The India-Europe-Corridor

Investment Gap in Infrastructure

There is an immense global need for investment in transport, energy and telecommunications infrastructures. In the West, for example in the USA and Germany, elements of the transport infrastructure, including streets and bridges, are dilapidated and will have to be renovated in the near future. Developing countries and most emerging economies are still lacking all sorts of infrastructure. On the African continent for example, transport routes from the raw material reserves in the countries’ interior to the ports are often quite developed, while connections between African countries are still quite rudimentary in many cases. According to the Global Infrastructure Hub, an organization established in 2014 by the G20, a global investment gap in infrastructure construction of around US $15 trillion can be expected by 2040, of which US $6.5 trillion will be in North and South America, US $4.8 trillion in Asia and Oceania, US $2 trillion in Europe and US $1.7 trillion in Africa.[1] Some countries and groups of countries have already launched extensive investment programs, such as the USA with its Infrastructure Investment and Jobs Act (US $1.2 trillion) or the EU’s NextGenerationEU (US $800 billion).

The New Silk Road and its Rival

Since 2013, China has been systematically expanding infrastructures in the emerging and developing countries within the framework of the Belt and Road Initiative (BRI). The transportation corridors, which have been reinforced in the process, were initially the overland and maritime transport routes from China westward. Meanwhile, also other routes and supplementary infrastructure projects are being promoted that are beyond the classical east-west links. According to reports Beijing has already spent an estimated US $1 trillion within the BRI framework.[2] Because this benefits Chinese more than western companies and strengthens China’s international standing, Western countries have begun to devise rival programs. In September 2018, the EU devised a so-called EU-Asia Connectivity Strategy. However, this project has been considered a comprehensive failure for years.[3] The United States followed suit in June 2021 with another global infrastructure plan (the Build Back Better World, B3W), which also does not get off the ground. In June 2022, it was reported that commitments under the initiative totaled only US $6 million.[4] At the beginning of 2023, observers considered B3W was “dead on arrival.”[5]

Global Gateway

Currently the EU is pursuing its most recent infrastructure program, that it had launched in late 2021 under the label Global Gateway. This project is also not making as much headway as Brussels would have liked. A year after the program was launched, observers were complaining that until now, mainly long-standing development policy measures are being relabeled “Global Gateway”, while others refer to the project as a “billion-euro bluff.”[6] Brussels has since initiated a whole series of other projects. Alongside improvement projects for energy and transport infrastructure,[7] these projects are particularly aimed at strengthening the EU’s access to vital raw materials for the energy transition – from lithium to green hydrogen.[8] In effect, the Global Gateway is largely a program to satisfy Europe’s needs in raw materials. The EU Commission boasts that 44 of its 87 infrastructure expansion flagship projects launched before August 2023, were located on the African continent.[9] However, this is happening at a time when various African countries are beginning to shift their focus from infrastructure development to industrialization. On the sidelines of the BRICS summit in Johannesburg in August, a Chinese government official reported that the People’s Republic of China is being asked by African states to shift its focus from building infrastructure on the continent to local industrialization.[10]

The India-Middle East-Europe Economic Corridor (IMEC)

In the wings of the G20 Summit, the USA and EU launched their next infrastructure initiative: the India-Middle East-Europe Economic Corridor (IMEC). Besides the United States and the EU, especially Germany, France and Italy, along with India, Saudi Arabia, and the United Arab Emirates (UAE) are participating. The plan is to construct a transport corridor from India via the Middle East to Europe. A first, eastern corridor will connect India by sea to the Arabian Peninsula. A second northern corridor will connect the countries of the Arabian Peninsula to Europe. The second corridor will integrate Jordan and Israel.[11] The corridor is conceived to link rail and ship transport, i.e., to transit train-delivered goods by ship between Indian and Arabian ports. This will be supplemented by submarine cables for power and data transmission. The delivery of green hydrogen from Israel to Europe is also in planning. According to US government circles, working groups are to be formed within 60 days to elaborate concrete plans and set deadlines. The project’s financing is completely unclear. Riyadh is reported to be prepared to possibly invest US $20 billion.[12]

Several Irons in the Fire

IMEC’s political objective is not only to establish a transport corridor in competition with China’s BRI, but also for India to establish an independent connection to Europe, which should help strengthen New Delhi’s standing vis à vis Beijing. The plan is facilitated by the fact that India is one of the barely 50 countries in the world that is not participating in the BRI and thus has found itself somewhat in isolation. Therefore, support for infrastructure measures would be beneficial for New Delhi. On the other hand, India, Saudi Arabia and the United Arab Emirates will be working more closely together within the BRICS framework. Therefore, the expansion of the transport corridor between the three countries also reinforces cooperation within BRICS. It also remains to be seen, if the IMEC plans can actually be implemented, and what significance they will ultimately have. India is not building up its infrastructure within the framework of the BRI, but has long since been expanding its infrastructure with New Development Bank (NDB) loans. Thus, IMEC infrastructure plans are but one of many irons New Delhi has in the fire.

[1] Edda Schlager: Globaler Infrastrukturbedarf treibt Auslandsbau an. gtai.de 30.06.2023.

[2] James McBride, Noah Berman, Andrew Chatzky: China’s Massive Belt and Road Initiative. cfr.org 02.02.2023.

[3] See also The Anti-Silk Road and Die Anti-Seidenstraße (II).

[4] Charles Kenny, Scott Morris: America Shouldn’t Copy China’s Belt and Road Initiative. foreignaffairs.com 22.06.2023.

[5] F. M. Shakil: Dead on arrival: The west’s B3W initiative to rival China’s BRI. thecradle.co 25.01.2023.

[6] See also Die Anti-Seidenstraße (II).

[7] See also Wertebasierte Infrastruktur.

[8] See also EU’s Latin America Offensive (II).

[9] Fact Sheet: Global Gateway: EU investiert weltweit in nachhaltige Infrastruktur. Bonn, August 2023.

[10] China says African countries want industrialisation over infrastructure. tbsnews.net 23.08.2023.

[11] Memorandum of Understanding on the Principles of an India – Middle East – Europa Economic Corridor. whitehouse.gov 09.11.2023.

[12] Aamer Madhani, Josh Boak: Biden, Modi and G20 allies unveil rail and shipping project linking India to Middle East and Europe. apnews.com 10.09.2023.