Indian Ocean Commission Countries a Flagship Study on Regional Integration

Indian Ocean Commission Countries A Flagship Study on Regional Integration

Summary Final Report December 2012 Indian Ocean Commission Countries A Flagship Study on Regional Integration

Summary Final Report December 2012

N O I S S I M M O C

N A E C O

N A I D t N r I o

p Y e D R

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y H r S a G m m A u L F S

Bank’s Future Cooperation with the Indian Ocean Commission Flagship Study Report Copyright © 2013 African Development Rights and Permissions Bank Group Angle de l’avenue du Ghana et des Rues All rights reserved. Pierre de Coubertin et Hédi Nouira The text and data in this publication may be reproduced as BP 323 -1002 TUNIS Belvédère (Tunisia) long as the source is cited. Reproduction for commercial Tél: +216 71 333 511 / 71 103 450 purposes is forbidden. Fax: +216 71 351 933 E-mail: [email protected] Legal Disclaimer

This document may be ordered from: The findings, interpretations and conclusions expressed in The Knowledge & Information Center (KVRC), this report are those of the author/s and are not necessarily African Development Bank those of the African Development Bank. In the preparation Address: BP 323 - 1002 TUNIS Belvédère of this document, every effort has been made to offer the (Tunisia) most current, correct and clearly expressed information

Telephone: +216 71103402 possible. Nonetheless, inadvertent errors can occur, and N O

I Telefax: +216 71833248 applicable laws, rules and regulations may change. The S S

I E-mail: [email protected] African Development Bank makes its documentation M

M available without warranty of any kind and accepts no O

C responsibility for its accuracy or for any consequences of its

N use. A E C O

For more information about this report and other N

A information on the Indian Ocean Commission Member I D t N r States, please visit I o

Y http://www.afdb.org/en/countries/southern-africa/ e D R

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y H r S a G m m A u L F S Foreword

Regional integration of Africa is at the core of the African • Analyze the challenges faced by the IOC Member Development Bank Group’s mandate. To this end, Regional States, both individually and collectively; Integration Strategy Papers (RISPs) are prepared to complement Country Strategy Papers (CSPs) as the main • Identify actual and potential growth drivers in the region; instruments for programming Bank support to Regional Recommend ways to strengthen the Bank’s Member Countries (RMCs). The Southern Africa and East partnership with the IOC based on the strategic

Africa RISPs for 2011-2015 both discuss the specific directions and comparative advantages of both N O challenges faced by countries belonging to the Indian Ocean organizations, while identifying capacity constraints that I S S

Commission (IOC) due to their geographic location, poor need to be addressed; and I M

linkages to the continent, small domestic markets, and M O

vulnerability to climate change. • Suggest priority areas for intervention by the Bank and C

areas of collaboration with other partners, with the aim N A This Flagship Report analyses the above challenges and of developing a pipeline of projects. E C O provides a framework for Bank support to and collaboration N

with the IOC and its Member States, namely, Comoros, The major findings and proposed areas of cooperation were A I D Madagascar, Mauritius and Seychelles. The study was discussed and validated by representatives from the IOC t N r I o

p commissioned by the Bank and carried out by a consultancy Member States and the IOC Secretariat at a workshop held Y e D R

firm under the supervision of Regional Department South B in Port Louis, Mauritius in November 2011. Further l T a S n and a task team comprising staff from East Africa Regional discussions with IOC’s representatives and internally at the i P F I

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Resource Centre (EARC), Regional Department East B Bank confirmed the main findings and recommendations of r S a G (OREB), Water and Sanitation Department (OWAS) and the study. m m A u L F NEPAD, Regional Integration and Trade Department (ONRI), S among others. The team reviewed the Bank’s strategic It is my expectation that this report will form a solid basis for documents on regional integration and held consultations future regional integration work in the IOC region, and will be with the IOC and its Member States. The specific objectives widely used by all stakeholders in the island states to support of the study were to: the agenda of integration with the rest of the continent.

Zondo SAKALA Vice President, Country and Regional Programs and Policy African Development Bank Group Preface

The African Development Bank (AfDB) has always embraced The preparation of this Flagship Report was based on broad the vision of an empowered, prosperous and integrated cross-complex collaboration and coordination. Extensive continent. Regional integration has been part of its Charter stakeholder consultation is another important aspect during since its establishment in 1964, and has been given priority the preparation. The Flagship Report is organized in a way in all major Bank strategies. The AfDB’s Strategy for 2013 – that, following the statement of purpose of the report, 2022 establishes the strategic emphasis on inclusive green Chapter 2 presents an analysis of growth and growth, which is to be embodied in all the AfDB’s activities macroeconomic performance in the IOC region, Chapter 3 including interventions and knowledge products. covers structural constraints to growth and regional

cooperation, Chapter 4 identifies challenges and N O

I This Flagship Report analyses the strengths, weaknesses, opportunities for regional cooperation, Chapter 5 draws a S S

I opportunities and threats (SWOT) that the IOC Member framework for strategic cooperation with the IOC Member M

M States face in the process of regional integration and the States, and Chapter 6 summarizes the conclusions and O

C areas in which cooperation among the countries can be recommendations.

N enhanced through targeting key constraints relevant to A E infrastructure linkages, institutional capacity and vulnerability Recognizing the need to respond to our clients’ demands C O

to disasters and pandemics. It aims to inform the ways in and adapting to a changing environment, the AfDB will N

A which the AfDB can proceed to strengthen support for the continue to dialogue with the IOC grouping, both at the I D t N r IOC Member States, whose needs have not been sufficiently regional and country level, to enhance the assistance through I o

Y addressed in the existing RISPs. our regional integration efforts. e D R

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Chiji OJUKWU Regional Director Regional Department South B Acknowledgements

This report was prepared by the African Development Bank’s Specialist (Southern Africa Resource Centre, SARC). Staff Regional Department South B (ORSB) with assistance from a from the AfDB’s NEPAD, Regional Integration and Trade Bank-wide task team and a group of consultants. The task Department (ONRI) also provided valuable support. team was led by Ms. Barbara Ramos, Economist (ORSB), who handed over to Ms. Martha Phiri, Principal Country Mr. Aloysius Ordu (the then Vice President, Country and Economist (Mauritius Liaison Office) and subsequently to Mr. Regional Programs and Policy, ORVP), Mr. Chiji Ojukwu

Oscar Pitti Rivera, Economist (ORSB) and Ms. Helga Peres, (Director ORSB), Mr. Septime Martin (Resident N O

Country Portfolio Officer (ORSB), who redrafted the final Representative, Angola Country Office, AOFO) and Mr. Steve I S S consultant report. The team received overall guidance from Kayizzi-Mugerwa (Director, Development Research I M

Mr. Ernest Addison, Lead Economist (ORSB) and publication Department, EDRE), helped to initiate the project and M O

of the work was assisted by Ms. Xin Long, Economist (ORSB). secured the funding. C

N A The report benefitted from valuable feedback from staff in The administrative staff of ORSB, Ms. Jacqueline Busumbru, E C O different departments, including Richard Walker, Principal Ms. Meriem Aloulou, Mr. Kayode Olukayode and Ms. Dorra N

Regional Economist (EARC); Philippe Trape, Senior Country Ben Niran have contributed to the successful execution of A I D Economist (OREB); Abdelkrim Bendjebbour, Resident the project. Valuable editorial service was provided by t N r I o

Representative (Madagascar Country Office, MGFO); Jean Deborah Davis. It is to acknowledge that the maps and Y e D R

Marie Vianey Dabiré, Senior Country Economist (MGFO); diagrams used in this publication do not, in any way, imply l T a S n

Hajavola Rakotondrazaka, Private Sector Field Officer recognition of any states or political boundaries by the African i P F I

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(MGFO); Bruno Boedts, Chief Operations Officer (MGFO); Development Bank or the authors. r S a G Nancy Ogal, Senior Water and Sanitation Engineer (OWAS); m m A u L F Davies Makasa, Principal Transport Engineer (Transport and Vice President: Zondo SAKALA S ICT Infrastructure Department, OITC); Maria Mdachi, Senior Regional Director: Chiji OJUKWU Education Analyst (Ethiopia Country Office / Human and Lead Economist: Ernest ADDISON Social Development Department, ETFO/OSHD); El Iza Lead Consultant: Ivan LINHART Mohamedou, Chief Political Analyst (Fragile States Unit, Core Task Team: Barbara RAMOS, Martha PHIRI, Helga OSFU) and Mtchera Chirwa, Chief PPP Infrastructure PERES, Oscar PITTI RIVERA Table of Contents

ACRONYMS AND ABBREVIATIONS 7 EXECUTIVE SUMMARY 8 1. PURPOSE OF THE REPORT 9 1.1. THE BANK AND REGIONAL INTEGRATION 9 1.2. REGIONAL INTEGRATION ARRANGEMENTS IN THE IOC REGION 9 2. GROWTH AND MACROECONOMIC PERFORMANCE IN THE IOC REGION 11 2.1. THE IOC MEMBER STATES: DIVERSITY AND COMMONALITIES 11 2.2. GROWTH AND MACROECONOMIC PERFORMANCE 11

2.3. MACROECONOMIC POLICY AND PERFORMANCE 13 N O

I 3. STRUCTURAL CONSTRAINTS TO GROWTH AND REGIONAL COOPERATION IN THE IOC 15 S S

I 3.1. REGIONAL TRADE 15 M

M 3.2. PRIVATE SECTOR DEVELOPMENT 16 O

C 3.3. REGIONAL INFRASTRUCTURE 17

N 3.4. AGRICULTURE, FISHERIES AND SUSTAINABLE DEVELOPMENT 19 A E 3.5. SOCIAL COHESION, CIVIL PROTECTION AND SECURITY 21 C O

4. CHALLENGES AND OPPORTUNITIES FOR REGIONAL COOPERATION 23 N

A 5. A FRAMEWORK FOR STRATEGIC COOPERATION WITH THE IOC MEMBER STATES 25 I D t N r 5.1. REVIEW OF THE BANK’S INTERVENTION AT COUNTRY AND REGIONAL LEVELS 25 I o

Y 5.2. INSTITUTIONAL CAPACITY BUILDING OF THE IOC SECRETARIAT, MEMBER STATES AND PRIVATE SECTOR 26 e D R

l 5.3. REGIONAL INFRASTRUCTURE DEVELOPMENT 27 T a S n

i 5.4. NATURAL DISASTER AND REGIONAL PANDEMICS RESPONSE MANAGEMENT 28 P F I

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r 6. RECOMMENDATIONS FOR PROGRAMMING SUPPORT TO THE IOC 29 S a G m m A u L F S ANNEXES 30 ANNEX 1: KEY ECONOMIC AND SOCIAL INDICATORS BY REGIONAL MEMBER STATES 31 ANNEX 2: KEY MACROECONOMIC INDICATORS (EXCLUDING REUNION) 31 ANNEX 3: CSP PRIORITIES OF COMOROS, MADAGASCAR, MAURITIUS AND SEYCHELLES 32 ANNEX 4: EASTERN AFRICA RISP 33 ANNEX 5: SOUTHERN AFRICA RISP 33 ANNEX 6: PROPOSED ACTION PLAN 34

REFERENCES 40 A A A A C A A I I I I I I E C C A A J I H F E E E E E E E D C A U S S S M K S S R R R R P P P N U P O O O O C P P O N F B I T A T C U A P I D A A I G D U D D D B E E E A A R L I F M I I E T C O E D O C E N R R R P C B D C P P D R S S T S C A S A A O R S R C G G F R D C F E I C S P F B B B O E I S E C I C D A M S A F C G P D A D D E A S D A C D s C C A A P - - B A B E P A E I E E E s E X B I y D A A N O S P S C E A T U U S S S S R S R R R I P P P R R R O N I I I N K M I J I I E E D E H E F E E E E E C C A C A A A A A A A A n n n n n n n a r a a m u a u c u c u o u o u e r r f i f f f u u f r u e e e e e e e n n o e a u o O h r t d v v f f t d i e r r r r r o o a l p o r e g e s s s o o r r r r b s r t t w u g u g g g g g g l i i i i i i i w e t e u m a m i a e e c

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FLAGSHIP STUDY INDIAN OCEAN COMMISSION Summary Final Report Executive Summary

for Southern and East Africa, for example, acknowledge the specific challenges faced by the countries belonging to This Flagship Study was commissioned with the aim of the IOC, due to their geographic location, poor linkages to providing input into the African Development Bank’s (AfDB) the continent, small domestic markets, and high activities in support of integration of the Indian Ocean environmental vulnerability. These challenges have been the

Commission (IOC) Member States. In addition to enabling subject of discussions between the Bank and the IOC N

O the Bank to enhance dialogue with the states of the IOC, the Secretariat on several occasions, including past missions I S

S study serves as a knowledge product for policymakers in the of the IOC Secretariat to Tunis, and recently during the last I

M region, Development Partners, officials from the private and Bank’s Annual Meetings held in Arusha, Tanzania (May M

O public sectors, and experts involved in the IOC regional 28th – June 1st, 2012). The discussions focused on the C

N integration process. need for specific interventions and innovative instruments A

E to support the participation of small island states in regional C

O The Bank’s main instrument for programming support to programs.

N regional integration are the Regional Integration Strategy A I D

t Papers (RISP), which provide the overarching framework The study proposes that the AfDB should focus its future N r I o

p for intervention in the five regions (Center, East, North, cooperation with the IOC on three areas: (a) institutional Y e D R

U South and West). RISPs also recognize the specificities of capacity building of the IOC, its Member States, and its l T a S n

certain groups of countries within each region. The RISPs private sector; (b) regional infrastructure development; and i P F I

y H r S a G m m A u L F S 1. Purpose of the Report

(c) response management related to natural disasters and The IOC was created in 1984 to promote sustainable regional pandemics. development of its Member States, speak for them in international fora, and defend their interests with regard to 1.1. The Bank and Regional Integration specific environmental and economic issues. Since 2005, the IOC has also played an active role in promoting regional Regional integration is at the core of the African Development trade and economic cooperation, transport and ICT

Bank’s mandate for the continent. The Regional Integration infrastructure, human development, and a regional cultural N O

Strategy (RIS) sets regional infrastructure and institutional identity. In 2009, the IOC adopted an Aid for Trade strategy I S S capacity building as priorities for each region—west, east, that prioritized development of a maritime corridor to I M

southern, north and central Africa—and the Regional facilitate trade, the promotion of renewable energies, and M O

Integration Strategy Papers (RISPs) focus Bank support in enhancement of food security. In 2011, the Council of C

each region on the provision of regional public goods, Ministers approved the establishment of an IOC economic N A regional financial integration, and Aid for Trade. and trade area to catalyze the development of regional E C O

economic integration programs, instruments and N

The RIS clearly states that innovative instruments are needed mechanisms, as a stepping stone to integration with the A I D to help Africa’s small, isolated and environmentally vulnerable continent’s larger economic communities, including the t N r I o

p island countries to participate in regional programs. Tripartite arrangement (COMESA-EAC-SADC, or CES). Y e D R

However, no specific efforts to address the needs of the l T a S n island states are included in any of the regional strategies. Despite the political willingness of Member States, however, i P F I

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cooperation in the region has been constrained by the r S a G This Flagship Report aims to fill that gap by providing a limited institutional capacity of the IOC Secretariat to m m A u L F framework for Bank support to the four African small island implement regional initiatives; and by the absence of a S states that comprise the IOC – Comoros, Madagascar, regional strategy to strengthen economic and trade Mauritius and Seychelles. The study analyzes the challenges cooperation, outline key activities, or identify necessary faced by the IOC Member States; identifies growth drivers financial and human resources. This study provides a and capacity constraints; recommends ways to strengthen knowledge base and offers guidance for policymakers in the Bank’s partnership with the IOC; and suggests priority the region, including private and public sector officials and areas for intervention. experts involved in the IOC regional integration process. It reviews the status of regional cooperation in the areas of trade, infrastructure, private sector development, social 1.2. Regional Integration Arrangements cohesion and sustainable development; identifies growth in the IOC Region drivers and constraints; proposes areas for Bank support FLAGSHIP STUDY INDIAN OCEAN COMMISSION Summary Final Report 2. Growth and Macroeconomic Performance in the IOC Region

to and enhanced cooperation with the IOC; and suggests an action plan for implementation. In spite of these differences, regional integration can help all 2.1. The IOC Member States: Diversity IOC states to overcome the challenges of isolation and and Commonalities remoteness, the risk of marginalization in wider regional groupings, climate vulnerability, and the lack of natural The IOC Member States have heterogeneous economies, resources (except in Madagascar). A key issue is to define a geographies, populations, and social indicators. GDP per multi-dimensional strategy that can address the differing N O capita ranges from around US$430 in Madagascar and needs of these remote island countries while helping the I S S

US$810 in Comoros to around US$23,000 in Reunion. entire region to integrate with a distant continental I M

Mauritius and Seychelles rank 52nd and 77th in the Human constituency. M O

Development Index and are classified as middle-income C

countries (MICs), while Comoros and Madagascar rank N A 163rd and 151st, have extremely high poverty rates, and are 2.2. Growth and Macroeconomic E C O unlikely to meet the MDGs for infant and maternal health, Performance N

environmental protection, and malnutrition by 2015. A I D The IOC region has experienced poor economic growth t N r I o

The economies also vary widely in size. Seychelles and performance since 2008, as a result of political instability in Y e D R

Comoros have nominal GDPs of less than US$1 billion and Madagascar and Comoros, and poor performance in l T a S n very limited national markets; while Madagascar, Mauritius Madagascar and Reunion. Madagascar, in particular, has i P F I

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and Reunion have nominal GDPs above US$1 billion and seen increased economic and social fragility since the r S a G relatively well-developed internal markets relative to eruption of political instability in 2009. Real GDP for the IOC m m A u L F population size. Madagascar has a population of almost 20 states has been well below growth rates on the continent S million, which represents 87 per cent of the total population and in EAC and SADC for the past few years (Figure 1). The of the IOC region and is more than 200 times the population global crisis exacerbated the effects of the region’s insularity of Seychelles. and other structural constraints.

Figure 1 Comparative Regional Real GDP Growth Rates (2005-2011)

Sources: AEO 2011, EAC Statistical Portal, SADC and INSEE investment opportunities if governance is improved. The services sector accounted for around 60 per cent of the Madagascar currently ranks 104th on the World Governance regional GDP in 2010, compared to 20 per cent each for Index. industry and agriculture. The main growth drivers are tourism, construction and public works, agro-food processing, and, In Mauritius, a relatively diversified economy combined with to a minor extent, light industries such as textiles. To enhance long-term political stability has resulted in steady growth, resilience against external shocks and maximize unexploited driven by the services sector, particularly real estate and potential, further diversification of exports is necessary. business activities; transport, storage and communications; Telecommunications and renewable energy are growing and financial intermediation. The banking and financial rapidly, and may become strategic sectors for the region in sector, considered by analysts to be mature and healthy, the short to medium term. There is also huge potential for represents 12 per cent of GDP and has played a critical role growth in banking and financial services, international in growth by facilitating access to lower-cost credit for contracting, and business services. However, the full private sector firms. The traditional sectors of tourism,

potential of these sectors remains unexploited due to the lack fisheries and textiles have nearly recovered from the effects N O

I of reliable transport and telecommunications infrastructure to of the global crisis. However, the economy is highly S S

I connect the IOC states with the wider CES regional grouping. dependent on the EU market and remains vulnerable to M

M Other constraints include the lack of a legal and regulatory external shocks. The challenges are to diversify export O

C framework for trade in services, and impediments to the free markets, enhance productivity and competitiveness in

N movement of persons. While there have been efforts to traditional sectors, strengthen governance, and improve A E improve governance and the business environment, much transport and communications infrastructure. Mauritius C O

remains to be done, especially in Madagascar and Comoros. ranks 30th on the World Governance Index and 1st in Africa N

A in the Doing Business Indicators. I D t N r Growth performance by country I o

Y In Reunion , which is an overseas Department of France, e D R

l In Comoros , the services sector contributed 45.3 per cent efforts to diversify the economy include the development of T a S n

i to GDP in 2010, followed by the agriculture sector at 44 per high-intensity knowledge, renewable energy, and ICT. French P F I

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r cent, and the industrial sector, at only 10.7 per cent of GDP internal transfers (45 per cent of GDP in 2009) and EU S a G m in 2010. Economic growth in 2010 was negatively affected structural development funds ( €1.89 billion for the period m A u L F S by political tensions related to the democratic transition 2007-2013) have enabled Reunion to develop infrastructure process, and a shortfall in external demand for the country’s that connects it with the rest of its national territory (France) most important cash crops, ylang-ylang and vanilla (Comoros and the African continent. The global financial crisis and is the world’s leading producer of ylang-ylang and the European debt crisis caused real GDP growth to fall in 2009 second world’s producer of vanilla after Madagascar). Long- and 2010. Growth turned slightly positive in 2011, aided by term sustainable growth will depend on strengthening strong performance in the tourism sector. Challenges include political governance, diversifying exports, improving the promoting productive activities oriented toward markets business environment, and providing the infrastructure other than the EU, and increasing the competitiveness of necessary for private sector development, including in the local production against imports. Local enterprises now tourism sector. In 2010, Comoros ranked 121st out of 139 provide only half of consumption needs and a mere quarter countries on the World Governance Index. of employment. The development of the local private sector, in particular small and medium-size (SME) industries, is In Madagascar, the composition of the economy has not critical for economic growth and job creation. changed over the past 30 years. The services, agriculture and industry sectors represent 58, 28 and 14 per cent of In Seychelles, the services sector represents roughly 73 per GDP, respectively. Political instability over the past years has cent of GDP in 2010, compared to 20 per cent for industry led to the closure of preferential access to the United States and only 2.4 per cent for agriculture. Tourism has been the and EU markets for Madagascar’s textile products; a main driver of growth after the global financial crisis, due in suspension of development aid; and a freezing of large part to Government efforts to develop new markets, infrastructure and public works financing. Foreign investors increase flights to Seychelles, and construct high-end face a high risk of expropriation and discretionary revision of tourism infrastructure. Other growth drivers are the concession contracts. The country represents significant construction and ICT sectors, and the positive impacts of the Government’s economic reform program. However, growth (Reunion’s macro policies are not considered here because remains fragile and subject to structural constraints. The they are aligned with France). However, the policies of the country ranks 103rd out of 183 countries for ease of doing different countries are not convergent due to the lack of a business, lack diversification, and imports most food regional policy and to the structural differences among the commodities. The fisheries industry is still suffering from a economies. lack of infrastructure, declining fish stocks, and increasing acts of piracy in Seychelles’ waters. The latter also affects All four countries have huge structural current account the yachts and cruise ships segment of the tourism sector deficits, reflecting their high import dependency and low and the price of food imports. export performance. All are characterized by large budget deficits except for Seychelles, which shows a surplus as a result of strict IMF programs during 2008-2011. Reunion,

2.3. Macroeconomic Policy and Performance and to some extent Comoros, have benefited from N O

remittances and the fixed exchange rate arrangement with I S S

The macroeconomic environment in four out of the five IOC France. Mauritius, Madagascar and Seychelles have an I M

Member States is relatively stable as a result of prudent fiscal independent monetary policy framework, with flexible M O

and monetary policies implemented during the past ten years exchange rate regimes that allow adjustments when C

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y H r S a G m m A u L F S FLAGSHIP STUDY INDIAN OCEAN COMMISSION Summary Final Report 3. Structural Constraints to Growth and Regional Cooperation in the IOC

necessary to restore internal and external equilibrium. The composition of this trade is much more diverse than 3.1. Regional Trade trade with the rest of the world. While intra-regional exports are dominated by limited amounts of manufactured Despite the political will and efforts of the IOC Secretariat and products / intermediates and raw materials (textile semi- Member States to accelerate economic and trade finished, fiber, paper, soap, lumber, animal feed, fish and cooperation, intra-IOC trade has been very limited – shellfish, nuts, vegetables), exports to the rest of the world N O averaging only 3.2 per cent of total IOC trade for the period (mainly the EU) are mostly primary products (vanilla, ylang- I S S

2008-2010 (Table 1). ylang, minerals). I M M

Table 1 Share of intra-IOC trade in total trade of the IOC O C

Intra-Regional Trade (percent of total trade) A

Member States E 2008 2009 2010 Average 2008-2010 C O

Comoros 3.6 4.0 2.9 3.5 N A I

Madagascar 2.4 4.5 3.3 3.3 D t N r I o

Mauritius 2.3 3.2 2.2 2.5 p Y e D R

Reunion 4.4 4.3 4.2 4.3 l T a S n

i P

Seychelles 5.2 4.5 1.5 4.1 F I

y H r S

TOTAL 2.9 4.0 2.9 3.2 a G m m Source: International Trade Centre (ITC); Annuaire sur la Coopération de la Reunion 2011. A u L F S government procurement, and sustainable development. Constraints to intra-regional trade include inadequate The IOC has also joined the CES Tripartite process, launched maritime and aviation infrastructure, absence of an effective by the Heads of States of member countries with a view to trading regime, lack of progress in creating an integrated implementing a free trade agreement (FTA) among the three economic and commercial zone, and the limited movement regional economic communities (RECs) by 2012. The main of persons and professionals. Added to these are the purpose of the CES Tripartite agreement is to harmonize the Secretariat’s weak institutional capacity for setting standards commitments of the three RECs. This process aims to (a) and resolving trade disputes. create a single market “from Cape to Cairo”; (b) minimize the challenges of multiple memberships and accelerate the The IOC authorities and Member States are aware that process of regional and continental integration; and (c) strengthening economic and trade cooperation within the establish a Tripartite FTA within the CES. region is strategically essential to unleash the potential of a broader regional market. To that end, Comoros, Madagascar, Other efforts toward integration include (a) the adoption of Mauritius, and Seychelles have signed an interim Economic an Aid for Trade Strategy (ATS), which aims to increase food Partnership Agreement (EPA) with two of their closest security and promote integration with COMESA; and (b) the neighbors on the continent, Zambia and Zimbabwe. creation of an economic and trade area among Member Negotiations on the final agreement are still ongoing, and are States aimed at boosting the regional integration process as focused on (a) harmonized regional market access rules for a vector of development, and preparing the region and its EU exports to the region; (b) rules and commitments on economic actors to meet the challenge of globalization. This services and investment; (c) trade facilitation and cooperation new economic and trade space is designed to be coherent on technical barriers to trade, sanitary and phytosanitary with the Tripartite process, with the four IOC states (all except standards and rules of origin; and (d) issues such as Reunion) expected to work together to implement the intellectual property rights, competition, transparency in Tripartite initiative roadmap, while reserving their rights to apply the principle of “variable geometry” in areas such as Madagascar rank 103rd and 137th, respectively. liberalization of services, which remains a very important area Aside from Reunion, which benefits from its interaction with for the IOC. The IOC economic and trade area will build on major French companies and French government investment already initiated actions aimed at: in infrastructure and renewable energy, the region attracts a low level of foreign investment compared to other RECs. FDI • Lowering transport and communication costs, including flows to the IOC were US$1.67 billion in 2010, compared to through more competitive broadband connectivity; US$2.1 billion and US$4.6 billion to EAC and CEMAC. • Developing a regional tourism strategy and industry Madagascar attracts most of the FDI in the region (51.5 per using “Vanilla Islands” branding, based on private sector cent of the total in 2010). However, Mauritius is the largest ventures and the complementary tourism assets and investor in other IOC Member States, and its private sector attractions of the different islands; has an exceptional presence and dynamism in the region, • Developing regional agro-industry subsectors. due in large part to its proactive pursuit of bilateral trade Madagascar, with its vast agro-industry potential, will agreements. Major investments by Mauritian firms are

become the region’s main source of food staples, as targeted towards tourism (hotel construction) in Seychelles; N O

I per the Regional Food Strategy. With the IOC region and to the telecom, financial, and manufacturing (mainly S S

I now a net importer of staple food products, there is also textiles and sugar) sectors in Madagascar. M

M an opportunity for the IOC states to set up regional joint O

C ventures in food production, and mechanisms to Despite these important signs of progress, private sector

N facilitate intra-regional trade of agricultural and agro- development in the region continue to be constrained by A E industrial products. difficult access to credit, and by: C O

A • Low availability of regional infrastructure, particularly I D t N r 3.2. Private Sector Development maritime and aviation infrastructure, which hinders the I o

Y movement of goods and increases the cost of e D R

l There are different levels of private sector development in the transport. In Madagascar, the poor state of road T a S n

i region, as reflected in the states’ business environment networks and the lack of electricity also hinder the P F I

y H

r rankings. While Mauritius is classified 23rd out of 183 effective exploitation of the potentials in agricultural S a G m countries, according to the 2012 World Bank Doing Business sector; m A u L F S Indicators, Comoros ranks 157th, and Seychelles and • Lack of policy harmonization, rules of origin, and mechanisms for resolving trade disputes, which makes public-private dialogue and improving the business it difficult for companies to establish themselves and environment. At the regional level, the Union of Chambers of develop strategic partnerships across the region; Commerce and Industry of the Indian Ocean (UCCIIO) was • Lack of a private sector development strategy or an organized to strengthen regional economic integration entity that specializes in removing constraints that through trade promotion and inter-island productive hinder private sector development; investment. The UCCIIO also aims to promote strategic • High cost of inputs, due to high transport, energy and networks and facilitate the establishment of private sector labor costs. partnerships in growth-driving sectors.

The IOC has identified the following areas of private sector development as critical for the region: (a) food security and 3.3. Regional Infrastructure

agribusiness; (b) ICT; (c) tourism; (d) finance; and (e) maritime N O

trade, including port services. Particular importance has been The African Infrastructure Country Diagnosis (AICD) and the I S S

placed on tourism (the “Vanilla Islands” concept) and Program for Infrastructure Development in Africa (PIDA) do I M

agribusiness (particularly in Madagascar), both of which have not consider the IOC Member States to be a regional M O

high growth potential and offer huge opportunities for grouping of countries, and therefore do not provide the C

economic cooperation. Cross-cutting efforts in the areas of region with the same type of support for its integration efforts N A capacity building and knowledge transfer are also needed to that is provided to COMESA, SADC and EAC. Instead, most E C O

encourage regional collaboration. support is provided to individual states by individual N

development partners (Table 2). A I D Member States have also created structures for advancing t N r I o

p Y e D R

U l

Table 2 Key Partners and Respective Interventions in the Infrastructure Sector T a S n

i P F I Development Partners y H

Member States r S Energy (renewable) ICT Transport a G m m A u EU, AFD*, Moroccan AFD*, Moroccan Fund*, EU, AFD*, Moroccan Fund*, L F Comoros S Fund*, ABEDA* ABEDA* ABEDA* EU, AFD, WB, ADB, AFD, WB, JICA, ADB, KF, EIB, Madagascar ABEDA ABEDA, OPEP OPEC Mauritius AFD, Arab Bank, KF IBRD Reunion EU, AFD EU EU Seychelles ADB, EIB IOC AFD, EU AFD

(*) Unspecified infrastructure sector

infrastructure sectors are described below. Infrastructure constraints by sector Maritime transport. The region faces major constraints in regional maritime transport infrastructure, which undermine The development of regional infrastructure in the IOC is the potential of the key sectors of tourism and agro-industry, constrained by lack of financing, limited private sector and hinder efforts to integrate with the continent. There is no participation, limited human resources, and lack of policy regional maritime transport infrastructure development coordination and harmonization. The region also lacks an strategy, and the three international ports that could serve as integrated approach to creating synergies and spillover regional hubs (Port Louis, Port Reunion and Port of effects among sectors. For example, trade facilitation cannot Toamasina) remain largely in the hands of public authorities. be addressed if infrastructure and private sector There is little private sector activity, except in the shift toward development are not included in the Aid for Trade Strategy private sector handling of container cargo and some tourism (ATS). Similarly, infrastructure development, trade facilitation transport. The lack of effective regional shipping services and private sector participation are required to address food adds, on average, 30 to 40 per cent to the cost of imports security and increase tourism. The key constraints in each and exports. Private shipping firms have not been successful because of the limited size of markets, long distances, and of the country. limited food production in Madagascar, which until now has Renewable energy . Renewable energy contributes to the

not realized its potential to meet the food security needs of generation of electricity and energy in all Member States – N O

I the entire region. Finally, increasing acts of piracy against an estimated 15 per cent in Comoros, 23 per cent in S S

I private cruise ships harms high development potential of Mauritius, 36 per cent Reunion, 5 per cent in Seychelles, M

M tourism’s yacht and cruise subsector, which now accounts and 60 per cent in Madagascar, which is highly dependent

O for only 0.37 per cent of the global market. on renewable energy because of its low level of C

N electrification. There are numerous regional and bilateral A E Air transport. The ability of the region’s air transport sector initiatives underway in the sector, notably the bilateral C O

to connect the islands is hindered by exorbitant freight costs partnership between Reunion and Mauritius to develop N

A and limited air traffic rights. In addition, some national airlines electricity from renewable energy sources (in particular I D

t do not meet minimum safety standards, and have lost the bagasse) and protect the environment through waste N r I o

Y right to operate in Europe. The UCCIIO is very involved in management and sustainable consumption of electricity. e D R

l regional discussions to find solutions to these issues. In the Reunion has also been investing in research and T a S n

i meantime, there are ongoing negotiations with the EU to development aimed at bio-ethanol production from micro P F I

y H encourage EU airlines to service the region. Efforts are also algae and electricity generation from ocean currents. In the r S a G m underway to improve security in the sector through regional region as a whole, however, growth of the sector is m A u L F S constrained by lack of financing, inadequate legal and regulatory frameworks for private sector participation, lack of mechanisms for dispute resolution, limited knowledge sharing, lack of policy harmonization, and the absence of centers of excellence to provide skilled labor for the sector.

ICT. Most IOC countries have reasonably well-developed national ICT backbones on their main island, but few connections on secondary islands. International connections to the region are limited and very expensive. Mauritius and Reunion are currently served by the South Africa Far East (SAFE) network. The Lower Indian Ocean Network (LION) provides a second link to Madagascar, with a planned link connecting Mayotte (an island state not in the IOC) to Mombasa, Kenya. None of the submarine cable networks in the eastern part of the continent includes all the harmonization of air surveillance. The latest generation air IOC Member States. The region lacks the fiber optic surveillance system, Automatic Dependent Surveillance networks needed for reliable high-speed internet, which is (ADS-X), has been tested by Reunion, Madagascar and a prerequisite for expanding tourism and international trade. Seychelles. These countries are now ready to replace their individual country air surveillance systems with the harmonized ADS-X approach.

Road infrastructure. The poor quality of aging domestic road networks increases the costs associated with maritime shipping, and negatively affects investment in maritime infrastructure. Compounding this is the monopoly of certain road transport carriers, which makes it difficult to enforce safety standards. The projected investments in the Port of Ehoala and in road infrastructure leading to the port are likely to facilitate trade by improving access to the southern regions - P I N I H

Despite efforts at reform, an unfavorable regulatory Agenda through job creation and poverty reduction. In N S Y A D G N environment constrains development of the broadband addition, the two sectors are closely related to the E U A A C I T L F S D market. A regional effort to put in place a common fiber environmental sector, henceforth requiring a sustainable O optic network has been slow to materialize. development approach to growth under environmental safeguard for the IOC Member States. To address these constraints, the future regional strategy for the IOC will incorporate sector programming tools, in Agriculture particular for multi-sectoral regional infrastructure. There are also efforts to strengthen cooperation in research and The agriculture sector remains underdeveloped and subject development, particularly for renewable energy; to develop to multiple common constraints, including, among others: and harmonize sector regulations; and to facilitate limited land surface under the pressure of population knowledge sharing and technology transfer. growth, climatic conditions exposing crops and livestock to

3.4. Agriculture, Fisheries and Sustainable Development

The agriculture and fisheries sectors represent both a real potential for sustainable economic development and the achievement of food security in the IOC Member States. The analysis on growth drivers clearly illustrates the importance and contribution, for instance, of the agriculture sector to GDP in these countries. Both sectors are important for the Bank to promote the Inclusive Growth health risks, high dependence on imports of agriculture markets, primarily the European and USA due to non- inputs, and limited access to international market. For compliance with and respect of rules of origins, health instance, Madagascar, which is the basket of food supply sanitary measures and environmental adherence, and weak for the region, faces many challenges that often threat this reporting system with regard to illegal and unregulated crucial role, such as: (i) lack of financing – the share of the fishing, have been indicated as the main handicaps affecting agriculture sector in the state budget decreased to around the sector’s development. Compounding the challenges is 20 per cent in 2010 compared to the pre crises period 1, (ii) the act of piracy that affects both the security of fishing fleet insufficient infrastructure as shown by the 2010 African and the economic viability of the fishing activity. To address Infrastructure Development Index (AIDI) 2, (iii) low productivity these development constraints, significant efforts have been resulting from lack of mechanization and modernization of made to ensure sustainable management of species, to agriculture technics, (iv) poor business environment comply with health sanitary regulations and traceability, and especially in terms of difficult access to land and credit for to improve the security in Indian Ocean. Among others the agriculture activities, and (v) lack of research and following actions have been recorded: (i) adoption in 2010

development while the sector is particularly vulnerable to of a regional strategy for fisheries and aquaculture, (ii) N O

I plagues and crops’ diseases. Despite the willingness and training of independents and accredited experts and S S

I engagement of the IOC Members States in developing establishment of laboratories and relevant institutions to M

M sustainable agriculture to enable food security, it should be proceed with necessary certifications (excluding in Comoros O

C noted that gaps exist for meeting this challenge. An and to a minor extent in Madagascar), (iii) establishment of

N example is the limited number of active regional projects or fishing ports equipped with cold storage in all of the IOC A E initiative aimed at promoting agriculture development. As of Member States (to a minor extent in Comoros and C O

end 2012, there is only one active project – the “Regional Madagascar), and (iv) increasing presence of patrol vessels N

A Initiative for the Adaptation of Small-scale Agriculture to using high technologies (e.g., radar, satellites) to deter illegal I D

t 3 N r Climate Change in the Islands of the Indian Ocean” – fishing and act of piracy. I o

Y financed with the support of the EU. e D R

l Environment and Sustainable Development T a S n

i Fisheries P F I

y H

r Protecting the population from the effects of natural S a G m In spite of its potential that could be capitalized with the disasters and global warming is of paramount importance m A u L F S improvement of maritime transport, development of the to the IOC. Efforts to strengthen regional capacity in these fisheries sector in the IOC Member States has been proven areas over the past five years have included (a) formalization to be much complex when compared to other sectors. Poor of the Mutual Assistance Network and reinforcement of infrastructure and knowhow, limited access to international regional capacity in terms of civil protection, with the

1 The share of the agriculture, fisheries and forestry sectors in the 2010 state budget was only 11.6 percent according to the World Bank’s Revue des Dé - penses Publiques Madagascar: Politique budgétaire et investissement public en période d’instabilité politique. (September 2011). 2 AIDI is a composite of five indicators: (i) net electricity generation (kilowatt-hours per capita); (ii) total mobile and fixed-line telephone subscribers (percentage of total population); (iii) paved roads (percentage of total roads); (iv) access to water (percentage of population); and (v) access to sanitation (percentage of population). In 2010, Madagascar’s AIDI score was 14.38 out of 100, ranking 48th out of 53 countries; and the country has the lowest AIDI within the four African IOC Member States. 3 In the framework of the Regional Plan for Fisheries Surveillance (PRSP), 28 joint surveillance missions representing over 800 days of sea patrols, 700 hours of air patrols have been carried out. Twenty offences were identified and seven boarding and inspections were ordered (see annex 5 for details on the project).

N O I S S I M M O C

N A E C O

N A I D t N r I o

p Y e D R

support of the French Cooperation; and (b) a pilot Regional welfare, and disaster preparedness among the states by l T a S n

Program on Prevention and Management of Risk of Natural aligning national strategies with regional strategies and i P F I

y H

Disasters, aimed at reducing the human and economic leveraging the states’ capacity to contribute to programs at r S a G impact of natural disasters, supported by the AFD. In the regional level. This is particularly important for m m A u L F addition, the EU’s 10th EDF is providing between €170,000 Madagascar and Comoros, which have suffered from political S and 250,000 over 2011-2014 to finance alert systems, instability and frequent natural disasters. strengthen disaster resistance in post-disaster reconstruction projects, and promote awareness of climate Health and Regional Cooperation change-related risk among the local authorities and population. At the country level, Comoros has integrated The region has achieved significant progress in terms of risk management by the Emergency and Civil Protection health sector development, but the states show substantial Centre (COSEP) into its national growth and poverty discrepancies in some health indicators. Mauritius and reduction strategy, with the support of UNDP; Madagascar Seychelles allocate more than 20 per cent of their national has developed a national strategy for disaster management, budgets for health expenditures, and display levels of health also in partnership with UNDP, which focuses on long-term relatively close to those of developed countries. Comoros national capacity building as well as regional and and Madagascar allocate 8 and 9 per cent, and their health international cooperation; Mauritius has established a indicators are close to Sub-Saharan Africa averages. National Centre for Disaster Management, to complement Development is threatened by pandemics associated with the existing initiatives such as the National Committee of poverty and natural disasters, particularly rabies, polio, Natural Disasters; and Seychelles coordinates its disaster measles, and malaria. HIV/AIDS is also a persistent problem. responses through the National Committee for Disaster Given the IOC’s prospects for increased trade and tourism, Management. strengthened mechanisms and alert protocols are essential to prevent the spread of disease across the region. To that 3.5. Social Cohesion, Civil Protection end, the IOC has partnered with other institutions to launch and Security three main programs: (a) URSIDA, a partnership with the Ministry of Foreign Affairs of France, aimed at training Social and human developments are priorities for the IOC approximately 100 medical personnel in emergency services; Secretariat and the individual Member States. The Secretariat (b) AIRIS, in cooperation with the Bank and UNAIDS, aimed aims to minimize disparities in health, education, social at improving the quality of life of people living with HIV/AIDS, States and those in the rest of Africa, Asia and Europe, with the aim of strengthening the capacity of IOC experts to efficiently manage regional integration processes and challenges.

Civil Protection and Maritime Security

The IOC promotes information sharing and best practices among Member States in the areas of security, governance, and combatting trafficking and fraudulent activities. The Convention on Regional Security, signed by the states in and increasing screening in remote areas; and (c) March 2006, promotes exchanges in the areas of judicial RSIE/SEGA, a joint initiative of the IOC and the African policy, administrative and public order, and security police. The Development Fund, aimed at minimizing the risk of epidemics region also benefits from an EU-funded €23 million maritime

across the states through the regular exchange of sanitary security program that aims to reinforce national and regional N O

I information. capacity to arrest, transfer, and detain pirates, and to mitigate S S

I the negative economic impact of piracy on Member States. M

M Education and Regional Cooperation Other initiatives include (a) the IOC Regional Security Platform O

C (2007-2008), which facilitates information sharing among the

N The region has made significant progress in improving national security services in areas such as trafficking, terrorism, A E access to education and training, but lacks a critical mass of illegal fishing, and financial malpractice; and (b) the IOC C O

professionals in key areas such as disaster risk management, Regional Judiciary Platform, which facilitates regional N

A food security, renewable energy, maritime infrastructure, cooperation on judicial matters. Most assistance provided by I D t N r tourism, and health and sanitation. To address these development partners to address security-related challenges I o

Y shortcomings, the IOC plans to develop exchange programs is channeled through the African Union. The French army also e D R

l among the region’s universities and research centers, as well has bilateral and multilateral privileged liaisons with both the T a S n

i as centers of excellence to train a network of technical IOC and SADC Member States, aimed at providing support P F I

y H

r experts. The IOC is already benefitting from the work of the to the AU African Standby Force (ASF), and developing the air S a G m Regional Multidisciplinary Centre of Excellence (RMCE) in force and navy in the concerned countries. Other bilateral m A u L F S Mauritius, led by COMESA, which represents one of the few exchanges between Member States entail information sharing initiatives in the education and research sector supported by between Mauritius and Seychelles in the fields of air force and the development partners in the region. The RMCE promotes naval expertise; and between Reunion and, respectively, exchanges between the universities of the IOC Member Mauritius, Seychelles and Madagascar on the development of 4. Challenges and Opportunities for Regional Cooperation

their police departments. make it difficult to define common objectives and regional Regional integration in the IOC is a multidimensional projects that could reduce shipping costs and increase process, involving a complicated mix of economic, economies of scale. The fragmented markets, high costs commercial, political, cultural and social challenges and of doing business, and lack of start-up capital are also opportunities for cooperation. major constraints to private sector development and expansion in the region.

Challenges include: N O

Risk of marginalization in wider regional groupings. The I S S

Structural constraint of insularity. Small economic size, risk of being marginalized by regional strategic frameworks I M

long distances from the continent and between islands of is compounded by the CES Tripartite Arrangement, which M O

the same country, lack of natural resources (except for creates a semi-continental integrated group of 26 countries C

Madagascar), and vulnerability to natural disasters require on the continent, with a total population of close to 600 N A that the IOC’s regional integration strategy evolve in parallel million and a cumulative GDP of more than US$850 billion. E C O with national integration strategies. N

Participation of Reunion in IOC regional initiatives . A I D Political instability in Comoros and Madagascar Reunion’s participation in regional initiatives may require the t Fragility. N r I o

p has hampered economic development in the region and establishment of new regional policies, which implies a Y e D R

deprived the people of those nations of access to social possible conflict between IOC and EU legal and regulatory l T a S n basic services. Both countries are also frequently hit by frameworks, particularly for trade. In cases where policies i P F I

y H

tropical storms, which impact both human and physical cannot be reconciled, Reunion might be forced to opt out r S a G capital. But while Comoros has access to Fragile State of the IOC framework. m m A u L F Facility to aid in reconstruction efforts, Madagascar is not S considered a fragile state according to the Bank’s Risk of natural disasters and climate change effects. A classification. key challenge for the region is to consolidate efforts to strengthen the capacity of national and local authorities to Limited connectivity and lack of regional infrastructure. limit the impact of natural disasters and to provide post- Long distances and lack of regional infrastructure constrain crisis assistance across the five island states. intra-regional trade and movement of people, which makes it difficult for the IOC states to compete in the global Piracy and maritime insecurity. The national police, justice, market. There is no specific strategy to develop regional and defense services of the IOC Member States lack infrastructure within the IOC; and the IOC’s maritime and sufficient resources to combat drug trafficking, clandestine ICT infrastructure needs are largely neglected in other immigration, falsification of documents, terrorism, maritime continental and regional programs. piracy, illegal fishing and sexual tourism. They also lack the resources to fulfill regional security objectives and Limited capacity to implement regional initiatives. The consolidate peacebuilding. IOC lacks capacity for strategic planning across countries and sectors. It also lacks qualified staff to deal with specific Opportunities include: issues such as trade, environment, or maritime regional infrastructure; as well as reliable regional data and statistics. Ease of achieving consensus. The small number of In addition, there is lack of coordination between the member states makes it easier to achieve consensus than Secretariat and the states, despite the existence of the in larger regional groups, such as SADC (15 members) or Council of Ministers and the permanent liaison officers COMESA (19), when regional-level intervention is necessary (PLOs) representing each country in the Secretariat. to address both common and country-specific challenges.

Heterogeneity of member states. The states’ different Membership of France/Reunion in the IOC regional geographies and levels of socio-economic development grouping . The France/Reunion membership has significant potential to strengthen the region’s economic and political size of the IOC economies presents an opportunity to profile, given its specialized institutions in agri-business and expand possibilities for intra-regional trade, which could lay biotechnology and its ability to attract French and EU the foundation for sectoral specialization and export market private sector investment. diversification, including towards African countries and emerging economies. Expansion of market and economies of scale. The limited

N O I S S I M M O C

N A E C O

N A I D t N r I o

p Y e D R

U l T a S n

i P F I

y H r S a G m m A u L F S 5. A Framework for Strategic Cooperation with the IOC Member States

are elaborated in Box 1. Identification of specific interventions 5.1. Review of the Bank’s Intervention will be based on the commitment and ownership of key at Country and Regional Levels stakeholders (regional and national institutions, private sector, civil society), and their political will to translate Bank Given its limited resources in relation to the needs of the IOC assistance into concrete actions. To promote ownership, the region, the Bank will focus its efforts on areas where it has a local partners will fully participate in the design and clear comparative advantage and expects to make a implementation of projects, and actively participate in N O substantial contribution to addressing the structural monitoring and evaluation activities. I S S constraints to growth. The guiding principles of Bank support I M M O

Box 1 Guiding Principles to Accelerate Trade and Economic Cooperation within the IOC C

N A Trade and economic cooperation within the IOC could be accelerated through a package of measures and reforms aimed E C O

at achieving five main strategic objectives: N A I D 1. Elimination of all Unnecessary Tariff and Non-Tariff Barriers to Trade: t N r I o

- Eliminating or drastically reducing quotas, embargoes, permits, import licenses, TBTs such as norms, SPS, Y e D R

and other prohibitions placed on imports; l T a S n

- Simplification of rules of origin; and i P F I

y H

- Reduction of tariffs barriers/measures according to an agreed target and timeline. r S a G 2. Promoting Trade in Services: m m A u L F - Establishment of a mobility regime for professionals (such as contractual services suppliers and independent S professionals, e.g., financial professionals, legal experts, and engineers, etc.), notably through visa facilitation/ elimination; and - Liberalization of trade in services, in particular in transport, telecommunications and financial services. 3. Improving the Business Regulatory Framework: - Improving the IOC Member States’ ranking in the Ease of Doing Business; - Improving the states’ ranking in the Corruption Perception Index; - Improving perceptions of governance; - Implementing Double Taxation Avoidance Agreements and Investment Promotion/Protection Agreements; and - Facilitating the flow of capital and creating a networking of agreements to attract investments to the region. 4. Improving Trade Facilitation and Logistics Performance Index: - Reducing costly delays at entry and exit ports; and - Enhancing customs facilitation and transit regimes critical for maritime shipping and logistics. 5. Capacity Building through Peer Learning and Support: - Public-private partnerships; - Trade and investment facilitation; and - Research and development.

Source: Concluding outcomes of the seminar, “Mauritius Experience – Deepening Cooperation with the African Development Bank and its Regional Member Countries”, Tunis, Tunisia, September 2012. FLAGSHIP STUDY INDIAN OCEAN COMMISSION Summary Final Report n b p d e T T F c s w s C t p f c d f s o u h u t e o q o e i h h e r e e o o g i r n e r o t p e w m s o e

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d The first Area of Cooperation will focus Bank support on: internal barriers in Madagascar (political crisis, restructuring of the agricultural sector, internal transportation), the Bank • IOC Secretariat: The creation of a Strategic Planning will focus its support in the near term on developing energy and Economic Trade Division housing three specialized infrastructure and telecommunications. units focused on (a) strategic planning and resource mobilization; (b) economics and trade; and (c) planning The second Area of Cooperation will focus Bank support and technical support for regional infrastructure on: development. This agency would play a proactive role in implementing key reforms to accelerate trade and • The energy sector: (a) preparation of a strategy, economic cooperation; blueprint and investment plan for the sector; (b) • National institutions in charge of trade and investment establishment of a facility, housed in the Bank’s Energy

promotion: Strengthening the capacity of national Department, to co-finance investments in renewable N O

institutions to (a) implement decisions made at the energy and facilitate technical and financial I S S

regional level aimed at promoting intra-regional trade partnerships with the private sector; (c) establishment I M

and investment; (b) promote and mobilize investment of a regional observatory on best practices in M O

for PPPs; and (c) support exchanges of experiences renewable energy to allow investors and professionals C

and best practices on PPPs and improving the to access information on existing companies and N A business environment; and renewable energy projects; (d) creation of a regional E C O

• Private sector institutions / associations: Efforts by the university program aimed at strengthening links among N

UCCIIO and national Chambers of Commerce to: (a) universities, and relying in particular on the “Ecole A I D foster dialogue on opportunities for private sector Polytechnique de Madagascar,” which trains water t N r I o

participation in the regional integration process; (b) engineers; and (e) provision of technical and financial Y e D R

develop knowledge networks focused on sharing best assistance to carry out studies on: (i) the renewable l T a S n

practices and identifying opportunities for trade and energy potential in each Member State; and (ii) regional i P F I

y H

investment in the region; (c) promote the development harmonization of sectoral policies, legislation and r S a G of results-based PPP initiatives, and develop regulatory procedures; and m m A u L F dedicated PPP funds in close collaboration with local • The ICT sector: (a) preparation of a harmonized S governments and private sector representatives; and Regional Master Plan for the sector, covering issues (d) promote partnerships between the public and such as access doors, available bandwidth capacity, private higher learning/training institutions, and pricing policies, and access to information for between the educational system and industry, in order investors; (b) improved coordination between to meet labor market demands and enhance the regulators and private sector operators to strengthen mobility of skilled workers among the Member States. monitoring of the sector liberalization process; (c) capacity building programs for private operators and regulators in partnership with universities, following the 5.3. Regional Infrastructure Development example of the Academy of ICT in Mauritius; and (d) establishment of a working group to oversee The proposed second Area of Cooperation aims at preparation of projects in the ICT sector. The working addressing the region’s infrastructure gaps. Due to the group will comprise the IOC Secretariat, along with enormity of the infrastructure needs, technical and financial representatives of relevant Ministries of Member cooperation with other development partners will be of States, the private sector, and technical and financial paramount importance. As the development of transport partners. It will be supported through the Bank’s infrastructure will require a political decision to establish a Infrastructure Project Preparation Facility (IPPF) and regional port, a maritime shipping system and settle the other available instruments and frameworks.

N O I S S I M M O C

N • Establishment of a regional response coordination A E 5.4. Natural Disaster and Regional mechanism; and C O

Pandemics Response Management • Creation of regional centre of excellence for infectious N

A diseases. This action will be part of the “Support I D t N r Bank assistance in disaster response management will Capacity Building Project for Achieving the MDGs in I o

Y support: Related Areas of Health in the IOC Member States,” e D R

l for which the Bank is currently mobilizing resources. T a S n

i • Capacity building in response management of relevant P F I

y H

r regional and national institutions; The RISPs for Eastern and Southern Africa are presently the S a G m • The creation of a regional centre of excellence focusing two strategic frameworks governing the Bank’s support to m A u L F S on environment and management of risk of natural the IOC regional grouping. However, neither addresses the disasters; and challenges and priorities of the IOC. If the RISPs remain the • Reconstruction of social and productive infrastructure strategic framework for the Bank’s regional operations in destroyed by natural disasters. the IOC, it will be important to ensure that their mid-term reviews explicitly take the main proposed actions for the IOC Bank assistance in pandemic response will support: into account, and specify how they will be implemented. 6. Recommendations for Programming Support to the IOC

While a mid-term adjustment of the RISPs would be a financing of regional infrastructure, it is recommended that a positive step, it would be preferable for the IOC to have a facility be established to co-finance regional projects, as well dedicated regional integration strategy paper; however, it as to provide additional resources to ongoing projects to would be preferable if a dedicated regional integration ensure their financial and operational viability. strategy paper were prepared for the IOC region, in view of the specific challenges facing the IOC Member States as a For activities for which resources are already available (such N O result of their insularity, and of the risk of marginalization of as the Fragile State Facility to support capacity building of I S S

IOC priorities within broader regional groupings. In addition, the IOC Secretariat) or are in the process of being mobilized I M

within the current Bank’s configuration, each of the IOC (such as ongoing discussions regarding grants for a health M O

Member States belongs to a different regional department: sector project and a research and innovation project), it is C

Comoros to OREB, Madagascar to ORCE, Mauritius to proposed that implementation begin as soon as the N A ORSB, and Seychelles to EARC. This could hamper the resources are mobilized, even before the relevant study is E C O

Bank’s future intervention by affecting coordination and finalized. Thereafter, these activities could become part of the N

impeding synergies between projects/activities. institutional capacity building activities identified by the study. A I D t N r I o

Another option for the strategic framework for the Bank’s For the purpose of ICT regional infrastructure, it is Y e D R

regional operations could be the establishment of a new recommended that the Bank establish a dedicated regional l T a S n dedicated regional strategic program for the IOC regional working group for project preparation and resource i P F I

y H

organization. This will enable the Bank to specifically target mobilization, and provide technical support to the group for r S a G the IOC Member States by providing a dedicated assistance the duration of project preparation. Upon the identification of m m A u L F taking into account the challenges of island states. financing resources, the working group would be replaced S by the Strategic Planning and Technical Support for Regional The overarching objective of this study is to identify areas Infrastructure Development Unit, housed in the Secretariat where the Bank can provide support to the IOC, given its which would be responsible for implementing the project. mandate and available financial and technical resources. With a view to fast tracking the implementation of identified Another recommendation is related to the objectives of the actions, it is recommended that the proposed areas of IOC Member States to fully integrate with COMESA, SADC cooperation be broken down into concrete projects and and the CES Tripartite process, and be connected to the programs. Following approval of the study by Bank African continent. To help further these objectives, the Bank management, a multi-sector mission should be conducted could encourage the NEPAD Secretariat and the AU to to identify key projects and programs. The mission, to be led consider expanding the Program for Infrastructure by relevant Bank Departments and the IOC Secretariat, Development in Africa (PIDA) – the main programmatic should also hold discussions with Member States on key instrument to promote connectivity within the continent – to implementation issues, including the need to establish a include the IOC region. dedicated working group for each regional initiative and project identified. Finally, the Bank’s support to the IOC should be evaluated prior to starting a new implementation phase of projects and Upon identification of potential projects and programs, the programs, in order to draw lessons learned from the Bank’s next step will be to mobilize resources through the Bank’s current interventions – including at country level – and to various financing instruments and from technical and financial measure the impact of the Bank’s support to regional partners. To promote private sector participation in the integration within the IOC. Annexes

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FLAGSHIP STUDY INDIAN OCEAN COMMISSION Summary Final Report FLAGSHIP STUDY INDIAN OCEAN COMMISSION Summary Final Report

CSP Country Duration Pillars Main components On-going or proposed projects/activities 4

- Drinking Water and Sanitation Project (on-going) A - Enhanced private sector com - N - Capacity Building Project Support (on-going) N

petitiveness and economic diversifica - E

- Energy Sector Project Support (proposed) X

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support to Economic ter Plan; Sector Rehabilitation of Crash Crops; Private Sector Profile reforms, public finance management P Diversification - Rural Youth Enterprises Project Support (proposed) R

and improvement of the business envi - I - Bas Mangoky Extension Project (proposed) O ronment R I

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- Agriculture infrastructure F

- Project Support for Fishing Community of Tuléar (on-going) - Improve the - Access to drinking water and C 2006-2009; - Irrigation Scheme Rehabilitation Project of Manombo (on-going) O

quality of rural infra - sanitation infrastructure M Two exten - - Lower Mangoky Rice Scheme Rehabilitation Project (on-going) structure - Transport infrastructure O Madagascar sions: 2010- - Fight against STD and HIV/AIDS (on-going) R

- Improve Go - - PPP and private sector deve - O

2011; - Road of Tuléar (on-going) S vernance lopment promotion ,

2012-2013 - Program for Drinking Water Supply and Rural Sanitation (on-going) M - Management of public finance - Ambatovy Cobalt-Nickel Private Mining Project A D A G

- Reducing - Enhance competitiveness and - MIC Grant Debt Management Capacity Building (on-going) A S

structural bottlenecks improve investment climate - MIC Grant Support to Public Sector Efficiency (on-going) C A

to competitiveness and - Consolidate fiscal performance - MIC Grant Sewage/Water Plan (identification stage) R ,

trade and improve public sector efficiency - MIC Grant Health Sector Strategy (on-going) Mauritius 2009-2013 M

- Enhancing pu - - Widen the circle of opportunity - CPSE Budget Support (on-going) A U

blic sector efficiency through participation, social inclusion - Container Expansion (identification stage) R I and social service deli - and sustainability - East-Coast Trunk Road (identification stage) T I very - Plaines Wilheims Stage (OWAS to complete PCR for June 2012) U S

- Feasibility Study for Water Supply in Mahe (on-going) N D

- Policy Based Partial Credit Guarantee (on-going) S E

- Seychelles Sub Marine Cable Project (on-going) Y

- Infrastructure development C - Strengthening - Water Supply Improvement Project (proposed) - Enabling financing and regula - H Private Sector Develop - - Line of Credit to SMEs (proposed) E Seychelles 2011-2015 tory environment L ment and Economic - PPP Framework (proposed) L - Human capacity development E Competitiveness - Infrastructure Action Plan (proposed) S - Human Resource Development Plan (proposed) - Institutional Support Project (proposed) - Statistical Capacity Building Program (on-going)

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FLAGSHIP STUDY INDIAN OCEAN COMMISSION Summary Final Report FLAGSHIP STUDY INDIAN OCEAN COMMISSION Summary Final Report

Area of Potential source Compo - Potential Part - Proposed Ti - Coope - Action Description of funding nent nership meline ration at Bank level

Action 1 Strategic planning and M&E are particularly important for implementing Support the establish - regional programs and projects but also to improve the capacity of the ment of a unit specifically IOC in mobilizing resources and predicting external aid. In addition, the dedicated to strategic unit will also contribute to prepare, implement and monitor the IOC re - planning, monitoring & FSF / Regional Depart - gional integration strategy. It should be noted that the availability of me - evaluation (M&E) and re - ments (RD) / Thematic EU / WB / AFD 2013-2015 dium/long term strategy with action plan, multi-year budget and M&E source mobilization - Trust Fund system is essential to attaining the eligibility status for the EU Agree - Strategic Planning and ments Contribution. This will enable the IOC to access additional re - Resource Mobilization A sources from the EU and other development partners for the N Unit. N

implementation of regional projects/programs. E X

6 P R O P O

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r cate on economic developments in the region; (b) support and coordi-

o Action 2

t 1.1. IOC nate the Member States in trade negotiations and implementation of A c

Support the establish - C e e

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ment of an Economic and 2013-2015 I

O e f capacity (CES Tripartite, EPA, WTO, etc.); (c) produce statistical information, in - Trust Fund / UNCTAD t o N a

Trade Unit. v y

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and diagnostic studies on trade and investment; and (e) support the a A d p N

n implementation of regional framework or strategies such as the STS. a a c

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b Action 3 n I m Support the development This unit will be responsible in defining for each infrastructure sector a e M

of capacity of the IOC blueprint, information tools including cartography (SIG) and a frame - ,

C Secretariat in regional in - work for regional collaboration in this area. It will also seek at streng - . O I 1 frastructure planning thening partnership with national, regional (e.g., RIA du COMESA, or FSF / RD / Thematic through the creation of a the Investment Fund of COMESA) and continental institutions opera - EU / WB 2013- 2015 Trust Fund dedicated Unit of Plan - ting in the infrastructure sector. Furthermore the Unit will play a critical ning and Technical Sup - role to strengthen collaboration with regional (DBSA) and continental port for Regional development banks (ADB) as well as development partners in promo - Infrastructure Develop - ting regional infrastructure. ment. Area of Potential source Compo - Potential Part - Proposed Ti - Coope - Action Description of funding nent nership meline ration at Bank level

The expected support is to improve the capacity of member countries to coordinate at national level the implementation of agreements esta - blished at regional level. This support could be the establishment of a Action 1 dedicated structure at national level (or technical assistance support to Implementation of deci - the structure already existing) to deal with government coordination on sions made at regional regional integration issues. A system of tracking implementation of re - level aiming at promoting FSF / RD / ONRI / The - gional decisions could sough in monitoring the progress and effective - EU / AFD 2013-2015 intra-regional trade and matic Trust Fund ness of the regional agreements made and identifies constraints investment. towards liberalizing trade and investment regimes across the IOC re - gion. A support could be provided to relevant national institutions to improve data collection on trade and investment. Finally, technical and financial assistance to implement an exchange experience and best practices program on PPP should also to be considered. 1.2. National re - r o

t levant insti - c e e tutions / All the IOC members countries concluded an Interim EPA with the EU, S h

t Action 2

e depart - f but three out of four signed the EPA (excluding Comoros) and only two t

o Support trade negotia - a ments in v

y (Mauritius and Seychelles) started its implementation. Support is nee - i t r i tions, including the EPAs WB / EU / c P charge of ded for effective implementation of the EPA signed and for preparing ONRI / RD 2012-2013

a and international trade UNCTAD d p trade and next round negotiations of EPAs (including trade facilitation and coope - n a

a negotiations c

investment

l ration on technical barriers to trade, sanitary and phytosanitary stan - s a e t n promotion dards and rules of origin). a o t i t S u

t r i t e s b n I m e M

C Action 3 . O I 1 Capacity building of na - Besides the training of public agents, technical assistance should be tional institutions in provided to coordinate policies on PPP and facilitate synergies at re - charge of the promotion gional level through increasing public-private policy dialogue. Technical ONRI / RD / OPSM WB / AFD / EU 2013-2015 of PPP to accomplish assistance is also expected to put in place appropriate legislation and their mission. strategy to PPP.

FLAGSHIP STUDY INDIAN OCEAN COMMISSION Summary Final Report FLAGSHIP STUDY INDIAN OCEAN COMMISSION Summary Final Report

Area of Potential source Compo - Potential Part - Proposed Ti - Coope - Action Description of funding nent nership meline ration at Bank level

Such support can consist in organizing regular private-public forums dialogues around subjects related to the private sector participation in the regional integration process. A concrete example is the leadership of the UCCIIO in promoting the concept of “Iles Vanille" in relation to the tourism sector. In addition to that, the private sector should be invi - Action 1 ted to participate in trade and investment protocol negotiations. A Support the CCI and the technical support can be given to private sector associations in the Thematic Trust Fund / UCCIIO in their efforts to preparation of papers / documents as a contribution from them to OPSM / RD / Regional WB / EU / AFD 2013-2015 promote trade and in - these commercial and trade negotiations. This is important to show the Public Goods (RPG) vestment in the region. view of the private sector in a structured manner and effectively contri - bute towards public-private dialogue. Furthermore, in order to meet the labor market needs in areas such as ITC, renewable energy, agricul - ture, mining and enterprise development, it is proposed to support the creation of partnerships between the public and the private higher lear - r

o ning/training institution as well as industry of the IOC Member States t c

e and advocate facilitating movement of professionals across the region. e S h 1.3.

e f

t Private sec - o a

v y i

t tor institu - r i c P This will consist of the establishment of networks for knowledge, best

a tions /

d Action 2 p

n practices and experience sharing in promoting trade and investment. a associa - a

c Support coordination ef -

l s tions The network will serve also to disseminate information on trade and in - Thematic Trust Fund / a

e forts between national WB / EU / AFD 2014-2015 t n vestment opportunities in the region. Technical and financial assistance OPSM / RD a o t i IPA and CCI. t

S will be necessary to put in place a regional portal that could be hosted u

t r i t e by the UCCIIO. s b n I m e M

, C . O I 1 Similarly to other RMCs, the objective is to develop in close collabora - tion with the local Governments and private sector representatives of Action 3 the IOC Member States, and PPP dedicated funds. Selected projects Promote and support the will be required to demonstrate the development outcomes of the re - Thematic Trust Fund / development of results- sources committed, such as income and employment creation while WB / EU / AFD 2013-2015 OPSM / RD based PPP initiatives. simultaneously contributing to the companies’ growth. The Bank can also leverage its role as a leading financial institution in Africa to assist local companies in identifying other forms of PPP programs, such as in the area of technical support and capacity building. Area of Potential source Compo - Potential Part - Proposed Ti - Coope - Action Description of funding nent nership meline ration at Bank level Action 1 Preparation of a strategy, This includes providing technical and financial assistance to develop Thematic Trust Fund / blueprint and investment those instruments and organize a regional roundtable of development 2014-2015 OPSM / RD / SEFA plan for the renewable partners. energy sector. The observatory will allow investors and professionals to access informa - tion of existing companies and renewable energy projects (hydro, geo - Action 2

t thermal, wind, biogas, hydro turbines, marine, biofuels, etc.). This

n Establishment of an ob - e initiative will also improve knowledge of best practices and facilitate the Thematic Trust Fund /

m servatory on regional best UE / AFD /

p establishment of technical and financial partnerships within the private ONEC / ONRI / RD / 2014

o practices in the field of UNDP l

e sector. Given the financial constraints, such initiative could be done SEFA

v renewable energy.

e through a PPP project, combining, under the auspices of the IOC, the D

e participation of the UCCIIO, Chambers of Commerce, Industry and Agri - r u

t culture of the Member States and the Energy Agency of Reunion. c u r t A facility could be established which would aim at facilitating the financing s a r

f of renewable energy projects in private sector and calls for proposals for

n Action 3 I

l PPPs. The facility could also be tapped by the IOC Member States, who

a Establishment of a facility Thematic Trust Fund /

n would like to see more innovative projects in their respective countries. UE / AFD / o

i to finance regional rene - ONEC / RD / Facility to 2013

g 2.1. The specific arrangements for the establishment of such a facility remain UNDP e wable energy projects. be created

R Renewable to be defined. During the phase of resource mobilization (see Annex 9 Energy below), the IOC and the Bank will together explore in detail the imple - mentation of such an instrument. .

2 The need for training and upgrading technical skills is one of the funda - Action 4 mental problems facing the energy sector. An initiative could be develo - Support regional univer - ped through a regional university program, strengthening links between ONRI / ONEC / RD / UE / AFD / WB 2014-2015 sity program. universities and relying in particular on the “Ecole Polytechnique de Ma - RPG dagascar”, which trains water engineers. Moreover, training in alternation remains to be developed for the training of technicians. Two main studies are targeted: - Study to develop a mapping of the potential of the renewable energy for each of the IOC Member States. The study will seek to ans - Action 5 wer, among other questions: What kind of energy processing generation Provide technical and fi - is the most adequate? What are the estimated costs? This study will nancial assistance to build on the databases being developed within the region as the geother - ONRI / ONEC / RD UE / AFD / WB 2013-2014 carry out ESW. mal potential of Reunion and the databases of regional resources for wind and solar to be developed under the support program for renewa - ble energy (EU / IOC). - Study on the regional harmonization of sectoral policies, legisla - tion and regulatory procedures.

FLAGSHIP STUDY INDIAN OCEAN COMMISSION Summary Final Report FLAGSHIP STUDY INDIAN OCEAN COMMISSION Summary Final Report

Area of Potential source Compo - Potential Part - Proposed Ti - Coope - Action Description of funding nent nership meline ration at Bank level The Regional Master Plan (RMP) for the ITC sector to be prepared will in - clude, among others, a regional integrated approach dealing with issues Action 1 of access doors, listing the available bandwidth capacity (domestic and Preparation of a Regional international), and pricing policies access information to investors. It will Master Plan for the ITC ONRI / OITC / RD / RPG WB / UE / AFD 2013-2014 be presented to development partners and the private sector during a re - sector. gional roundtable. The Bank’s support is expected for both the prepara - tion of the RMP and the realization of the regional roundtable.

t Action 2 Establishment of a regional consultation/coordination structure involving n

e Improve coordination bet - private operators and public regulators with the aim of dealing with the m

p ween regulators and pri - gradual liberalization of the sector and the implementation of ITC-PEP. ONRI / OITC / RD WB / UE / AFD 2014 o l

e vate sector operators. This will allow identifying investment projects to be included in the Regio - v

e nal Master Plan for the ITC sector. D

e r

u Action 3 t

c Specifically, the Bank can assist the IOC in coordinating between the is -

u Develop capacity building r

t lands an integrated approach of trainings through: (a) digital university (as

s programs for the private

a suggested by the Mauritius Chamber of Commerce); (b) partnerships r f 2.2. operators and the regula - ONRI / OITC / RD WB / UE / AFD 2014 n

I between universities such as the partnership between the Academy of

l ITC Sector tors in the telecommuni - 5 a ICT and the ICC OTAM in Mauritius or the Master in TNSI founded in n cation sector. o i 2005 in partnership with the school and GOTICOM PIC of Madagascar. g e R - Kigali protocol Implementation Progress Study in the IOC region. - ITC legal and regulatory harmonization study in the IOC region. Action 4 The study will establish a scenario for the segmentation of the ITC market . Provide technical and fi - 2 and the scope of the harmonization of the legal and regulatory frame - nancial assistance to ONRI / OITC / RD WB / UE 2014-2015 works (mostly in terms of pricing and regulation). carry out ESW. - Revisit the situation and the feasibility study for the SEGANET project. - Preparation of the SEGANET project and financial proposal.

Action 5 For each project selected, a working group (composed by the IOC, Support the establish - Member States, domestic private sector and the Bank) will set up and will ment of dedicated wor - ONRI – IPPF / Thematic discuss and work in the preparation of PPP projects. The Bank’s/NEPAD WB / UE / AFD 2013- 2015 king group for project Trust Fund / OITC / RD IPPF initiative will be the main instrument to technically and financially as - preparation proposals. sist the preparation of regional ITC projects.

5 The Technologies New System Information (TNSI) trains annually around thirty engineers from various scientific fields such as computer science, mathema - tics or physical sciences. To achieve this Master, lessons are made in part by the University and partly by private sector engineers. Area of Potential source Compo - Potential Part - Proposed Ti - Coope - Action Description of funding nent nership meline ration at Bank level

The following studies may be conducted as a prerequisite to further sup -

- port the regional transports infrastructure: c u

r - Transport maritime corridors study (as stated in the Southern t s

a Africa RISP). r

f Action 1 n

I - Regional air transport re-organization study in relation to the “Iles

l Provide technical and fi - ONRI – IPPF / Thematic t a

n Vanilles” concept (put in place common itineraries for serving the islands, n

e nancial assistance to Trust Fund / OITC / RD / WB / UE 2014-2015 o i 2.3. low cost promotion products, possibility to combining transports, etc.). m

g carry out ESW RPG p e Transport - Inter-island maritime transport study to identify the adequate: o l R e sector transport chain, multi-modal transportation scheme, port tariffs, trade fa - v e cilitation measures, non-tariff barriers, scope of diversification of traffic D

r (passengers, agricultural food commodities). . u 2 t

To date, the Bank assistance in the region was based on a case by case Action 1 support, which is provided after the natural disaster has occurred. It is

r Support relevant national strongly suggested the establishment of a dedicated fund for post crises

e 3.1. AFD / EU /UN t institutions in post crises response management following occurrence of natural disasters. Such a s

a Natural di - OSHD / Climate Change Agencies/ s

i response management fund will primarily target the reconstruction of critical infrastructure, mainly 2013-2015

d sasters Facility / RPG WB/JICA/

l and risk mitigation for na - roads, and ensuring basic urgent needs to populations. Supports from

a EIB/IAD r tural disasters situations. other sources of financing should support the establishment of a dedica - u t

a ted center of excellence dealing with environment and management of n

o risk of natural disasters. t

t n e m e g a n s a c i Put in place/operationalize mechanism for regional coordination response m

m e e to the threat of pandemics diseases. Such a mechanism of coordination s d n n should allow the Member States to share information in real time and im - o a p p

s Action 1 plement protocol actions rapidly. It is also proposed to extend the pre - l

e AFD / EU / UN a 3.2. n R Improving regional coordi- vious financial assistance to prevent and fight against HIV/AIDS and

o Agencies/ i Regional nation to respond to pan - enlarge the support to the control of other diseases such as malaria. OSHD / RPG 2012-2015 g

e pandemic WB/JICA/ r

demic diseases. Such a financial instrument may be flexible enabling the Bank to intervene

d diseases EIB/IAD . n in situations of natural disasters with risk of propagation of diseases wi - 3 a thin the region. In addition, it is proposed the establishment of mecha - nisms of coordination and the creation of one regional centers of excellence for infectious diseases.

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