Is the IMEC destined to fail?
Indian Prime Minister addresses at the Partnership for Global Infrastructure and Investment & India-Middle East-Europe Economics Corridor event during G20Summit, in New Delhi on September 09, 2023. Source: Prime Minister’s Office, Government of India
By Soumya Chaturvedi
The New Delhi Leaders’ Declaration from the G20 Summit was a highly anticipated diplomatic document.[1] However, an announcement on the sidelines of the Summit garnered global attention, deservingly so. On September 10, 2023, a memorandum of understanding (MoU) was signed between India, the United Arab Emirates, Saudi Arabia, Italy, France, Germany, the United States of America, and the European Union to work towards establishing the India-Middle East-Europe Economic Corridor (IMEC).[2] IMEC is a project aimed at building and strengthening the connectivity between India, the Arabian Gulf, and Europe. The MoU suggests that the project would begin with laying down railway lines to complement existing maritime and road transport routes and could eventually expand to electricity, clean energy, and digital connectivity.
Apart from being an ambitious project with massive economic potential, the most striking feature of the project is its ambition to enable enhanced and robust connectivity between India, UAE, Saudi Arabia, Jordan, Israel, and Europe. While for some of these countries, IMEC is a projection of existing strong relations, for others, it could be a positive step in building new bridges.
For India, IMEC and its success has three-fold significance — it enhances India’s geoeconomic outreach towards the West; it provides a strong impetus to the Indian economy and establishes India as the logistical hub for countries in the region to connect with countries in the Western Indian Ocean region and beyond; and, it substantiates the Indian claim of being an important innovative global stakeholder and arguably, a more reliable partner than China with its Belt and Road Initiative (BRI).
The experiences of France, Italy, and Germany with China and the BRI have not been pleasant.[3] For them, investing in IMEC is part of the “de-risking” strategy as the highly interdependent nature of economic affairs limits their ability to “decouple” from China.[4] In recent years, there has been a persistent European effort to signal strategic autonomy over their affairs. This, coupled with Europe’s lackluster economic growth following COVID-19, further supports their interest in ensuring the success of IMEC.
IMEC is also an opportunity to strengthen U.S.-Saudi relations. U.S. dependence on Saudi oil led many to believe the countries’ alliance to be inseparable. However, the discovery of shale gas in the U.S. lessened American reliance on Saudi oil, while the assassination of Jamal Khashoggi and Obama’s Iranian policy further strained relations.[5] However, the Middle East still hosts a plethora of strategically sensitive oil and trade choke points at a time when global energy markets are already strained. China’s growing footprint in the Middle East, including its role in the recently concluded Saudi-Iran détente, is a cause of worry for American lawmakers and has forced them to reconsider their approach.[6] With IMEC, the United States aims to stall, if not reverse, the trend of Chinese involvement in the region and reinforce its presence.[7]
For the Middle East, IMEC is a win-win proposition. The limitations of being oil-rentier states in a world embracing clean energy have compelled these countries to diversify their tools of statecraft and find sustainable levers of economic growth. With increasing Chinese investments and political involvement in the Middle East, the region could act as a stabilizer between the U.S. and China by hosting a substantial link of IMEC. The success of IMEC caters to the advantage of all the participating states individually, but the fragmentation and polarization of the Middle Eastern region cast a long shadow of doubt on its success. In the absence of shared political objectives, aligning economic interests or keeping political objectives and extra-regional elements from meddling with these economic interests is exceptionally challenging for Middle Eastern actors.
The most important, albeit controversial, link in the IMEC will be access to the Mediterranean Sea by connecting Saudi Arabia with Israel via Jordan. Saudi Arabia and Israel stand at loggerheads with no diplomatic relations. The announcement of IMEC raised several speculations about the possibility of normalizing relations between the two, as was seen between Saudi Arabia and Iran in mid-2023.[8] However, the recent developments between Palestine and Israel have derailed such efforts.[9] The possibility of normalization sounds further unlikely, particularly when IMEC is being considered as the potential trigger for Hamas’s actions.[10]
The presence of active militant and terrorist organizations, violent religious polarizations, and failed and near-failed states in the region have already increased the cost of investments. However, the Saudi-Jordan-Israel link has the potential to bring enormous economic prosperity and strengthen geopolitical positioning for the participating countries through IMEC. On the diplomatic front, the recently brokered Saudi-Iran détente is a ray of hope, signifying the possibility of peace between sharp opponents, even if it is fragile. The economic success brought forth by the Abraham Accords also serves as an example of the potential of peace in a region as fragmented as the Middle East.[11]
By connecting the most strategic dots on the map, IMEC has the potential to be a game-changer if a similar spirit is shown in normalizing Saudi-Israel relations. Despite the adversarial relationship between Israel and Palestine, Saudi Arabia would have to “de-hyphenate” the two and craft an independent approach to exploring economic possibilities with Israel without interference with its political positioning on Palestine.[12] IMEC truly aligns with the self-interest of each of the participating countries. Given the recent success of the political reset in the region, IMEC cannot be considered destined to fail. However, for it to succeed, the nations will have to prioritize geoeconomics above their divergent political positions.
About the author
Soumya Chaturvedi is an international relations scholar. She has previously worked as a Consultant with the G20 Secretariat in the Indian Ministry of External Affairs. She is currently working as a Senior Research Fellow at India Foundation, a New Delhi-based think tank.
Endnotes
“G20 New Delhi Leaders’ Declaration,” Ministry of External Affairs, Government of India, September 9-10, 2023, accessed October 10, 2023, https://www.mea.gov.in/Images/CPV/G20-New-Delhi-Leaders-Declaration.pdf
“Memorandum of Understanding on the Principles of an India – Middle East – Europe Economic Corridor,” The White House, September 9, 2023, accessed October 11, 2023, https://www.whitehouse.gov/briefing-room/statements-releases/2023/09/09/memorandum-of-understanding-on-the-principles-of-an-india-middle-east-europe-economic-corridor/.
Le Corre, Philippe, “Not Too Far, Not Too Close: The French Way of Handling China,” ThinkChina, January 04, 2023, https://www.thinkchina.sg/not-too-far-not-too-close-french-way-handling-china; Sacks, David, “Why Is Italy Withdrawing From China’s Belt and Road Initiative?,” Council on Foreign Relations, August 03, 2023, https://www.cfr.org/blog/why-italy-withdrawing-chinas-belt-and-road-initiative; Ulatowski, Rafał, “Germany in the Indo-Pacific Region: Strengthening the Liberal Order and Regional Security.” International Affairs 98, 2, (2022): 383–402. https://doi.org/10.1093/ia/iiac008.
O’Carroll, Lisa, “EU Softens China Strategy by Adopting ‘De-risking’ Approach,” The Guardian, June 30, 2023, https://www.theguardian.com/world/2023/jun/30/eu-china-strategy-de-risking-ursula-von-der-leyen-brussels.
Sokolsky, Richard, and Miller, Aaron David, “The U.S.-Saudi Relationship Is Out of Control,” Carnegie Endowment for International Peace, October 12, 2018, https://carnegieendowment.org/2018/10/12/u.s.-saudi-relationship-is-out-of-control-pub-77484.
“Joint Trilateral Statement by the Kingdom of Saudi Arabia, the Islamic Republic of Iran, and the People’s Republic of China,” Saudi Press Agency, March 10, 2023, https://www.spa.gov.sa/en/ed7aabfefaw; “The Iranian Foreign Ministry’s Statement on Resumption of Diplomatic Ties Between the Islamic Republic of Iran and Saudi Arabia”, Islamic Republic of Iran Ministry of Foreign Affairs, March 11, 2023, https://en.mfa.gov.ir/portal/newsview/713816.
Samaan, Jean-Loup, “The India-Middle East Corridor: a Biden Road Initiative?,” Atlantic Council, October 06, 2023, https://www.atlanticcouncil.org/blogs/the-india-middle-east-corridor-a-biden-road-initiative/.
“Readout of President Joe Biden’s Meeting with Prime Minister Benjamin Netanyahu of Israel,” The White House, September 20, 2023, accessed October 15, 2023, https://www.whitehouse.gov/briefing-room/statements-releases/2023/09/20/readout-of-president-joe-bidens-meeting-with-prime-minister-benjamin-netanyahu-of-israel.
Center for Preventive Action, “Israeli-Palestinian Conflict,” Council for Foreign Relations, Updated on October 16, 2023, accessed on October 22, 2023, https://www.cfr.org/global-conflict-tracker/conflict/israeli-palestinian-conflict.
Jha, Prashant, “Biden links Hamas attack with West Asia reset push,” Hindustan Times, October 27, 2023, https://www.hindustantimes.com/india-news/biden-links-hamas-attack-with-west-asia-reset-push-101698343749987.html.
“The Abraham Accords Declaration,” US Department of State, accessed October 25, 2023, https://www.state.gov/the-abraham-accords/.
Behuria, Ashok Kumar, “Navneet Kumar Asked: What Does the Term ‘De-hyphenation’ Mean in the Foreign Policy Context?,” Manohar Parrikar Institute for Defence Studies and Analyses, August 31, 2018, accessed November 26, 2023, https://idsa.in/askanexpert/what-does-the-term-de-hyphenation-mean-in-the-foreign-policy-context.