The Geopolitics of the India-Middle East-Europe Economic Corridor

At the G20 summit held in New Delhi in September 2023, the leaders of France, Germany, India, Italy, Saudi Arabia, the United Arab Emirates, the United States, and the European Commission unveiled the India-Middle East-Europe Economic Corridor (IMEC). This ambitious trade and investment initiative is comprised of an eastern corridor connecting India to the UAE, Saudi Arabia, Jordan, and Israel, and a northern corridor linking those Middle Eastern countries to Europe. IMEC will supplement road and maritime transport routes that already exist, aiming to increase connectivity and economic integration between Asia and Europe via energy infrastructure, railways, high-speed cables, and shipping lanes. The countries participating in IMEC constitute 40 percent of the world’s population and roughly 50 percent of the global economy. This corridor will rely on the UAE and Saudi Arabia’s seaports, roads, and logistics hubs, serving to strengthen these Gulf Arab states’ importance as critical nodes in global trade routes.

There are geopolitical dimensions to IMEC worth considering in the context of the six Gulf Cooperation Council (GCC) states adapting to the realities of multipolarity. Except for Oman, all members of this sub-regional institution have Dialogue Partner status in the Shanghai Cooperation Organization (SCO). In August, the UAE and Saudi Arabia received invitations to join the BRICS bloc; the UAE quickly accepted the invitation and Saudi Arabia will likely do so too. Despite the integration of some GCC states into the SCO and BRICS, the UAE and Saudi Arabia were enthusiastic about signing the IMEC memorandum of understanding, underscoring their growing influence over the rebalancing of the world’s economic order and geopolitical landscape. This transport corridor will serve to reinforce the centrality of energy-rich Gulf Arab states in the global economy, as the world’s center of geoeconomic gravity continues shifting away from the West to the East and the Global South—a shift that accelerated after the 2008-09 global financial crisis.

The Biden administration’s support for IMEC largely stems from its efforts to reassure US allies and partners in the Middle East about Washington’s commitment to the region while also presenting an alternative to China’s Belt and Road Initiative.

The Attempt to Challenge China’s ME Presence

Analyzing this Asia-Middle East-Europe corridor requires considering great power competition amid the so-called “new Cold War” between the United States and China. The Biden administration’s support for IMEC largely stems from its efforts to reassure US allies and partners in the Middle East about Washington’s commitment to the region while also presenting an alternative to China’s Belt and Road Initiative (BRI), which was first unveiled by President Xi Jinping a decade earlier when it was originally called “One Belt, One Road.” BRI is Beijing’s grandiose initiative that seeks to interconnect Asia, Africa, Europe, and Latin America while positioning China as the center the global economy in the 21st century. Gulf Arab states play central roles in the BRI vision, particularly given synergies between Saudi Arabia’s Vision 2030 (and other GCC members’ economic diversification agendas) and this Chinese initiative. Beijing’s deepening relationships with historically West-aligned Arab states and Israel have raised concerns in Washington, prompting the US to try to counter China’s expanding geoeconomic influence in the Middle East.

The idea of the United States and other technologically advanced countries working together to effectively counter the BRI with alternative corridors and transregional mini-lateral frameworks is not new. In 2021, the I2U2 Group was formed. Comprised of the US, Israel, the UAE, and India, this group’s purpose has been to enhance cooperation across multiple domains (energy, water, food security, transportation, health, and space) with private sector capital. IMEC seeks to build on the I2U2 Group and pursue a far more ambitious set of objectives. As announced, this transcontinental corridor will do nothing short of “drive sustainable development for the entire world,” as Indian Prime Minister Narendra Modi declared. European Commission President Ursula Von der Leyen hailed the ship-to-rail transit network as “a green and digital bridge across continents and civilizations.” In the words of Israeli Prime Minister Benjamin Netanyahu, IMEC will be the “largest cooperation project in our history.”

However, US policymakers must recognize that GCC members do not view multipolarity as Washington does. In the wake of Russia’s full-scale invasion of Ukraine in February 2022, East-West and Global North-Global South bifurcation has accelerated on the international stage, intensifying pressure on Gulf Arab states to “pick a side.” But GCC members have instead opted for conducting increasingly independent and multi-aligned foreign policies that build on their deep ties with countries worldwide, including the United States, China, and Russia. For Gulf Arab states, this approach to foreign policy is logical, as it grants GCC members greater autonomy and leverage in global affairs. By working with as many powers as possible, including those which are enemies and rivals of each other, the UAE, Saudi Arabia, and others in the GCC can maximize their geopolitical clout across multiple regions.

By working with as many powers as possible, including those which are enemies and rivals of each other, the UAE, Saudi Arabia, and others in the GCC can maximize their geopolitical clout across multiple regions.

Therefore, with differing geopolitical interests and perspectives on multipolarity, each country along IMEC’s path will look at this transcontinental corridor differently. While Washington will view IMEC through the lens of halting China’s geoeconomic rise in the Middle East and bringing GCC states closer to the West’s orbit of influence, officials in Abu Dhabi and Riyadh will view this trade corridor as a means to further balance their networks in Europe and North America with those in China and other countries of the East and Global South. Rather than seeing themselves supporting US-led efforts to push back against Beijing’s BRI, the Emiratis and the Saudis will approach this corridor with the intention of further establishing their countries as bridges between the West, East, and Global South. Put simply, IMEC is merely the latest opportunity for the UAE and Saudi Arabia to become increasingly important hubs of inter-regional connectivity, which will help their plans for more economic diversification away from hydrocarbons.

Yet it is not just the GCC states along IMEC’s path that will reject this “with-the-West-or-the-East” thinking. NATO member-state Greece may be similar to the UAE and Saudi Arabia in viewing IMEC as a means to expand its role in twenty-first century interconnectivity. IMEC’s main European node is the Port of Piraeus, which is Athens’ chief seaport. The Chinese state-owned China Ocean Shipping Company (COSCO) is the majority stakeholder in this Greek port situated on the Saronic Gulf, which also serves as a key entry point to Europe for BRI.

From Emirati and Saudi perspectives, the dominant global powers—the US, China, and Russia—are not alone in shaping the world’s geopolitical and economic balance. “Middle powers” such as the UAE and Saudi Arabia are also influencing the international order. The destabilizing reverberations of the Russia-Ukraine war felt across multiple continents—from Europe’s energy dilemmas to worsening food insecurity in African and Arab countries—have enabled Saudi Arabia and other GCC states to leverage their resources and geography to reinforce their roles as essential partners to Global North and Global South countries amid chaotic international crises. US President Joe Biden’s words of gratitude to his Emirati counterpart at the event in India unveiling IMEC in September illustrated this point. “Thank you, thank you, thank you,” Biden said to UAE President Mohammed bin Zayed, “I don’t think we would be here without you.” The US president’s motivations for visiting Jeddah in July 2022 and abandoning his campaign pledge to treat Saudi Arabia as a “pariah” also highlight the White House’s assessment that the kingdom is too important to marginalize considering the magnitude of global challenges facing the West.

India’s Rivalries with China and Pakistan

Tensions between India and China shape certain geopolitical dynamics surrounding IMEC and New Delhi’s incentives to participate in this transcontinental corridor. With Chinese-Indian relations reaching a low point over their border dispute, these two Asian giants are jostling for influence, with New Delhi making efforts to counter China’s clout in countries across the Himalayas and South Asia. As China and India’s competition heats up, Indian Ocean island-states such as the Maldives and Sri Lanka have been able to leverage intensified friction between Beijing and New Delhi to their advantage; so too will GCC members.

IMEC will enable Modi’s government to capitalize on India’s growing interconnectedness with Saudi Arabia, the UAE, and other Gulf Arab states, where there are large Indian diaspora populations.

IMEC will enable Modi’s government to capitalize on India’s growing interconnectedness with Saudi Arabia, the UAE, and other Gulf Arab states, where there are large Indian diaspora populations, in ways that are seen as having potential to halt China’s rising influence in the Middle East and elsewhere. India’s increased assertiveness in challenging Beijing’s ascendancy will add to Washington’s perception of New Delhi as a critical “new Cold War” partner. At a time when India is experiencing an unprecedented row with America’s NATO ally and northern neighbor, Canada, New Delhi’s position as a perceived bulwark against expanding Chinese influence will probably incentivize the White House to avoid siding too closely with Ottawa against the sub-continental powerhouse.

India’s tensions with Pakistan are also relevant. India has consistently opposed the BRI, in no small part due to the China-Pakistan Economic Corridor (CPEC) transiting Pakistan-controlled land that New Delhi maintains is India’s sovereign territory. Therefore, New Delhi sees IMEC as an opportunity to secure greater economic leverage over China and Pakistan by joining a natural alternative to the BRI. In the past, Pakistan has essentially maintained a veto over overland connectivity between India and the West. As one Indian foreign policy analyst has argued, IMEC will break this Pakistani veto, opening the door to much more economic integration between India and Europe via the Middle East without needing to deal with Islamabad while Indian-Pakistan territorial disputes remain unresolved.

The Abraham Accords

In line with I2U2, the Biden administration sees a need to pull India away from Russia and Iran’s spheres of clout. Washington also seeks to pull GCC states away from Russia and China’s orbits of influence, while further integrating Israel into the rest of the Middle East by attempting to bring Riyadh to normalize with Tel Aviv. Expansion of the Abraham Accords is central to the White House’s foreign policy strategy in the Middle East.

At this juncture it is unclear whether Saudi Arabia would officially abandon the Arab Peace Initiative and formalize relations with Israel without significant concessions to the Palestinians. Nonetheless, short of Saudi Arabia joining the Abraham Accords, all signs indicate that the de facto Saudi-Israeli relationship will continue widening in scope. Israel’s tourism and communication ministers visiting Riyadh in September/October and Saudi Arabia opening its airspace to Israeli flights in 2022 both highlighted the kingdom’s participation in the Arab region’s overall trend toward normalization. IMEC has the potential to advance an “economic normalization” between the two countries, which could advance Saudi Arabia’s Vision 2030 goals, particularly when it comes to investment and technology.

The White House assesses that a Riyadh-Tel Aviv normalization accord would serve to bring the kingdom away from Beijing’s orbit of influence. Nonetheless, this appears to be wishful thinking. Given the realities of multipolarity and diminished Saudi confidence in the United States’ reliability as a security partner in the Middle East, as well as the extremely high value that Riyadh places on its ever-deepening relationship with China, the White House likely lacks the means to convince Saudi Arabia to make fundamental changes to its partnership with Beijing in line with Washington’s interests.

If the case of UAE-Israel normalization is any guide, it would be flawed to assess that an Arab state formalizing diplomatic relations with Israel would entail said Arab country moving away from China, considering the extent to which Chinese-Emirati relations have only deepened in the Abraham Accords era. Talk of the UAE and China holding joint military drills in Xinjiang earlier this year speaks to this point. Irrespective of whether Saudi-Israeli relations formalize or not, Riyadh, like Abu Dhabi, will continue seeking to keep its options open while preparing for the “post-American Gulf era.” Ultimately, China is the most important player from the standpoint of the kingdom’s quest to gain greater geopolitical autonomy from Washington.

The Geopolitical Road Ahead

With IMEC having been unveiled so recently it is difficult to predict all the geopolitical consequences of this multicontinental corridor, especially given the many unknown variables in the equation at this early stage. Yet IMEC will probably further highlight a fundamental difference in how Washington and Gulf Arab capitals look at China’s rise and the world’s transition away from US-led unipolarity. Whereas US policymakers frequently look at competition between Washington and Beijing in a zero-sum context, whereby any of China’s geoeconomic gains in the Middle East are by default a loss for the West, officials in GCC states reject this assessment. The Emirati and Saudi governments view their relationships with the West and China within the context of a positive-sum game. Policymakers in the UAE and Saudi Arabia refuse to accept that they are under pressure to side with either Washington or Beijing amid the “new Cold War.” The GCC members remain determined to expand their networks in the West, the East, and the Global South all at the same time.

In the final analysis, officials in Washington and in European capitals who are optimistic about IMEC denting China’s geoeconomic rise in the Middle East might find their optimism misplaced. Although this colossal corridor promises many opportunities to deepen western countries’ economic, trade, energy, investment, and commercial links to the UAE and Saudi Arabia, it is unrealistic to believe that IMEC will result in these two Gulf Arab powerhouses being pulled away from China.(Oct 10, 2023 Giorgio Cafiero)

The views expressed in this publication are the author’s own and do not necessarily reflect the position of Arab Center Washington DC, its staff, or its Board of Directors.

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