“IMEC will supplement road and maritime transport routes that already exist, aiming to increase connectivity and economic integration between Asia and Europe via energy infrastructure, railways, high-speed cables, and shipping lanes. The countries participating in IMEC constitute 40 percent of the world’s population and roughly 50 percent of the global economy.”
On September 8, at the G-20 summit in New Delhi, Indian Prime Minister Narendra Modi unveiled the India-Middle East-Europe Economic Corridor (IMEC), a multi-billion connectivity scheme linking India, the Middle East, and Europe. India’s co-signatories in this endeavour are the United Arab Emirates (UAE), Saudi Arabia, the United States, Germany, France, and the European Union (EU).
The corridor consists of an eastern corridor connecting India to the UAE, Saudi Arabia, Jordan, and Israel, and a northern corridor linking Middle Eastern countries to Europe.
IMEC will supplement road and maritime transport routes that already exist, aiming to increase connectivity and economic integration between Asia and Europe via energy infrastructure, railways, high-speed cables, and shipping lanes. The countries participating in IMEC constitute 40 percent of the world’s population and roughly 50 percent of the global economy.
The India-Middle East-Europe Economic Corridor represents an important shift in United States’ and European Union’s efforts to promote trade in the Middle East. Unlike past trade initiatives, the IMEC encompasses a broader coalition of regional and non-regional participants. It also makes infrastructure a priority over trade policy as a means to expand inter- and intra-regional trade. The White House hopes that the IMEC will ‘usher in a new era of connectivity from Europe to Asia.’ Proponents of the initiative estimate that the IMEC could cut the time to send goods from India to Europe by 40% and slash transit costs by 30%. The IMEC will also expand digital connectivity on the Arabian Peninsula, and give Europe and India new sources for clean gas.
IMEC will consist of two distinct corridors – the east corridor linking India to the Arabian Gulf and the northern corridor connecting the Arabian Gulf to Europe. This will include a railway network designed to offer reliable and cost-effective cross-border ship-to-rail transportation, complementing existing maritime and road routes.The corridor will also feature the installation of infrastructure for electricity and digital connectivity, as well as pipelines for clean hydrogen export.
Once completed, it will establish a dependable and cost-effective ship-to-rail transit system for cross-border movement of goods and services. It complements existing maritime and rail-road transport routes, such as the Suez Canal, North South Transport Corridor, and China’s Silk Routes, facilitating seamless transit between India, the UAE, Saudi Arabia, Jordan, Israel, and Europe. For India, the project holds economic promise through its large diaspora in the Middle-East, contributing to energy security and serving as a market for Indian goods. It positions India strategically, fostering influence over the Indian Ocean and expanding reach into Mediterranean, Atlantic regions.
Additionally, the IMEC envisions the development of three industrial corridors namely food, green energy and knowledge economy. The commitment of participating countries is reflected in their joint pledge of committing themselves to a diligent formulation of an action plan for sources of funding, network route and alignments, design and layout and allocation of work among participating countries.
Another important aspect to look at is the involvement of the US in the initiative.The US has multifaceted objectives, including steering India away from the influence of Russia and Iran, especially in light of the challenged ‘North-South Transport Corridor’.
The US seeks to maintain its regional presence as a stabilising force by involving Saudi Arabia, the UAE, Israel, and other Gulf nations. This strategic move aligns with the ‘Abraham Accords’; and the other broader initiative, i.e. I2U2 (India, Israel, US and UAE).
The Biden administration’s support for IMEC also stems from its efforts to reassure US allies and partners in the Middle East about Washington’s commitment to the region while also presenting an alternative to China’s Belt and Road Initiative (BRI), which was first unveiled by President Xi Jinping a decade earlier when it was originally called “One Belt, One Road.”BRI is Beijing’s grandiose initiative that seeks to interconnect Asia, Africa, Europe, and Latin America while positioning China as the centre of the global economy in the 21st century.China’s Belt and Road Initiative dates from 2013. In a short span of time, it has received an extraordinary amount of attention, not just in China but throughout the world. As of September 2018, more than 130 countries and international organisations had signed cooperation agreements with China.
Potential Challenges:
Even though the IMEC holds significant potential for the participating countries, it may face several critical challenges and obstacles that must be addressed to ensure its successful implementation.
The expected cost of the proposed corridor will be $20 billion on laying a dedicated rail network, contiguously supported by state of art optical fibre network and a hydrogen pipeline.The extended planning phase of infrastructure projects, combined with high private investor expectations, can inflate costs and undermine financial feasibility. Hence, ensuring consistent funding for numerous projects within the corridor presents challenges, as recipient nations may face uncertainties in securing commitments from international donors or private investors. The resultant delays in fund allocation can lead to project delays, cost overruns, and reduced viability.The complexities associated with the logistical challenges of the project are still to be addressed, given that such a large project encompasses a vast geographic area.The diverse political and legal frameworks governing all the nations involved may create bureaucratic hurdles, trade barriers, and delays in decision-making processes, resulting in a slowdown in the corridor’s progress.
In geopolitical terms, IMEC is touted as a counter to China’s BRI, but the scale and scope of the BRI is much greater. Since its launch a decade ago, over 150 countries and about 30 international organisations have signed on to the BRI. Many nations participating in the IMEC are also part of the BRI and whether it is the Haifa Port in Israel or Piraeus in Greece along the IMEC route, Chinese presence is all too visible.
By:-Abhinav Goel
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