Bangladesh has a lot of room to develop its trade and investment ties with IORA members
Many academics, including American geo-strategist Alfred Mahan and Robert Kaplan of the 19th and 20th centuries, have emphasized that the Indian Ocean is where the global tug of war will take place in the 21st century. The need for institutionalized collaboration among the nations in the waters spanning three continents has been constantly emphasized so that the Indian Ocean littoral countries can function as a community. Last but not least, the Indian Ocean Rim Association (IORA), an intergovernmental organization founded on March 7, 1997, aims to promote regional collaboration and sustainable growth.
The IORA has 23 members all across the Indian Ocean Rim and 10 dialogue partners. The IORA and Indo-Pacific concepts complement one another primarily because the IORA’s coverage area serves as the pivot for the Indo-Pacific. China is a dialogue partner, along with Russia and the USA, although it is not a member of the IORA. While it is a liberal developmental and functional organization, its strategic reach is vast — from Australia in the Indian Ocean to the coasts of eastern and southern Africa. India, geographically, lies at the centre of this.
Bangladesh’s strategic location at the apex of the Bay of Bengal brings significant responsibilities as a facilitator and connector between regions and competing powers. The country is the chair from 2021-2023 and is currently hosting the Sixth Edition of the Conference with a vision towards mutual growth, prosperity, and strengthening of the international community under the theme of “Peace, Prosperity, and Partnership” for a resilient future.
Geopolitical and geo-economic relevance
The IOR has become a crucial component of global strategic thinking, thanks to its enormous resource base and supply chain trade routes. From the Persian Gulf to the Straits of Malacca, this third-largest ocean is home to 38 countries, three of the five fastest-growing economies in the world, 64% of the global population, and 60% of the global GDP. Moreover, 80% of seaborne trade passes through this region, while over 80% of the world’s oil trade and 100,000 commercial vessels depend on this route every year.
In the age of competition for control of sea lanes and global trade, the area hosts some of the world’s most important chokepoints, like the Straits of Hormuz, the Straits of Malacca, Lombok, and the Sunda Straits. The after-effects of any kind of disruption are unimaginable. Moreover, the space most critical to securing trade flows in the Indo-Pacific is the Indian Ocean Region (IOR). That’s why maritime security is an important consideration in the IORA.
Along with its considerable strategic and commercial relevance, the stakes in this area increased tremendously with China’s rise from an emerging country to a major world power. The country aims to increase its influence in the Indian Ocean in addition to developing dominance in the South China Sea. Because roughly 80% of China’s oil imports flow through this region, as do almost 95% of its exports to major trading partners in the Middle East, Africa, and Europe. However, the formation of the US Indo-Pacific Strategy (IPS) and the emergence of new anti-China military alliances like AUKUS and the QUAD have dramatically changed the geopolitical realities of this region.
In this case, for most of the small or middle powers in the IOR who rely on multilateralism as their foreign policy and don’t want to get entangled in the current great power rivalry, a multilateral forum such as the IORA can serve as a better alternative. Because most of the stakeholders in the stalemate, including the US, China, India, Russia, and Australia, are direct members of the IORA or dialogue partners, the forum can contribute to arranging dialogues and mitigating skepticism between them.
The region currently faces not just conventional security threats, but also non-traditional challenges, including biohazards, cyberwarfare, and maritime piracy. That’s why there has been growing debate about evolving new mechanisms to shift the focus of the IORA from cooperation on economic issues to addressing security challenges emerging from the four T’s: Turbulence, turmoil, tension, and transition.
The IORA network involves five members of the G-20, and nine G-20 members are dialogue partners. As a result, the G-20 conference is incredibly accessible to the IORA member states. The US, the EU, and China all have soft power strategies that IORA can use to its advantage if it can create a venue for productive interaction amongst these countries.
Another important aspect is that, despite the potential for trade and investment, the IORA market is not fully explored by its member states, even after more than two and a half decades. The current intra-IORA trade ratio is 35%, which is significantly lower than corresponding levels in the EU (60%) and North America (40%) and about half of that in East and Southeast Asia.
So, it is important to rethink intra-IORA trade and investment dynamics. Developing a regional trade agreement to strengthen economic relations among member states by eliminating intra-IORA trade and investment barriers is now more important than ever.
Understanding Bangladesh’s prospect
Needless to say, Bangladesh has a strong maritime legacy. Geographically, the country is ashore in the Bay of Bengal and, as such, in the Indian Ocean. As a responsible stakeholder, Dhaka has always rejected power competition over the Indian Ocean and doesn’t want to see any unilateral dominance by any particular group or country in the region. At the 1973 Commonwealth Conference, the Father of the Nation, Bangabandhu Sheikh Mujibur Rahman, spoke about the aspiration to establish the Indian Ocean as a zone of peace.
Bangladesh recently reiterated its position regarding the Indo-Pacific region, saying that Dhaka would like to see an open, free, and inclusive Indian Ocean without any particular dominance. As one of the most crucial trading hubs, a competition-free, peaceful, stable, prosperous, and inclusive Indian Ocean region is important not only for Bangladesh but also for the region as a whole.
The IORA region is becoming the hub for both production and consumption of energy resources. Therefore, Bangladesh has a lot of room to develop its trade and investment ties with IORA members. The forum can also strengthen Dhaka’s alliances with Australia, ASEAN, the Gulf nations, the Indian Ocean island nations, and other African nations.
The IORA’s scope and focus allow Bangladesh to expand its ongoing economic growth. In 2018, Bangladesh adopted its longest vision policy, the Delta Plan 2100, to make its rivers and oceans sustainable for future generations. Bangladesh is now aiming to develop a blue economy, which is a priority area of the IORA. As well, as Bangladesh faces recurrent disaster issues, Dhaka can build its capacity in disaster management by utilizing this platform. Furthermore, the forum may facilitate trade and investment for Bangladesh.
Hence, if the blue economy can be seen through a food security and forex-earning lens, it can potentially change the fate of 160 million Bangladeshis. So, Bangladesh needs to focus on fostering regional maritime cooperation with the two apex regional bodies, BIMSTEC and IORA.
The significance of a collaborative approach to working is one lesson that the pandemic taught the world. So, more forward-thinking and productive partnerships are required in the IOR.
To sum up, in the face of current global challenges to climate, food, and energy security, it is time for the IORA to move to a position where it will play a key driving force to ensure a peaceful and prosperous Indian Ocean Rim, prioritizing people-centric cooperation, not power-centric competition and confrontation.
Prithwi Raj Chaturvedi is a Researcher and Political analyst from New Delhi, India.