and maritime cooperation.

Leaders from the 21-member Indian Ocean Rim Association (IORA) outlined the vision in the Jakarta Concord, signed at their first summit last week in the Indonesian capital.

"We commit ourselves to harnessing and developing cross-cutting issues and priority objectives by developing the opportunity of the oceans by promoting the blue economy as a key source of economic growth, job creation and education, based on evidence-based sustainable management of marine resources," the agreement said.

The summit, held to commemorate the 20th anniversary of the establishment of the IORA, agreed to establish four working groups to enhance cooperation in the blue economy, maritime safety and security, tourism and cultural exchanges and women's empowerment.

"All leaders are aware of the current challenges. All leaders realise the potential that IORA countries have and all leaders also realise it is important to keep the Indian Ocean, the ocean that unites us, safe," Indonesian President Joko Widodo said in his closing statement alongside Australian Prime Minister Malcolm Turnbull and South African President Jacob Zuma.

He added that the leaders were committed to upholding the 1982 United Nations Convention on the Law of the Sea (UNCLOS) as the constitution that rules the ocean.

Mr Turnbull said that in an age of globalisation and rapid technological advances, it was more important than ever to work together, given how the Indian Ocean has shaped the history, economy, cultures and religions of countries for centuries.

Australia was one of the original seven nations that met in Mauritius in 1995 to discuss how to enhance economic cooperation across the ocean.

"We also introduced a blue economy priority policy, which underscores the fact that we all have a stake in ensuring our region's marine resources are harvested in a sustainable manner," Mr Turnbull said.

Mr Widodo said Indonesia believed the Indian Ocean was emerging as a key global axis in world affairs after centuries of dominance of world affairs by the Atlantic and, in the last 30 years, talk of a Pacific Century marked by the rise of East Asia.

Despite being the third largest body of water in the world after the Pacific and the Atlantic, the Indian Ocean has had less prominence in global affairs, yet half of the world's container ships and two-thirds of the world's oil trade traverse the area.

"Therefore, the Indian Ocean is the future ocean. The future of world economy is in this region," he said at the IORA Business Summit, held alongside the leaders' summit. "Indonesia wants to strengthen its maritime axis to be intertwined with IORA."

Arif Havas Oegroseno, deputy chief of maritime sovereignty at the Maritime Affairs Coordinating Ministry, said Indonesia would help others develop their blue-economy capabilities through capacity-building in maritime resources cultivation, tourism and investment.

Yose Rizal Damuri, head of the Department of Economics at the Center for Strategic and International Studies, said the blue economy also received attention during Indonesia's 2013 chairmanship of the Asia Pacific Economic Cooperation (Apec) forum.

He said the timing of the new focus was in line with a presidential regulation issued early this month, which outlines the 2016-19 action plan for Indonesian maritime policy.

"One of the points in the presidential regulation is about managing our maritime resources and this is related to the blue economy," he told Asia Focus. "It's not just about reaping economic value from maritime resources but it is also about making sure it is sustainable, such as maintaining the fish population, maritime connectivity and developing maritime industries."

For example, he said, fish populations cross boundaries and a policy on maritime resources issued in one country could have an impact on other countries' maritime resources.

"If their policies are not in sync with one another, it would affect the sustainability of one another's maritime resources' sustainability," Mr Rizal said.

Indonesian Trade Minister Enggartiasto Lukita said the Indian Ocean region also represented a vast and growing population with great potential in terms of trade and investment.

The countries on the ocean are home to 2.7 billion people or 35% of the world's population but they only account for about 12% of world trade, 10% of gross domestic product and 13% of foreign direct investment, according to the Indonesian Chamber of Commerce.

"We have known each other for hundreds of years, with the sea as a unifier. Unfortunately, we have long turned our backs on the potential of the IORA region," Enggartiasto said.

Just six countries within the bloc -- Singapore, Malaysia, India, Indonesia, Australia and South Africa -- make up 96% of intra-IORA trade. The Indonesian government is looking to pursue more trade with countries such as Bangladesh, Kenya, Mozambique, South Africa, the United Arab Emirates and Iran.

Enggartiasto said Indonesia's exports to Africa last year were worth only US$4.2 billion despite $550 billion in potential, while shipments to the Middle East were worth $5 billion, with potential for $975 billion.

As government officials commit to mutual cooperation and bolstering trade, chambers of commerce from IORA states will focus involving small and medium enterprises (SMEs) in efforts to develop the Indian Ocean economy.

"Empowering SMEs is one of our main agenda items, given that they contribute to 95% to the economy in IORA countries," said Rosan Roeslani, the chairman of the Indonesian Chamber of Commerce.

The IORA member states are Australia, Bangladesh, the Comoros, India, Indonesia, Iran, Kenya, Madagascar, Malaysia, Mauritius, Mozambique, Oman, the Seychelles, Singapore, Somalia, South Africa, Sri Lanka, Tanzania, Thailand, the United Arab Emirates and Yemen.


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