Proposed new East-West trade route
A far-reaching plan to channel Europe-Asia trade through the Middle East is at risk of stalling before it even gets started, notes Bloomberg.
The Israel-Hamas war has halted progress on what’s known as the India-Middle East-Europe Economic Corridor — a project touted last year by Washington and key allies that envisages building new rail links across the Arabian peninsula. As Houthi attacks disrupt Red Sea shipping and turmoil spreads across the region, IMEC is effectively on ice.
That’s a setback for US strategy, because the plan served multiple purposes – to counter China’s Belt and Road infrastructure program, build influence in the so-called “Global South,” and speed up the hoped-for rapprochement between Israel and Saudi Arabia.
Asked whether the regional conflicts had stopped the project, US National Security Council spokesman John Kirby said in a briefing that efforts to lay the groundwork are “ongoing.”
“While it’s principally around a rail system, there would be all kinds of logistics and sustainment hubs along the way, and offer all kinds of opportunities for infrastructure improvement and employment,” Kirby said. “That’s a years-long process.”
A person familiar with the plans earlier said the outbreak of violence in the Middle East has diverted attention away from discussions on IMEC.
In their contest with China for global influence, the US and Europe have struggled to win support in the developing world. Many emerging nations stayed neutral in the face of Russia’s invasion of Ukraine, and backed an immediate end to Israel’s war in Gaza – declining to follow the American line in both cases.
To bolster their leverage, Group of Seven countries are engaging in what some have dubbed a battle of offers – holding out the prospect of tangible infrastructure projects, rather than appealing to shared values.
IMEC was one of the most ambitious. It was cemented at September’s Group of 20 summit, in a three-way handshake between an unlikely triumvirate: US President Joe Biden, Indian Prime Minister Narendra Modi and Saudi Crown Prince Mohammed bin Salman.
Analysts also saw the project as a step toward the administration’s real prize: a pact between Israel and Saudi Arabia.
In Davos, National Security Advisor Jake Sullivan said the US approach had been “to work towards a package deal that involved normalization between Israel and key Arab states” as well as “a political horizon” for Palestinians. “That was our goal before Oct. 7,” he said.
Hamas’s attack that day triggered Israel’s war in Gaza — which threatens to spill over on multiple fronts, drawing in Iran-backed Hamas allies such as the Houthis and Hezbollah, as well as the US.
All this chaos put an abrupt stop to IMEC. The 3,000-mile route runs through countries now on high alert in case they get caught up in the war. Arab public outrage over the civilian death toll in Gaza means governments of IMEC participants like the United Arab Emirates must tread carefully. Saudi Arabia is ruling out any deal with Israel unless there’s a clear path to a Palestinian state.
Of course, IMEC – a project that fitted neatly into American geopolitical rhetoric but remained light on detail — might have foundered even absent a Middle East war.
“While IMEC certainly looked promising on paper, complex regional dynamics were always going to pose implementation challenges,” said Craig Singleton, a senior fellow at the Foundation for Defense of Democracies, a Washington think tank.
Biden has referred to the “historic” project on several occasions since the G-20 summit – including citing it as a way of countering Belt and Road. “We’re going to compete on that,” the president told a White House press conference in October. “We’re doing it a different way.”
Vlahutin, the former EU policy maker, said that with Western capital now seeking alternatives to China for investment, “the countries in the so-called Global South, and in particular India, have a massive chance.”
Still, in some respects the US and its allies are playing catch-up with China, which launched Belt and Road more than a decade ago.
“Washington is seriously struggling to counter China’s grand economic vision,” Singleton said. “The collapse of IMEC is a stark reminder that grand strategic plans often stumble in the face of harsh geopolitical realities.”
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