The United States has been planning for months to launch a regional project involving India, the United Arab Emirates, Saudi Arabia, Jordan, Israel, and Europe. In this light, a memorandum of understanding was signed at the recent G20 summit to establish the India-Middle East-Europe Economic Corridor (IMEE EC), a move that the United States hailed as “historic”, saying that it will help bring about peace and prosperity in the Middle East.
The project raises a plethora of intriguing questions about its nature, motivations, and the difficulties inherent in determining its viability and stability.
I. The Nature of the IMEE EC
Official data and political statements so far suggest that the IMEE EC will involve three parallel tracks, each of which will be built in a separate but consecutive phase.
The First Track
Trade: This track combines the following three routes: 1) The sea route from western India, where the port of Mumbai and the Gujarat region are located, through the Arabian Sea and the Gulf of Oman, to arrive at Jebel Ali Port in Dubai; 2) a railroad beginning in Batha, the northernmost point of the Emirates, crossing into Saudi Arabia at the city of Haradh. It would then travel longitudinally through Saudi Arabia to the city of Al Hadithah on the Jordanian border, then continue on from Jordan to the Sheikh Hussein Border Crossing on the Israeli border, the Israeli settlement of Beit She’an, and finally the port of Haifa, which looks out over the Mediterranean Sea; and 3) a second sea route connecting European ports, specifically those in Italy, with the Israeli port of Haifa (owned by the Indian company Adani Group, which is close to the ruling regime).
The Second Track
Technology: To maximise the knowledge-digital economy, fibre-optic cables will connect the IMEE EC’s participating countries (such as India, the UAE, Saudi Arabia, Jordan, and Israel) with Europe. This could lead to future digital cooperation between the IMEE EC countries in operating and maintaining data centres.
The Third Track
Energy: The IMEE EC will involve connecting the aforementioned countries with energy pipelines that advance the green economy in green hydrogen and electricity industries.
II. Motives
Several factors are associated with the proposed project between the aforementioned countries and the United States, and they may impact its scope, such as:
1. Destabilizing China’s Growth
The Covid-19 crisis and the Russian-Ukrainian war were detrimental to the stability of global supply chains, which had a negative impact on shipping lanes. This is why both China and the United States have been racing to re-engineer supply chains by forming new regional, political, and economic alliances and blocs.
The United States, a few European countries, and India hope that the IMEE EC will lead to the creation of a political-economic bloc among its participants. The overall objective is to establish a new maritime route in an effort to obstruct China’s Belt and Road Initiative (BRI). Possibly, this explains why China skipped the G20 summit.
The IMEE EC comes at a time when the BRICS group (Russia and China) announced that Saudi Arabia, Iran, and Egypt were welcome to join the bloc, an announcement that was overshadowed by geopolitical calculations concerning supply chains and logistical hubs in Egypt, Saudi Arabia, and India.
The United States is therefore considering including India in the global economy as a substitute for China by boosting investments in the areas of energy, food, and technology, which qualifies the Indian economy to overtake that of China at some point, particularly since China may face new economic challenges in the near future, according to some economic estimates.
2. Regulating India’s Ascent
The United States plans to direct India’s rise along predetermined trajectories that advance American goals in the Indo-Pacific, given the recent US monitoring of the thawing relations between India and Russia, especially in the wake of the conflict between Russia and Ukraine.
The rapprochement between India and Russia can be seen, for instance, in the oil industry, agreements to conduct business in local currency, and trade, particularly in the latter area, where India agreed to build the North South Transport Corridor, a shipping route that will allow Indian goods to be exported to Russia and then sold on the European market.
So, the US has been trying to get India to join its alliance network and away from Russia and Iran by opening up trade routes that are good for India’s economy. In the next few years, it is anticipated that Indian exports to the UAE alone will amount to $50 billion. If the IMEE EC is successful, Indian exports to the Gulf market, Israel, and the European market may total more than $250 billion.
The above graph shows that the IMEE EC helps India reach its full export potential in the European market, the Gulf, Israel, and Turkey (which is not included in the IMEE EC).
3. Encircling Iran
This point relates to the preceding one. The United States discovered that India does not wish to end its already robust relationship with Iran, which is detrimental to Israel’s security interests in the region because Iran benefits from the regional projects proposed by Russia and India, such as shipping lanes and energy and infrastructure projects.
If the IMEE EC is successful, India will likely postpone the construction of the Chabahar Port in Iran and boost exports to the Jebel Ali Port in Dubai and the Omani Sohar Port, both of which it has recently invested in.
4. Integrating Israel into the Regional Economic Map
The US is aware that normalising relations between Israel and the region’s countries may involve costly political conditions that compromise both Israeli and US national security, as was made clear by Saudi Arabia’s requirements for accepting normalisation with Israel.
Accordingly, the United States considered incorporating Israel in the midst of complementary economic and infrastructure calculations in the areas of energy, technology, and trade.
3. Pragmatic Assessment of Potential Challenges
The United States is aware that there are many obstacles to implementing the IMEE EC, particularly in the volatile and complex Middle Eastern region. The following is a rough estimate of the most significant potential challenges, which have actual features and indicators:
1. Iranian Disapproval
Despite China’s success in formally normalising relations between Saudi Arabia and Iran, the new phase did not herald an end to Saudi-Iranian hostilities. In the crisis over dividing the Dorra field between Kuwait and Saudi Arabia, for instance, the Iranian Islamic Revolutionary Guard Corps (IRGC) emerged as an explicit actor.
Iran also continues to undermine regional security in the Arabian Gulf, particularly through the Strait of Hormuz, the Gulf of Oman, and the Arabian Sea. As a result, the UAE recently announced its withdrawal from the US alliance because it is no longer a reliable final assurance for enforcing stability in the region.
It is possible that the IRGC will continue to throw a wrench into efforts to ensure the safety of shipping lanes in the Strait of Hormuz, particularly when we factor in the complex relationship dynamics between Iran and the United States in the nuclear file. This may be the reason why the United States recently made concessions to Iran in the form of a prisoner exchange and partial easing of economic sanctions.
2. Saudi-US Tensions
There are rising tensions brewing between the United States and the Kingdom of Saudi Arabia as the former seeks to limit Saudi Arabia’s ties with China in particular. Recently, Prince Abdulaziz bin Salman, the Energy Minister of Saudi Arabia, stated that “Saudi Arabia seeks closer cooperation with China on trade investments and energy flows”. When asked about the sceptics’ criticism of the expanding Saudi-Chinese ties, he responded, “I completely disregard it”. Another instance was when Saudi Arabia declared its intention to maximise the advantages of the Indian Spice Route initiative and China’s BRI. By doing this, Saudi Arabia is separating itself from polarising alliances that benefit one party at the expense of another.
This could foreshadow future tension between Saudi Arabia and the United States because the Saudis will not be able to accomplish the primary goal of the United States, which is to limit the global growth margins of the Chinese economy.
3. The Palestinian-Israeli Conflict
Israel plans to build a railway between the settlement of Beit She’an and Jordan’s Sheikh Hussein Border Crossing, as well as a joint industrial zone with Jordan dubbed the Jordan Gateway Industrial Park. This explains why Israel is racing against the clock to disarm the armed Palestinian resistance groups in Jenin and Tulkarm. This also helps to clarify why the Israeli government is investigating the possibility of resettling the northern West Bank in order to protect the area designated for the Israeli-Jordanian economic project from the Palestinian resistance.
On the other hand, in an Iranian message aimed at encircling Israel and its future projects on the northern Jordanian-Israeli border, Lebanese Hezbollah announced the expansion of its military presence in southern Lebanon and southern Syria, facing Israel.
This explains why the US is so frustrated with the Israeli government for delaying the financial settlement between Israel and the Palestinian Authority (PA) over a dispute over tax clearances and funding for the PA to bolster its position in the West Bank, particularly in the northern part of the territory. However, Netanyahu appears to be under pressure to reject the financial settlement due to the calculations of extremist-affiliated Israeli ministers.
4. Tension in Jordan towards Israel
Jordanian public opinion is exerting pressure on the Jordanian King to halt all political and economic relations with Israel as a result of Israeli extremism, which is exemplified by an increase in the rate of settler incursions into Islamic holy sites belonging to the Jordanian Hashemite Charity Organisation.
Furthermore, the Irbid border region with Israel, where future joint projects with Israel will take place, is a tribal region controlled by Jordanian tribal families (linked to the Hashemites by a conditional social contract that is renewed annually), and these tribes openly express animosity towards Israel.
As a result, joint Israeli-Jordanian projects like the Jordan Gateway Industrial Park, the Water-for-Energy Deal, and the Jordan-Israel railway connections are likely to be hindered.
5. Israel’s Vague Budget
As was previously mentioned, the IMEE EC’s final destination is a railway line that traverses Israel from Beit She’an to the port of Haifa. In addition, Israel plans to invest ILS 100 billion ($27 billion) in the United Israel project, which aims to build a railway network connecting the country’s northern and southern regions as well as the eastern coast of the Mediterranean Sea.
With the Israeli army’s insistence on increasing its defence allocations to finance projects to manufacture unmanned military parts and conduct training and military manoeuvres as outlined in the Tnufa [Momentum] five-year plan, it is impossible to predict Israel’s success in allocating funding based on the development of the Israeli budget, particularly the most recent items for 2023-2024.
Additionally, Netanyahu is under political pressure to increase funding for settlement construction and to support Itamar Ben-Gvir’s radical National Guard plan.
The budget is also under intense political pressure as a result of the withdrawal of some foreign direct investments from high-tech industries as a result of the planned judicial reform, which portends a sharp polarisation of society that will undermine its security stability.
To offset somewhat sluggish government spending, Israel’s budget adheres to the necessity of maximising foreign direct investments, especially from Gulf sovereign funds (particularly the UAE).
6. Turkey’s Position
Turkey will not keep quiet about regional initiatives from which it is excluded. This was reflected in Turkey’s stance on the EastMed project, which sought to lay a pipeline connecting Israel, Cyprus, and Greece, prompting Ankara to quickly forge closer ties with the deposed government in western Libya and demarcate the maritime borders between Turkey and Libya in the east.
As a result, Turkey may not remain silent regarding the development of the IMEE EC, as suggested by Erdogan’s rejection of the plan and assertion that Turkey was more suitable for the project.
The Turkish response may be influenced by political and economic factors, such as a re-evaluation of the opportunities presented by the Turkey-Iraq Development Road, which is similar in many ways to the US project, and it will also force Turkey to strike a balance between Russia and the United States.
In conclusion, one could contend that political considerations outweigh the economic justification for the United States’ IMEE EC. In effect, the IMEE EC faces significant difficulties in its political, economic, and security facets. Notably, it will take significant effort to secure the shipping lane, one of the IMEE EC’s paths, either by bolstering the US Navy’s presence (which is already strengthening) or by organising a larger security alliance in the area and relying on new military technologies.
