On September 9, 2023, during the G20 meeting in New Delhi, the governments of seven countries and the European Union signed a memorandum of understanding to create an India-Middle East-Europe Economic Corridor. Only three of the countries (India, Saudi Arabia, and the United Arab Emirates or the UAE) would be directly part of this corridor, which was to begin in India, go through the Gulf, and terminate in Greece. The European countries (France, Germany, and Italy) as well as the European Union joined this endeavor because they expected the IMEC to be a trade route for their goods to go to India and for them to access Indian goods at, what they hoped would be, a reduced cost.

The United States, which was one of the initiators of the IMEC, pushed it as a means to both isolate China and Iran as well as to hasten the normalization of relations between Israel and Saudi Arabia. It seemed like a perfect instrument for Washington: sequester China and Iran, bring Israel and Saudi Arabia together, and deepen ties with India that seemed to have been weakened by India’s reluctance to join the United States in its policy regarding Russia.

Israel’s war on the Palestinians in Gaza has changed the entire equation and stalled the IMEC. It is now inconceivable for Saudi Arabia and the United Arab Emirates to enter such a project with the Israelis. Public opinion in the Arab world is red-hot, with inflamed anger at the indiscriminate bombardment by Israel and the catastrophic loss of civilian life. Regional countries with close relations with Israel—such as Jordan and Turkey—have had to harden their rhetoric against Israel. In the short term, at least, it is impossible to imagine the implementation of the IMEC.

Pivot to Asia

Two years before China inaugurated its “One Belt, One Road” or Belt and Road Initiative (BRI), the United States had already planned a private-sector-funded trade route to link India to Europe and to tighten the links between Washington and New Delhi. In 2011, then U.S. Secretary of State Hillary Clinton gave a speech in Chennai, India, where she spoke of the creation of a New Silk Road that would run from India through Pakistan and into Central Asia. This new “international web and network of economic and transit connections” would be an instrument for the United States to create a new intergovernmental forum and a “free trade zone” in which the United States would be a member (in much the same way as the United States is part of the Asia-Pacific Economic Cooperation or APEC).

The New Silk Road was part of a wider “pivot to Asia,” as U.S. President Barack Obama put it. This “pivot” was designed to check the rise of China and to prevent its influence in Asia. Clinton’s articlein Foreign Policy (“America’s Pacific Century,” October 11, 2011) suggested that this New Silk Road was not antagonistic to China. However, this rhetoric of the “pivot” came alongside the U.S. military’s new AirSea Battle concept that was designed around direct conflict between the United States and China (the concept built on a 1999 Pentagon study called “Asia 2025” which noted that “the threats are in Asia”).

Two years later, the Chinese government said that it would build a massive infrastructure and trade project called “One Belt, One Road,” which would later be called the Belt and Road Initiative (BRI). Over the next ten years, from 2013 to 2023, the BRI investments totaled $1.04 trillion spread out over 148 countries (three-quarters of the countries in the world). In this short period, the BRI project has made a considerable mark on the world, particularly on the poorer nations of Africa, Asia, and Latin America, where the BRI has made investments to build infrastructure and industry.

Chastened by the growth of the BRI, the United States attempted to block it through various instruments: the América Crece for Latin America and the Millennium Challenge Corporation for South Asia. The weakness in these attempts was that both relied upon funding from an unenthusiastic private sector.

Complications of the IMEC

Even before the Israeli bombardment of Gaza, IMEC faced several serious challenges.

First, the attempt to isolate China appeared illusory, given that the main Greek port in the corridor—at Piraeus—is managed by the China Ocean Shipping Corporation, and that the Dubai Ports have considerable investment from China’s Ningbo-Zhoushan port and the Zhejiang Seaport. Saudi Arabia and the UAE are now members of the BRICS+, and both countries are participants in the Shanghai Cooperation Organization.

Second, the entire IMEC process is reliant upon private-sector funding. The Adani Group—which has close ties to Indian Prime Minister Narendra Modi and has come under the spotlight for fraudulent practices—already owns the Mundra port (Gujarat, India) and the Haifa port (Israel), and seeks to take a share in the port at Piraeus. In other words, the IMEC corridor is providing geopolitical cover for Adani’s investments from Greece to Gujarat.

Third, the sea lane between Haifa and Piraeus would go through waters contested between Turkey and Greece. This “Aegean Dispute” has provoked the Turkish government to threaten war if Greece goes through with its designs.

Fourth, the entire project relied upon the “normalization” between Saudi Arabia and Israel, an extension of the Abraham Accords that drew Bahrain, Morocco, and the United Arab Emirates to recognize Israel in August 2020. In July 2022, India, Israel, the United Arab Emirates, and the United States formed the I2U2 Group, with the intention, among other things, to “modernize infrastructure” and to “advance low-carbon development pathways” through “private enterprise partnerships.” This was the precursor of IMEC. Neither “normalization” with Saudi Arabia nor advancement of the I2U2 process between the UAE and Israel seem possible in this climate. Israel’s bombardment of the Palestinians in Gaza has frozen this process.

Previous Indian trade route projects, such as the International North-South Trade Corridor (with India, Iran, and Russia) and the Asia-Africa Growth Corridor (led by India and Japan), have not gone from paper to port for a host of reasons. These, at least, had the merit of being viable. IMEC will suffer the same fate as these corridors, to some extent due to Israel’s bombing of Gaza but also due to Washington’s fantasy that it can “defeat” China in an economic war.

Source:Counter Punch

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There’s a rail revolution underway in Central Asia and Kazakhstan is leading the effort, using railways to bring political independance.

Kazakhstan, Azerbaijan, and Georgia announced in late June of this year that they are seeking to unify rail tariffs and set up a joint logistics company.  

This marks a major milestone in the process of expanding the Trans-Caspian International Transport Route (TITR) into the long-anticipated Middle Corridor between Europe and China.

The Middle Corridor is a shorter and sanctions-free alternative to the Eurasian Northern Corridor, which runs through the Trans-Siberian Railway, Trans-Manchurian Railway, Trans-Mongolian Railway, and the Baikal Amur Mainline.

Weeks earlier in May, a joint venture was agreed between Kazakhstan Railways and Singapore-based PSA International to further speed up the process that will see Central Asian and Kazakhstani railroads take a leading role in the logistics of Eurasian trade.  

This is the culmination of a vision of independence set in motion in the 1990s by the region’s most influential leader since the fall of the Soviet Union, Kazakhstan’s first president Nursultan Nazarbayev, who was in office from 1991 to 2019.  

Central Asian countries’ quest for geopolitical and geo-economic independence has grown further in recent months, following the war in Ukraine and Russia’s weakening hand in the region.

Russian influence in decline?

“For political reasons, these plans did not go forward [for decades], because Russia had a tremendous influence on Kazakhstan,” says Gulmira Rzayeva, managing director of UK-based consultancy Eurasia Analytics.

The Russian route used to carry more than 90% of the rail traffic between Europe and the Far East prior to the war—yet now, with sanctions reducing shipments over the Eurasian Northern Corridor by as much as 40% last year, support for the Middle Corridor is growing.

“Key European countries that used to be opposed or lukewarm to it, such as Belgium, Luxembourg, and the Netherlands, have recently turned into its proponents,” adds Rzayeva.

Similarly to the ancient Silk Road, it is often compared to, the Middle Corridor is more of a network of interconnected routes than a single, neatly delineated corridor.

A main artery runs through Kazakhstan, Uzbekistan, and Turkmenistan, crosses the Caspian Sea to Azerbaijan, Georgia, and the Black Sea on its way into Europe: a total of about 4,250km of rail lines and 500km of sea transport. Alternatives include routes through Iran and Turkey that need no ferries.

This amounts to about 2,000km less than the Eurasian Northern Corridor, as well as (if all goes to schedule) transit time savings of about a week—or more than three weeks when compared to the southern sea route that transits the Suez Canal.

Downsides to the Middle Corridor, however, include the complex logistics and potential instability in the many countries along the way – especially Iran, which similarly to Russia is a nation under sanction.

But even so, goods have already been travelling for several years on some of the routes. Last year, approximately 1.5 million tons of goods travelled through Kazakhstan along the TITR, over double the volume compared to 2021.

Connecting with Belt and Road

It is incorrect to conflate the Middle Corridor, as observers sometimes do, with China’s Belt and Road Initiative (BRI). The main difference is that the Middle Corridor is primarily of concern to Central Asia, while the BRI is both larger in geographic scope and seen as a conduit of Chinese influence.  

There is, nevertheless, considerable overlap – commentators are quick to point out that back in 2013, Kazakhstan and Nazarbayev personally played a key role in the launching of the BRI in the capital Astana as a kind of progenitor to the Middle Corridor – and today, funds from the BRI are expected to flow into the TITR.

“Much of what was discussed at the [2023 China-Central Asia] summit in Xi’an, China, included plans to upgrade bilateral investment agreements and increase cross-border freight volume between China and Central Asia,” says Felix Chang, a senior Asia expert at US-based think tank Foreign Policy Research Institute.

“Such plans would naturally give the Middle Corridor route a boost by accelerating the infrastructure needed to support trade and encouraging greater trade through it.”

The wider region is already busy building railways and other infrastructure. Kazakhstan alone has built 2,500km of railway in the past six years, to the cost of at least $35bn.

Uzbekistan and Kyrgyzstan are rapidly expanding their rail links, as well as their links with China. Azerbaijan and Kazakhstan, meanwhile, are working on their port capacities and ferries, seen as a potential bottleneck in the TITR.

Creating political independence for Kazakhstan

Kazakhstan and its neighbours’ strategic location, sandwiched between Russia and China, as well as other regional powers such as Turkey and Iran, can be both a foreign policy blessing and a curse.  

The challenge to turn the latter into the former is enshrined in Central Asia’s iconic “multi-vector foreign policy,” which originated in Kazakhstan and was formulated in the early 1990s by Nazarbayev, says Uluc Ozulker, a former senior Turkish diplomat who served as the country’s ambassador to France as well as other nations.

Despite stepping down in 2019 after almost three decades in power as president, in his own words to make room for a younger generation of leaders, Nazarbayev remains a highly respected and influential figure in the region, according to Ozulker.

While ruling with an iron fist, Nazarbayev turned the country into the region’s most advanced economy. He also invested the country’s oil wealth into nation-building and infrastructure, making a top priority of radically modernising the rail system. That was the expression of the multi-vector policy that shaped Central Asia’s transportation, economic development, and foreign policy.

This policy involved developing key parts of the Middle Corridor, including the dry port of Khorgos, the Khorgos-Eastern Gates special economic zone on the border of China, and Aktau Seaport.

More than a shortcut that would save money for everybody involved, the Middle Corridor is a vital backup to trade links running through Russia for the entire region, which has traditionally relied on the Eurasian Northern Corridor for its imports and exports and is now suffering from the political destabilization of that route.

Beyond that, by increasing Central Asia’s leverage over both Russia and China and safeguarding strategic links to Europe, the Middle Corridor can act as a pillar of political independence for Khazakstan and its neighbours, as they navigate the changing geopolitical climate between Russia and China.

Source: Railway Technology

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Source: Export

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