Harmony over hostility: Key to the India-Middle East-Europe economic corridor
HARMONY OVER HOSTILITY: KEY TO THE INDIA-MIDDLE EAST-EUROPE ECONOMIC CORRIDOR
WRITTEN BY SIDDHARTH SRIDHAR AND ANSHU MEGHE
1 May 2024
On 18 December 2023, the US launched Operation Prosperity Guardian, an ongoing multinational military coalition aimed at protecting vital shipping lanes and responding to attacks by Houthi rebels in the Red Sea. The Red Sea, a pivotal global trade route, has become increasingly volatile due to escalating tensions and security challenges. This strategic location has become a hub for great power competition and intense regional rivalry, a 2019 Stockholm International Peace Research Institute (SIPRI) report highlights. The area hosts a variety of global naval bases: the United States, China, and Japan in Djibouti; the UK and Turkey in Somalia; the UAE in Yemen; along with Saudi and Egyptian naval forces along their coasts in the Red Sea. Additionally, there is a proposed Russian naval base in Sudan and growing interest from India in establishing its naval presence. This external militarisation raises critical concerns about the future security and stability of the region, creating a complex security dilemma for the states with significant interests in the trade passing through this vital artery.
As major powers deploy forces to protect trade interests in the Red Sea, a new proposal needs attention: the India-Middle East-Europe Economic Corridor (IMEC). It is an ambitious, and aspirational initiative that lies on the Arabian Sea and the Persian Gulf, and thus, appears to completely bypass the Red Sea and the host of security threats that come with having a presence there. However, as the recent Iran-backed Houthi attacks demonstrate, the Arabian Sea is no stranger to experiencing similar maritime security issues and other unpleasant spillover effects of the ongoing geopolitical rivalry in the Horn of Africa.
Although the vision of IMEC is overpowered mainly by the ongoing war in Gaza, its success in the equally tumultuous landscape of other parts of MENA is crucial. The feasibility of IMEC depends on the stabilisation of the Middle East, particularly achieving a ceasefire or a more durable solution to the Israel-Hamas conflict, advancing normalisation talks between Israel and Saudi Arabia, and a coordinated diplomatic effort from member states for its development. In this region, where numerous states harbour hostility towards IMEC or feel excluded, the success of IMEC hinges on devising a strategy that not only includes but also collaborates with these states.
IMEC: navigating the path of a visionary project
IMEC, inaugurated at the G20 Summit in September 2023, is a proposed economic corridor between India, the UAE, Saudi Arabia, the European Union, and the US. The project aims to drastically improve trade efficiency between India and Europe by reducing transit times by 40 per cent and transit costs by 30 per cent, and by establishing a high-speed digital network to enhance connectivity as well as a sustainable hydrogen pipeline. Projected as a means to counterbalance China’s Belt and Road Initiative (BRI), IMEC offers an alternative route, avoiding the congested Red Sea and Suez Canal, to streamline maritime and overland freight movement.
Only time, coupled with the concerted efforts of member states to implement robust incentivisation measures, will determine whether the project will eventually launch.
Currently, IMEC represents a bold vision more than a reality. Only time will reveal whether IMEC can transition from concept to reality, facing the challenge of meeting its member states’ high expectations. The project’s ambition to build extensive rail and port infrastructure across challenging terrains highlights both its complexity and the significant obstacles that it must navigate. The recent conflicts in the Red Sea have revealed vulnerabilities in the global supply chains, prompting shippers to use the longer, costlier Cape of Good Hope route, delaying shipments by 10-14 days and significantly affecting global trade.
While IMEC offers a strategic alternative route from India through the Middle East to Europe, aiming to circumvent the Red Sea’s security challenges, it currently exists only in theory under a Memorandum of Understanding (MoU). Its efficiency hinges on a combination of sea and rail links beginning with a sea route from India’s Mumbai and Mundra ports to the UAE, followed by a railway through Saudi Arabia and Jordan to Israel’s Haifa Port. A subsequent sea link from Haifa to Greece is expected to facilitate trade between India and Europe. However, concerns over economic feasibility persist due to the undefined project and transport costs, especially when comparing the potentially higher costs of land transport with the current sea route’s efficiency. Thus, while IMEC’s strategic design offers logistical advantages, its economic competitiveness against the well-established Suez Canal route remains uncertain.
Risks and complexities: the case for cooperation
Similar to the maritime security initiatives employed by states in the Red Sea to safeguard their maritime routes against piracy, terrorism, and humanitarian disasters, IMEC, if it takes off, is likely to attract a heightened naval security presence in its surrounding areas. This increase in naval security presence can prompt India and other IMEC member states to bolster their influence through the deployment of warships and heightened Intelligence, Surveillance, and Reconnaissance (ISR) measures. The confluence of various states reinforcing security and ISR capabilities in the region, in turn, anticipates heightened insecurity in an already volatile region.
As each IMEC state increases its naval security presence in a bid to secure its infrastructure, they could inadvertently raise the perceived threat level among non-IMEC states, and provoke a reciprocal increase in the latter’s security measures. This can feed into the security dilemma, potentially increase the likelihood of conflict escalation, and significantly raise the consequences of miscommunications between states. Through this lens, the well-intentioned augmentation of naval security presence could not only diminish the overall sense of security among states but also escalate the chances of inadvertent confrontations.
Although IMEC and China’s Belt and Road Initiative (BRI) are often viewed through a lens of competition, their engagements in strategic locations reveal a complex overlap of shared interests and activities. Notably, UAE and Saudi Arabia, key players in both initiatives, exemplify this shared engagement. This confluence of interests, particularly evident in key ports and railways operated by both IMEC state firms and Chinese firms across critical junctions, underscores the necessity of collaboration to adeptly manage the multifaceted dynamics at play. While corporate investments in these infrastructure projects may not directly equate to state actions, they significantly broaden the investing state’s influence and strategic footprint in these locations, effectively blurring the lines between corporate and national interests. Key examples include the UAE’s Khalifa Port, which is operated by Chinese firm COSCO and is a key location for both initiatives. Nearby, in Israel, India’s Adani Group runs the old Haifa Port, while the Shanghai International Port Group manages Haifa Bayport. Additionally, COSCO has a majority (67 per cent) stake in Greece’s Piraeus Port and its associated rail company PEARL, bolstering its trans-Europe and Asia transport capabilities. Chinese firms also control essential railways like the China-Europe Railway Express and the Hungarian-Serbian Express Railway.
These convergences indicate that BRI and IMEC are somewhat interdependent, with the potential for China to even benefit from IMEC’s success. However, being excluded from IMEC, middle powers such as Egypt, Turkey, and Iran might miss out on its economic advantages, potentially causing them to distance themselves from IMEC members and instead gravitate towards China. Additionally, it is crucial to acknowledge the persistent challenge posed by non-state actors and terrorist groups, such as the Houthis, whose actions continue to destabilise the region’s security landscape. Collaborating with states outside the IMEC framework to share resources and intelligence could substantially mitigate threats from non-state actors, thereby enhancing the prospects for regional security and stability for IMEC member states. Therefore, IMEC members should consider proactively collaborating with excluded states from the planning stage to mitigate these risks.
Thinking ahead
Despite challenges and concerns that the IMEC may remain theoretical, member states can create diverse incentives that could simultaneously serve their interests while also creating an environment that will contribute to IMEC’s progress. For example, India is currently establishing a robust diplomatic and military presence in the Red Sea which aligns with its Indian Ocean Region ambitions. This proactive approach bolsters India’s maritime trade protection, regional partnerships and Humanitarian and Disaster Response (HADR) readiness, serving as confidence-building measures (CBMs) to foster trust and open communication with regional states. In establishing these bonds of trust and dialogue, India would not only fortify its position in times of calm but also hone a framework of mutual understanding that can prove invaluable during crises or crucial negotiation stages for IMEC.
Improving IMEC’s chances requires stabilising Middle East geopolitics, notably through Saudi-Israel normalisation. Despite the challenges and Riyadh’s demands for a two-state solution, there is unified support for continuing normalisation. Success hinges on third-party mediation, most likely by the US, to bridge gaps between key IMEC nations. This approach entails fostering incentives for shared economic gains that surpass the influence of more aggressive ideologies and militant agendas, and pushing for expansion of the Abraham Accords. Additionally, navigating the Sino-American rivalry is essential, emphasising the protection of shared interests.
Moreover, establishing formal institutions for IMEC could enhance transparency and cooperation, mirroring successful global governance models and allowing for inclusive economic dialogues with both member and non-member states. Creating an independent secretariat for IMEC would emphasise cooperation over competition and enhance its efficiency as a platform for inclusive economic discussions. Additionally, an informal dialogue mechanism for non-members would enable broader influence on the economic framework, reflecting the inclusivity of effective global governance.
A strategic meeting of IMEC member states — the last of which was cancelled due to the Israel-Hamas war — is imperative to establish a clear roadmap and operational plan. This meeting would be pivotal for highlighting the corridor’s long-term vision, which includes the integration of regions, cultures, and technologies. Moreover, making the IMEC agenda a key focus in all bilateral and multilateral diplomatic forums would also help effectively socialise and advocate for the project.
Standing the test of time: IMEC’s capacity to endure
At best, IMEC is a laudable initiative that can significantly augment the security and efficiency of global supply chains, firmly establishing the position of member states such as India as significant global powers. At worst, due to the vast hurdles that might prevent it from getting off the ground, IMEC could become another ambitious infrastructural project that failed to realise its potential.
Only time, coupled with the concerted efforts of member states to implement robust incentivisation measures, will determine whether the project will eventually launch. However, one thing is clear: for IMEC to stand a chance of materialising, collaboration, not competition, is the path forward.
DISCLAIMER: All views expressed are those of the writer and do not necessarily represent that of the 9DASHLINE.com platform.
Author Biographies
Siddharth Sridhar, currently a Junior Fellow in the Stimson Center’s South Asia Program, concentrates his research on great power competition, Indo-Pacific dynamics, climate-related security challenges, and artificial intelligence governance. His latest work in The Diplomat examined deterrence-by-detection as an approach for India to address its boundary disputes with China.
Anshu Meghe is the founder of Astrea Policy Associates, a political risk advisory and public advocacy firm. Previously, he was the Chief Minister’s fellow with the Government of Maharashtra in India. He has completed his Master of Arts in Law and Diplomacy from the Fletcher School of Law and Diplomacy at Tufts University. His academic interests are in Security Studies, Political economy, Transnationalism and Great Power Competition. Image credit: Unsplash/M Anink.