On pause for nearly two years amidst the deadly global pandemic, 2023 will unquestionably be the witness, yet again, of the diverse strategic skills of the world’s superpowers to regain economic supremacy. I’m no geopolitical expert, but the International Monetary Fund’s conclusion that India and China will account for half of global growth in 2023, while the US and Europe will contribute only 10%, was enough to remind me of the crucial role of the crowded waterways of the Indian Ocean, given its geoeconomic importance. Our small island-nation Mauritius will be no spectator as it is already part of the new power dynamics with its unique China-Mauritius Free Trade Agreement (FTA) and its Comprehensive Economic Corporation and Partnership Agreement (CECPA) with India, among other bilateral and commercial partnerships.
Indeed, while the northern Indian Ocean is an important trade route for oil, connecting the Middle East with Asia, the South is no less important as it is of uttermost geographical relevance for the West and the littoral countries of the Indian Ocean Rim (IOR) for maritime security, military and economic issues.
Yes, 2023 will be a challenging year. Many advanced and emerging market economies will have to come up with substantial institutional and pro-growth economic reforms to avoid the dark fogs of a recession that seems to be settling in, impacting trade and investment flows. In this context, for sure, the world will be a lot better off with a Chinese recovery than without one. This also means that the end of China’s zero-Covid policy will be re-opening the door for greater intensifying power competition between Uncle Sam and the Middle Kingdom, with India joining the party. So, make no mistake, India and China are likely to reshape the international economy; a Chinese and Indian century is apparently in the offing.
As the Indian Ocean becomes a more prominent theatre in the international geopolitical game, Chinese policymakers are also now recognizing that being a global economic leader implies that China needs a world order built around its spheres of influence, as proved by their first meeting in November 2022 with 19 Indian Ocean region countries. Not to forget that China’s presence in the Indian Ocean is growing with its port facilities in Djibouti, Kenya, Tanzania, Mozambique, Madagascar, Sri Lanka, and even Pakistan. On the other hand, India’s growing interest in the region is no secret, being a fundamental part of its Neighbourhood First policy; and India’s presence in Agalega is no classified information, no matter how hard the government denies it. Add to this the Logistics Exchange Memorandum of Agreement between India and the US; and now India has access to not only Agalega, but also Diego Garcia.
This huge geographic expanse home to some 2.7 billion people has, inarguably, its weight in world affairs with the big powers vying for its control via all kinds of strategies and alliances. Amid this growing great power competition, as an independent island state, we, of course, have our own considerations. Against a background of solid historical ties and cultural affinities with both China and India, we now have the more complicated task of discerning how to manage and deal with their growing interest in our region and our maritime EEZ, but at the same time, there is the opportunity to develop greater cooperation in projects ranging from infrastructures, blue economy, and security, among others, as well as credit facilities, grants, investment, knowledge-sharing, and networking. However, if not carefully handled, that may carry the pitfalls of an economic dependency that is not to our advantage.
But beyond such concerns, we do have a clear opportunity for advancing effective economic diplomacy in these hard times when the economy is being buffered by strong headwinds. We can start by leveraging these agreements to boost our export of goods and services. Since China and India are in the top 5 of our trading partners in terms of imports, our export figures could, and should, be improved meaningfully.
We have to fully exploit the potentialities of these regional agreements by adjusting our economy while building up a new synergy between our main stakeholders, with a more proactive public sector and a more technologically-savvy private sector to plug into their production networks and supply chains that are driving most of the global trade and investment flows. This synergy between all stakeholders is important to be able to define clearcut optimum strategies with expected outcomes and objectives.
But, whatever the economic and foreign policy strategies we adopt, we have to be cautious, especially at the political level, and be seen as non-aligned in the superpower rivalry taking hold in our region! The question is, are we, when we are offering certain “questionable facilities” to the Indian side at Agalega ?