By Harshita Khaund
Abstract
The India-Middle East-Europe Economic Corridor, proclaimed to be a ‘major medium of economic integration’ between India, West Asia and Europe, represents a cornerstone of multilateral cooperation and 21st century globalization in the fields of railway connectivity, digital and financial connection and green energy partnership. While optimists herald it as a modern day silk route promising global economic prosperity, it remains to be seen if the IMEC holds the capacity to counter polarizing geopolitical dynamics and contend with the presence of the Chinese Belt and Road Initiative.
IMEC – A green and digital bridge across continents and civilizations
With much global gusto and acclaim, the Indian leadership under the chairmanship of Prime Minister Narendra Modi heralded the 18th Heads of State and Government Summit of the Group
of 20 in September 2023. While initial commentaries displayed skepticism over India’s ability to achieve consensus on a plethora of global issues, as the summit was marred by increasing geopolitical hostility over the Russia-Ukraine war and the looming threat of Chinese disengagement with multilateral platforms, the platform managed to achieve 100 percent consensus, unanimously agreed upon by Russia and China as well (whose noticeable absence spawned theories of growing ineffectiveness of the platform itself). The Declaration further achieved historical prominence as the most ambitious pronouncement till date, containing 112 outcomes, while enhancing on the democratic reshaping of geopolitics through the inclusion of the African Union as a permanent member of the G20.
One of the key takeaways from the Summit was the announcement of the India-Middle East-Europe Economic Corridor, a mega shipping and railway connectivity corridor, interconnecting transit networks between India, the UAE, Saudi Arabia, Jordan, Israel, and Europe (including France, Germany and Italy). According to the official Memorandum of Understanding, IMEC will comprise two corridors, namely the East Corridor connecting India to the Arabian Gulf, while the Northern Corridor will draw a bridge between the Arabian Gulf and Europe. The zenith of the project features the railway network which, upon completion, will provide “a reliable and effective cross-border ship to rail transit network”. India’s prowess, particularly in the field of railway construction in arid areas, significantly figures in the corridor’s proposed agenda of supplementing existing maritime and land transport routes. The proposed goods and services transit will be augmented by electrical and digital infrastructure enhancement through the laying of fiber optic cables as well as pipes for clean hydrogen exports.
While the White House Communique defines it as ‘a new era of connectivity with a railway, linked through ports connecting Europe, the Middle East and Asia’, it is imperative to trace the historicity of IMEC. We can recall the words of Peter Frankopan in his pioneering work ‘The Silk Roads: A New History of the World’, who emphasized the role trade routes such as the historic Silk Route played in connecting not merely goods, but ideas and cultures as well, providing fertile grounds for technological advancement and groundbreaking restructuring of entire civilizations. Dating back to 200 BCE, the Mauryan Empire, from its seat of power in Bharat, exercised significant socio-economic influence through commercial engagement with the Greco-Roman civilizational plateau. It is notable to remark Indian Prime Minister Narendra Modi’s comments proclaiming IMEC as the “basis of world trade for hundreds of years to come” while drawing parallels with India’s propensity for global prosperity since the ages of the Silk Route.
IMEC vs BRI – An epic economic showdown?
Since its conceptual formulation by Indian National Security Advisor Mr. Ajit Doval through engagements with his American counterpart Mr. Jake Sullivan within the broader deliberative
frameworks of the I2U2 (comprising of India, the United States of America, Israel and the United Arab Emirates), the IMEC has generated much buzz among geopolitical spectators because of its contra positioning to the famed Chinese Belt and Road Initiative at a time when the latter has come under questioning for its inability to deliver on its promises.
The Belt and Road Initiative, China’s pathway to enhancing its diplomatic clout, came at a time global headwinds were strongly anti-China amidst the furor of alarm bells sounded in the West over China’s predicted ascension as a hegemonic power with strong militaristic tendencies in the South China Sea. Xi Jinping’s vision of amalgamating the overland Economic Silk Road and the Maritime Economic Belt to initiate ‘the project of the century’ largely consisted of initiatives to “complement the development strategies of countries involved by leveraging their comparative strengths” through trade, infrastructural, economic and cultural interconnectedness. And it has paid off to a considerable extent. Consider the following statistics – as of 2021, China had signed Memorandums of Understanding with a staggering 147 countries accounting for 40% of global GDP. China’s outbound foreign direct investment, particularly to BRI countries, amounted to $154 billion in 2020; while in its heyday, the BRI projects raised a total financial value of $155 billion.
Since its inception a decade ago, however, the momentum behind China’s financial big-brotherly orientation seems to be taking a hit, owing not merely to repercussions of the pandemic, but its inability to maintain stable growth in the number and value of foreign projects. Increasingly, reports have suggested that a greater number of Chinese private investors, after initial periods of zealous investment, have bitten off more than they can chew when it comes to initiating new projects. This comes at a time when China’s Sri-Lankan experiment raised questions of ‘debt-trap diplomacy’, where an increasing number of low-income countries have struggled to repay their debts. Take the example of Pakistan, which has seen wide scale protests over major port projects financed by China as part of the China-Pakistan Economic Corridor infrastructural framework amidst economic downward spiraling, eventually leading to negotiated bailouts by the International Monetary Fund.
The IMEC, with its vision of infrastructural capacity building and heightened region-to-region connectivity, has been widely dubbed as a strong contender to China’s flailing BRI even as Italy, which had signed on as a participant of the BRI in 2019, recently withdrew from the same and instead opted to align itself with the IMEC project. For the United States, this further represents a strategic shift away from conventional military alliances to an ‘economic entente’, as it aims to widen its sphere of influence across Europe and Asia through softer diplomatic overtures in an increasingly multipolar geostrategic arena.
The Middle East, in particular, has emerged as a region of renewed geopolitical interest after a period of disengagement following America’s disastrously unprepared military exit from Afghanistan and its flip-flopping maneuvers on the question of the Iran Nuclear Deal. US
President Joe Biden’s controversial fist bump with Saudi Crown Prince Muhammad Bin Salman in July of this year is a stark testimony to this fact, after initial periods of thaw in the relations. Deliberations over IMEC reflect America’s policy prerogative of finding the middle ground – when unable to transform the region or completely extricate itself, it is best to bond over shared concerns of economic growth.
The absence of the mighty Dragon of the East must also not be ignored. Chinese media has repeatedly bemoaned the US’s ‘increasing desperation’ to lure countries, mainly from the Indo-Pacific, into its camps through mini-lateral groupings such as the IMEC in efforts to contain the rise of China. This sentiment is most vehemently manifested in the work of Professor Ding Long of the Middle East Institute at the Shanghai International Studies University. The article, titled ‘The Indo-European Economic Corridor won’t go far if it excludes China’ remains self-explanatory and ridicules American hyper-fixation with military security even within frameworks of cooperative infrastructural development.
Optimistic geopolitical analysts have also been tempted to view the IMEC as an obvious successor to the Abraham Accords of 2020, signaling deeper normalization of relations between Israel and the Arab world and a boost to the US’s favorable position in the region. As per reports, “Israel’s National Security Adviser, Tzachi Hanegbi, called the corridor ‘the most meaningful evidence’ that both sides are moving from ‘a shot in the dark’ towards meaningful efforts to normalize relations between the two countries”. However, glaring complications remain in the pathway to civilized relations, further propelled by the ongoing Israel-Hamas war. It is not immediately obvious if the Saudi counterpart necessarily views the Economic Corridor as anything more than a strategy of economic diversification. Political connotations would undeniably raise questions of a US sponsored Saudi civilian nuclear programme and formalized US security guarantees.
For India, a geostrategic grouping of convenience such as the IMEC presents boundless opportunities to expand its socio-economic and diplomatic clout, inflated by its presidency of the G20 and its global stature as a leader of the developing world. Emerging as an alternative trade route to the troubled North-South Corridor to Russia via Iran’s Chabahar, the multi-modal IMEC route can ship Indian goods from Mumbai to the European mainland within 10 days, which is 40% faster than conventional maritime trade routes of the Suez Canal. India’s already existing integrated value chains, including the multi-billion dollar ‘India-Middle East Food Corridor’ and an integrated hydrocarbon value chain, provide a bridge for synergizing efforts between the key players of the IMEC. India’s strategic orientation towards the Middle East is particularly noteworthy in the face of burgeoning Chinese influence in the region, even as bilateral trade with the United Arab Emirates and Saudi Arabia surged to $84 billion and $53 billion respectively as of March 2023. India’s ability to invest skillfully by utilizing multilateral value chains and taking on economically fruitful infrastructure projects would determine its standing as a Eurasian economic power with credibility to counter the CPEC through its partnership with IMEC.
Prospects and Challenges Ahead:
While US President Joe Biden has hailed the project as a ‘big deal’, scholarly attention to how IMEC can thwart the obstacles encountered by BRI deserves merit. While the BRI has been cited as a platform for China to exercise covert influence in domestic politics of participating countries, there is reason to believe that IMEC proposes a more equitable gains distribution pattern with balanced partnerships driven by countries which have frequently espoused standards of ethical political conduct. According to Bibek Debroy, Chairman of the Economic Advisory Council to the Prime Minister, IMEC opens up a diversity of markets for India to access, while creating an alternative alliance platform for Middle Eastern countries and giving a democratic pushback to China’s BRI. In addition, IMEC envisages not merely physical connectivity but also digital and financial interconnections with the intent to “link both continents to commercial hubs and facilitate the development and export of clean energy; lay undersea cables and link energy grids and telecommunication lines to expand reliable access to electricity; enable innovation of advanced clean energy technology; and connect communities to secure and stable Internet” according to the White House Press Release.
The efficiency of the Corridor would, however, require exceptional logistical cooperation in terms of infrastructural development traversing across diverse geographical terrains. Even in the case of the BRI, where China acted as a stand-alone financier, building road and railway connectivity proved to be intensely challenging amidst mounting pressure of sustained financial investment across geographically far-flung areas. Keeping location aside, navigating the geopolitics of the diverse partner regions, each with political dynamics, internal policies and laws, and sovereign foreign relations poses risks of disagreement and eventual stalling of projects altogether. With global relations plunging towards increasing polarization in the midst of two wars, sustaining financial cooperation for infrastructural investment may encounter significant bottlenecks in the face of bureaucratic hurdles and heightened propensity for distrust between partner nations. The ‘cooperative’ aspect of IMEC must also be prioritized instead of transforming its objectives to serve as a medium of heightened trade wars between the US and China.
IMEC’s propensity to become a game changer for the global political economy thus warrants deeper commitment to boost economic welfare even in the midst of perceived irreconcilable politico-ideological differences between countries. From a liberal perspective, IMEC shines as a beacon of hope in an otherwise bleak geopolitical realm with its promises of global interconnectedness. It remains to be seen to what extent it can commit to its pledge.
Author’s Bio
Harshita Khaund is a Master’s student of Diplomacy, Law and Business at the Jindal School of International Affairs. She holds a bachelor’s degree in Political Science from Indraprastha College for Women, University of Delhi. Previously, she has undertaken research work at the Center for Civil Society, Project Statecraft and the Center for National Policy Research. She is keen to work in the arenas of International Relations, particularly West-Asian geopolitics and global conflict and humanitarian challenges.
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