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Silk Road vs Spice Route: IMEC and its Implications

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PM Modi’s opening remarks at the G20 Meeting made references to overcoming the crisis of mutual trust among nations and the turbulent state of the global economy. The culmination of the G20 Summit 2023 in Delhi has resulted in some crucial developments in the global arena. India’s PM Narendra Modi announced the launch of a transnational and plurilateral mega connectivity project, the India-Middle East-Europe Economic Corridor (IMEC). India, Saudi Arabia, UAE, France, Germany, Italy, the EU and the US have agreed upon a historic decision to create a hybrid connectivity project involving both maritime and rail routes. However, the idea behind IMEC is rooted in the I2U2, a Quadrilateral forum comprising India, Israel, UAE and the US.

Stretching between India and Europe via the Middle East, IMEC has certainly foregrounded it as a counter to China’s flagship project BRI.  Therefore, IMEC becomes a significant geopolitical move by teaming up with some of the G20 nations to avoid reliance on Chinese projects for economics, infrastructure and connectivity purposes. Soon after the announcement nations like Türkiye raised concerns about its viability if excluded, concerns are obvious as it would deprive the role of Türkiye in such a crucial project for infrastructure development.

IMEC: Components & Aims

The IMEC corridor is divided into two parts the Northern Corridor and the Eastern Corridor. Making the Arabian Gulf the centre, the Northern Corridor would connect Europe and the Arabian Gulf. Within the Arabian Gulf, the land route would provide passage for railway lines through Haifa port in Israel to Jordan to UAE via Saudi Arabia. The Eastern Corridor will then connect the Arabian Gulf with India.  The corridor aims to connect ports across the two continents to make trade and transport easier and faster by reducing transit time by up to 40%. IMEC provides an alternative channel to the congested and highly tariffed Suez Canal. Further, the corridor aims at easing trade, exporting clean energy through hydrogen pipelines, laying underground sea cables for energy and stable internet resulting in unlocking sustainable and inclusive economic growth.

Reinventing and reviving the old heritage:

The particular route involving India, the Middle East and the European landmass revives the ancient spice trade route which had been prevalent and was much more in magnitude and expanse during the early centuries till the 15th AD. During ancient times, the maritime trade route was popular by the name ‘Red Sea Route’ which connected the market of the Roman Empire and the Indian subcontinent via the Red Sea. Reviving this route would emphasise the existing trade and cultural relations among the nations and would act as a counter to the ‘Silk Road’ narrative invoked by China under BRI. The IMEC provides a direct route that connects India with Europe, by including a railway line the spice route has been reinvented to achieve a more direct route between Europe and India.

A Geopolitical Master Stroke if materialised!

The Middle East region is witnessing unprecedented geopolitical shifts with China-brokered Saudi-Iran reconciliation, hopes are renewed for the possibility of an Israeli-Saudi peace agreement but with the US as a middleman, hints of which are revealed by the I2U2 group. The US is promoting the corridor proactively and has proposed a meeting of member states to discuss a plan of action in the next sixty days.  Subject to materialisation this corridor holds significant potential to bring rival states like Saudi Arabia and Israel to the same table. Connecting Haifa port in Israel with the rail line passing through Saudi Arabia would create complex interdependence among these states which would be mutually beneficial and perhaps lead to strengthening of ties. Further, the geopolitical turmoil in the Middle East could be addressed if the region gets interconnected with a common agenda of socio-economic development.

This corridor also indicates a shift from China-led infrastructure projects towards a more inclusive approach. As issues have surfaced regarding the loan sustainability provided by Chinese firms under BRI, several projects were labelled unsustainable. The problems arising with the Chinese credit line for infrastructure projects in  Sri Lanka and Pakistan are a reminder of a debt trap. News surfacing that Italy planning to pull out from BRI would further encourage other nations to follow, thereby making IMEC a viable alternative to BRI.

A Better Alternative to BRI?

IMEC forms part of a broader West-led initiative, Partnership for Global Infrastructure Investment (PGII) announced during the G7 Summit, UK in June 2021. US President Joe Biden emphasised the ‘Build Back Better World (B3W) framework’ to create a more sustainable environment under PGII which would be focussed on building a climate change resilient infrastructure transparently to achieve the objectives of gender equality and health infrastructure development.

IMEC creates a distinction from BRI in terms of the qualitative aspects offered. focussing on quality infrastructure projects, IMEC takes into consideration factors like economic sustainability of infrastructure projects for the host country, transparent disclosure, and low environmental, social and governance risk (ESG) risk.

To attract private players, Blue Dot Network (BDN) certification would further expedite and simplify the process by rating the sustainability and viability of the projects, so that investor’s money does not spill into low-quality projects. Further, initiatives like FAST-infra would mobilise more private investment in high-quality sustainable projects at par with global standards which contrasts Chinese bilateral debt lending and restructuring under BRI.

Additionally, possibilities of backward extension are there as India can provide space and logistics under its Act East policy to extend the corridor to nations like Bangladesh, and Myanmar, and other Southeast Asian countries like Thailand and Taiwan. Thereby making it easy for goods manufactured in Asia to reach different markets along the corridor, reducing the time of transport and prices of goods in the global market.

The localised issues with BRI-related projects like the CPEC in Pakistan where it faces resistance from the people in Sindh and Baluchistan province, also in Africa reminds us of the neglect of the humanitarian aspect of infrastructure development under BRI. Learning from the existing situation, the IMEC has incorporated the lessons and has tried to rectify the loopholes in multinational infrastructure development projects of such magnitude to present a sustainable project with a holistic approach.