This article advances the view that regional integration among ten nations along the Indian Ocean rim will have positive economic and political consequences for all the members. Emergence of this geographically large area with one-fourth of the human population w i l l be good for financial markets and the global economy as well.
Planned regional arrangements will offer major benefits to outsiders, for example, Gulf countries, by stimulating growth and enhancing market forces. Traditional enmity between India and Pakistan, however, and the economic and political adjustments that South Africa is undergoing after the first free election may prevent cooperation in the region, not to mention the fact that the area has deep economic problems with mass poverty and low per capita incomes. Problems aside, there are hopeful signs, both economic and political, that encourage the Indian Ocean rim nations to seriously consider establishing a regional trade bloc. For example, a substantial middle class is emerging in the area. Industrialization is slowly progressing, challenging the dominance of the agricultural sector. India, however, will have to take the initiative in the matter. The size of her economy and her pre-eminence as a regional political force equip India to play the key role in the establishment of a regional agreement in the area.