India-Middle East-Europe Economic Corridor: Towards Building a New Global Connectivity

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The new initiative to build a rail and maritime corridor between India and Europe through the Middle East is one of the remarkable outcomes of India’s G-20 Summit this year. In a significant move on Sept. 10, India, the United States, the European Union, France, Germany, Italy, Saudi Arabia, and the United Arab Emirates signed a Memorandum of Understanding MoU in order to establish the India-Middle East-Europe Economic Corridor (IMEC) solidifying their commitment to a shared objective of connectivity. This collaborative effort is poised to have far-reaching implications, as these powerful actors join forces to pursue common goals and navigate the complex dynamics of the contemporary geopolitical landscape. However, the corridor represents a significant transcontinental infrastructure project encompassing both rail and shipping networks. This notable initiative, according to the United States, holds the potential to foster economic growth by enhancing connectivity and promoting economic integration and cooperation between the regions of Asia, Europe, and the Arabian Gulf.

The establishment of the IMEC is expected to give rise to an important shift in regional and continental connectivity. This ambitious initiative consists of two distinct corridors, namely the east corridor linking India to the Arabian Gulf, and the northern corridor linking the Arabian Gulf to Europe. By facilitating enhanced trade and transportation links between these regions, the IMEC aims to foster economic integration and cooperation and strengthen geopolitical ties. Moreover, the IMEC will include rail links, maritime lines, energy pipelines, and high-speed data, according to statements. Therefore, this strategic move holds the potential to reshape the connectivity dynamics and unlock new opportunities for collaboration and growth. The planned initiative, however, encompasses the implementation of railway projects that, once finalized, will result in a dependable and economically viable cross-border ship-to-rail transportation network. This connectivity is also anticipated to serve as a valuable supplement to the current maritime and road transport routes, facilitating the seamless transit of goods and services between India, the UAE, Saudi Arabia, Jordan, Israel, and Europe.

A New Dimension in Global Connectivity

The establishment of the IMEC holds immense historical implications, encompassing both geopolitical and economic significance. Its primary objective is to enhance transportation connectivity, thereby expediting the growth and integration of Asia, the Arab, and Europe. The proposed initiative outlines a strategic vision for the establishment of a robust and economically viable railway and ship-to-rail transit system. The initiative, however, not only holds immense potential for bolstering regional trade but also presents a unique opportunity to establish vital connectivity between Asia and Europe. This connection, which has not been previously thought of since the days of the ancient Red Sea route, has the capacity to revolutionize the transportation landscape by offering shorter transits, enhanced accessibility, and comprehensive multifaceted connectivity.

The prevailing maritime corridor connecting Asia and Europe is characterized by a steadfast reliance on the previously established Suez Canal and Mediterranean maritime routes, despite their longer distance and associated logistical expenses. The maritime route from Jawaharlal Nehru Port Trust (JNPT) in India to the Suez Port spans a duration of approximately 11 days, while the journey to Dammam encompasses a shorter timeframe of around six days. The implementation of a 24-hour railway transit option has the potential to significantly impact the transportation of shipments to Haifa. By reducing the transit time by three to four days, this proposed measure could streamline the delivery process and enhance overall efficiency. In this regard, the Memorandum of Understanding (MOU) indicates a clear indication that the shipping of cargo will involve a strategic intermodal approach, specifically involving the seamless transfer of goods between maritime vessels and railway systems. The imperative at hand entails the strategic development of crucial rail connections, terminals, and inland container depots (ICDs) across prominent Gulf and Mediterranean ports.

Moreover, the Gulf Cooperation Council is currently building a rail network to link Kuwait and Muscat on a north-south coastal railway line, which would facilitate the IMEC initiative to connect Gulf ports. Despite this, the only method to leave Saudi Arabia is through the Saudi Arabian Rail (SAR) network, which links Saudi ports and is operational all the way to the borders of Jordan via a formidable heavy-haul railway system. This land bridge will be very cost-effective since SAR currently operates large and long-distance cargo trains from Saudi ports in the Gulf. With the SAR network terminating at the Jordanian border, IMEC’s notable problem would be connecting the last SAR railhead in Al Haditha (KSA) with Haifa (Israel). Nevertheless, plans are currently underway to build a rail line from the Saudi border crossing at Al Haditha to the Jordanian capital of Amman. Jordan will also need to build a rail connection to connect Amman to Beit She’an in Israel. Planning has just begun on this infrastructure undertaking. A route from Jenin, close to the Jordanian border, would take Israelis from Haifa to Beit She’an. Even though this route is shorter than the one through the Suez Canal, the port of Haifa will need to expand its facilities to accommodate the increased volume of goods that will use it. Therefore, it is important for Jordan and Israel to provide the necessary infrastructure in a timely way to enable IMEC to function.

Geostrategic Objective and IMEC vs BRI Debate

However, IMEC’s mission is to stimulate regional economic development and attract new investment. Objectives include enhancing food security and maintaining supply chains, connecting economic centers in Asia and Europe, and promoting the production and export of sustainable energy. With the aid of the initiative, more people will have access to power, the Internet, and other forms of modern communication. By contrast, some argue that this connectivity initiative is a facet of the Partnership for Global Infrastructure and Investment (PGII) which the leaders of G7 created at the G-7 Summit in August 2022 to compete with China’s Belt and Road Initiative (BRI) by providing funding for infrastructure projects that would improve connectivity in developing nations. The US and its allies have long been working to develop it as a viable alternative to China’s BRI. The PGII, like the IMEC, being concerned with four main areas of climate and energy security, gender equality and equity, health and health security, and digital connectivity has been involved in a number of initiatives and investments.

Both major transnational initiatives—IMEC and BRI—have a lot of common ground in terms of their economic and geopolitical goals. However, since its announcement in 2013, the magnitude of China’s Belt & Road Initiative (BRI) is greater which has seen the signing of partnership papers with over 150 different countries and with more than 30 international organizations, generating about $1 trillion and giving rise to more than 3,000 projects. Countries like Italy, Saudi Arabia, and the United Arab Emirates (UAE), who are all signatories to the IMEC MoU, are all members of BRI, despite Italy’s recent decision to withdraw. During the G20 Leadership Summit in New Delhi in September, Italian Prime Minister Giorgia Meloni informed Chinese Premier Li Qiang of Italy’s decision to withdraw from the BRI. However, while the BRI is a worldwide trade and development plan based on the routes of the historic Silk Road connecting China and the West, the IMEC strategy papers make no mention of either BRI or China. Although it is in the initial stage, it is expected to bring about a breakthrough in regional and worldwide connectivity which US President Joe Biden put as the “real big deal”. In this regard, some argue that, from economic and geostrategic perspective, this connectivity will result in new debate of counter-BRI-connectivity while having many positive developments as well. However, to bring it into force and finalize the specifics, the countries who signed the MoU will relish a joint meeting within two months after the summit.

Expenditure and Expectation

The new corridor covers 40% of the world’s population and 50% of the world’s economy. The projected expenditure for the proposed corridor is estimated to reach a substantial $20 billion, primarily allocated towards the establishment of a dedicated rail network. This endeavor will be further reinforced by the integration of a cutting-edge optical fiber network and a hydrogen pipeline, showcasing a comprehensive and forward-thinking approach to infrastructure development. The plan entails the expansion of the current UAE-Saudi-Amman rail network by constructing an additional 300 kilometers of railway infrastructure, thereby establishing a connection between Amman and the port of Haifa in Israel. This development is expected to boost transportation and trade opportunities between these regions. In light of the anticipated economic gains from this initiative, the United Arab Emirates has demonstrated a willingness to allocate financial resources towards expediting the completion of the remaining 300 kilometers of this project. This connectivity also aims to enable the efficient flow of goods through the enactment of a unified digital trade document and standardized transport regulations. This alternative route is expected to offer significant cost advantages compared to the Suez Canal, which imposes substantial charges for services such as vessel towing, tugboat assistance, pilotage, and transit fees.

In addition, the IMEC has outlined a visionary plan for the establishment of three distinct industrial aspects, each with its own strategic focus. These corridors include the food sector, which aims to bolster agricultural productivity and ensure food security; the green energy sector, which would promote sustainable and environmental-friendly sources of power; and the knowledge economy sector, which aims to foster innovation, research, and development in order to drive economic growth and competitiveness. The establishment of dedicated cable networks will pave the way for a robust solar energy grid, as well as enhanced information and digital connectivity. This development holds immense potential for the Indian IT sector and the burgeoning knowledge-based economy of the Middle East and Europe, opening up a plethora of opportunities for growth and advancement. The formation of a knowledge economy for Industry 4.0 between India and Israel highlights the substantial collaboration taking place in the science and innovation sector which might help the other partners as well. This partnership underscores the mutual commitment of member nations to harness their respective expertise and resources in order to drive advancements in this rapidly evolving field.

The newly announced India-Middle East-Europe Economic Corridor (IMEC) represents a landmark initiative to enhance transportation connectivity and economic integration between Asia, the Middle East, and Europe. With an estimated $20 billion investment in dedicated rail infrastructure and advanced digital networks, IMEC has the potential to reshape global trade flows. The corridor is poised to offer a faster, more economical transit route between Asia and Europe compared to traditional Suez Canal passages. Beyond logistics, IMEC also envisions joint industrial cooperation spanning food, energy, and the knowledge economy. The linkage of solar energy grids and high-speed data networks will drive cross-border innovation. With its emphasis on multifaceted connectivity, IMEC is a strategic step towards building a new global connectivity in the 21st century.

– Kawsar Uddin Mahmud is a Research Intern at the KRF Center for Bangladesh and Global Affairs (CBGA).

Published in The Geopolitics [Link]