IMEC countering BRI: Navigating the geopolitical, financial and logistical hurdles

The G-20 Summit held on Sept. 9-10, 2023 led to the announcement of India-Middle East Economic Corridor. The Project aims to connect continents of Europe and Asia and was announced by the leaders from India, United States, Italy, Greece, France, Germany, UAE, and European Union. It features two corridors, first one known as the Eastern Corridor connects Arabian Gulf to the India and second one as Northern Corridor links Arabian Gulf to the Europe. The IMEC is lauded by the West especially by the US as a Modern Spice Route with potential to boost global and regional trade, connectivity and institutionalize peace. The West envisions IMEC as one of projects having the credibility to challenge and counter China’s BRI even though the deal is far from being done. In reality, the project is far from being close in competition with BRI, a multi-billion-dollar project with sustainable state led financing and historically proven feasible routes. This article will shed light on such complications of geopolitics, investments and routes that stand in the way of IMEC’s vision of countering China’s BRI.

Implementations will counter daunting challenges, first one being the volatile middle east region. With the amidst of recent Israel-Hamas conflict, the region is again in hot waters and a wake-up call on the challenges this project will face. Michael Kugelman, director of the South Asia Institute at the Wilson Center in Washington points out that aside from financial challenges, stability & diplomatic cooperation is core to this project. The ongoing war between Hamas and Israel reflect how difficult it is for IMEC to be completed in true vision. The global security implications include the possibility of war expanding into wider regional conflict. Secondly, with this project the Washington envisioned normalization between the Saudi Arabia and Israel as their link is of core importance to the project. Their normalization would have led to US brokering Abraham Accords between the two states. Nevertheless, with this conflict reaching newer heights each day the normalization of relations between the two states seems to be at stake. 

Secondly both Iran and Turkey are not happy with the exclusion from the corridor. Interestingly, many scholars in Turkey picture that the downfall of the project as inevitable. Ali Oguz Dirioz, an associate professor at the TOBB University of Economics and Technology is of the view that the exclusion of Turkey from the IMEC will not be fruitful. Turkey has been a critical contributor of various international trade and supply chains as it is a natural link between Asia and Europe. Dirioz pointed out that the failure of EastMed pipeline was due to the exclusion of Turkey. He stated that EastMed never turned out to be economically and environmentally viable because of its roots. Likewise, the Turkish Foreign Minister Fiden commented on the IMEC agreement during the G20 meeting that Turkey is located at the crossroads of 3 continents, and successful sustainable energy and transportation corridor are not possible without Turkey. Similar statement was given by the Turkish President Recep Tayyib Erdogen.

The third major Issue with IMEC is the construction of intermodal transport which will have enormous cost.  Multi-Modal corridor has always been difficult to support logistically and financially.  The question is the source of funding the project, only Saudi Arabia has contributed US$20 billion to IMEC. BRI on contrast is funded by China, the second largest economy and a leading trading giant. China’s influence on Global South is huge and India’s economy is one fifth of China’s economy so it is an overstatement to say the India will lure more followers in Global South than BRI. So, both transport infrastructure and funding are a problem for IMEC while BRI has efficient transportation, funding, and logistics support with its status as a hub of global supply chain.

More importantly, new corridors for trade work efficiently when the basic infrastructure previously exists. In IMEC’s case, the closet EU port is present in Greece which are poorly developed. The construction of new railways in mountainous Greece and the deserts of Saudi Arabia and UAE will require huge amount of money, for which no plan by either US or EU has been hatched.  The west sees IMEC as a part of its wider objective of Partnership for Global infrastructure investment and as puzzle to decrease China’s influence in the Middle East. But certainly, Saudi Arabia and UAE does not consider China a threat. Their initiatives to join IMEC is not mark their presence in the multipolar world. Both Saudi and UAE aims to become diverse economies in near future to open up their countries for global investments. 

In conclusion, IMEC is quiet an ambitious project proposed by India which definitely has its pros but it encounters three main challenges geopolitical situation, financial and logistical complexities and vulnerabilities. With Israel and Hamas at war, the major prerequisite of diplomatic cooperation is now far more complicated. The corridor envisaged to connect multiple diverse nations, with different historical and political ideologies with various strategic interests could possibly face more daunting security challenges with this war.   

Opinions expressed in this article are those of the author.

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