Belts and Roads: Is IMEC Going to Happen?

Belts and Roads: Is IMEC Going to Happen?

The corridor’s potential as a counterbalance to the BRI remains contingent on the United States’ ability to manage and implement this ambitious project effectively.

The rise of the People’s Republic of China (PRC) and its growing influence on the global stage has become a central theme in contemporary international relations, challenging the longstanding dominance of the United States and the Western world. This global rivalry spans multiple dimensions and is characterized by a complex interplay of economic, technological, geopolitical, and ideological factors. The India-Middle East-Europe Economic Corridor (IMEC) is an exciting development in this context. It represents an alternative economic integration and connectivity vision that could counterbalance China’s Belt and Road Initiative (BRI). The corridor could offer countries an alternative path to economic integration and development by connecting regions across Asia and Europe. However, it remains to be seen whether it can effectively challenge the scale and scope of China’s BRI.

The IMEC vision’s potential as a counterbalance to the BRI framework is rooted in its strategic positioning and objectives. The IMEC carries significant global geopolitical significance, reflecting Washington’s ambition to be more prominent in shaping connectivity, trade, and economic integration worldwide in the twenty-first century. By aligning the United States with the interests of India, Gulf states, and European nations, this initiative creates a global strategic partnership that has the potential to challenge the PRC’s dominance in the Eurasian landmass. Moreover, Eurasian countries concerned about over-reliance on China’s BRI can view the IMEC as an attractive connectivity, trade, and economic integration net alternative. Thus, the IMEC could emerge as a formidable initiative with the potential to alter the global economic and geopolitical landscape significantly. Nevertheless, IMEC’s potential as a game changer and counterbalance to the BRI remains contingent on Washington’s ability to manage and implement this ambitious project effectively. 

The BRI and IMEC: Comparative Analysis

On the sidelines of the G20 Summit in New Delhi 2023, the United States, India, the UAE, Saudi Arabia, France, Germany, Italy, and the European Union signed a Memorandum of Understanding (MoU) to establish the India-Middle East-Europe Economic Corridor (IMEC). IMEC aims to bolster economic development by fostering connectivity and economic integration between Asia, the Middle East, and Europe. It consists of two separate corridors: the east corridor connecting India to the Gulf region and the northern corridor connecting the Gulf region to Europe. This project aims to establish commercial hubs, expand access to clean energy, enhance telecommunication lines, and ensure secure and stable internet connections.

The IMEC, if executed, will have significant implications for Asia, the Middle East, and Europe’s political, economic, and energy dynamics. Economically, the corridor has the potential to transform the nature of international trade and transportation, ushering in a new era of inter-regional cooperation. The project will boost economic growth by strengthening regional connectivity, commerce, investment, innovation, logistics, and competitiveness, ultimately leading to sustained prosperity throughout the corridor. It could create new opportunities for economic growth, development, and stability in the participating states and regions outside of them (job creation, increased investment, financial improvement, and enhanced access to markets). According to estimates, the IMEC has the potential to make India-Europe cargo flows significantly faster (will reduce the transit time from eighteen to ten days) by a 40 percent reduction in travel time and a 30 percent reduction in transportation costs for goods. 

Energy, the corridor is set to play a vital role in facilitating the trade of renewable energy sources, including hydrogen, through its networks of pipelines. The IMEC aims to link the UAE, Saudi Arabia, Jordan, and Israel by railway and connect them to India by port, cutting shipping times and costs and reducing fuel usage. IMEC’s focus on sustainability and clean energy is consistent with the worldwide trend to develop environmentally friendly and sustainable infrastructure that addresses environmental issues.

Political, the IMEC can change and forge new alliances to transform world power relations amid a rising regional and global rivalry for economic integration and transportation corridors. The corridor allows member countries to diversify their economic partnerships and lessen reliance on powerful international entities. This change in power relations may impact traditional alliances and alignments, leading to a rebalancing of influence. Further, it holds significant potential to create complex interdependence among rival states (e.g., connecting Haifa port in Israel with the rail line passing through Saudi Arabia), which would be mutually beneficial and strengthen ties. More importantly, the corridor directly challenges China’s BRI by providing BRI member countries with an alternative for infrastructure development and economic cooperation. The planned transport corridor will shorten the supply chain and reduce the dependence of developing countries on China.

The PRC launched the BRI, a massive infrastructure project, in 2013 and has signed BRI-MoUs with nearly 150 countries (75 percent of the world’s population.) and over thirty international organizations, mobilizing almost $1 trillion and creating over 3,000 projects (financed and built roads, power plants, ports, railways, and digital infrastructure). However, there are signs that China is slowing down on BRI because of its flagging economy and the global economic slowdown, which coincides with rising interest rates and inflation. Recent reports indicate that China plans to introduce BRI 2.0, a revised version that aims to exercise greater control over project expenditures and implement stricter scrutiny when announcing new projects. Thus, the question inevitably arises as to whether the IMEC would complement or compete with China’s BRI.

While the IMEC and the BRI share similarities (they feature some of the same keywords such as “connectivity,” “integration,” and “development”) in promoting connectivity, trade, and economic integration, there are significant differences in terms of scale, funding, transparency, and objectives. First, The BRI is much more prominent in scale, the world’s largest global infrastructure undertaking, with nearly 150 member countries, thirty international organizations, and thousands of projects. At the same time, the IMEC includes several dozen countries (mainly from the Middle East and Europe) but does not include African, Central Asian, Southeast Asian, or other South Asian countries besides India. Second, the BRI has been operational since 2013, giving it a decade-long head start over IMEC. 

Third, China has funneled $1 trillion to BRI, and this number may grow to $8 trillion, dwarfing IMEC’s estimated cost of $20 billion. This IMEC is part of the Build Back Better World (B3W), now rebranded as the Partnership for Global Infrastructure Investment (PGII), including the G7 nations. PGII aims to channel private capital to invest in four areas: climate and energy, ICT, gender equity, and health. Hence, the BRI is centrally designed and opaque, with its funding coming from just China. The IMEC corridor is based on consultations with all concerned for a while, and its focus is on viability backed by funding from multiple sources, primarily through public-private partnerships.

Fourth, the BRI has since outgrown its original corridors, becoming global in scope, and has always kept its participants from any state or region. The IMEC, in contrast, is aimed at linking India, the Middle Eastern nations, and Europe. Several IMEC member countries, including Italy, Saudi Arabia, and the UAE, are concurrently involved in the BRI. While still technically part of the BRI, Italy strongly desires to withdraw from the initiative. Finally, unlike the BRI, which aims at securing the PRC’s access to natural resources, the IMEC intends to serve the common benefit of all the participants while offering an alternative model of development based on shared values, transparency, sustainability, and respect for sovereignty.

Game-changer or Dud?

We can view the IMEC as Washington’s strategic response to Beijing’s growing influence across Eurasian through the BRI. By cultivating stronger bonds between these critical geopolitical zones, the corridor has the potential to offer an alternative pathway for states seeking to diversify their economic ties and reduce dependency on China. While complicated and multifaceted, the IMEC initiative has the potential to alter regional and global dynamics. The corridor is not only an economic project but also a political and strategic one that reflects the aspirations and values of its partners. Washington supports the IMEC to counter the PRC’s influence and challenge its BRI framework (as part of the PGII), threatening its interests and values. It also sees the corridor as a way to reshape global connectivity, enhance trade and investment opportunities, address common challenges such as climate change, terrorism, and pandemics, and strengthen its strategic partnerships with India, Europe, and the Middle Eastern countries.

Nevertheless, the future of the IMEC is uncertain, and it is premature to call this a severe counterweight to China’s BRI. The corridor is still in its early stages, and it is unclear how it will be implemented. The IMEC can be a major game-changer in global connectivity and economic integration by serving as an alternative option for states cautious about over-dependence on China. This would be contingent on IMEC’s ability to present a more sustainable and transparent model for infrastructure development, effectively addressing some of the criticisms directed at the BRI (debt concerns, lack of transparency, environmental issues, and geopolitical tensions).

The realization of IMEC (expected to take over a decade) hinges on many factors, including a significant Western commitment, navigating geopolitical tensions, addressing environmental concerns, ensuring security and stability along the corridor, regional cooperation, financial viability, and technological advancements. Therefore, while IMEC holds immense promise, its successful implementation necessitates meticulous planning, robust governance mechanisms, and unwavering commitment from all participating countries. Additionally, the corridor’s multimodal nature, spanning land and sea, will cost tens of billions of dollars and face substantial logistical challenges. The corridor’s potential as a game changer and counterbalance to the BRI remains contingent on the United States’ ability to manage and implement this ambitious project effectively. This endeavor holds far-reaching implications for the economic and geopolitical dynamics of the regions it encompasses.