A new transport corridor announced on the sidelines of the G20 summit in Delhi will become the basis of global trade for hundreds of years, Indian Prime Minister Narendra Modi announced in a recent radio address.
Will this prediction come true?
US President Joe Biden and Saudi Crown Prince Mohammed bin Salman improved their frosty relationship, going from an awkward fist bump last year to a firm handshake a month ago when they announced the India-Middle East-Europe Economic Corridor (IMECfor its acronym in English).
(Biden had once promised to turn Saudi Arabia into a global pariah.)
The project, launched to strengthen transport and communication links between Europe and Asia through rail and maritime networks, is beneficial for the region, but also says a lot about American foreign policy, “which, in short, consists of anything that advances American interests against China,” Ravi Agarwal remarked to the BBC. , editor in chief of Foreign Policy magazine.
The United States does not benefit materially from being part of the project, “but this can be put in the same category as the Japan-South Korea summit at Camp David,” says Parag Khanna, author of Connectography.
The United States marked its diplomatic presence at that meeting held at the presidential rest residence by mediating a thaw between the two Pacific nations in the face of growing Chinese expansionism.
Many also see IMEC as an American counterpart to China’s Belt and Road Initiative (BRIfor its acronym in English), a global infrastructure construction project that connects China with Southeast Asia, Central Asia, Russia and Europe (and which many call the New Silk Road).
Are they really similar projects?
This year marks a decade since President Xi launched the BRI.
- China’s “new Silk Road”
Some say that the great ambitions of the initiative have diminished significantly as project lending has slowed amid China’s economic slowdown.
Countries like Italy are expressing their desire to withdraw, and nations like Sri Lanka and Zambia find themselves trapped in debt traps, unable to meet their credit obligations.
The BRI has also faced criticism for many other reasons, from its “underlying objectives of gaining strategic influence through development footprint…aggressively linking different regions with Sinocentric value chains, inadequate attention to local needs, lack of transparency, disregard for sovereignty, adverse environmental impact, corruption and lack of robust financial oversight,” Girish Luthra, a member of the Observer Research Foundation think tank, wrote in a recent article.
Despite setbacks, the Chinese have accomplished an “amazing amount” of things, and IMEC is not even close to being a “rival”says Khanna, adding that at best he can be a moderate volume runner.
“It is not revolutionary like the BRI. It’s a good advert, but you don’t look at the proposal and say, ‘My God, the world can’t live without it,'” Khanna told the BBC.
You can see why.
China has a 10 year head start with the BRI and total investments under the initiative exceeded $1 trillion in July. More than 150 countries have joined as partners, which, as Luthra writes, has significantly expanded its geographic reach “from a regional initiative to a almost global“.
The IMEC is not the first effort by the developed West to use infrastructure as a counterweight to contain China’s growing footprint.
The G7 and the US launched a Global Infrastructure and Investment Partnership in 2022, with the goal of mobilizing US$600 billion in global infrastructure projects by 2027.
The Global Gateway It is the EU version of the BRI.
- The multimillion-dollar investment plan with which Europe seeks to compete with China’s New Silk Road
Neither matches its scale or ambition. However, the fact that the last five years have seen an increase in these projects in response to China’s initiative is evidence that the BRI has been a “global economic multiplier”, Khanna says.
Some analysts caution that IMEC should not be seen exclusively in opposition to the Belt and Road Initiative (BRI), suggesting that such a binary perspective may not be fruitful.
Their training gives an additional boost to the current trend of transactional partnershipswhere countries collaborate with multiple partners simultaneously.
“Nowadays, most countries tend to participate in multiple forums and alliances,” says Ravinder Kaur, a professor at the University of Copenhagen.
“The devil is in the details”
The IMEC memorandum of understanding is short on details, but an action plan is expected in the next 60 days. To date, all he has done is map out the potential geography of a corridor.
Making it a reality will be enormously complex. “I would like to see the key government agencies that will fund the investments, the capital that each government will allocate, and the timelines identified,” Khanna says.
It will also be necessary to implement a new customs and commercial architecture to harmonize paperwork, he adds, and gives the example of the trans-Eurasian railway through Kazakhstan, which passes through 30 countries.
“That traffic is fluid. Authorizations are only needed at the beginning and end of the trip. “We don’t have this with IMEC.”
Then there are also the obvious geopolitical complexities to navigate the links between partner countries such as USA, Israel and Saudi Arabiawho often disagree.
According to experts, it doesn’t take much for such tactical cooperation to fail.
The IMEC will compete with the Suez Canalthe waterway in Egypt used to transport goods between Mumbai and Europe.
“To the extent that IMEC improves our relations with the United Arab Emirates and Saudi Arabia, will harm relations with Egypt“wrote economist Swaminathan Aiyar in his column for the Times of India.
Shipping by sea through the Suez Canal is also cheaper, faster and considerably less complicated. “It may make excellent political sense, but it goes against all the principles of transportation economics,” adds Aiyar.
But IMEC’s ambitions transcend the narrow scope of trade and economics to include everything from power grids to cybersecurity, based on conversations that have taken place in security forums such as the Quad, says Navdeep Puri, former Indian ambassador to the Emirates. United Arabs, in a column for The National News.
“If the lofty ambitions outlined in New Delhi can become a reality, they would make a unique contribution to a safer and more habitable planet. For now, let us live with that hope.”
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