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Reimagining Geopolitics: How the IMEC Corridor Aims to Reshape Global Trade Dynamics

At the recent G20 summit in New Delhi in September, U.S. President Joe Biden announced that India, Saudi Arabia and the United Arab Emirates (UAE), together with Israel, France, Germany, Italy and the United States, would participate in the creation of an “India–Middle East–Europe Economic Corridor,” or IMEC. According to the initial plan, the new route will include advanced fiber optics, clean hydrogen pipelines, and economic zones stretching from India through the UAE, Saudi Arabia, Jordan and Israel to the Piraeus Port in Greece.

The initiative to establish a new route came as part of Western efforts to curb the influence of the China-led Belt and Road Initiative (BRI) and prevent it from dominating trade between Europe and Asia. Indeed, the IMEC route has great potential to revolutionize global trade dynamics, even though it is not able to challenge the far larger and more ambitious BRI at this early stage.

Dramatic Changes

Like other newly proposed transit routes, the IMEC is expected to facilitate international trade by creating a consolidated trade route that will reduce trade costs, promote market access, and encourage investment opportunities. The planned corridor would run around 4,800 kilometers and will have two separate wings, with the Gulf in the center; the eastern wing will connect India to the Gulf states, while the western wing will tie the Gulf states to Europe. In addition to countering Chinese influence, it is expected that the new transit project would positively contribute to the ongoing diplomatic normalization between Israel and the Gulf states—and Saudi Arabia in particular—due to the financial windfall that could result from closer regional economic integration. As an added bonus for the Gulf states, the successful implementation of this plan will weaken Iran, their geopolitical arch-foe, and broader communications can be established between the U.S. and its regional allies, to Beijing’s detriment.

The consequences of the corridor could go far beyond the results of other, more limited development projects in the broader Middle East region. Indeed, through the project, the United States aims to fundamentally reshape the Middle East’s geoeconomic and geopolitical landscape by boosting regional connectivity projects. Such a plan may be explained by the recent tensions between the Biden administration and the Gulf partners, which have increasingly sought interactions with Russia and China—as evidenced by Saudi Arabia’s rapprochement with Iran, which was mediated in Beijing, Washington’s competitor in the Middle East. The facilitation of the transit route project through the United States would help the U.S. to alleviate Gulf countries’ doubts about its long-term commitments and bolster its leadership in the Gulf.

A Path to Regional Stability or Potential Challenges Ahead?

On the other side, there is little downside for regional states like Saudi Arabia and the Arab Emirates (UAE) to engage with the IMEC; the project does not directly challenge China’s BRI, preserving their relations with Beijing, but also offers a litany of political and economic dividends. For example, the IMEC project fits well into Saudi Arabia’s “Vision 2030” plan for economic diversification. The Gulf monarchies are also keen to isolate Iran from international trade routes as a part of their strategy to counter the Islamic Republic’s influence and rekindle relations with Israel, Tehran’s main sworn enemy. However, the Saudi authorities have so far insisted that the corridor is likely viewed neither as a part of a strategic competition with Tehran nor as a part of any effort to push for a relationship with Israel.

Nevertheless, the prospects of diplomatic normalization between Riyadh and Tel Aviv within the IMEC format may be one of the largest reasons behind the U.S. enthusiasm in pushing Saudi Arabia to take active participation. The new transit route will enable Washington to contain Iran and closely monitor Chinese expansion in the Middle East. Indeed, by pushing the IMEC’s implementation and involvement of regional countries, the United States has an unparalleled opportunity to turn the temperature down in a highly volatile region, increase regional connectivity, and create more space for diplomacy to resolve regional conflicts. Although the outbreak of war between Israel and Hamas has undermined broader trends of cooperation between Israel and the Arab world, the broader trends remain the same: both Tel Aviv and the Gulf capitals see the benefits that closer economic ties could lend to peacemaking.

The IMEC project is a new one and contains some shortcomings. It consists of land and sea connections, but lacks some vital overland connections, namely highways and railways. As such, building all necessary infrastructure across the vast geographic area will take time. Therefore, creating an integrated transportation system to cover the vast distances contained within the IMEC route will be highly challenging for all stakeholders.

For this reason, the successful realization of the IMEC would undermine the role of another, similar transit route project—the International North-South Corridor (INSTC), led by Russia and Iran. Iran has cautiously watched new regional connectivity projects, and seems to be suspicious of the IMEC, which bypasses Yemen, Syria, and Lebanon—three regional states with close ties to Tehran and hosting its various proxy forces. Although Iran’s involvement in the project seems to be a foregone conclusion at the present given the extreme state of Western sanctions against Tehran, Iran could add much to the bloc given its strategic geolocation, and it may hope to one day be included in the project if its nuclear negotiations and other talks with the U.S. yield positive outcomes.

In short, the IMEC holds immense potential for economic growth and can boost the broader Asia region’s trade and energy partnerships. However, the project’s implementation will come with serious difficulties and geopolitical risks, such as the internal power dynamics of participating countries or possible border clashes. In this vein, the agreement’s successful implementation will require the United States, the Gulf’s traditional security guarantor, to issue further commitments of support to regional states, drawing from its extensive experience in counter-terrorism measures and security cooperation. The costs of this will be high, but the benefits from successful intra-Gulf and regional integration will be well worth it for Washington’s security interests.

The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views of Gulf International Forum.

Issue: Economy & Innovation, Geopolitics
Country: KSA

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Fuad Shahbazov is a policy analyst covering regional security issues in the South Caucasus. He is a former research fellow at the Center for Strategic Studies of Azerbaijan and a former senior analyst at the Center for Strategic Communications, also in Azerbaijan. He has been a visiting scholar at the Daniel Morgan School of National Security in Washington, DC. Currently, he is undertaking an MSc in defense, development and diplomacy at Durham University, UK. He tweets at: @fuadshahbazov.


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