InfraNomics has been working with the Asian Development Bank and the Federal Government about increasing trade in WA’s Indian Ocean Region. An increasing theme in InfraNomics’ work is the attention that is being directed towards the Indian Ocean Rim. Six of Australia’s Top 15 trading partners are from the Indian Ocean region. Over 50% of Australia’s total exports depart from ports in the Indian Ocean and over 90% of Western Australia’s imports and exports pass through ports. With a combined population of over three billion people in Western Australia’s time zone, it’s about time that the Indian Ocean Rim is no longer ignored.
The strategic importance of the Indian Ocean Rim has also been highlighted in the shift in terminology from the “Asia-Pacific” to the “Indo-Pacific”, which is essentially the Asia-Pacific plus India. Even the United States is formally recognising the region as the “Indo-Pacific” and changed the name of its United States Pacific Command (USPACOM) station in Hawaii to the United States Indo-Pacific Command (USINDOPACOM) in May, 2018.
There are over 25 countries that make up the Indian Ocean Rim. With the Indian Ocean now the world’s business trade corridor (surpassing the Pacific and Atlantic oceans), WA is in a prime position to develop our trading relationships with these emerging markets and in turn become a lynchpin in Indian Ocean trade logistics.
A lot has been written about China’s One Belt One Road initiative. China recognised the strategic importance of the Indian Ocean Rim and has been steadily investing hundreds of billions of dollars on infrastructure projects throughout Africa and West Asia, such as Tanzania, Kenya, Somalia, Sri Lanka, Pakistan and Bangladesh.
In August 2018, Australia, as part of an alliance with the US and Japan, launched a US$113m fund to provide support to Indian Ocean Rim countries for digital economy, energy and infrastructure projects. Hon Bill Johnston MLA has been developing the relationship between WA and the Common Market for Eastern and Southern Africa (COMESA) which we believe has the potential to dramatically increase bi-lateral trade for the benefit of all countries in the region.
The Asian Development Bank is running a project on Promoting Investments and Economic Growth in Central and West Asia, East Asia, and South Asia Subregions, of which most member countries are part of the Indian Ocean Rim. The project is about the development of a Trade Credit Insurance and Guarantee Agency (TCIGA). The TCIGA initiative is intended to facilitate increased trade, economic and social development, thereby allowing member countries to grow their GDP through exports. Local company Pitcher Partners teamed up with GDSI (Ireland) and submitted the winning bid. InfraNomics will be providing specialist technical advice on international trade, trade financing and business case expertise for this project. This shows that WA advisory companies can beat the rest of the world in providing world class advice.
Initiatives such as the TCIGA and the support of organisations such as the Asian Development Bank initiative will be a game changer for the countries involved. It will provide the financial tools required for these countries to grow their domestic industries and in turn increase their value-added exports. In turn, the opportunities for WA to grow our economy whilst assisting Indian Ocean Rim countries grow theirs will be numerous.
With the right initiative, strategy and governmental support WA has the opportunity to become a trade and expertise powerhouse in the Indian Ocean Rim. In the future this may mean that Perth’s CBD becomes a regional financial centre, Kwinana the premiere regional industrial area with world-leading port facilities and Fremantle a regional tourism, cultural and entertainment capital. It’s up to us to take the opportunity and run with it.