Perspectives on Global Risks: the 2nd JEF Global Risk Symposium

By Deonanan (Raj) MakoondAuthor
Deonanan (Raj) Makoond

Introduction

various Lomé Conventions, Cotonou Agreement and subsequently
the Economic Partnership Agreement (EPA), which in its initialperiod included Zimbabwe (Chart 1).
The setting up of the Indian Ocean Commission (IOC) in 1982, toinclude Reunion Island, a territorial department of France, further
enhanced this Eurocentric cooperation. Whilst it is fair to recognizethat the IOC has not brought significant economic integration among
the islands, Madagascar and Mauritius remain the two main driversof economic cooperation among the Indian Ocean island countries(Chart 2).
In between their post-independence years and the apartheid era,
Mauritius, Madagascar and the Seychelles joined the Preferential
Trade Area for Eastern and Southern Africa (PTA) to improve theirmarket access to Africa. The PTA later became the Common market
for Eastern and Southern Africa (COMESA).
It is pertinent to highlight that among the COMESA member
countries, the Indian Ocean islands developed some commercial ties
with the Eastern and Southern African countries – namely Kenya,Zimbabwe, Malawi, and Zambia (Chart 3).
Following the dismantling of the apartheid regime in South Africa
and the emergence of the Southern African Development Community(SADC), these Indian Ocean islands joined the SADC, and throughThe object of this paper is to highlight the Indian Ocean as aregion that can bring about an effective rapprochement between theAsia-Pacific and Africa. It attempts, in the first instance, to define thecontours of the political economy of the various multilateral andbilateral arrangements connecting the three regions (Asia-Pacific,Indian Ocean and Africa), the chemistry within these contours andthe rapprochement emerging within the Asia-Pacific, Indian Ocean
and African group of countries.

Contours of the “Political Economy”& Cooperation“Political economy” arrangements among the three regions haveexisted both at the multilateral and bilateral levels for decades. The
multilateral economic cooperation among the main island countriesof the Indian Ocean – namely Mauritius, Madagascar, the Seychelles
and Comoros – dates back to their post-independence period when
all of them joined the African Caribbean and Pacific (ACP) group tomaintain their preferential market access to Europe through theLomé Convention. The cooperation has been maintained by the
CHART 1

From Lomé to EPA

CHART 2

Indian Ocean Commission

From Lomé to EPA(EU-ACP)

Indian Ocean
Commission

Mauritius
Madagascar
Seychelles
Comoros

Mauritius
Madagascar
Seychelles
Comoros

Zimbabwe

France / Réunion

Source: Compiled by the author

Source: Compiled by the author

CHART 3

COMESA
COMESA
Mauritius
Madagascar
Seychelles
Comoros
Kenya
MalawiRwandaZambiaBurundiDRC
Djibouti
Egypt
Eswatini
Eritrea
Ethiopia
Libya
Somalia
Sudan
Tunisia
UgandaZimbabweSource: Compiled by the author

https://www.jef.or.jp/journal/

Japan SPOTLIGHT • May / June 201943

Perspectives on Global Risks: the 2nd JEF Global Risk Symposium

CHART 4

CHART 5SADC

CHART 6

Indian Ocean Rim Association
SADC

Accelerated Programfor Economic
Integration

Indian Ocean Rim Association

Mauritius
Madagascar
Seychelles
Comoros
Mozambique
MalawiSouth Africa
Tanzania
ZambiaAfricaSingapore
Australia
India
Sri Lanka
Indonesia
Thailand
Malaysia
Bangladesh

AngolaBotswana
DRC
Eswatini
LesothoNamibia
Zimbabwe

Source: Compiled by the author

MiddleEastAsia

Mauritius
MadagascarSeychelles
Comoros

The Accelerated Programfor Economic Integration(APEI)South Africa
Kenya
Tanzania
Mozambique

Mauritius
Madagascar
Seychelles

Iran
UAE
Oman
Yemen

Mozambique
Malawi
ZambiaIndian
Ocean

Source: Compiled by the author

Source: Compiled by the author

CHART 7

Tripartite free trade

CHART 8BRICS

Tripartite Free Trade
COMESA/SADC/EAC
Mauritius
Madagascar
Seychelles
Comoros

Russia

CFTA- Continental Free
Trade Area FTA

China

Kenya
Mozambique
MalawiRwandaSouth Africa
Tanzania
ZambiaAngolaBotswana
BurundiDRC
Djibouti
Egypt
Eritrea
Eswatini
Ethiopia

India

LesothoLibyaNamibia
SomaliaSouth Sudan
Sudan
Tunisia
UgandaZimbabwe

BrazilBRICS

South Africa

Source: Compiled by the author
Source: Compiled by the author

the SADC trade agreement, which became operational in 2009, theysignificantly raised their exports in continental Africa. For instance,
exports of textiles from Mauritius to Africa went up significantly andSouth Africa became a major market to compensate for the decreasein European imports following the global financial crisis (Chart 4).
The first multilateral cooperation arrangement to connect Asia,
Indian Ocean islands and some Eastern and Southern Africancountries was completed in 1995 when several countries – namelyIndia, Australia, Singapore, Mauritius, Oman, South Africa and Kenya– signed the Indian Ocean Rim Initiative. This association forregional cooperation was later expanded to 21 countries andre-named the Indian Ocean Rim Association (IORA). China, Japanand France were given observer status (Chart 5).
The IORA as an economic group has yet to show results but it
does offer a platform for some of the major players in Asia (such asIndia and Indonesia), in Africa (such as South Africa, Kenya, andMozambique) and the Indian Ocean islands to enhance cooperation.
Within the existing multilateral arrangements, new specific
44 Japan SPOTLIGHT • May / June 2019

initiatives for accelerated cooperation are emerging. One suchinitiative is the Accelerated Program for Economic Integration (APEI)
regrouping Mauritius, the Seychelles, Zambia, Malawi andMozambique, which was set up in 2012. Madagascar has expressed
its wish to join the APEI and is expected to join the group soon
(Chart 6).
On continental Africa, over and above COMESA and SADC
arrangements, groups of countries are also accelerating economiccooperation through initiatives such as the East Africa Community(EAC), the Tripartite FTA, and since 2018 the Continental Free TradeArea. These agreements are enhancing regional cooperation,
removing both tariff and non-tariff barriers, and facilitating theireconomic integration in the global economy (Chart 7).
At a more global level, these three groups of countries have beeninteracting in various initiatives. For example, within the BRICS
nations, China, India and South Africa do work closely and throughthe Indian Ocean these three players can really establish an Asia/Indian Ocean and Africa corridor (Chart 8).

Perspectives on Global Risks: the 2nd JEF Global Risk Symposium

CHART 9CHART 11Engagement of India in the
Indian Ocean & Africa

Engagement of Japan in the
Indian Ocean & Africa
JapanIndia
Africa / India

Japan / Africa

India-Africa Forum Summit (IAFS)
Indian Ocean Rim Association (IORA)

Tokyo International Conference on Africa’s Development (TICAD)
Japan International Cooperation Agency (JICA)

Indian Ocean

Indian Ocean

CECPA(Mauritius)
M.O.U(Seychelles)
Growing Cooperation(Madagascar)

Blue Economy(Mauritius)
Blue Economy(Seychelles)
Port Development(Madagascar)Source: Compiled by the author

CHART 10Engagement of China in the
Indian Ocean & Africa

Source: Compiled by the author

CHART 12Engagement of Mauritius with Asia,
Africa & the Indian Ocean

China

Mauritius

China / Africa

Belt and Road Initiative (BRI)
Forum on China-Africa Cooperation (FOCAC)

Indian Ocean

FTA(Mauritius)
BRI(Madagascar)
Growing Cooperation(Seychelles)

Special Economic Zone(SEZ)
Ghana
Ivory Coast
SenegalIndian Ocean
Madagascar (SEZ)
Seychelles (Continental Shelf)

India / China
India - CECPA
China - FTA

Source: Compiled by the author

Source: Compiled by the author

It is also relevant to recognize the intensive engagement of China,
India and Japan in the Indian Ocean and Africa.
India, through the India Africa Forum Summit (IAFS), ismaintaining close ties with Africa. It is further reinforcing the India–
Africa partnership through bilateral arrangements with Indian Ocean
island economies, namely the Comprehensive Economic Cooperation
and Partnership Agreement (CECPA) with Mauritius, and closer
cooperation with Madagascar and the Seychelles (Chart 9).
China, through its “One Belt, One Road” initiative is getting closeto Africa. It also has a range of bilateral agreements with IndianOcean economies such as its FTA with Mauritius and a Memorandumof Understanding with Madagascar (Chart 10).
Japan, through the Tokyo International Conferences on Africa
Development (TICAD) and Japan International Cooperation (JICA),
has been maintaining an effective presence through trade and mainly
exports. Japan is now raising its engagement in the Indian Ocean
through port development and involvement in the blue economy withMauritius, the Seychelles and Madagascar (Chart 11).
Mauritius is the host for the Indian Ocean RIM secretariat and isengaged in the special economic zones in Ghana, Ivory Coast andSenegal. Through a modest economy, by its strategic location and its
positioning as an international financial center, it is well placed toemerge as a platform for connecting the Asia-Pacific and Africa(Chart 12).

The Chemistry Within the Contours
The political economy interests of China, India, Japan and France
in the Indian Ocean are on the rise for geostrategic reasons within
the Indian Ocean and Africa. These four countries will endeavour tomaintain an effective presence not withstanding their respective
moves for “checks and balances” to achieve as far as possible anacceptable equilibrium among themselves and their respective
partners in the region.
Japan SPOTLIGHT • May / June 201945

Perspectives on Global Risks: the 2nd JEF Global Risk Symposium

CHART 13Multilateral synergies among countries
of Asia-Pacific, Indian Ocean & Africa
Asia-Pacific
India
China
Australia
Japan

CHART 14Bilateral synergies among countries ofAsia-Pacific, Indian Ocean & Africa

AfricaIndian Ocean
Mauritius
Madagascar
Seychelles
ComorosRéunion(France)

Indian Ocean

Asia-PacificSouth Africa
Mozambique
Malawi
ZambiaTanzaniaKenya
RwandaSEZIndia
China
Australia
Japan

CECPA (India Mauritius)
FTA (Mauritius / China)
Blue Economy (I / J / C / M / M / S)
Enhanced Economic Cooperation (M/ Mada)
Mauritius – Financial Services Center
Mauritius – Headquarters Center
Maritime Security in the Indian Ocean (IO / I / J / C)
Extended Continental Shelf Cooperation (M/S)

Mauritius
Madagascar
Seychelles
ComorosRéunion(France)

AfricaSouth Africa
Mozambique
Malawi
ZambiaTanzania
Kenya
RwandaSEZ

BRI (“One Belt, One Road” Initiative)
IFAS (India Africa Forum Summit)
FOCAC (Forum on China Africa Cooperation)
TICAD (Tokyo International Conference on Africa’s Development)
JICA (Japan International Cooperation Agency)
IORA (Indian Ocean Rim Association)
SEZ (Ghana / Ivory Coast / Senegal)

Source: Compiled by the author

Source: Compiled by the author

CHART 15

Outcomes & influence of multilateral &bilateral arrangements
Asia-PacificIndian Ocean

AfricaReinforced Multilateral and Bilateral Synergies
Strategic Economic Cooperation
Closer Economic Integration
Strategic Cooperation
OceansInfrastructure

FinanceSecurity

EnergySource: Compiled by the author

Chart 13 summarises the multilateral synergies among the threegroups in terms of the interests of specific countries in each of thethree regions. Chart 14 highlights the bilateral synergies among
countries of the three regions.
In light of both the multilateral and bilateral arrangements among
countries from the three regions, some significant synergies areemerging. However, the next phase of engagement between China,
India and Japan in the Indian Ocean and Africa will most probably
differ from the strategies they have adopted over the last 30 years.
China’s engagement will be more private-sector driven given theeconomic challenges it is facing at present. These challenges will
restrict the range of state intervention. India, by its emerging
economic strength, will be able to provide more state support to its
private-sector investment drive in the Indian Ocean and Africa.
46 Japan SPOTLIGHT • May / June 2019Japan’s political engagement will also increase to support its
investment interest in the region to contain the influence of Chinese
investment.
These new strategies will lead to various layers of cooperation,
namely economic and geopolitical, which could influence the global
economic architecture in areas such as the ocean economy, financialservices, infrastructure, security and energy as shown in Chart 15.
Deonanan (Raj) Makoond is the program director of Eclosia Group. He wasformerly the CEO of Business Mauritius, the coordinating body of the Mauritius
private sector (2016-2018). Prior to joining Business Mauritius, he was director of
the Joint Economic Council (1994-2015), deputy secretary-general of theMauritius Chamber of Commerce & Industry (1991-1994) and senior economist
at the Ministry of Economic Planning & Development (1975-1991).