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G20 Summit: Biden’s vision of IMEC to counter BRI and Pakistan’s Future!  By Kashif Mirza

Byadmin

Sep 11, 2023

The writer is an

economist, anchor,

analyst and the

President of All

 Pakistan Private

Schools’ Federation

president@Pakistan

privateschools.com

The U.S., the EU, India, Saudi Arabia, the UAE, and others launched the Middle East-Europe Economic Corridor (IMEC), the initiative to link railways, ports, electricity and data networks, and hydrogen pipelines on the sidelines of the Group of 20 (G-20) summit in New Delhi, and announced a Memorandum of Understanding (MoU) committing to work together to develop a new India-Middle East-Europe Economic Corridor (IMEC), a vast multinational rail and ports deal linking the Middle East and South Asia, boosting trade ties with potentially wide-ranging geopolitical implications. The corridor would help boost trade, deliver energy resources, and improve digital connectivity. The network reflected Biden’s vision for far-reaching investments that come from effective American leadership and a willingness to embrace other nations as partners. The enhanced infrastructure would boost economic growth, help bring countries in the Middle East together, and establish that region as a hub for economic activity instead of as a source of challenge, conflict, or crisis as it has been in recent history. The leaders did not lay out who would be paying for the project. A working group will lay out fuller plans over the next 60 days, including a timeline for building the infrastructure. The G-20, comprising 19 countries and the European Union, and now African Union, that was founded in 1999, is finally in Delhi, with all eyes on the New Delhi declaration issued at the end of the summit. Here are four key takeaways from the two-day summit: The G20 leading economies began the weekend’s proceedings by welcoming the African Union (AU), the newest member of a bloc that already represented 85 percent of the world’s gross domestic product (GDP). The AU at full strength has 55 members, but six military-ruled nations are currently suspended. It has a collective GDP of $3 trillion with some 1.4 billion people; G20 leaders have been deeply riven over the Ukraine war since Moscow’s War. Facing the prospect of a major diplomatic embarrassment, host India pressed members to agree on a common statement that watered down its earlier condemnation of the war. The G20 denounced the use of force for territorial gain but refrained from direct criticism of Russia by name. Ukraine’s Ministry of Foreign Affairs spokesman Oleg Nikolenko criticized the statement, saying the G20 had nothing to be proud of; Leaders failed to agree on a phase-out of fossil fuels despite a United Nations report a day earlier deeming the drawdown indispensable to achieving net-zero emissions. G20 nations account for about 80 percent of global emissions and an inability to agree on the phase-out is a cloud over a key round of climate discussions to begin in November in the oil-rich United Arab Emirates; A broad alliance – including the United States and Saudi Arabia – unveiled ambitious plans to create a modern-day Spice Route linking Europe, the Middle East and India. The plans are also being touted as a means of helping to normalize relations between Israel and Gulf Arab states. A new debate has surfaced since the announcement, that the new corridor connecting Asia-Middle-East-Europe, aimed to target the well-established China-Pakistan Economic Corridor (CPEC)—a multibillion-dollar project— part of the larger Belt and Road Initiative (BRI). Enhancing connectivity with all regions has been a key priority, as connectivity is a means to not only increase mutual trade between different countries but also cut trade time between India and Europe by 40 percent. The pact comes at a critical time as U.S. President Joe Biden seeks to counter China’s Belt and Road push on global infrastructure by pitching Washington as an alternative partner and investor for developing countries at the G-20 grouping. Although heavily trade-focused, the scheme could have wide-ranging implications – including developing contacts between long-time foes Israel and Saudi Arabia. Signatories hope it can help integrate India’s vast market of 1.4 billion people with countries to the west, offer a counterbalance to Chinese infrastructure spending, boost Middle Eastern economies, and help normalize relations between Israel and Gulf Arab states. Biden said it would bridge ports across two continents and lead to a more stable, more prosperous, and integrated Middle East. It would unlock endless opportunities for clean energy, clean electricity, and laying cable to connect communities. European Commission President Ursula von der Leyen said the so-called India-Middle East-Europe Economic Corridor, or IMEC, was much more than just a railway or a cable. Whereas, Prime Minister Narendra Modi said, “Today, as we embark upon such a big connectivity initiative, we are sowing the seeds for future generations to dream bigger.” IMEC is envisioned to consist of two separate corridors, with an east corridor connecting India to the Arabian Gulf and a northern corridor connecting the Arabian Gulf with Europe, according to the MoU. The deal will benefit low and middle-income countries in the region and enable a critical role for the Middle East in global commerce. Along the railway route, participants intend to lay cable for power and data lines, as well as a pipeline for hydrogen derived from renewable energy for use in power generation. One proposed project would link railway and port facilities across the Middle East – including the United Arab Emirates, Saudi Arabia, Jordan, and Israel – potentially speeding trade between India and Europe by up to 40%. A shipping container that today travels from Mumbai through the Suez Canal to Europe could in the future go by rail from Dubai to Haifa in Israel and on to Europe, saving both money and time. At present, the Suez Canal is a major bottleneck to world trade, handling roughly 10% of global maritime trade, but is often beset by disruptions. At the same time, the plan neatly aligns with several of Washington’s goals in the Middle East, and officials say the United States is keen to see the projects take flight. Biden’s administration is actively prodding Riyadh, a major oil producer and security partner, to normalize ties with Israel after decades of conflict and closed borders. Saudi Arabia has never officially recognized Israel. According to Israel’s Prime Minister Benjamin Netanyahu, the United States had approached Israel several months ago for this project, which will reshape the face of the Middle East. The State of Israel will be a central hub in this economic initiative by making this collaboration project the largest in history. U.S. involvement could also help mend deeply damaged ties between Riyadh and Washington, which frayed after the U.S.-Iran nuclear deal and the 2018 murder of dissident journalist Jamal Khashoggi. It would also strengthen telecommunications and data transfers through a new undersea cable connecting the region. The economic corridor would develop infrastructure to enable the production and transport of green hydrogen. The pact offers opportunities for manufacturing, innovation, and people. Moreover, all the projects could also help oil-soaked Middle Eastern states wean their economies off dependence on fossil fuels. 

Biden seeks to counter China’s Belt and Road push on global infrastructure IMEC by pitching Washington as an alternative partner and investor for developing countries at the G20 grouping. The State of Israel will be a central hub in this economic initiative by making this collaboration project the largest in the history. For Pakistan, it’s high time that we get our house in order and set our priorities straight by setting agendas and reforms.

Biden seeks to counter China’s Belt and Road push on global infrastructure IMEC by pitching Washington as an alternative partner and investor for developing countries at the G20 grouping. China’s powers and influence are increasing so rapidly that the U.S. and EU feel the need to have alternatives. Italy, an important signatory of China’s BRI, has just pulled out of the arrangement. But, the new project would not necessarily undermine China’s global infrastructure project, which has its own independent existence. Due to its enmity with China, India was not part of the Belt and Road Initiative, so this initiative gives connectivity to India. On the other hand, IMEC poses a direct challenge to China’s BRI and can transform Intercontinental Trade, but how it will finally turn out depends on many factors, such as the working out of financing and the continued support in member countries through political headwinds like elections and change of governments. Much of this connectivity drive is aimed at containing China’s Belt and Road Initiative (BRI), the big idea first put on the table by Xi in 2013. Countries in Central Asia, South Asia, the Middle East, and several African nations had signed on to the proposal that was funded mainly by China’s government-owned banks. But many of the countries, including Sri Lanka, have got into a debt trap over their inability to pay back. The same has happened to some African countries. Moreover, the purpose of the infrastructure, apart from offering an alternative to BRI projects, is still not clear either is expensive to ship oil and gas over land, so energy probably isn’t the main game; or is it about Indian exports into the Middle East then? If IMEC takes off, it will give a massive fillip to both continents. But this is at the moment just on paper and getting it started and functioning will take a decade and more — provided all countries remain on board several years down the line. While everyone agrees that the signing of IMEC’s MOU has tremendous potential, how it will finally turn out depends on many factors. For now, one can just wait and watch until more is known. The move came amid US efforts for a broader diplomatic deal in the Middle East that would have Saudi Arabia recognize Israel. It seems this is a clear plan to rival China’s massive Belt and Road infrastructure initiative that was announced back in 2013, which is designed to connect Asia, Africa, and Europe. So, it seems that this is really a counterweight plan. The plan could significantly respond to China’s much-vaunted Belt and Road Initiative (BRI), a step seen as a challenge to China’s economic ambitions in the region. The BRI has spread Chinese influence, investments, and commerce across Europe, Africa, Asia, and Latin America. If finalized, it would be a game changer that strengthens connectivity between India and the Middle East and would aim to counter BRI. Indeed, Narendra Modi’s sole aim is to make India a better Country, by this Strategy in the near future, India will become the most powerful nation in the World, which will surprise even the USA, the United Kingdom, Russia, and Japan. He uses all the developed countries of the world for his benefit. First, he destroyed US ties with Pakistan and Afghanistan and created an alliance with Vietnam, which damaged China’s dream of Superpower, over a long-time dispute over oil extraction overseas between Vietnam and China which has benefited India. With India’s support, Vietnam began producing Oil in China’s Southern Seas. Vietnam now supplies a major part of its Oil to India, the United States also has supported this. He severely damaged Pakistan without going into a formal war. He brought the Port of Iran under his control and also set up an Indian Military base on the border with Afghanistan which is very close to the border of Pakistan. In order to increase Indian trade, he also built a route through Iran to Afghanistan bypassing Pakistan. Modi abrogated and repealed Sections 370 and 35A, and now has an eye on Azad Kashmir of Pakistan. Saudi Arabia and UAE are getting closer to India by making heavy Investment in India, both countries has a brotherly relationship with Pakistan and are considered as a trusted traditional ally. Now it depends on the suggested scale of IMEC’s investment which is an indication of how seriously the Saudis and UAE take India and India’s economic potential. In Asia, Modi is rooting out the space of China and the United States in a very Scientific manner and recently canceled the SAARC Summit which has shown his power and has succeeded in maintaining India’s superiority over Asia. China-Pakistan Economic Corridor (CPEC) was launched in 2008 connecting China and Pakistan through railways, telecom, and technology infrastructure along with Special Economic Zones (SEZs), from Kashgar to Gwadar port city, to boost economic activity. Both countries are aggressively taking the CPEC to new heights as CPEC is one of the most innovative and strategically important projects in recent decades. President of China Xi Jinping termed the CPEC as friendship between China and Pakistan is based on trust and mutual support, and we have been devoted friends through both good and hard times. Building a China-Pakistan community of shared destiny is a strategic decision made by the two governments and peoples to create an even brighter future for China and Pakistan.  For Pakistan, now it’s high time that we get our house in order and set our priorities straight by setting agendas and reforms. Our nation deserves better and a brighter future. It’s time for change and a renewed commitment to the values. Perhaps reassessing and questioning ourselves might bring about a change in our Country’s needs.

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