On the verge of the 10th anniversary of China’s Belt and Road Initiative (BRI), a transformative development has taken place as India, in collaboration with the United States, the United Arab Emirates (UAE), Saudi Arabia, France, Germany, Italy, and the European Union, has unveiled the India-Middle East-Europe Economic Corridor (IMEE-EC). This ambitious initiative aims to facilitate economic integration by establishing a comprehensive corridor connecting Asia and Europe, effectively challenging China’s BRI dominance on the global stage.
Global Support for IMEE-EC
Notably, Italy, a prominent G-7 member, is poised to distance itself from China-sponsored BRI. This aligns with the broader sentiment against BRI, making it a fitting time for the United States, under President Joe Biden, to join forces with Saudi Arabian Crown Prince Mohammed bin Salman at the behest of Indian Prime Minister Narendra Modi in support of the IMEE-EC project. UAE President, a close ally of India, has also played a crucial role in promoting this initiative, seeing the Arabian Peninsula as a vital economic bridge between India and Europe. With support from France’s Emmanuel Macron, Germany, Italy, and the European Commission, the IMEE-EC has gained significant international traction.
The Middle East Corridor
The Middle East corridor encompasses two distinct routes. The East Corridor links the Indian port of Mundra on the west coast to Fujairah port and, via a railway through Saudi Arabia and Jordan, transports goods in standardized containers to the Israeli port of Haifa. The west corridor, originating from Haifa, facilitates the movement of Indian goods to various ports, including Marseille in France, and other ports in Italy and Greece.
The corridor’s infrastructure is nearly complete, with the exception of a small railroad section in Saudi Arabia, making it poised for activation in the near future. This ambitious project holds the potential to connect countries like Vietnam, Thailand, Myanmar, and Bangladesh to the corridor, provided Myanmar allows a dedicated port for this initiative and reduces its reliance on China. For example, Bangladesh, with its six railway exit points to India, could utilize this corridor to send goods to Europe through the Mundra port.
Challenging the BRI
The IMEE-EC’s signing comes at a time when China’s Belt and Road Initiative faces mounting scrutiny and criticism. Several participating countries are grappling with high-interest rates on Chinese debts, leading to debt-for-equity swaps. Nations like Pakistan, Sri Lanka, Kenya, Zambia, and others are struggling to repay their mounting debts to China, with bad debts exceeding USD 100 billion. The China-Pakistan Economic Corridor, for instance, has not only plunged Pakistan into an economic crisis but also sparked political unrest in various regions. Sri Lanka’s economic condition is dire, with minimal activity at Chinese-built infrastructure. While some countries like Sri Lanka and Nepal attempt to balance between India and China, the challenges remain, and they heavily depend on external financial support.
The New Spice Route and Global Trade
Driven by the cooperation of the United States, UAE, Saudi Arabia, and India, the new Middle-East Corridor has the potential not only to rival China’s BRI but also to surpass it in the future as the backbone of global trade. This corridor is expected to shape new global supply chains and emerge as a critical player in the world of international trade. The commitment of the United States, under President Biden, to the IMEE-EC and the global biofuels alliance further highlights the strategic importance of this emerging spice route, positioning it as the new silk road of the modern era.
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