Regional Interdependencies

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Neorealism and neoliberalism claims to offer better explanations on international cooperation with a causal link between the significance of comparative gains and operations of international institutions.  The future of regional institutions is vital not only for policy but also applicable to the international relations theory. Regional integration appears to empower Small Island Developing States (SIDS to concentrate on concerns that are relevant to their phase of development and also to boost trade.

Why does regional integration look like a substitute that will permit Indian Ocean Rim (IOR) Islands to create dynamic economic relations and links of solidarity among themselves? The unity of an alliance hinges on the cost benefit calculations of its members. The evolving geopolitical scope of the IOR Islands of Mauritius, Seychelles, the Maldives, Sri Lanka and Réunion compels these States to forge stronger neighbourhood ties. To these five Island States, the Asian and African neighbourhood is of increasing importance with greater emphasis on their neighbours. Given the increasing convergence of the strategic interests of these Island neighbours, their foreign policies have mainly featured the synchronisation of policies with the multipolar system and balancing the foreign policy manifestation with outreach to different regions and regional groupings.

India’s island neighbours

These islands confront many challenges on the long road to their chosen path of development integration. The solidarity of an alliance hinges on the cost benefit estimates of its members. More than ever, presently, economic integration is more important for South Asia’s development. The justification behind the synchronisation of the five islands with their neighbours is apparent, as the neighbouring States and regional organisations provide the prospects for extensive growth and development. Particularly for a small island nation, the benefits of accessing neighbouring island markets are significant. The focus of much socio-political and economic analysis has been the contrast between the five Indian Ocean islands’ geo strategic importance and their economic performance.

Some of the Free Trade Agreements (FTAs) of the IOR cover the wider geopolitical factors and other factors that influence and affect the world of diplomacy, international relations and global business. The South Asian Association for Regional Cooperation (SAARC), the South Asian Free Trade Area (SAFTA) and the Association of South East Asian Nations (ASEAN) and the Africa Continental Free Trade Area (AfCFTA) offer the opportunity of becoming not only a regional growth pole as at present, but also of becoming a continental growth pole. The pros and the cons of regional market integration are well demonstrated. 

In its multilateral engagement strategy, SAARC has adopted a somewhat neutral approach. This has empowered the organisation to build close links with a number of multilateral entities across the globe including Western powers such as the EU, the US, African nations and its Asian neighbours. The economic liberalisation of SAFTA signatories has been a critical challenge for the SAARC. The strategic relations between Sri Lanka, Maldives and other neighbouring nations such as Pakistan, Bangladesh, Nepal, Bhutan and Afghanistan have been progressively getting stronger.

The SAFTA agreement offers prospects of increasing the level of bilateral trade between Sri Lanka and its SAARC partners. Furthermore, Sri Lanka has entered into FTAs with India and Pakistan.  The FTA with India offers Sri Lanka access to the 1.3 billion Indian consumer markets. Another striking feature of Sri Lanka’s diplomacy has been its wider engagement with other Asian partners such as the East Asian nations and the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) member States.  With the right balance, Sri Lanka stands to benefit both economically and strategically through engagements with the ASEAN.

After the formation of AFTA, the ASEAN member States succeeded in signing trading protocols within the organisation. The model of ASEAN succeeded in fashioning one of the most successful free trade areas in Asia and the world. An important milestone in South East Asia was the establishment of AFTA which facilitated the economic integration of ASEAN member States. The AFTA (ASEAN Free Trade Area ) agreement has provided ASEAN member States with a platform to exploit their potential for exports. Presently, the focus of ASEAN States is on creating an Economic Community for its members.

Notably, a number of States have expressed interest in being a part of the proposed ASEAN Economic Community. Notably, the engagement of Sri Lanka, Maldives, Mauritius and Seychelles with ASEAN and the other East Asian partners is primarily driven by economic necessity. These Asian partners offer these five Island States the prospects of seeking profitable economic engagement within the Asian neighbourhood. The IORA is a platform to demonstrate its obligation and active regional involvement.  Sri Lanka, the Maldives, Mauritius and the Seychelles are all members of the IORA who intend to put issues such as the blue economy on their agenda.

Deeper regional integration 

The new market created under the AfCFTA agreement is estimated to be as large as 1.3 billion people across Africa with a combined gross domestic product (GDP) of US$ 3.4 trillion.  Africa is in a position to begin trading on over 81 per cent of products on preferential terms. The AfCFTA agreement enacted in January 2021, aims to increase intra-African trade by removing import duties and to double it if non-tariff barriers are reduced. According to United Nations Conference on Trade and Development (UNCTAD) estimates, this agreement could enhance intra-African trade by about 33 per cent.

Mauritius, Seychelles and Réunion 

The AfCFTA agreement provides Mauritius and Seychelles the golden opportunity to access Africa’s massive market. Under the African Growth and Opportunity Act (AGOA), Mauritius qualifies for trade benefits which provides duty- free and quota-free access to the U.S. market for over 6,000 products.  India’s first trade agreement with any African country is the India-Mauritius Comprehensive Economic Cooperation and Partnership Agreement. With the status of a French region, Réunion is an integral part of the Eurozone.  As a special territory of the EU member States, Réunion enjoys special status within and outside the EU. The Western Indian Ocean States (WIOS) of Mauritius, Seychelles and Réunion promote diplomatic, economic and commercial ties amongst each other.

Regional integration dynamics

The new regional order presently underway provides unique opportunities for Mauritius, Seychelles, the Maldives, Sri Lanka and Réunion to establish their added value. These five islands have important checkpoints on either ends of their boundaries. These developments highlight the need for a proactive engagement with Indian Ocean island neighbours.

About the Author :

Dr. Srimal Fernando received his PhD in the area of International Affairs. He was the recipient of the prestigious O.P. Jindal Doctoral Fellowship and SAU Scholarship under the South Asian Association for Regional Cooperation (SAARC) umbrella. As a Lecturer he focuses on comparative politics of Small Island Developing States (SIDS). Dr. Fernando is an academic specialist in International Relations and an adviser on New Regional Diplomacy. He has received accolades such as the 2018/2019 ‘Best Journalist of the Year’ in South Africa (GCA) Media Award for 2016 and the Indian Council of World Affairs (ICWA) accolade. He is the author of ‘Politics, Economics and Connectivity: In Search of South Asian Union.

By Dr. Srimal Fernando