NOURNEWS- The designers of the India-Middle East-Europe Economic Corridor (IMEC) strategic corridor which was announced at this year's G20 summit, is aimed to connect India to the United Arab Emirates, Saudi Arabia, Jordan, Israel, and Europe.
In fact, participants in designing and implementing of the said corridor hope to reduce the costs of trading among themselves, strengthen market access, and create new investment opportunities.
They also claim that the close economic connections resulting from the corridor increase the incentive for cooperation in various security and diplomatic spheres between participant countries, but examining the challenges and obstacles to the corridor shows that the story is not that simple.
The complex geopolitical rivalries of countries, different ideologies and political values, widespread security and terrorist threats in the participant countries in the IMEC, logistical challenges and diverse geographical areas, and the impossibility of creating an interconnected transport structure, different legal frameworks, and the need for large investment on the one hand, and conflicts of interest, and the lack of prospects for diplomatic and consistent dialogue to resolve the issues is only part of the problem for implementing this plan and actually creating this corridor.
Indo-West Asia-Europe Strategic Corridor: Economic or Geopolitical advantage?
But perhaps the most important obstacle to this corridor is neither geopolitics nor logistics, nor conflicts of political and economic interests of participants. Experts argue that even with geopolitical advantages, a strategic corridor is not possible without at least three relative advantages: “economic advantage,” “cost savings,” and “time savings.”
“Economic advantage” means that the strategic corridor must connect the producer to the consumer in the cheapest way possible, and in fact be a means of transferring the surplus consumption of the producer. What is clear is that the ports of the West Indies are now also connected to Europe via the Suez Canal, a safer, shorter, faster, cheaper route and, in a word, a higher economic and more advantageous route.
On the other hand, a look at the volume of trade between India and China with Europe shows that China was the second-largest trading partner in Europe, with its trades totaling $850 billion in 2022. In contrast, India has about a tenth of China's trade volume with Europe at $90 billion.
While it may be claimed that the West's distancing from China means India is the next manufacturing hub, evidence suggests that as China grows, the low-cost production chain is shifting from the country to Southeast Asian countries such as Vietnam, Thailand, and Bangladesh, which are already among the biggest importers from China.
In terms of “saving money and time”, experts believe the cheapest way of international transportation over long distances is sea transportation, so the sea corridor should be the most cost-effective transportation route. That's why China is so keen on the “Belt and Road Initiative” (BRI) scheme.
But this important indicator has not been confirmed by even the most optimistic European think tank regarding the Indo-West Asia-Europe strategic corridor, because, to transport a container on this route, the means of transportation must be changed repeatedly to land to rail and sea and then vice versa, which, in addition to spending high financial costs, greatly increases the sending time of the goods to the point that even it would take more time than the Suez Canal.
War of corridors and strategic location of Iran, Turkey, and Egypt
Some experts interpret the attempt to replace corridors that can serve the geopolitical interests of countries as a “War of strategic corridors” and believe that the outbreak of the Ukraine war and the deepening contrast of the strategic interests of Europe and Russia on the one hand, and the essential role of corridors in the formation of the new world order on the other hand, has led Europe to seek new ways and create new ways for their own commercial exchanges.
In fact, with the aim of marginalizing Russia on the North-South corridor Western designers of the Indo-West Asia-Europe corridor have proposed this idea and intend to launch this corridor, to inflict a fatal blow to the North-South corridor, which aims to connect Mumbai in India to Northern Europe via the Caucasus and then Russia.
In analyzing the success or failure of this corridor, Iran's strategic role and position at this geographical intersection is particularly important in the project “Road and Belt Initiative” and experts believe that Iran's dominance of the Strait of Hormuz, which is the gateway between India and the United Arab Emirates within the aforementioned corridor, should not be ignored.
The reactions of other countries such as Egypt and Turkey are also noteworthy. Egypt's strategic geographic location on international trade routes through the Suez Canal, which is a vital transport route connecting the Mediterranean to the Red Sea as well as a key source of foreign exchange revenue, could be threatened by the creation of the Indo-West Asia-Europe corridor as an alternative route and be a limiting factor for Egypt's dominant role in the region.
The diversion of trade from the Suez Canal and its negative economic consequences for Egypt will undoubtedly trigger a backlash. In addition, the Turkish president has made it clear that without Turkey's participation, there would be no transit for goods or energy in the region.
What is the reason for the Indo-West Asia-Europe Strategic Corridor?
With all the geopolitical, logistic, security, and economic challenges facing this corridor, the question that arises is what is the need for such a passageway?
The study and analysis of the existing facts about the corridor show that its construction plan is more than rooted in economic and even geopolitical advantages for trade between members, due to American-Israeli mischief in the Persian Gulf region.
The goal of this political project is to dismantle or negatively influence China's Road and Belt initiative, as the economic efficiency of the project appears small compared to the economic benefits of China's strategic plan.
But why was New Delhi so eager to propose this project at the G20 summit? This time the answer is pretty clear! To explain this, one has to look at the internal affairs of India, for Indian President Narendra Modi intended to present a successful picture of the G20 summit, and also within a year of India's general election, he will establish himself as a distinguished and influential figure which addresses the economic and political threats of India’s neighboring countries.
Iran’s interests pass through which corridor?
Long beaches, unique geographical location, and transit, easy access to the sea and other countries make Iran the heart of one of the premier trade routes.
Iran's position on this international highway has created many opportunities and threats for the country, and understanding this important fact can bring a lot of economic and international bargaining power to the country, and will lead to the development of projects related to this corridor to be at the top of the country's development plans.
The International North-South Transport Corridor (INSTC), which connects India via Iran to the Caspian Sea, Russia, and Northern Europe, will bypass the Suez Canal, making the route 40% shorter and 30% cheaper than traditional routes.
Since the beginning of the Russian-Ukrainian conflict, the strategic importance of this corridor, especially for Moscow and Tehran, has been felt more than ever since both countries face Western sanctions, and the full activation of this corridor has become more influential to facilitate and accelerate the de-dollarization and neutralization of Western sanctions.
Experts believe that by expanding this corridor, the Islamic Republic of Iran could add at least $20 billion to its foreign exchange revenues annually and further reduce its dependence on oil revenues.
But the list of North-South Strategic Corridor rivals is not short, either. The Indo-West Asia-Europe corridor, with all the flaws and deficiencies we have mentioned, is only one of the four passageways that pose a serious threat to the North-South corridor.
After the announcement regarding the plans for the construction of the corridor, Turkey and Iraq also announced their plans to implement the “development corridor” that connects the southern port of Basra to the Fisher Pass on Turkey's border with the road and railway, and said initial agreements have been reached for Bulgaria, Hungary, and Serbia to join the crossing. They also announced their upcoming plans for making Gulf states, including the UAE, join this plan.
What is clear is that we are facing a war of great corridors in which major regional and international powers are involved and will likely play a major role in reshaping the international political scene and the map of coalitions.
In the meantime, the role and geography of Iran in the North-South and East-West strategic corridors are not unique but have a decisive impact on shaping the political geography of the region and the future world, therefore, investment in the development of the North-South corridor is of great importance.
In this regard, although good steps have been taken, especially in the field of land road development, there is a need to take fundamental steps to remove technical barriers related to roads, especially rail crossings, reform of customs regulations and tariffs in accordance with international road laws, digitization, reform of border control procedures, providing logistical equipment and development of ports is strongly felt.
The recent trip of the Iranian Minister of Roads and Urban Development to the Republic of Azerbaijan and the signing of the document of the executive session of the railway crossing through Iran in the construction of the Aras rail corridor can be an important step in the activation of new strategic corridors.
Although it has a long path filled with ups and downs, achieving the development goals related to the construction of the North-South Corridor is an unavoidable necessity, and neglecting it will lead to the loss of rich economic benefits and political and security achievements.
BY: Pooya Mirzaei
NOURNEWS