Why IMEC could become a fading memory
The tall promises of the IMEC about a 40 percent cut in India-Europe trade time deserve to be questioned for several reasons.
In a show of triumph on the sidelines of the recently concluded G20 (Group of 20) Leaders’ Summit in New Delhi, India, and its partners announced an overly ambitious multinational rail and shipping project. The initiative, called the India-Middle East-Europe Economic Corridor (IMEC), compromises of an eastern component linking India to the Arabian Gulf, and the Arabian Gulf to Europe on the northern front. “Across the corridor, we envision driving existing trade and manufacturing and strengthening food security and supply chains. Our approach aims to unlock new investments from partners, including the private sector, and spur the creation of quality jobs,” read a factsheet from the White House.
For all the noise and premature success narrative about cross-border ‘ship-to-rail’ transit networks, the contours of this wishful arrangement and its financial viability are increasingly under question.
Consider the deep-seated geopolitics of the corridor itself. Extending transportation links from the Middle East to India does not automatically guarantee ‘connectivity’ for an entire region at large. For instance, India is centered within South Asia, a region also home to Pakistan alongside several other nations with geographically strategic locations. By reducing South Asian connectivity to India alone, IMEC carries the deliberate impression of sidestepping connectivity for all in a bid to guarantee railway and port linkages to a single state.
Similarly, Washington and New Delhi’s outsized lobbying for this corridor merits a closer look at the underlying motivations. Consider the Israeli occupation: it is deliberately billed as a key connectivity partner under IMEC, a blatant attempt to normalize the inclusion of an illegal occupation within a so-called trade and connectivity “game-changer.” In truth, this is another conscious effort by Washington to leverage the connectivity cover to force convergence of trade interests with the Israeli occupation. Let us be clear: none of these political motivations align with the stated goal of IMEC – to catalyze the “transformative integration of Asia, Europe and the Middle East.”
Representatives of participating countries including the United States, India, European Union, and Arab states are also set to meet in the next sixty days to develop an action plan to produce a corridor timetable. By branching off into discussions, IMEC simultaneously raises the specter of implicit lobbying for interests that cater to the aspirations of pro-occupation forces, and threatens unwarranted tolerance of the Israeli occupation that has laid siege on Palestinian lands, rights and freedoms for decades.
On economics, tall promises about a 40 percent cut in India-Europe trade time deserve to be questioned. These are premature assumptions when sources of financing and cost-sharing mechanisms among states are yet to be hammered out. India appears to be taking a backseat on all these big issues, insisting that it will be connected by railroads but refusing to build them. Meanwhile, several European economies are facing domestic economic exigencies at home, resulting in fast-shrinking space for funds mobilization and drastic limits on generous overseas spending. The United States is in no position to punch beyond its weight either, given a sharply divided Congress on spending excesses and the recent pains of alarming debt.
Even if Washington was able to deliver billions on its part, a dismal track record of infrastructure investment struggles to make the case for competence. Look no further than the much hyped-up Build Back Better World (B3W): it was sold as a sustainable counterweight to China’s massive Belt and Road Initiative (BRI). Fast forward, B3W is widely seen as dead on arrival with little prospects of growth, expansion or generous financing. It is here that Europe and Washington’s collective emphasis on IMEC is glaring proof that priorities have shifted in a completely different direction.
As such, considerable ambiguity on the prospective investment and trade returns of IMEC make it difficult for countries to bank on this as a “game-changer.” India’s well-known opposition to China’s BRI is unlikely to be reciprocated by the United Arab Emirates (UAE) and Saudi Arabia, who continue to strengthen multibillion-dollar infrastructure partnerships with China.
For these economies, IMEC is not about alignment but more about adding another connectivity test-case that can help Gulf economies advance their multinational trade and connectivity needs. Unlike IMEC, the BRI represents a long-standing presence on the global scale, spreading over a decade. It is also a sprawling connectivity plan that has withstood downward economic pressure, braved the challenges of COVID-19, and come through on several debt-management concerns of participating countries.
The impression that a contentious IMEC can suddenly pull together economies and regions through integrated railroads and ports is a far cry. Core areas of contention include a dire lack of clarity on financing and contingencies, bringing into question the presumed viability of this multinational connectivity feat. Moreover, it is unclear if this initiative can singlehandedly succeed in addressing the apprehensions of middle and low-income powers that often find themselves on the fringes.