India-Middle East-Europe Economic Corridor

The IMEC, Promising or Pointless?

by Emma Ko, Texas A&M University, College Station

As the Chinese Communist Party (CCP) celebrates the 10th Birthday of the Belt and Road Initiative (BRI), other global leaders are less elated. Countries that view China as an economic and global adversary have spent the last ten years trying to create policies that would counter the CCP’s economic bid for influence. The G20 announced the newest of these countermeasures at their recent summit earlier in September, the India-Middle East-Europe Economic Corridor, or IMEC. This plan, which operates under the Partnership for Global Infrastructure and Investment (PGII) aims to better connect parts of the Middle East, Europe, and Asia through economic agreements and infrastructure. Although this initiative is relatively new, it has sparked much debate as to how it may impact the current global economy and whether it can challenge the economic incentives offered by China.

The IMEC is meant to connect parts of Asia, the Middle East, and Europe with physical infrastructure such as railways, pipelines, and telecommunication lines. More importantly, the G20 hopes that this initiative will increase economic cooperation between these three regions through trade deals and supply chains. The plan itself is still in the developmental stages, with little specifics known about what it will achieve and when. However, members have agreed to draft concrete plans over the next 60 days. As Biden said at the launch in Delhi, “This is a big deal. This is a real big deal.”

Officially, according to a White House Primer published on September 9th, the corridor aims to “usher in a new era of connectivity” and “unlock new investments from partners, including the private sector.” Unofficially, many believe this is the U.S. and other like-minded countries’ newest attempt at decreasing the influence of China in the global economy by providing alternatives for developing countries who are looking for economic partnerships. Considering that the BRI has an extensive framework developed over a decade and funded by the seemingly limitless coffers of the CCP, the IMEC certainly has its work cut out for it.

However, this is a good start. For growing economies like India, which are ready to transition to a global and economic world power, often China and Russia are the best options for economic partnerships. One practical example of this is the India-Russia oil relationship. After the beginning of the Ukrainian war, most Western countries including the U.S. halted natural gas trade with Russia. To keep their sources of revenue, Russia priced their oil very cheaply, and India, needing cheap oil to fuel their industrial rise, saw an opportunity. Now, 55% of India’s crude oil comes from Russia according to Rystad Data. Many other countries are in the same boat.

The infrastructure and trade deals offered by China in the BRI are attractive because they are accessible and cheap. Previous initiatives by the U.S. such as the Free and Open Indo-Pacific and smaller bilateral agreements simply cannot compete with the scope and pricing of the BRI. If the U.S. and members of the G20 want to strategically decouple China and even Russia from developing countries, they need to provide these countries with economic alternatives, and that is something they hope the IMEC and PGII will do.

For the G20, this is the best approach to decreasing China’s influence. While most countries like the U.S. cannot match the CCP’s ability to buy loyalty and will not take the cutting corner approach many BRI projects use when it comes to carbon emissions and labor standards, there is strength in numbers. Supporting an initiative like the IMEC allows single countries to stop trying to compete with China on their own and draw on the support of like-minded allies.

Members of the IMEC include developing countries, but they also include powerhouses such as Saudi Arabia, Israel, France, and Germany, among others. Instead of a single country attempting to counter the BRI, the IMEC offers a multitude of much more agreeable alternatives for economic partnerships. It also ensures that no one country will have the burden of providing infrastructure and economic deals to others, making it one of the better approaches to strategically decoupling the world from China’s economy.

While this is the start of a promising venture for G20 members at large, what are the implications of this initiative for smaller cities and regions like DFW? As an internationally minded region, Dallas/Fort Worth can view the IMEC as an opportunity for increased global collaboration. The IMEC’s main aim is general economic connectivity; part of this is connecting individual commercial hubs. As a region that is internationally involved, DFW has an opportunity to further engage on the global level using the new pathways IMEC will create.

Additionally, initiatives that increase connectivity will always provide a space for citizen diplomacy. Cities like Dallas are powerful ambassadors for their countries and certainly have a role to play. As the U.S. seeks to establish deeper economic and cultural ties with the IMEC’s target regions, it will look to its regional ambassadors like DFW to serve as representatives on the global stage.

Ultimately, whether or not the IMEC can decrease China’s economic presence or counter the BRI remains to be seen. Although the initiative is needed, and a multilateral approach has more chance of success than past bilateral approaches, much of the success will depend on whether the member countries will be able to work together. The IMEC has big goals. It aims to connect large and vastly different regions, and when it comes to such initiatives, the bigger the region the harder it is to effectively collaborate. Regional, historical, and ideological differences will all come into play and the initiative is currently behind the BRI in terms of longevity and funding. However, the IMEC looks very promising, and the fact that it has progressed this far signals hope that it will eventually successfully fulfill its objectives.

 

The views and options expressed in this article are the student’s alone and are not endorsed or reflect the views of the nonprofit, nonpartisan, World Affairs Council of Dallas Fort/Worth.