Saudi Crown Prince Mohammed bin Salman announced the signing of a memorandum of understanding about the new economic corridor (IMEC) between India, the Middle East and Europe. On the sidelines of the G20 summit held in India on September 9 and 10, he said that this project will contribute to developing and rehabilitating infrastructure, linking ports, increasing the passage of goods and services, and enhancing trade exchange between the parties. An MOU was signed between India, the US, UAE, France, Germany, Italy and the EU. It will also put the Middle East at its centre.

Bin Salman explained that the corridor would contribute to laying pipelines to export and import electricity and hydrogen which will enhance the security of global energy supplies. He said that the MoU supports efforts to develop clean energy and generate new, quality employment opportunities and long-term gains for all parties.

Analysts said that the new economic corridor means seven quick wins for countries in the Middle East. They are: developing and rehabilitating infrastructure, connecting ports, increasing the passage of goods and services, enhancing trade exchange, laying pipelines to export and import electricity and hydrogen, supporting clean energy development efforts, and generating new job opportunities.

Analysts also pointed out that, apart from the role of the new economic corridor in competing with the Silk Road that was announced in 2013, the economic order will also shape a new map of the global economy, in which the Middle East is the centre.

The economic order consists of two separate corridors. There is  the Eastern Corridor linking India with the Gulf and the Northern Corridor linking the Gulf to Europe. A railway, which is vital, will also be constructed, It will form a cross-border ship-to-rail network to complement existing land and sea transport routes to enable the transportation of goods and services.

Gains of Middle Eastern countries

Macroeconomic analyst, Imad Kamal, also said that the new corridor will achieve seven gains, whether for the countries of the Middle East or for the global economy. Analysts also said the announcement came at the right time since many countries were included in the BRICS group. (This includes Russia, India, China and South Africa)

Kamal explained that an economic corridor would enhance global trade at a time when it has been negatively impacted by the Corona pandemic and the Russian war in Ukraine, as well as securing safe routes for global supply chains. The new corridor will also enhance trade with the G20 and BRICS countries, as well as creating new markets for giant companies in the region, whether in the field of energy or petrochemicals.

He pointed out that the project could also reduce pressure on the foreign reserves of the countries of the Middle East, through the possibility of having a unified currency.

Promoting diversity in the post-oil era

In a recent research study, the Italian Institute for International Political Studies concluded that the economic corridor between India, the Middle East and Europe would enhance the role of Saudi Arabia and the UAE in global trade and supports diversification in the post-oil era. The project also places the Arabian Gulf at the heart of geopolitical competition, and the resulting implications for regional defence integration and maritime security.

The study explained that for the Gulf Cooperation Council (GCC) countries, the Belt and Road Initiative and the economic corridor are not conflicting initiatives. The economic corridor between India, the Middle East and Europe, supported by the US, has two immediate and symbolic results for the Arabian Gulf. The first is the strengthening of the economic and strategic role of Saudi Arabia and the UAE in global trade routes and global security, as well as the Chinese Belt and Road initiative. The second is that the new economic corridor should help to maximise Saudi economic and energy ambitions. The UAE will also be provided with new opportunities for diversification in the post-oil era. The corridor too will be useful for implementing the economic visions of these countries.