Module-4 14 Hours

Regional Economic Integration

 Forms of Integration, Advantages and disadvantages of Trading Blocs
 The Common Market of Eastern and Southern Africa (COMESA)
 The Southern African Development Community (SADC)
 The Indian Ocean Rim Association (IORA)
 The Asia Pacific Economic Cooperation (APEC)
 The Mercado Comun del Cono Sur or Southern Common Market (MERCOSUR)

What is Regional Economic Integration?

Regional Economic Integration can best be defined as an agreement between groups of

countries in a geographic region, to reduce and ultimately remove tariff and non-tariff
barriers to the free flow of goods, services, and factors of production between each other. A
regional integration agreement (RIA) covers all of these different arrangements including
those involving countries where members are not all from the same geographic region.

Need for Regional Economic Integration

The need for economic integration is summarized below:

Factors Movements

Factors of production such as labor, machineries, entrepreneurial abilities are moved

voluntarily from a relatively saturated area to places for which those skills can be applied
more effectively. After all, when Auhor Lewis was asked some years back why many
countries were underdeveloped? His reply was that “those countries lack or have few
capitalists”. It can safely be said that those countries lack genuine entrepreneurs will have a
hard time in accomplishing or bring about true development to their respective countries.

Specialization will flourish

The need for specialization will be intensified. Meaning that countries within the block will
engage in creative specialization instead of being jack-of-all-trades. This will bring about a
more efficient allocation of resources, which will invariably enhance the finishing touch and
the number of products brought out in the regional market. Naturally, the larger the number
of commodities made available to the consumers, the less the price to the consumers ceteris
paribus. This of course will promote efficiency in production. In other words, inefficient
producers will have to give way for the more efficient producers.
Levels of Regional Economic Integration

• Sectoral trading agreements (STA) are very limited. They may be thought of as reflecting
trade cooperation rather than actual integration. Sectoral cooperation limits the agreement to
well-defined sectors such as grain or steel. Sectoral trading is coded as level one integration.

• Preferential trade agreements or areas (PTA) require participants to eliminate or lower

tariffs on each other’s imports. Participants are allowed to retain the ability to determine the
existence and the level of restrictions to be imposed on non-members. Typically, a free trade
area (FTA) involves zero tariffs between member states, although usually only extended to
selected goods and services. Both PTAs and FTAs are coded as the second level of regional
integration although PTAs are not admissible under WTO rules. PTAs are considered shelters
for inefficient industries in the member countries and are viewed as harming nonmember
countries due to the economic loss incurred when parties to the agreement divert trade to
themselves and exclude outsiders.

• Customs unions (CU) are similar to FTAs except that participating countries agree to adopt
uniform import tariffs and common restrictions to outside countries in the form of a common
external tariff (CET). The creation of the CET aids in the negation of trade deflection and
rules of origin issues. The establishment of the CET implies some form of common decision-
making and the development of common institutions to aid in the regulation of common trade
interests and the redistribution of the CET revenue. The CET is the defining factor of a
customs union which is coded level three of regional integration.

• Common markets (CM) require a much greater degree of political and economic
cooperation than the three previously discussed arrangements. The free movement of the
factors of production characterizes a common market. In order to ensure competition on a
level playing field, these agreements are often complemented with the harmonization of
policies in health and safety, social security, and education. Free movement of factors is thus
the key attribute of this type of RIA which is coded as level four.

• An Economic union (EU) reflects a higher and increasingly complex level of regional
cooperation. The addition of monetary and fiscal harmonization requires the formation of
supranational institutions and organizations that typically have binding decision-making
power over the members. An EU also presupposes common taxation and other common
procedures. While there is increased political unification in an EU, the individual sovereign
states maintain their separate identities. Only the European Union countries participating in
the European Monetary Union have attained this level, level five.

• A Supra-national union (SNU) covers both the political and the economic realms.
Member states abandon goals of preserving national sovereignty. An example of this type of
unification is the United States or the unification of East and West Germany, i.e., a
federation. The Supra-national union is not included in the current data set.

FACTORS AFFECTING REGIONAL INTEGRATION

ARRANGEMENT (RIA)

MEASURES OF UNCERTAINTY

The change in the global structure of trading alliances, brought on by the end of the Cold
War, lead countries to seek multilateral agreements in an attempt to alleviate augmented
risks. Furthermore, the supra-national institution governing dispute settlement, the WTO,
emerged in 1995. Four measures of uncertainty are examined in this paper: trade uncertainty,
political uncertainty, business cycle uncertainty, and price uncertainty.

Trade uncertainty can be measured through a country’s openness in terms of exports and
imports as a ratio of gross domestic product (GDP). Rodrik (1987) has argued that the more
open a country is to international trade, the more uncertainty is created for participants in the
economy. Openness to international trade is associated with uncertainty because a country
with a higher proportion of international trade dependence is more likely to have its terms of
trade adversely affected by the international community. Since countries may choose trade
integration as a method to mitigate risks associated with trade, we expect there to be a
positive relationship between trade openness and RIA formation.

There are several measures of trade openness. The traditional measure of trade openness,
from the Penn World Tables 6, is the ratio of imports and exports to GDP.8 A second
measure, taken from the World Bank, uses tariffs measured by import duties as a percentage
of total imports. A third measure, the Trade & Openness Index (TOI), published by
Economic Freedom of the World (EFW), is designed to measure the degree to which
countries’ policies interfere with international exchange. In contrast to the more traditional
measures, there are four basic components to this index: tariff rates; the black-market
exchange premium; restrictions on capital movement; and the actual size of the trade sector
as compared to the expected size. This index was derived for 109 countries in 1998 and
slightly fewer in previous years. It is only available for the later part of the 1990's. In 1998,
the highest-ranking countries were Hong Kong, Singapore, Estonia, Belgium, Ireland,
Netherlands, Germany and Luxembourg. As with the traditional measure of openness, a
positive relationship between this index and levels of regional integration is expected.

Political uncertainty may be measured in a number of ways. Two potential measures, one of
corruption and another of economic freedom, are presented. The first measure is the level of
corruption in a country. High levels of corruption make it more likely that countries try to use
regional integration agreements to end trade risks brought about by the capricious behavior of
domestic government representatives. The corruption index published by Transparency
International is a constructed ranking where the purpose is to assess the corruption level of 52
countries as perceived by businesspeople, risk analysts, and the general public. The
perceptions of this group may not always be a fair reflection of the actual state of affairs and
does not necessarily reflect the concrete level of corruption in the surveyed countries and
thus, due to its subjectivity, trends are difficult to determine. High levels of corruption, and
therefore greater political uncertainty, should provide a positive incentive for regional
integration.

The second potential measure of political uncertainty is the index of economic freedom. This
index provides a higher rating for those countries with institutions and policies consistent
with price stability, the rule of law and secure property rights, smaller governments, and free
trade. Freer trade is defined as lower tariffs and fewer non-tariff barriers consistent with
regional integration. The EFW index relies on quantitative variables to develop its rating
gradations for each component. Institutional improvement has been shown to be a
prerequisite for growth and development and thus more secure trade. Institutional
development is expected to be positively related to regional integration as countries secure
property rights and continue to deepen their levels of regional integration.

Several other ways of measuring political stability presented themselves. None were
significant. One way is using the mean number of revolutions. Another measure of stability is
based upon the integrity of central bank policies. While both were initially included in the
ordered probit analysis, neither was a significant indicator of the level of regional integration
and therefore are not reported in the results section.
Business cycle uncertainty is another type of uncertainty contributing to greater levels of
regional integration. There is risk associated with the general health of the economy for
individual producers as they are subject to the vicissitude of their domestic environment. A
more open economy may expose a country to the vagary of other countries business cycles;
however by joining a RIA, the country may also afford itself of the opportunity to take
advantage of the “portfolio effect” of all these business cycles and thus reap the benefits of
more stable production and income. Indeed, Mattli (1999) finds that downturns in business
cycles spur the formation of cooperative agreements. Furthermore, there is growing evidence
that volatility is positively correlated with the rate of growth (this includes most Western
European countries). Business cycle uncertainty is generally measured using GDP growth,
calculated from t to t+1, as a rough measure of year-to-year uncertainty.

Price uncertainty is proxied with inflation rates. It has been shown that average inflation
rates are lower in more open economies. Inflation rates are often used as measure of domestic
instability, soundness of economic policies, and as a reflection of the importance of
international markets. Global financial markets interact on a daily basis. It serves to discipline
those countries in the developing world with extremely high inflation rates and thus
discourages the adoption of domestic policies which promote price uncertainty. Inflation is
measured as changes in the personal consumption price levels of each country.

Effects of economic integration

The formation of an economic community effects not only the volume and structure of trade
of member countries, but also the use of resources, production, prices of traded goods, as well
as the bargaining power of member countries in international markets. More specifically, the
effects of economic integration are as follows:

(1). The removal of tariffs on imports from member countries leads to beneficial increase in
the volume of trade according to the principles of comparative advantage.

(2). After the removal of tariffs, member countries would tend to increase their production of
goods for which they are best suited. Thus, the result is more efficient allocation of
productive resources.

(3). The formation of a community results in a single enlarged market for many commodities.
Producers in member countries begin to compete with one another and the most efficient
displaces the less efficient rivals. The surviving producer is then able to increase its volume
of production, and realize economics of mass production. Put differently, the unit cost of
production falls as the level of production increases.

(4). The member countries, particularly raw material producing countries, can cooperate as
regards the supply of commodities to world market. For example, ECOWAS (Economic
Community of West African States) countries control an overwhelmingly large proportion of
the world’s output of cocoa and groundnut, and could thus have some monopoly power in the
world markets for these commodities. This power could enable member countries improve
their terms of trade. Because of increased efficiency in member countries resulting from
integration, member countries would experience an increased rate of economic growth. Such
increased rate of growth has occurred in the European Economic Community (EEC).

Trade Bloc Advantages 

Some of the benefits of forming a trade bloc include:

 Lower prices and more varied products. Tariff elimination leads to lower prices for
consumers in member countries. Free flow also increases access to a wider variety of
goods.

 Larger market. Companies can increase their sales to other member countries without
worrying about protection. The broader market allows them to take advantage of
economies of scale.

 Boost direct investments. Under common market and union economies, capital is free
to flow, encouraging companies to increase investment and create jobs in some member
countries.

 Access to cheaper and more abundant capital. Under an economic union, companies
can take advantage of member countries that have more developed financial markets.

 Encourage specialization. Increased trade allows for increased specialization, whereby

member countries develop the most efficient industries.

 Decrease monopoly power as competition increases. Goods and services flow freely

and create greater choices for consumers. It increases competition in the market and
forces firms to increase innovation and efficiency to stay competitive.
  Positive effect on knowledge abundance and technology transfer. In a common
market or economic union, capital and professional laborers move freely between
members, allowing for a positive effect on knowledge and technology.

 Better quality intermediate inputs. This is because production factors can freely enter
and exit member countries, such as in common markets and economic unions.

 Minimize the potential for conflict among members. Members – who were

previously competing – can adopt mutual policies that are favorable to them.

 Increase economic power. It gives members a stronger bargaining position on trade

policies and agreements because they form a united front. For example, in a palm oil
dispute, the European Union has stronger negotiating power as a buyer because many
countries are united to fight Indonesia.

 Offers new opportunities for trade and investment. Member countries benefit from
inward investment and increase trade opportunities.

 Growth in member countries also tends to extend to other members. Economic

expansion in one member country increases demand in other members.

Trade Bloc Disadvantages 

Trade blocs may benefit some countries but not others. That raises several problems. Here is a
list of trade bloc weaknesses:

 Shutting down the domestic industry. Increased competition creates winners and

losers. If domestic industries are uncompetitive, they exit the market, increasing
unemployment. The danger is even greater if many industries are uncompetitive, and
they absorb a significant workforce.

 Increased economic dependence. Economic performance between member countries

is interconnected. The economic crisis in one member spreads to other member
countries. The impact is even broader due to the significant size of the trade bloc’s
economy. Examples include the debt crises in Greece, Italy, and Spain, which required
the European Central Bank to intervene to handle it. The intervention was to prevent the
impact of the crisis from spreading to other member countries.
  Loss of state sovereignty. The trade bloc makes decisions for all members. It may
conflict with the domestic economic interests of some member states. Also, the
decisions may favor member countries with a more significant size of the economy.

 Bring up the trade diversion. The trade bloc distorts the benefits of world trade. The
inefficient firms within the bloc can still survive and are protected from competition
from more efficient firms outside the bloc.

 Retaliation from non-member countries. To protect their economies, they are likely
to form new trade blocs to defend their positions

The Common Market of Eastern and Southern Africa (COMESA)

The history of COMESA began in December 1994 when it was formed to replace the former
Preferential Trade Area (PTA) which had existed from the earlier days of 1981. COMESA
(as defined by its Treaty) was established ‘as an organization of free independent sovereign
states which have agreed to co-operate in developing their natural and human resources for
the good of all their people’ and as such it has a wide-ranging series of objectives which
necessarily include in its priorities the promotion of peace and security in the region.

However, due to COMESA’s economic history and background its main focus is on the
formation of a large economic and trading unit that is capable of overcoming some of the
barriers that are faced by individual states. COMESA’s current strategy can thus be summed
up in the phrase ‘economic prosperity through regional integration’. With its 21 Member
States, population of over 583 million a Gross Domestic Product of $805 billion, a global
export/import trade in goods worth US$ 324 billion, COMESA forms a major market place
for both internal and external trading. Geographically, COMESA almost two thirds of the
African Continent with an area of 12 Million (sq km).

A Free Trade Area

The FTA was achieved on 31st October, 2000 when nine of the member States namely
Djibouti, Kenya, Madagascar, Malawi, Mauritius, Sudan, Zambia and Zimbabwe eliminated
their tariffs on COMESA originating products, in accordance with the tariff reduction
schedule adopted in 1992.This followed a trade liberalization programme that commenced in
1984 on reduction and eventual elimination of tariff and non-tariff barriers to intra- regional
trade. Burundi and Rwanda joined the FTA on 1st January 2004. These eleven FTA members
have not only eliminated customs tariffs but are working on the eventual elimination of
quantitative restrictions and other non-tariff barriers.

Customs Union

A Customs Union maybe defined as a merger of two or more customs territories into a single
customs territory, in which customs duties and other measures that restrict trade are
eliminated for substantially all trade between the merged territories. The territories, in turn
apply the same duties and measures in their trade with third parties. In preparation for a
Customs Union the Eleventh Meeting of the Council of Ministers held in Cairo, Egypt
adopted a Road Map that outlined programmes and activities whose implementation was
necessary before the launching of the Union. It is expected that the launch will be achieved
by the year 2008.

Industry and Agriculture

The Mandate of the Industry and Agriculture Division is to promote development of

competitive, sustainable and profitable agriculture and industries that contribute to economic
and social prosperity of the COMESA citizens. The overall objective of the Industry and
Agriculture Division is to contribute to deepening regional integration through promoting and
supporting efforts to drive inclusive industrialization, private sector development and
agricultural growth and transformation in the COMESA region.
Specific Objectives

The specific objectives of Industry and Agriculture Division include:

1) To support increased agricultural productivity and agro-processing for improved food

security and nutrition, and agro-product competitiveness in the COMESA region;

2) To promote and support competitive and diversified industrial development in the

COMESA region;

3) To foster linkages between industry, value addition to agriculture and other natural
resources as well as supporting development of other economic sectors for inclusive and
sustainable development in the COMESA region;
4) To promote and support compliance with regional and international standards and Sanitary
and phytosanitary (SPS) measures for increased access to competitive markets and enhance
intra-regional and international trade;

5) To support development, harmonization and implementation of policies, regulations,

strategies and programmes on agriculture and industry development in the region;

6) To promote and support creation of enabling environment for investment and business
development in the region. The Industry and Agriculture Division delivers its mandate
through the following technical units and agency

Agriculture Development

Coordinate and support the development, harmonization and implementation of agricultural

policies, strategies and programmes and regulations to promote complementarity and
sustainability of the national agricultural programmes in order to ensure inclusive agricultural
growth and transformation for COMESA regional food and nutrition security, economic
development and integration.

Services: – We formulate regional agricultural policy and regulatory frameworks in line with
the continental and global frameworks for harmonized development and implementation of
national agriculture policies, strategies, plans, and regulations; – We assist Member States in
developing, implementing, monitoring and reporting on their National Agriculture and Food
Security Investment Plans (NAIPs) aligned to the continental and regional frameworks and
international agreements; – We partner with development and strategic organizations to
mobilize technical and financial resources to support the implementation of the COMESA
Regional Agriculture Investment Plan and Member States NAIPs; – We promote and support,
through collaborating with regional agricultural research institutions, regionally coordinated
agricultural research to generate and disseminate information on improved technologies,
innovations and management practices to stakeholders in the agricultural sector.

Livestock

 Support efforts aimed at driving sustainable livestock production and productivity, value
addition and access to markets in the COMESA region.
Services: 

• COMESA support member States to attract public and private investments along the
different livestock values chains;

• It supports member states to enhance Livestock Production and Animal Health to increase
productivity and resilience of livestock production systems;

• It supports member States to enhance innovation, generation and utilization of technologies,

capacities and entrepreneurship skills of livestock value chain actors;

• It supports member States to enhance access to markets, services and value addition.

Blue Economy

Support investment in sustainable use of ocean resources for economic growth, improved
livelihoods, and jobs while preserving the health of ocean ecosystem.

Services: 

• We promote and support increased investment in diversification of existing ocean-based

economic sectors (particularly fisheries, tourism and ports) to realize greater value and
efficiency from the existing resource base;

• We support exploration and feasibility of new and emerging maritime sectors (for example
sustainable fisheries, marine-based aquaculture, tourism);

• We support improved prevention of ocean/blue economy risks including illegal, unreported

and unregulated (IUU) fishing, marine pollution and climate change through integrated
approaches to effective regional cooperation on maritime security.

Industrial and Private Development

Support initiatives to promote sustainable industrialization and private sector development in

the COMESA region.

Services: 

• We support the development of regional Industrial Policy and strategic frameworks;

• We support the development of regional SMEs policy framework;

• We support Member States to domesticate the regional industrialization and SMEs and the
local content policy frameworks;

• We mobilize technical and financial resource to support the implementation of regional and
national industrialization and SMEs strategies and programmes.

Investment Promotion

Support efforts aimed at transforming the COMESA region into a single and harmonized
investment destination.

Services: 

• We support adoption of COMESA Common Investment Area Agreement (CCIA);

• We support Member States in improving the ease-of-doing business environment, building

on regional best practices and peer- to- peer experience sharing.

Sanitary and Phytosanitary (SPS) and Technical Barriers to Trade (TBT)

Support efforts to enhance regional and global market access and trade as well as plant and
animal health, and food safety

Services: 

• We work with SPS regulatory authorities to facilitate market access agreements, implement
capacity building programmes across the private and public sectors aimed at compliance with
trade partners SPS requirements;

• We work with Member State national bureaus of standards to develop mutual recognition
frameworks for conformity assessment;

• We support regulatory laboratories to achieve equivalence of laboratory test results and to

recognize each other’s certificates of analysis;

• We support a network of plant health and animal health professionals in the public and
private sector, to manage transboundary plant pests and animal diseases in a transparent and
credible manner that does not obstruct trade.
Alliance for Commodity Trade in Eastern and Southern Africa (ACTESA)

A specialized Agency of COMESA established in line with article 182 of the COMESA
Treaty. Its programmes are aimed at boosting of intra-regional agricultural trade through
supporting small-scale farmers access to agricultural input, output and financial markets.

Services 

• We support harmonization of agro-inputs (e.g. seeds and fertilizers) policies/regulations,

standards, quality assurance and market development in COMESA region;

• We support harmonization of grades and standards for staple food commodities to enhance
small-scale farmers access to national, regional and international markets;

• We build capacities of farmers and providing market linkage support to enhance their
access to markets;

• We support the strengthening of market services and facilities;

• We assist private firms in investing in knowledge, technology and other forms of transfers
to the benefit of local suppliers;

• We provide comprehensive and evidence-based policy findings and improving the policy
environment for investment and agricultural trade.

Trade and Customs Division

The main function of the division is to implement programmes to enhance cooperation in

Trade, Customs and Monetary Affairs in order to achieve a fully integrated, internationally
competitive and unified single economic space within which goods, services, capital and
labor are able to move freely across national frontiers. The cooperation programmes aim to
achieve the removal of all physical, technical, fiscal and monetary barriers to intra-regional
trade and commercial exchanges through the following stages of integration.

It is an Economic Community (EU) with a common currency and unified macroeconomic

policy. The creation of a unified, single economic space will closely link the national
economies of the Member States together and significantly increase the degree of economic
integration in the region, resulting in profound structural changes in the economies of the
Member States. This will strengthen economic interdependence among the member countries,
reduce the room for independent policy-making and amplify the cross-border effects of
developments originating in each member country. This necessitates effective policy
coordination among the Member States, including the pursuit of policies in support of
broadly balanced development to complement the creation of the unified market without
internal borders. The creation of a zone of increasing monetary stability is also imperative for
the achievement of market integration. This entails the pursuit of monetary cooperation with
the final goal of a common currency. This, in turn, implies a common monetary policy, a high
degree of compatibility of economic policies and consistency in a number of other policy
areas, particularly in the fiscal area. The aim is to gear these policies to price stability,
balanced growth, rising and converging standards of living, high employment and external
equilibrium.

The unified economic space with the four freedoms – goods, services, capital and labour –
comprises the following basic elements:

– A regional market without internal frontiers within which goods, services, capital and
labour can move freely; common policies aimed at structural change and regional
development;

– Macroeconomic policy coordination competition policy and other measures aimed at

strengthening market mechanisms;

– Assurance of the total and irreversible convertibility of currencies; full integration of

banking and other financial markets; and pursuit of measures for the eventual creation of a
monetary.

THE SOUTHERN AFRICAN DEVELOPMENT COMMUNITY (SADC)

The Southern African Development Community (SADC) was established as a development

coordinating conference (SADCC) in 1980 and transformed into a development community
in 1992. It is an inter-governmental organization whose goal is to promote sustainable and
equitable economic growth and socio-economic development through efficient productive
systems, deeper co-operation and integration, good governance and durable peace and
security among fifteen Southern African Member States.
SADC total trade has followed a similar pattern to total world trade. Total SADC trade
almost quadrupled between 2000 and 2011 from US$ 91089.52 million in 2000 to US$
353636.4 million in 2011, although there was a sharp decline of more than 25% in 2009 as a
result of the global economic crisis. Main intra SADC trade export items include petroleum
oils, agricultural products, electricity and some clothing and textile products. Main export
items to the rest of the world consist of predominantly export of resources (e.g. coal,
ferrochromium, manganese ores, platinum, as well as precious metals and diamonds),
resource intensive manufactured goods, mainly for the automotive industry, some clothing
and textiles, and tobacco. The highest share of total SADC exports over time is to the Asia
Pacific Market, followed by the EU market. Trade within Africa is the smallest and of this the
majority is intra SADC trade.

The main objectives of Southern African Development Community (SADC) are to achieve
economic development, peace and security, and growth, alleviate poverty, enhance the
standard and quality of life of the peoples of Southern Africa, and support the socially
disadvantaged through Regional Integration. These objectives are to be achieved through
increased Regional Integration, built on democratic principles, and equitable and sustainable
development.

The objectives of SADC, as stated in Article 5 of the SADC Treaty (1992) are to:

 Achieve development and economic growth, alleviate poverty, enhance the standard
and quality of life of the people of Southern Africa and support the socially
disadvantaged through Regional Integration;
 Evolve common political values, systems and institutions;
 Promote and defend peace and security;
 Promote self-sustaining development on the basis of collective self-reliance, and the
inter-dependence of Member States;
 Achieve complementarity between national and regional strategies and programmes;
 Promote and maximise productive employment and utilisation of resources of the
region;
 Achieve sustainable utilisation of natural resources and effective protection of the
environment;
  Strengthen and consolidate the long-standing historical, social and cultural affinities
and links among the people of the Region.

SADC Common Agenda

Linked directly to the SADC Objectives is the SADC Common Agenda, originates in Article
5 of the SADC Treaty (1992) as amended. The Common Agenda summarises the key
strategies and policies of the institution. Subsequently, the SADC institutional structure is
consistent with the SADC Common Agenda and Strategic Priorities that it encapsulates. The
same values are echoed in the Regional Indicative Strategic Development Plan
(RISDP) and Strategic Indicative Plan for the Organ (SIPO).

The SADC Common Agenda is underpinned by a series of principles and policies,

including:

Principles

 Promotion of sustainable and equitable economic growth and socio-economic

development that ensures poverty alleviation with the ultimate objective of its
eradication;

 Promotion of common political values, systems, and other shared values, which
are transmitted through institutions that are democratic, legitimate and
effective; and

 Promotion, consolidation and maintenance of democracy, peace and security.

SADC Policies

1. Promote sustainable and equitable economic growth and socio-economic

development that will ensure poverty alleviation with the ultimate objective of
its eradication, enhance the standard and quality of life of the people of
Southern Africa and support the socially disadvantaged through regional
integration;

2. Promote common political values, systems and other shared values which are
transmitted through institutions that are democratic, legitimate, and effective;
 3. Consolidate, defend and maintain democracy, peace, security and stability;

4. Promote self-sustaining development on the basis of collective self-reliance,

and the interdependence of Member States;

5. Achieve complementarity between national and regional strategies and

programmes;

6. Promote and maximize productive employment and utilization of the resources

of the Region;

7. Achieve sustainable utilization of natural resources and effective protection of

the environment;

8. Strengthen and consolidate the long-standing historical, social and cultural

affinities and links among the people of the Region;

9. Combat HIV and AIDS and other deadly or communicable diseases;

10. Ensure that poverty eradication is addressed in all SADC activities and
programmes; and

11. Mainstream gender in the process of community building.

SADC Strategies

1. Harmonize political and socio-economic policies and plans of Member States;

2. Encourage the peoples of the Region and their institutions to take initiatives to
develop economic, social and cultural ties across the region, and to participate
fully in the implementation of the programmes and projects of SADC;

3. Create appropriate institutions and mechanisms for the mobilization of requisite

resources for the implementation of programmes and operations of SADC and
its institutions;

4. Develop policies aimed at the progressive elimination of obstacles to the free

movement of capital and labor, goods and services, and of the peoples of the
region generally, among Member States;
 5. Promote the development, transfer and mastery of technology;

6. Improve economic management and performance through regional cooperation;

7. Promote the coordination and harmonization of the international relations

of Member States; and

Secure international understanding, cooperation and support, and mobilise the inflow of
public and private resources into the region.

Economic Integration Milestones

The Regional Indicative Strategic Development Plan (RISDP) outlines a series of milestones

to be achieved within the context of the SADC Common Agenda. These Integration
Milestones help the Southern African Development Community (SADC) and its partners to
measure the progress that is being made towards the ultimate objective of the Regional
Indicative Strategic Development Plan: Deepen the integration agenda of SADC with a view
to accelerating poverty eradication and the attainment of other economic and non-economic
development goals.

A. Free Trade Area

The SADC Protocol on Trade (2005), as amended, envisages the establishment of a Free

Trade Area in the SADC Region by 2008 and its objectives are to further liberalise intra-
regional trade in goods and services; ensure efficient production; contribute towards the
improvement of the climate for domestic, cross-border and foreign investment; and enhance
economic development, diversification and industrialisation of the region.

Freeing trade in the region will create larger market, releasing the potential for trade,
economic growth and employment creation. The SADC Free Trade Area seeks to meet the
following needs of the private sector and other regional stakeholders:

 Increased domestic production;

 Greater business opportunities

 Higher regional imports and exports

 Access to cheaper inputs and consumer goods

  Greater employment opportunities

 More foreign direct investment and joint ventures

 The creation of regional value chains

Result

The SADC Free Trade Area was achieved in August 2008, when a phased programme of
tariff reductions that had commenced in 2001 resulted in the attainment of minimum
conditions for the Free Trade Area - 85% of intra-regional trade amongst the partner states
attained zero duty.

While the minimum conditions were met, maximum tariff liberalisation was only attained by
January 2012, when the tariff phase down process for sensitive products was completed.

For countries falling under the Southern African Customs Union (SACU), this process
was completed in January 2007. For Mozambique, the process will only be completed in
2015 in respect of imports from South Africa.

Thirteen out of fifteen SADC Member States are part of the Free Trade Area,
while Angola and Democratic Republic of Congo  remain outside.

Malawi fell behind with the implementation of its tariff phase-down schedules since 2004. In
December 2010, Malawi undertook a tariff reform exercise to align its tariff schedule to
the COMESA and SADC tariff regimes. Since this intervention, the SADC Secretariat is
assessing Malawi’s tariff schedule to determine the level of compliance with its commitments
under the SADC Trade Protocol.

Zimbabwe experienced problems in implementing its tariff commitments on sensitive

products and was allowed to suspend tariff phase-downs from 2010 until 2012. Annual
reductions will therefore resume in 2012, for completion in 2014.

Although Tanzania was on schedule with its tariff commitments, the Government applied for
derogation to levy a 25% import duty on sugar and paper products until 2015 in order for the
industries to take measures to adjust.
Impact

Since 2000, when implementation of the SADC Trade Protocol commenced, intra-SADC
trade has more than doubled, with intra-SADC trade estimated to have grown from about
US$13.2 billion in 2000 to about US$34 billion in 2009, representing an increase of about
155%.

As a proportion of total SADC trade, intra-SADC trade has only grown from 15.7% to 18.5%
in the same period.

As the process to remove tariffs on sensitive products is on-going until 2012, there is still
potential for further expansion of intra-SADC trade as most of the products on the sensitive
list such as textiles and clothing, leather and leather products are highly tradeable products.

Monitoring

SADC is establishing a Trade Monitoring and Compliance Mechanism for monitoring the
implementation of the Free Trade Area, with a specific mechanism for identifying and
eliminating non-tariff barriers. This mechanism has the potential to facilitate movement of
goods and will lead to increased trade.

B. Customs Union

The second SADC Integration Milestone is the establishment of a SADC Customs Union.

A Customs Union is where a group of countries that have established a free trade area agree
on common external tariffs and a common external trade policy. Driven by the need to
increase trade and economic development in the region, this milestone is focused on trade
and financial liberalisation, competitive and diversified industrial
development and increased investment in the region. All of these elements pave the way
towards the next step in the Regional Indicative Strategic Development Plan implementation
framework for the Integration Milestones - a SADC Common Market.

The target date for establishment of a Customs Union included in the Regional Indicative
Strategic Development Plan was 2010.
Results

Due to capacity constraints within the SADC Secretariat the implementation of the Regional
Indicative Strategic Development Plan started late, meaning this milestone has not yet been
attained. However, it is anticipated that that the establishment of the SADC Customs Union
will be reached by 2013.

These delays in the implementation of the SADC Customs Union mean that following steps
in the chain of integration milestones will be delayed, including the SADC Common
Market and Monetary Union.

Impact

Even though the SADC Customs Union has not yet been established, it is possible to point to
other regional examples to show the impacts of cooperation on customs and trade:

Sugar Agreement

The SADC Protocol on Trade includes special agreements for products or industries from the
region that are 'sensitive' to external market forces, including artificially low market prices.
The Sugar Agreement  includes measures intended to increase co-operation and support for
regional sugar producers. Support for Southern African sugar producers came in the form of
preferential access to the Southern African Customs Union (SACU), which is made up
of Botswana, Lesotho, Namibia, South Africa and Swaziland. SADC Member States with a
sugar surplus are allowed to export an agreed portion of that surplus sugar to SACU member
countries without paying any customs duty (duty-free). The amount of sugar each
SADC Member State may export to SACU is proportional to the Member State’s share of the
total SADC sugar surplus.

Challenges

The proposed transition from the SADC Free Trade Area to a SADC Customs Union presents
a number of challenges that may hinder progress. The first major challenge is the
establishment of a single Common External Tariff (sometimes referred to as a CET), which is
complicated by the fact that within SADC there are currently 11 individual tariff policies that
will need to converge into a single and uniform tariff regime. This will be a complex process
to negotiate.
COMMON MARKET

A Common Market is an agreement between two or more countries removing all trade
barriers between themselves, establishing common tariff and non-tariff barriers for importers,
and also allowing for the free movement of labour, capital and services between themselves.

The SADC Common Market is one of the primary goals of SADC in the area of Trade,
Economic Liberalisation and Development and it is projected that the region will reach this
milestone by 2015. Prior to reaching this milestone, SADC must establish a Customs Union,
which was projected for completion by 2010.

Each of the Trade, Economic Liberalisation and Development milestones is intended to bring
the SADC region closer to a Common Market, which in turn is hoped will enhance industrial
development and increase competitiveness across all sectors.

Results

Despite current delays in reaching the preceding milestones, SADC is working hard to
overcome the challenges presented by the Customs Union, with the long-term goal of
establishing a Common Market.

Challenges

SADC is currently faced with two major challenges as the levels of integration move from
the Free Trade Area, through Customs Union and on towards a Common Market:

 Addressing the conflicts that may arise from attempting to service obligations
from membership in multiple regional and international bodies, such as customs
unions and common markets.

 Development of policies and strategies that are targeted at supporting

vulnerable groups, rural and urban poor, small businesses, informal operators
and women.

Rules of Origin

The Rules of Origin are the criteria used to determine the national source of a product.
Governments practices different methods for determining Rules of Origin. Some apply the
criterion of change of tariff classification, others the criterion of percentage value added, and
others the criterion of manufacturing or processing operation.

In a globalising world it is becoming increasingly important that harmonisation is achieved

on these practices by SADC Member States, in order to introduce consistency.

Monetary Union

Monetary Union is where two or more countries achieve macroeconomic convergence,

stable and harmonise exchange rates systems, liberalise capital and current accounts
transactions and adopt market-oriented approaches to the conduct of monetary policy.
Establishing Monetary Union in the SADC region is one of the ultimate goals of the SADC
Protocol on Trade and a key milestone in the drive for deeper integration in SADC.

The Regional Indicative Strategic Development Plan implementation framework identified

2016 as the target for this milestone, which follows the establishment of the Free Trade Area,
the Customs Union and the creation of a Common Market. As the establishment of the
second and third integration milestones have been delayed, Monetary Union may also be
delayed.

Plans to establish Monetary Union in SADC is supported by the SADC Committee of Central

Bank Governors, which is leading cooperation amongst the central banks of the region. This
cooperation aims to enhance regional monetary cooperation by reforming payment, clearing
and settlement systems; harmonisation of legal operational frameworks for central banks and
implementation of best banking practices.

Results and Impact

While the establishment of the SADC Monetary Union is not anticipated until 2016 at the
earliest, considerable advances are being made to pave the way for its introduction:

 Operationalization of payment clearing and settlement systems – the Real

Time Gross Settlement System has been developed to modernize cross-border
payment settlements and has been implemented in 12 SADC Member States.
  Implementation of best banking practices, norms and standards –
14 Member States have implemented an application to harmonize banking
supervision processes, developed by the ICT sub-committee of the SADC Sub-
committee on Bank Supervision.

 Development of an institutional administrative and legal framework – in

2009, the SADC Ministers of Finance developed and approved the Model
Central Bank Law, which was designed to set harmonized frameworks for
control of exchange policies, bank procedures and systems.

Challenges

Despite the positive progress in this area, the Committee of Central Bank Governors has
experienced human resource capacity and funding challenges, resulting in delays of some of
the projects intended to facilitate cooperation and harmonisation in the banking sector in
SADC.

SINGLE CURRENCY

The final step in the process of deepening regional economic integration in SADC is the
implementation of a Single Currency, which will establish the region as an Economic
Union. The Regional Indicative Strategic Development Plan Implementation Framework
targets 2018 for the attainment of this milestone.

Results and Impact

Although the target date for establishing a Single Currency is several years away, a proposal
for a system to facilitate cross-border payment and settlement was developed by the SADC
Payment Systems Steering Committee. This system would allow the settlement of payment
transactions in a central location and was based on a single currency. This model system will
initially be tested on the current Common Monetary Area countries that use the South
African Rand (South Africa, Lesotho, Namibia and Swaziland) and if successful, will be
ready to be rolled out to the rest of the SADC Member States as the region advances its
integration process.
Challenges

Currently, the single biggest challenge in obtaining this, and any of the more advanced
economically related integration milestones, is the lack of clarity surrounding the issue of
countries with membership of more than one customs union. Only when this issue is resolved
will SADC be able to move forward with its agenda of regional economic integration.

CONTINENTAL AND INTERCONTINENTAL COOPERATION

Africa’s cooperation efforts can be traced as far back as the development of the Organisation
of African Unity in 1963, which saw African states coming together with the intention of
achieving greater unity and peace within the region. This inter-regional organisation was
hinged on the realisation that in order to achieve any economic growth or peace on the
African Continent, Member States would have to work together.

Continental and inter-regional cooperation and integration efforts have been ongoing for
several decades now. Theory and experience have proved that such cooperation can
positively contribute to capacity development, infrastructure and economic development
across countries and regions. Emphasis on the term ‘cooperation‘ signals a process of
working or acting together often towards a common goal.

Some of the inter-regional cooperation initiatives within and involving the SADC Region
include the following initiatives, also discussed on the following pages:

 The African Union, SADC and NEPAD – working relationship between the
these three key regional and continental institutions.

 The Tripartite Cooperation – orchestrated cooperation between SADC, the East

African Community (EAC) and the Common Market for Eastern and Southern
Africa (COMESA)

Indian Ocean Rim Association (IORA)

The Secretariat of the Indian Ocean Rim Association (IORA) is hosted by the Government of
the Republic of Mauritius which is based in Cyber City, Ebène, Mauritius.  It manages,
coordinates, services and monitors the implementation of policy decisions, work programmes
and projects adopted by the Council of Ministers. 
The Secretariat is responsible for the servicing of all IORA meetings, the representation and
promotion of the Association, the collation and dissemination of information, the
maintenance of an archive, depository and registry for IORA documentation and research
material and the mobilization of resources.

The Secretariat is headed by a Secretary-General, who is assisted by four Directors and

Experts, on voluntary secondment from Member States. A Chair in Indian Ocean Studies has
been established to support the work of the Association through rigorous, in-depth research
on the six priority areas of IORA. The Secretariat is also supported by locally recruited staff
focusing on various areas of development.

Since India became the IORA Chair for the period 2011-2013, there has been a growing
direction and determination to strengthen institutions and capacities within IORA. India
revitalized IORA during its chairmanship and six Priority and two Focus Areas were
identified on the basis to promote sustained growth and balanced development in the Indian
Ocean Region.

PRIORITIES AND FOCUS AREAS

Maritime Safety & Security

The Indian Ocean region faces many traditional and non-traditional safety and security
challenges including piracy, armed robberies at sea, terrorism, human trafficking, irregular
movement of persons, drugs trafficking, illicit trafficking in wildlife, trafficking of weapons,
crimes in the fisheries sector such as IUU fishing, degradation of ocean health, unlawful
exploitation of marine resources and climate change with its related repercussions on
environmental security.

Covering a vast maritime zone of nearly 68.56 million sq. km. and incorporating coastal
states from South Africa in the west, running up the eastern coast of Africa, along the Gulf to
South and Southeast Asia, ending with Australia in the east, IORA serves as the ‘first line of
defence’ to build upon existing national, regional and international measures, thereby
enhancing coordination and supporting harmonized international Maritime Safety and
Security (MSS) collaboration.
Recognising that a safe and secure Indian Ocean is important for socio economic
development, IORA assigned MSS in 2011 as the top priority area of focus.  The importance
of the Indian Ocean as a major transit area for international trade is evident in the fact that
half of the world's container ships, one third of the world's bulk cargo traffic and two thirds of
the world's oil shipments cross its waters annually.
 
For IORA, Maritime Security includes elements of international peace and security,
sovereignty/territorial integrity/political independence, security from crimes at sea, security
of resources and environmental security; while Maritime Safety is concerned with training
(both technical and personnel), transport, construction and equipment related issues,
assistance in distress situations, etc.

IORA has been addressing MSS in the Indian Ocean through a broad range of activities to
enhance international cooperation in security and governance to successfully tackle the
challenges faced by the region. The IORA Leaders’ Summit held in March 2017, in Jakarta,
Indonesia, highlighted the prioritization of these concerns through its theme, “Strengthening
Maritime Cooperation for a Peaceful, Stable, and Prosperous Indian Ocean”.
 
The ‘IORA Working Group on MSS’, also known as the WGMSS, established in September
2018 and presently chaired by Sri Lanka for a period of two years, is currently advancing the
IORA Action Plan (2017-21) with Member States developing a regional agenda through a
‘MSS Work Plan’. The Second IORA Meeting of Experts on MSS held in November 2017 in
India, provided an outcome document entitled “Blueprint for Maritime Safety and Security in
IORA”, which serves as a base document for initiatives to be implemented by the Working
Group.
 
In August 2019, Sri Lanka hosted the First Meeting of the IORA Maritime Safety and
Security Working Group, which finalized the regional Work Plan drawn up for a period of
two years (2019 – 2021). This meeting provided an opportunity for Member States to discuss
the way forward and to initiate concrete actions in the sphere of MSS.
 
IORA has also devised flagship initiatives such as the Indian Ocean Dialogue, which is held
annually as a track 1.5 event, bringing together key representatives including scholars,
experts, analysts, and policy makers from think tanks, civil societies and governments from
IORA Member States to discuss pertinent issues including MSS.

The Association aims at building upon existing national, regional and multilateral measures
to support a more effective utilization of resources for enhanced cross-border co-operation
and sharing of knowledge, experiences and best practices to secure the Indian Ocean as an
ocean strengthening maritime cooperation for a peaceful, stable, and prosperous region.

Trade and Investment Facilitation

Promoting trade and investment is at the heart of IORA. The Indian Ocean Rim region has
been linked by commerce for centuries and is still at the center of global trade and investment
flows.

Today half of the world’s container ships and two thirds of the world’s oil shipments pass
through the Indian Ocean, including key transit points such as Bab el-Mandeb and the Straits
of Hormuz and Malacca. Emerging economies such as India, Indonesia, Kenya, and South
Africa will ensure that the importance of the Indian Ocean Rim to the global trading
environment will only increase in years to come.

New in 2021, IORA is partnering with London-based Global Trade Review (GTR) to feature
in GTR’s flagship trade conferences.  An initiative of the Indian Ocean Rim Business Forum
(IORBF), IORA will be injecting business perspectives for the Indian Ocean region into
topical debates about the trends, opportunities and challenges to expand trade and investment
globally, with a focus on IORA’s Member States and Dialogue Partners.  Contact us to learn
more.
 
IORA Member States have committed to pursue trade liberalisation and lower barriers to
promote freer flows of goods, services, investment, and technology.  Trade and Investment
Facilitation is one of IORA’s six priority areas.  The IORA Action Plan 2017-2021 sets seven
ambitious targets for IORA, summarized as:
 
Short Term:
 Conduct capacity building on reducing barriers to trade;

 Cooperate to promote SMEs;

 Establish an online IORA Trade Repository to assist businesses find trade

information; and

 Establish an Investment Guide to promote investment;

Medium Term:
 Revitalize IORA’s private sector arm, the Indian Ocean Rim Business Forum
(IORBF); and

 Cooperate to promote financial services;

Long Term:
 Make business travel easier.

IORA’s past successes have included:

 Training on Indian Ocean approaches to arbitration and dispute resolution, conducted

by the Mauritius Chamber of Commerce and Industry (MCCI) in Johannesburg, South
Africa, on 10-14 February 2020. Read more here.
 The Experts’ Meeting on Trade and Investment Facilitation in the Indian Ocean
Region held on 30-31 January 2020 in Mauritius. Read more here.
 The successful Modernising Trade in the Indian Ocean Rim conference, held on 17-
18 June in Durban, South Africa. Read the report here
 The adoption of an IORA MOU on Promoting Small and Medium Enterprises
(SMEs), which are vital to boost economic growth and access to technology, markets
and capital;

 Technical workshops and exchanges on regional trade and investment topics, such as
the financial inclusion of women (more about IORA’s work on women’s economic
empowerment here);
 Trade Ministerial Meetings that highlight successes and emerging opportunities for
the region, including through initiatives such as IORA Start-Up Sessions that have
linked entrepreneurs and potential investors
  A high-level B2B Business Summit in March 2017 in Jakarta, opened by President
Joko Widodo, and accompanying Declaration
 Progress in implementing an IORA online Trade Repository, to promote easy access
to trade and investment information in the region (under construction)
 Ongoing-Creation of an IORA Center of Excellence for Dispute Resolution in the
IORA Region (under construction).
 
IORA’s Trade and Investment Facilitation work is led by a Working Group on Trade and
Investment (WGTI) and the Indian Ocean Rim Business Forum (IORBF).

Fisheries Management

Indian Ocean coastal states share a keen interest in the management and conservation of the
region's vital resources whereby fisheries is a key aspect. Fisheries and related industries are
critical in ensuring food security and the impact of overfishing and climate change has
accelerated the reduction of major fish stocks within the Indian Ocean region.

The fisheries sector in the Indian Ocean provides food to hundreds of millions of people and
is an important contributor to food security, poverty alleviation, job creation and income
generation. Out of the estimated 28.5 million people directly employed by the marine fishing
sector (both industrial and artisanal) worldwide, artisanal fishing comprises 90% of all
fishing jobs globally, representing approximately 45% of the world’s fisheries, and nearly a
quarter of the world catch.

However, there has been a decrease in the fish stocks over the past years. It was estimated
that 47% of 441 stocks (for which some available information on their status are available)
were fully exploited, 18% were overexploited, 9% were depleted and 1% was recovering.
Therefore, this necessitates urgent actions worldwide, including the Indian Ocean, for
sustainable conservation, management, development and utilization of the India Ocean
fisheries resources.
 
IORA is attributing high importance in strengthening cooperation in both the Fisheries
Management Sector, as well as the Blue Economy, as reflected in the IORA Action Plan
2017-2021, which was adopted at the IORA Leaders’ Summit in March 2017 in Indonesia.
This Action Plan is viewed as a roadmap that sets-up concrete actions to be undertaken on a
short-term, medium-term and long-term basis, as well as to charter the future development of
the IORA and for promoting cooperation in each priority sectors and focus areas.

In view of sustaining and sustainably manage this growing industry, IORA Member States
have been addressing several issues covering a wide range of themes such as: seafood
products safety and quality; seafood handling, post-harvest processing and storage of
fisheries and aquaculture products; banking and artisanal fisheries; sustainable management
and development of fisheries resources; fish trade; among others.
 
In addition, the IORA Fisheries Support Unit (FSU), which is hosted by the Sultanate of
Oman, manages and spearheads IORA efforts to identify and discuss key fisheries-related
issues mentioned in the action plan. It also serves to study proposals and facilitate research in
areas that are of practical use to Member States. The FSU acts as a regional centre for
knowledge sharing, capacity building and addressing strategic issues in the fisheries and
aquaculture sectors.
 
In order to tackle the challenges facing regional fisheries management, Member States should
expand on this cooperative mechanism. In addition, it might be appropriate to find ways to
remove barriers and boundaries among the different parts of the fisheries management
processes including science, policy, and decision-making, involvement of private sectors, and
Dialogue Partners engagement, so as to bring them together into regional management
forums.               

The role of the FSU as an Advisory Committee for Fisheries and Aquaculture may be further
explored and strengthened. It has been reported that the future increasing global demand for
fish consumption will have to be met by aquaculture. This therefore necessitates the attention
of IORA Member States for further research, capacity building initiatives and development in
this sector. IORA is also working toward developing regional/international networking to
interact with other institutions sharing common interests in fisheries management.            
Fisheries management should be at the core of the new maritime policy, which IORA should
strengthen and develop to build mutual understanding among all decision-makers and players
of the maritime industry. Effective decision-making must also integrate environmental
concerns into maritime policies as maritime pollution and plastic debris, which plays a major
role in the decline of fish stocks. 
Disaster Risk Management

The Indian Ocean Region (IOR) is sometimes called the “World’s Hazard Belt” as it is prone
to disasters, both natural and man-made. Natural disasters under the group of Climatological
(cyclones and droughts), Geological and Tectonic (earthquakes and tsunamis) and
Hydrological (floods and tidal surges) origins are very common and reoccurring phenomena
in the region. According to the UN ESCAP, around 50% of natural disasters occurring in this
region are climatogenic and seismogenic in nature.

Manmade disasters arise from anthropogenic hazards, that is, hazards caused by human
action or inaction; many mirror natural disasters, yet man has a direct hand in their
occurrence, as may be seen in cases of oil spills, fires, leakage of poisonous and destructive
substances, illegal dumping, and so on.

The year 2018 and 2019 saw tsunamis and earthquakes in Indonesia, severe droughts in
Madagascar, floods and landslides in India, seasonal cyclones in the Islands of the Indian
Ocean, and many more calamities. The 2008 Super Cyclone in Myanmar and the December
2004 Indian Ocean earthquake and tsunami will forever be etched in public memory. The loss
of lives as well as the damage to property and the natural environment is incalculable. The
domino effect on poverty, famine, societal imbalance and other resultant tragedies cannot be
discounted.

 Management of disaster risks is particularly urgent in the IOR because it is home to small
island nation states and developing littoral countries with high population densities, which are
hit much harder due to the lack of resources and assets to handle the calamity. Moreover, the
region is also witnessing an increasing link of natural disasters to climate change with
increasing sea levels and rising water temperatures. Disaster Risk Management (DRM) is
therefore an area of collective interest to IORA Member States.
 
DRM for IORA, revolves around the development of knowledge and capacities by
governments, communities and individuals to effectively anticipate, respond to and recover
from hazards and emergency situations. The area of work in DRM therefore covers
preparation, mitigation and recovery. Governments around the world have committed to take
action along the guidelines of the Sendai Framework to reduce vulnerabilities to natural
hazards, and IORA is greatly influenced by the same. It must be noted that although the IOR
is prone to disasters, it also has the world best institutes to help manage disasters.
 
IORA recognizes DRM to be a multidisciplinary concept as it involves the participation of a
multitude of stakeholders, including national governments, non-governmental organizations,
regional and international partners, donors, civil society and the private sector. IORA is
therefore in the process of encouraging partnerships between governments and institutions to
strengthen this Priority Area through the development of joint training programmes, sharing
of experiences and best practices, building capacity and enhancing the technical capabilities
within the region. The aim is to facilitate and enhance regional cooperation on preparedness
and response strategies to fragile and unpredictable situations.
 
Under the IORA Action Plan 2017-2021, the development of DRM in IORA has been given
focused direction. The Core Group on DRM, chaired by India for a period of two years, is
tasked with leading the formulation of a Work Plan for this Priority Area, with the aim to
enhance cooperation and develop resiliency in the IOR. Furthermore, the Core Group
(Indonesia, Mauritius, Mozambique and Sri Lanka) along with Member States, are currently
in the process of finalising the regional Work Plan and the IORA Guidelines for
Humanitarian Assistance and Disaster Relief (HADR).
 
In September 2019, IORA in collaboration with the IOC-UNESCO held the International
Symposium on Tsunami Early Warning Systems - Lessons-learnt from the 2018 Tsunamis in
Indonesia, which provided a unique platform for IORA experts to formulate actionable and
practical recommendations for inclusion to the draft regional DRM Work Plan. In November
2019, experts from various technical and medical agencies from Member States responsible
for post-disaster relief operations, met at the RWTH Aachen University in Germany to learn
more about building innovative resilient communities. 
BLUE ECONOMY

Oceans cover 72 percent of the surface of our blue planet and provide a substantial portion of
the global population with food and livelihood. Enhancing more than 80 percent of global
trade, marine and coastal environments constitute a key resource for economic development.
On the basis of the strategic location of the Indian Ocean region, IORA has emphasized on
growing the Blue Economy in a sustainable, inclusive and people centered manner.

The objective of the Blue Economy is to promote smart, sustainable and inclusive growth and
employment opportunities within the Indian Ocean region’s maritime economic activities.
The Blue Economy is determined to initiate appropriate programs for: the sustainable
harnessing of ocean resources; research and development; developing relevant sectors of
oceanography; stock assessment of marine resources; introducing marine aquaculture, deep
sea/long line fishing and biotechnology; and human resource development; among others.

This special focus area was recognised at the 14 th IORA Ministerial Meeting in Perth,
Australia, on 9 October 2014. The Blue Economy captured the attention of all IORA Member
States due to its growing global interest and potential and for being recognised as the top
priority for generating employment, food security, poverty alleviation and ensuring
sustainability in business and economic models in the Indian Ocean. Considering its wide
range of valuable resources, the Blue Economy is gaining increasing interest in IORA
Member States that are all committed to the establishment of a common vision that would
make this sector a driver for balanced economic development in the Indian Ocean Rim
region.       

Since 2014, several capacity building programmes have been carried out covering a wide
range of areas, including inter alia: fisheries and aquaculture; seafood products safety and
quality; seafood handling, post-harvest processing and storage of fisheries and aquaculture
products; banking and artisanal fisheries; sustainable management and development of
fisheries resources; fish trade; seaport and shipping; maritime connectivity; port management
and operations; marine spatial planning; ocean forecasting/ observatory; blue carbon; and
renewable energy. The First IORA Ministerial Blue Economy Conference (BEC) was held in
Mauritius on 2-3 September 2015 where the Blue Economy Declaration was adopted.
Reflecting on the global trends, this Declaration seeks to harness oceans and maritime
resources to drive economic growth, job creation and innovation, while safeguarding
sustainability and environmental protection. Indonesia hosted the Second Ministerial Blue
Economy Conference on “Financing the Blue Economy” on 8-10 May 2017 in Jakarta,
Indonesia, whereby the Jakarta Declaration on the Blue Economy was adopted, aiming at
optimising the use of existing financial instruments in the IORA region to enhance Blue
Economy development in our Member States. The need for new and innovative financing
mechanisms and for strengthening collaboration between the public and private sectors, as
well as Dialogue Partners, was also highlighted.        
 
It is envisaged that Blue Economy development in IORA will further be strengthened and
will be on the top of IORA’s agenda in the coming years with the establishment of the Blue
Economy Working Group (WGBE). The establishment of the WGBE emanates from the
IORA Action Plan 2017-2021 that was adopted at the Leaders’ Summit that was held on 5-7
March 2017 in Jakarta, Indonesia. The meeting also saw the adoption of the Jakarta Concord
that reiterate IORA’s commitment to promote Blue Economy development in the region as a
key source of inclusive economic growth, job creation and education, based on the evidence-
based sustainable management of marine resources.

The IORA Secretariat has identified the following six priority pillars in the blue economy as
were recommended by the Council of Ministers’ meeting (COMM) and revised by the
Secretariat in consultation with Member States:
 Fisheries and Aquaculture

 Renewable Ocean Energy

 Seaports and Shipping

 Offshore Hydrocarbons and Seabed Minerals

 Marine Biotechnology, Research and Development

 Tourism

 Ocean Knowledge Clusters and SIDS & LDC Programmes are cross cutting priorities.
 Fisheries & Aquaculture
Fisheries, which is a vital oceanic resource forms the core of the Blue Economy, as one of the
main resources of the Indian Ocean which provide food to hundreds of millions of people and
greatly contribute to the livelihoods of coastal communities. It plays an important role in
ensuring food security, poverty alleviation and also has a huge potential for business
opportunities. There has been a strong increase in fish production from 861,000 tons in 1950
to 11.5 million tons in 2010 and the world's total demand for fish and fisheries products is
expected to rise from 50 million to 183 million tons in 2015, with aquaculture activities
predicted to cover about 73% of this increase. Aquaculture, which offers huge potential for
the provision of food and livelihoods, will under the Blue Economy incorporate the value of
the natural capital in its development, respecting ecological parameters throughout the cycle
of production, creating sustainable, decent employment and offer high value commodities for
export. 

To meet the increasing public demand in seafood products, natural fisheries resources are
being over-exploited and threatened. Therefore, the urgent need to find a balance between
population need and environmental health has provided impetus to the promotion of
sustainable fishing and aquaculture. Well-managed fisheries can deliver billions more in
value and millions of tonnes more fish each year, while aquaculture has the potential for
continued strong growth to supply the food requirements of a growing world.

Renewable Ocean Energy

The world population is expected to increase to an estimated 9 billion people in 2050, which
is 1.5 times greater than the current population, resulting in an increase in countries' demands
on fossil fuels. Recently there has been a collapse in the price of crude oil, but the possibility
of an eventual normalization (of return to higher prices) should not be disregarded and thus
necessitates the continued attention of IORA Member States to consider alternative
renewable sources of energy. Renewable sources of energy such as solar and wind are
already being implemented worldwide. However, additional incentives in renewable energy
are strongly in demand to further decrease the burden on fossil fuels. The time is therefore
appropriate to explore the potential of renewable energy derived from the ocean. The ocean
offers vast potential for renewable "blue energy" from wind, wave, tidal, thermal and biomass
sources.  

In line with the above efforts, it is also proposed to bring together the offshore oil and gas
community with the renewable ocean energy community to undertake a gap analysis in
relation to Oil and Gas exploration. In this regard the potential for the development of the
offshore oil and gas industry in the Indian Ocean region should also be taken into
consideration.
 
Seaports & Shipping
The seaport and maritime transport sector is one of the important priority sectors under the
Blue Economy, in which Member States are showing a greater interest. In spite of the
continuous rise of maritime transport and shipping transactions in the region, uneven
distribution of trade exists among the rim countries, where only a handful are benefiting
economically from maritime exchanges and transportation. Some Member States
unfortunately are struggling to keep pace with the rapid development and complexity of
maritime trade as they face challenges in terms of congestion, new information technology
and equipment, improvement of port infrastructure and professional services. In this regard,
regional cooperation is important for unlocking the bottlenecks to ports development and
maritime economy expansion in the Indian Ocean so as to enhance blue growth through
economic cooperation and trade relations between Member States.

Offshore Hydrocarbons & Seabed Minerals

With the decreasing inland mineral deposits and increasing industrial demands, much
attention is being focused on mineral exploration and mining of the seabed. The seabed
contains minerals that represent a rapidly developing opportunity for economic development
in both the Exclusive Economic Zones of coastal nations and beyond the limits of national
jurisdiction. Seabed exploration in the Indian Ocean has already started, but the major
constraints in the commercialization of these resources lie in the fact that Member States have
limited data on the resources their exclusive economic zone (EEZ) possesses, lack capacity
for exploration, mining and processing of these minerals. Therefore, improved information is
needed to assess the potential across the region.

Marine Biotechnology Research & Development

Marine biotechnology (or Blue Biotechnology) is considered an area of great interest and
potential due to the contribution for the building of an eco-sustainable and highly efficient
society. A fundamental aspect is related to aquaculture, whereby new methodologies will
help in: selective breeding of species; increasing sustainability of production; and enhancing
animal welfare, including adjustments in food supply, preventive therapeutic measures, and
use of zero-waste recirculation systems. Aquaculture products will also be improved to gain
optimal nutritional properties for human health. Another strategic area of marine
biotechnology is related to the development of renewable energy products and processes, for
example through the use of marine algae. In addition, the marine environment is a largely
untapped source of novel compounds that could be potentially used as novel drugs, health,
nutraceuticals and personal care products; Blue Biotechnology could be further involved in
addressing key environmental issues, such as in bio-sensing technologies to allow in situ
marine monitoring, in bioremediation and in developing cost-effective and non-toxic
antifouling technologies. Finally, marine derived molecules could be of high utility as
industrial products or could be used in industrial processes as new enzymes, biopolymers,
and biomaterials.

Tourism

Marine tourism, with its related marine activities (including cruise tourism), is a growing
industry that represent an important contributor to the economy of countries and for
generating employment. However, these activities, if not managed sustainably, could develop
a parasitic relationship with the environment, leading to destruction and degradation of
marine habitats and environment, loss of biodiversity, marine pollution and over-exploitation
of resources. This necessitates actions for environmental protection in order to prevent any
irreversible impacts (for example sedimentation over coral organisms by sheer human
physical impact, beach erosion, and mangrove clearance) that may arise from marine tourism
industry. Protecting local marine resources is one of the most urgent needs in promoting
sustainable tourism. Sustainable coastal tourism can assist with the preservation of artisanal
fishing communities, allow for subsistence fishing, protect the environment, and make
positive contributions to sustainable economic development. In view of addressing these
issues, there is a need to: create more and increase the size of marine protected areas (MPAs);
establish and promote sustainable marine tourism; create opportunities for financing MPAs;
develop more marine parks, among others. In addition to providing areas for recreation and
enjoyment, marine parks support billions of dollars of vital ecosystem services worldwide.
 
Sustainable Whale and Dolphin Watching Tourism
Whale and dolphin watching tourism is one of the fastest growing marine tourism sectors in
the world and is on the rise in the IORA region. Whale and dolphin watching tourism can
create economic, social, and environmental benefits such as inclusive economic growth and
job creation for coastal communities, while also encouraging the protection of marine species
and habitats.
 
The Indian Ocean region is home to many unique marine species, including vulnerable
species such as the Indian Ocean humpback dolphin and the Arabian Sea humpback whale.
Whales and dolphins are culturally important to many member states. With threats to ocean
health and marine species on the rise, it is important to ensure that whale and dolphin
watching is ethical, sustainable, non-invasive, and safe for both tourists and animals.
 
Recognising this, the IORA Sustainable Whale and Dolphin Watching Tourism
Network was established in 2016 to help IORA member states become world leaders in
sustainable practice. The purpose of the Network is to provide a regional forum for key
stakeholders to facilitate the exchange of experience, information, and expertise on whale and
dolphin watching, and to encourage collaboration. Information relevant to the Network is
shared through a biannual newsletter.

IORA Indian Ocean Blue Carbon Hub

The IORA Indian Ocean Blue Carbon Hub aims to build knowledge and capacity relevant to
protecting and restoring blue carbon ecosystems (which include mangroves, seagrasses and
tidal marshes) throughout the Indian Ocean in a way that enhances livelihoods, reduces risks
from natural disasters and helps mitigate climate change.

Blue carbon ecosystems have an immense capacity to sequester carbon, a feature which
makes them a good candidate for efforts to mitigate climate change. Indeed, the name reflects
the high amount of organic carbon they contain. In addition, they support livelihoods in a
variety of ways including through fisheries, and can reduce the effects of storms.

The Indian Ocean contains a disproportionate amount of the world’s blue carbon ecosystems,
and the nations of the Indian Ocean have an opportunity to lead the world in harnessing the
benefits that they provide. The Hub seeks to support IORA Member States to do this through
evidence-based actions.

The objectives of the Hub include:

 Providing a source of advice to, and expertise for, IORA Member States

 Engaging in and facilitating research that seeks to improve knowledge and provide the
evidence base for development of robust policy and finance mechanisms

 Establishing best practice and disseminating information about best practice

 Developing partnerships with organizations that can assist with implementation of

activities that meet these objectives.

Priority activities for the Hub include a think-tank series, a visiting fellowship program for
early career professionals, and scientific expeditions. The think-tank series aims to convene
leading thinkers, innovators and practitioners to address some of the most fundamental
challenges preventing implementation of evidence-based policy. The first of these was held
in Mauritius in February 2020, and focussed on finance.
 
The Hub was announced by Australia’s Foreign Minister at the Third IORA Ministerial Blue
Economy Conference, in Dhaka in September 2019. It is based at the Indian Ocean Marine
Research Centre in Perth, Australia.
THE ASIA PACIFIC ECONOMIC COOPERATION (APEC)

The Asia-Pacific Economic Cooperation (APEC) is an inter-governmental forum for 21

member economies in the Pacific Rim that promotes free trade throughout the Asia-Pacific
region. 

 Following the success of ASEAN's series of post-ministerial conferences launched in

the  mid-1980s, APEC started in 1989, in response to the growing interdependence of
Asia Pacific economies and the advent of regional trade blocs in other parts of the
world;  
 It aimed to establish new markets for agricultural products and raw materials beyond 
Europe. 
 Headquartered in Singapore, APEC is recognized as one of the highest-level
multilateral blocs and oldest forums in the Asia-Pacific region and exerts a significant
global influence.  
 The heads of government of all APEC members except the Republic of China (which
is represented by a ministerial-level official under the name Chinese Taipei as
economic leader) attend an annual APEC Economic Leaders' Meeting.  
 The location of the meeting rotates annually among the member economies, and a 
famous tradition, followed for most (but not all) summits, involves the attending
leaders dressing in a national costume of the host country.  
 APEC has three official observers: the Association of Southeast Asian Nations
Secretariat, the Pacific Economic Cooperation Council and the Pacific Islands Forum
Secretariat  
 APEC's Host Economy of the Year is considered to be invited in the first place for
geographical representation to attend G20 meetings following G20 guidelines. 

Mission

 APEC is the premier Asia-Pacific economic forum. Our primary goal is to support
sustainable economic growth and prosperity in the Asia-Pacific region. 
 We are united in our drive to build a dynamic and harmonious Asia-Pacific
community by championing free and open trade and investment, promoting and
accelerating regional economic integration, encouraging economic and technical
 cooperation, enhancing human security, and facilitating a favourable and sustainable
business environment. Our initiatives turn policy goals into concrete results and
agreements into tangible benefits. 

Objective

 The broad objectives are to provide a forum for discussion on a wide range of
economic issues and to promote multilateral cooperation among the market-oriented
economies of the region. Specifically, APEC aims to promote economic and technical
cooperation among the members by stimulating the flow of goods, services, capital
and technology; to develop a liberalized trade and investment regime; to encourage
private investment,  and to support ‘open regionalism’. 

STRUCTURE 

 APEC consists of Annual Ministerial Meetings, Senior Officials Meeting, Working

Groups and a Secretariat.  
 The governing body of APEC is the Annual Ministerial Meeting of the foreign and
trade ministers of all the member-states.  
 The chairmanship of the meetings rotates every year among the members. 
 The Senior Officials Meetings, consisting of representatives of all the member-states, 
are held annually and are responsible for the implementation of policies framed by 
Ministerial Meetings.  
 There are ten Working Groups dealing with Telecommunications, Trade and
Investment  Data, Fisheries, Tourism, Transportation, Trade Promotion, Investment
and Technology,  Human Resource Development, Regional Energy Cooperation and
Marine Resource  Conservation, and two ad hoc groups dealing with Regional Trade
Liberalization and  Economic Policy.  
 The Secretariat is headed by the Executive Director who holds a term of one year.
How Has the Region Benefited? 

 APEC has grown to become a dynamic engine of economic growth and one of the
most important regional forums in the Asia-Pacific. Its 21 member economies are
home to around 2.9 billion people and represent approximately 60 per cent of world
GDP and 48 per cent of world trade in 2018.  
 As a result of APEC’s work, growth has soared in the region, with real GDP
increasing from USD 19 trillion in 1989 to USD 46.9 trillion in 2018. Meanwhile,
residents of the  Asia-Pacific saw their per capita income rise by 74 per cent, lifting
millions out of poverty and creating a growing middle class in less than three
decades. 
 Bringing the region closer together, reducing trade barriers, and smoothing out
differences in regulations have boosted trade which, in turn, has led to this dramatic
increase in prosperity. Average tariffs fell from 17 per cent in 1989 to 5.3 per cent in 
2018. During that same time period, the APEC region’s total trade increased over
seven times—outpacing the rest of the world with two-thirds of this trade occurring
between member economies. 
 APEC implements a wide variety of initiatives to help integrate the region’s
economies and promote trade while addressing sustainability and social equity. 

SCOPE OF WORK 

The Three Pillars of APEC's agenda focus on: 

1. Trade and Investment Liberalization  

APEC members take actions to reduce tariff and non-tariff barriers to trade and investment
that boosts job creation, incomes and growth. Collaboration is guided by APEC's Regional
Economic Integration agenda and includes the advancement of bilateral and regional trade
agreements and the long-term goal of a Free Trade Area of the Asia-Pacific (FTAAP). 

2. Business Facilitation  

APEC members pursue measures to reduce the time, cost and uncertainty of doing business
in the region and open new economic opportunities including for small firms, women and
youth. APEC's Structural Reform agenda supports the development and harmonization of
policies that improve market access and efficiency and uphold public interest such as the
safeguarding of health and safety. 

3. Economic and Technical Cooperation (ECOTECH)  

ECOTECH builds the technical capacity of APEC's diverse members to promote

trade, investment and robust, secure and sustainable economic growth that widely benefits the
region's people. Priorities include strengthening anti-corruption, cross-border education and
skills training, emergency preparedness, energy security, environmental protection, defence
against pandemics and infrastructure development, among others.

Osaka Action Agenda 

The Osaka Action Agenda provides a framework for meeting the Bogor Goals through trade
and investment liberalisation, business facilitation and sectoral activities, underpinned by
policy dialogues and economic and technical cooperation. As part of this framework,
General  Principles have been defined for APEC member economies as they proceed through
the APEC  liberalisation and facilitation process.  

The following General Principles are provided in the Osaka Action Agenda and are applied
to  the entire APEC liberalisation and facilitation process:  

 Comprehensiveness - addressing all impediments to achieving the long-term goal of

free and open trade. 
 WTO-consistency - measures undertaken in the context of the APEC Action Agenda
are consistent with the principles of the World Trade Organization (WTO). 
 Comparability - APEC member economies endeavor to have comparable trade and
investment liberalization and facilitation, taking into account the general levels
achieved by each APEC economy. 
 Non-discrimination - reductions in barriers to trade achieved through APEC are
available to all APEC Member Economies and non-APEC economies.  
 Transparency - the laws, regulations and administrative procedures in all APEC
member economies which affect the flow of goods, services and capital among APEC
member economies are transparent.  
  Standstill - APEC Member Economies do not take measures which have the effect of
increasing levels of protection.  
 Simultaneous start, continuous process and differentiated timetables - APEC
member economies began simultaneously the process of liberalization, facilitation and
cooperation and continuously contribute to the long-term goal of free and open trade
and investment.  
 Flexibility - APEC member economies deal with the liberalization and facilitation
process in a flexible manner, taking into account differing levels of economic
development.
 Cooperation - Economic and technical cooperation contributing to liberalization and
facilitation is actively pursued. 

 India has requested membership in APEC and received initial support from the
United  States, Japan, Australia and Papua New Guinea. 
 Officials have decided not to allow India to join for various reasons, considering that 
India does not border the Pacific Ocean, which all current members do. 
 However, India was invited to be an observer for the first time in November 2011.

 CRITICISM 

 APEC has been criticized for promoting free trade agreements that would impose
restrictions on national and local laws, which regulate and ensure labor rights, 
environmental protection and safe and affordable access to medicine. 
 According to the organization, it is "the premier forum for facilitating economic
growth,  cooperation, trade and investment in the Asia-Pacific region" established to
"further enhance economic growth and prosperity for the region and to strengthen the
Asia Pacific community. 
 The effectiveness and fairness of its role have been questioned, especially from the
viewpoints of European countries that cannot take part in APEC and Pacific Island
nations that cannot participate but stand to be affected by its decisions.

THE MERCADO COMUN DEL CONO SUR OR SOUTHERN COMMON MARKET

(MERCOSUR)

The Southern Common Market (MERCOSUR for its Spanish initials) is a regional
integration process, initially established by Argentina, Brazil, Paraguay and Uruguay, and
subsequently joined by Venezuela and Bolivia* -the latter still complying with the accession
procedure.

Its official working languages are Spanish and Portuguese. The working documents’ official
version will be that of the host country language of each meeting. As of 2006, through the
Decision CMC No. 35/06, Guarani was incorporated as one of the languages of the Bloc.

MERCOSUR is an open and dynamic process. Since its creation, its main objective has been
to promote a common space that generates business and investment opportunities through the
competitive integration of national economies into the international market. As a result, it has
established multiple agreements with countries or groups of countries, granting them, in some
cases, the status of Associated States – this being the situation of the South American
countries. These participate in activities and meetings of the Bloc and have trade preferences
with the States Parties. MERCOSUR has also signed commercial, political or cooperation
agreements with a diverse number of nations and organizations on all five continents.

Since its origins, MERCOSUR has been based on the principles of Democracy and Economic
Development, which underpins the core values of a human-faced integration. Aligned with
these, different agreements have been added in terms of migratory, labor, cultural, and social
matters -just to mention a few, which are of utmost importance for its inhabitants.

These agreements meant the incorporation of the Citizen, Social and Productive Integration
dimensions. For this to be achieved, it was necessary to adapt and expand the institution’s
structure throughout the region by meeting new demands and deepening the effective
participation of the citizenship. Moreover, it had to equip itself with its own financing
mechanisms, such as the MERCOSUR Fund for the Structural Convergence (FOCEM),
amongst other funds.

Through an annual contribution of over $100 million dollars, FOCEM funds projects
aimed at prompting competitiveness , social cohesion, and the reduction of asymmetries
among members involved in the process.

MERCOSUR full potential is immeasurable and can be found in the most diverse areas. Its
territory of almost 15 million km2
consists of a great variety of natural wealth and treasures
which humanity possesses: water, biodiversity, energy resources, and fertile lands. Its
greatest asset , nevertheless , is its people. Thanks to a lot of population of over 295 million
people, it has an invaluable heritage of cultural, ethnic, linguistic and religious diversity ,
which coexists harmoniously making MERCOSUR a region of peace and development.

MERCOSUR makes its decisions through three bodies: the Council of the Common Market
(CMC), the main body of MERCOSUR which conducts the integration process politically;
the Common Market Group (GMC), which oversees the daily functioning of the Bloc; and
the Mercosur Trade Commission (CCM), responsible for the administration of common
commercial policy instruments. More than 300 negotiation forums assist these bodies in the
most diverse areas, integrated by representatives of each States Parties in order to promote
initiatives to be considered by decision-making bodies.

Over time and for the purpose of the implementation of its regional policies, MERCOSUR
has created several permanent agencies in different cities. Examples of these are the Fund for
the Structural Convergence of MERCOSUR (FOCEM), the Institute of Public Policies on
Human Rights (IPPDH), MERCOSUR Social Institute (ISM), the Parliament of
MERCOSUR (PARLASUR), the Secretariat of MERCOSUR (SM) and the Permanent
Review Tribunal (TPR).nual contribution of over $100 million dollars, FOCEM funds
projects aimed at promoting competitiveness, social cohesion and the reduction of
asymmetries among members involved in the process. Through an annual contribution
of over $100 million dollars, FOCEM funds projects aimed at promoting competitiveness,
social cohesion and the reduction of asymmetries