The real take-away for India from the recently concluded G 20 Summit was the announcement about the formation of ‘India-Middle East-Europe Economic Corridor [IMEC]. A galaxy of global leaders unveiled this on Saturday, 10th September. It’s an ambitious trade and infrastructure project linking India, Middle East and Europe in a first-of-its type project that will build a modern era spice route. It involves railway and shipping networks. It will vastly enhance commerce, energy and digital connectivity.
The IMEC is widely regarded as a counter-weight to China’s BRI which was announced exactly a decade ago by China’s Xi Jinping. He unveiled the most ambitious programme the Belt and Road Initiative [BRI] in September 2013 while on a state visit to Kazakhstan. BRI was and is looked at China’s ambitious plan of expansion that covers three continents.
Ever-since the BRI was announced it generated suspicion about China’s real intentions. It is no secret that China aims to dislodge USA from the status of super power no. 1 and occupy that status. To achieve this ambition, it needs to spread its influence far and wide. This is one aspect of the BRI, the other being the slow-down of the Chinese economy. By early 2010s, Chinese experts realized that the double-digit growth rate of China’s economy is unsustainable in the future. And it needs different economic drivers to keep posting that economic growth rate. This is economic aspect of the BRI. No wonder many scholars compared the BRI with US’s Marshall Plan.
Right from the beginning, India has maintained a position that is distinctly against the BRI. This is only because of the China-Pakistan- Economic-Corridor [CPEC] runs through India’s territory, Pak-Occupied Kashmir [PoK]. The CPEC is a 3000-km long route of infrastructure projects connecting China’s northwest Xinjiang province with the Gwadar Port located in western province of Balochstan in Pakistan. The After the CPEC, came the BRI which India boycotted and the boycott continues.
Initially all resources-poor countries welcomed the BRI and all that it brought in. Till today some 150-odd countries have signed on the BRI which means 75% of the world’s population. Once the initial enthusiasm died, the realization set in that it is not ‘roses roses all the way’ and there are some bitter truth to be faced. The story of Sri Lanka is by now well known all over the world. The Emerald country has now become an exemplar of all that is wrong with the Chinese dream-project. It is alleged that the former President of Sri Lanka Mahinda Rajapaksa moved very close to the powerful leaders in Beijing and got huge loans for massive infrastructure projects in the country. Unfortunately before signing on the dotted line, Rajapaksa did not study the business model and later realized that the projects are unlikely to earn enough returns to enable his country to pay back the loans. Out of sheer frustration, the Hambantota port had to be handed over to Chinese firms on a 99-year lease. Since then the BRI, Chinese flagship project is getting bad names.
Ever since China announced the BRI, India was nervous for obvious reasons. It felt that the Chinese ambitions simply means threat to its territorial integrity. Indian policy makers were burning mid-night oil to come up with a strong rejoinder to the BRI. Very soon the sheen of BRI started to wear off and harsh reality started coming to surface. Sri Lanka is not the only one to repent. Others got smart in time and started either cancelling the deals or leaving the BRI altogether. At a press conference after the G 20 Summit in New Delhi, Italy’s Prime Minster Giorgia Meloni said a final decision on leaving the BRI was yet to be taken. But there are high chances that it will say good-bye.
India is smart-enough and seasoned-enough to know that only criticizing the BRI will not keep the needy countries away from the lure of BRI. It must offer the poor countries something equally attractive. This is how the IMEC was launched with lot of fanfare. The proposed IMEC will have two corridors-the eastern corridor connecting India to the Arabian Gulf and the northern corridor connecting Arabian Gulf to Europe. The project aims to build a ‘reliable and cost-effective’ cross-border and ship-to-rail transit networks. This will ensure traffic of goods between India, the UAE, Saudi Arabia, Jordan, Israel and Europe. Not only this, the IMEC will bring significant advantages to India as it will place the country at the core of trade flows from Southeast Asia to the Middle East and Europe bestowing strategic and economic advantages to India.
If the IMEC progresses as per the prediction, soon India will be a leading player posing direct challenge to Chinese hegemony. And nothing will be sweeter to US’s ears. No wonder US is whole-heartedly supporting the IMEC and US President Joe Biden did not mince words when he described the IMEC as ‘game-changing regional investment’.
China’s reaction was predictable. Xi skipped the G 20 Summit and preferred to host debt-burdened leaders of countries such as Zambia and Venezuela. These two countries have sought economic relief from China in recent years as they struggle to service heavy debts, significant portion of which is owed to Beijing. In other words, it is now BRI v/s IMEC.