TRENDS IN TRADE RELATIONS AMONG THE MAJOR NATIONS OF THE INDIAN OCEAN RIM

Abstract

Given the existing political frictions between some of the IOR countries, initiatives for economic co-operation are less likely to be mooted by political forces. The question investigated in this thesis is whether market forces, rather than governments could induce IOR economic co-operation.

Unlike the Atlantic and Pacific Oceans, there are no specific organisations or associations designed to enhance economic co-operation among the IOR countries. This is so despite the fact that the region's importance lies in its "geographical location, the important sea routes which travels it, and the wealth of natural resources of the...countries on the shore of the ocean..." (Dipoyudo, 1982, p1).

Countries in the IOR are distinctly different. Apart from varying vastly in geographical size, population and income levels, substantial disparities are also observed in their production structure and trade policies. Despite this, the general trend observed has been one that suggests clearly the increasing importance of the region to the individual IOR countries.

The IOR region is an increasingly important source from which the world gets most of its key raw materials. In particular, the IOR countries taken together, have comparative advantage in the production of products classified in commodity categories 0 to 8 (except 5) of the Standard International Trade Classification (SITC). These trends indicate that there are encouraging possibilities for economic co­ operation in the region.