Saudi Crown Prince Mohammad bin Salman and US President Joe Biden shake hands next to Indian Prime Minister Narendra Modi on the day of the G20 summit in New Delhi, India, Sept. 9, 2023. (Credit: Evelyn Hockstein/Reuters)
Having failed to rally the emerging economies in the G20 around a strong stance against Russia or on climate change, Western states have scored another victory. On Saturday, US President Joe Biden unveiled a major logistics corridor project designed to link India, the Middle East and Europe via railways, shipping lines, pipelines and high-speed data cables.
While the US, India, Saudi Arabia, the UAE, the EU, France, Germany and Italy signed a memorandum of understanding, Biden declared that Israel and Jordan would also be part of this initiative, which he called “historic.”
He added that the corridor would unlock “endless opportunities” for the countries involved, “making it far easier to trade, export clean energy” and “connect communities,” thus “a more stable, more prosperous and integrated Middle East.”
There are still a few uncertainties, such as the budget and the exact routes in the project, which are expected to be discussed over the next two months. In any case, they are expected to follow a simple trajectory of more than 4,800 kilometers, starting from the Indian coast by sea to the UAE, then through Saudi Arabia, Jordan and Israel by rail, before reaching Europe by boat.
Called the India Middle East Europe Economic Corridor (IMEC), the official aim of the plan is to facilitate the transfer of goods and renewable energies via cables, including hydrogen to be exported via pipelines along the railway lines that will be built between these different regions.
It is a project that is advantageous for Washington, which can thus allow an alliance of allied powers to develop without getting too involved.
“The US and Europe understand that their management model for South Asia and the Middle East is obsolete because they can no longer tell these countries what to do,” said an analyst focusing on Saudi-Asian relations on condition of anonymity, as they are not authorized to speak publicly on the subject. “So they are adopting a more inclusive approach, ensuring that the region’s countries become equal partners.”
Last week, European Commission President Ursula von der Leyen traveled to Abu Dhabi to meet Mohammed bin Zayed for discussion of the IMEC. This trip was part of a series of visits by senior US and European officials aimed at convincing the UAE to curb its cooperation with Russia.
The IMEC is thus an opportunity for the UAE to reassure the West. At the G20, Biden thanked Abu Dhabi for its impetus in creating the project. These videos went viral on the country’s social media.
“Publicly thanking the UAE is a goodwill gesture and a signal that most of the UAE and American interests overlap and that the strength of UAE-India relations has finally made this initiative possible, which rhymes with the great American strategy for this region,” said Umar Karim, a researcher at the University of Birmingham.
All of this has the clear aim of competing with China’s Belt and Road Initiative (BRI), and its sprawling ambitions to revive the old Silk Roads. It is no coincidence that the IMEC was unveiled a month before the next BRI conference in Beijing. In these two competing ventures, the aim is facilitating trade while gaining influence, at a time when Washington is accused of having disengaged from the Middle East.
Overlapping interests
The IMEC is also a boon for the Gulf States, whose position at the center of the corridor turns them into trade hubs between Asia and Europe.
“The Gulf States could be in a better position to become transport and trade hubs linking” Asia, the Middle East and Europe, said Karim. “And they are already part of the BRI, so there will be significant overplay between BRI and IMEC, whose smooth running will depend on the oil monarchies, giving them new leverage with the various stakeholders.”
From this regional perspective, Israel’s planned participation in the IMEC is significant, as Washington pushes for the rapid establishment of relations between Tel Aviv and Riyadh. In this way, the plan enables Saudi Arabia to move closer to Israel while avoiding formalizing the normalization process that still faces numerous obstacles. Trade between the two countries is expected to transit through Jordan.
Faced with its UAE neighbor, which signed the Abraham Accords in 2020, Saudi Arabia is nonetheless seeking to position itself as a force to be reckoned with. Despite regional competition, Saudi Crown Prince Mohammed bin Salman has set his sights on making his country a hub for all sectors: trade, transport, technology, fossil and decarbonized energy, sport, culture and so on.
“While the Emirates already have significant international trade and financial flows, MBS’s political activism to connect his kingdom to the rest of the world will certainly bear more fruit in the context of a project like IMEC, which appears fresh and new, just like the Saudi leader’s initiatives,” Karim added.
India and the Gulf, big winners from the IMEC
“The Gulf States, like India, are the biggest winners from the IMEC, as they become the linchpin of an economic and trade corridor supported by the West, while at the same time being able to preserve their strategic autonomy,” said Karim.
On the economic front, the project could give a boost to the Modi government’s plan to stimulate exports from the sub-continent, which declined by 22 percent in June compared with the previous year. India also aspires to become the food granary for vast swathes of the world, including the Middle East.
“While the Modi government has hitherto sought to connect India to its immediate neighborhood, it is now targeting the Middle East, which it sees as part of the wider neighborhood,” Karim added.
The country already has close ties with Israel and the UAE, marked by military cooperation and significant economic exchanges. The Indian diaspora also represents the largest foreign population in the UAE. With Saudi Arabia, the relationship has intensified more recently, and again during the G20: the two countries have just signed 47 memorandums of understanding and Riyadh announced it could set up an office of its investment fund in New Delhi.
“The UAE and Saudi Arabia are India’s third and fourth largest bilateral trading partners,” said the Saudi-Asian relations analyst, “but there is still room to increase this figure. One way of looking at it is that India is the largest economy geographically close to the Middle East, China being further away. So it’s also a question of economic integration.”
On its way to becoming the world’s most populous country, India represents a sizeable market, whose energy needs are likely to increase still further. This is a way for the oil monarchies to seek guarantees against the slowdown in growth observed in the Middle Kingdom.
“It is clear that the West has decided to make India a major production center to counter China, which means that its global profile will increase further in the coming years,” said Karim. All the more so since the BRI has been a point of contention between Beijing and its Indian neighbor, as certain parts of its corridor have to cross Kashmir which is disputed with Pakistan.
The fact remains that India’s infrastructure and logistics facilities are less developed than those of China, and are therefore hardly comparable,” he added. “This connectivity project will therefore take time to emerge as a replacement for China.”
This article was originally published in French in L'Orient-Le Jour. Translation by Joelle El Khoury.