Thewesternbalkans
A grand US-led connectivity project was announced at the G20 summit in New Delhi in September 2023, connecting India with Europe via the Persian Gulf. It is intended to rival China’s Belt and Road Initiative (BRI). India-Middle East-Europe Economic Corridor (IMEC) will pass through India, the UAE, Saudi Arabia, Jordan, Israel and the EU. The founding members also include the US, Germany, France and Italy.
The conflict in the Middle East, which erupted shortly after the announcement of the corridor initiative and continues to this day, has led to the suspension of plans for the project. However, there is no abandonment of the project and it can still be implemented, with all participants able to achieve their geopolitical goals. During Indian Prime Minister Narendra Modi’s visit to the UAE in February 2024, India and the UAE signed the first formal agreement for the construction of the corridor, and French President Macron appointed a special representative for IMEC. The UAE ambassador to India Abdulnasser Alshaali suggested on Tuesday that „the ongoing Middle East conflict has posed significant challenges to the ambitious India-Middle East-Europe Economic Corridor project“. Despite the hurdles, he said, progress has not been halted.
These are signals that despite the challenges, the participating countries are pursuing their goals.
The regional instability in the Middle East over the past year, caused by the war in Gaza, Houthi attacks in the Red Sea, the escalation of tensions between Israel and Iran, and the change of power in Syria, have led to the fragmentation of the IMEC project and the search for alternatives. Geopolitical polarization strongly influences the choice of these alternatives.
Not alternatives, but additional routes
The participating countries in IMEC must agree that the project offers not so much an alternative as additional routes. IMEC can hardly replace the Suez Canal. India’s position is that IMEC’s entry point into Europe should not be just one. The Chinese have settled in Piraeus, which is why, according to Indian experts, ports in Italy (Genoa, Trieste) or France (Marseille) are considered suitable. After Italy’s withdrawal from the Chinese BRI initiative, Trieste is becoming increasingly attractive to India.
In the current geopolitical constellation, it is becoming increasingly clear that IMEC should be seen as a long-term complement to current trade routes. Participating countries should insist that the corridor be expanded into a digital, energy and logistics network, i.e., that it has a network character. It will help liberalize trade with India (based on the EU-India Free Trade Agreement) and support all participants in their transition to renewable energy. In this regard, ways to modify the original IMEC Memorandum of Understanding could be sought.
Competing Corridors
The proposed IMEC will inevitably be compared to the Intermodal Central Corridor between China and Europe used by the Chinese, as well as to the competing Northern Land Corridor through Russia and the Southern Land Corridor through Iran. Due to sanctions against Russia and Iran and due to a desire to develop its western provinces, China is focusing on the use and development of the Central (Middle) Corridor.
The Chinese side is interested in modernizing underdeveloped or underloaded Black Sea ports such as Varna, Burgas, Constanta, Batumi and Chernomorsk (Ukraine). The Chinese China Engineering Company Ltd. completed the deepening of the Chernomorsk port to 14.5 m in 2019. In the same year, the Varna port (Varna Logistics Center) was expanded with financing from the state-owned China Development Bank and with the participation of the Chinese companies China Machinary Engineering Corporation and CERIECO. The project worth 120 million euros was announced by the Chinese side as part of the BRI. A cooperation agreement is also being discussed between the port of Burgas and the port of Shantou, Guangdong province in Southeast China. At this stage, however, the Chinese presence in the NATO member countries Bulgaria and Romania remains without noticeable economic activities, and China is seeking to acquire and control small and underdeveloped ports.
In parallel with the development of the intermodal corridor from the eastern coast of China to Central Europe through the ports of Piraeus and Rijeka (the state-owned Chinese company COSCO), more and more Chinese companies are showing interest in using the intermodal Central Corridor (the Trans-Caspian International Transport Corridor – TITR). China failed to join the project to build the only deep-sea port on the Eastern Black Sea Coast – Anaklia in Georgia, which is why it is actively using the multimodal corridor Batumi/Poti – Constanta. The Chinese state-owned company COSCO and the eastern Chinese port of Lianyungang are showing specific interest in the Georgian port of Batumi.
Beijing’s interest in ports with all their associated infrastructure in the Black Sea basin, including intermodal terminals, should also be seen in the context of China’s preparations for entering e-commerce in Europe and the need for logistics capacities.
Opportunities for the Balkans
Although the Black Sea and Balkan countries have no plan or concept for participation in IMEC, the crisis in the Middle East has shown the importance of the Black Sea, which is the only entrance to the Middle Corridor from Central Asia.
The role of the port of Constanta is increasing enormously, but it has limited capacity (dozens of container ships are waiting at any given moment in front of the port, and Constanta’s connection with Turkish ports is being activated). At least two more docks are needed in Constanta port. The railway network in Romania is also problematic, as it does not meet economic needs, since the average speed of freight trains in the country is 40 km. The weaknesses of the road and rail infrastructure in Romania do not allow China to actively use the corridor to Central Europe, which is why the preferred destination for Chinese transit will be the southern European ports. In principle, the Romanian leadership is willing to participate in the IMEC project, but a signal of political will needs to be given.
The unstable situation in Syria may also prompt the countries participating in the India-Middle East-Europe economic corridor initiative to use alternative/additional routes. Some of the participants in the initiative themselves, such as Saudi Arabia and the UAE, do not see it as a challenge to China, but as a diversification of their own economies and interregional connections. This gives the Balkan ports (Greek, Croatian, Bulgarian, Romanian), along with the Italian ones, a chance to attract attention to themselves.
In connection with the IMEC corridor, the Three Seas Initiative, which already includes 13 countries (after Greece joins in 2023), is also gaining importance. Countries outside the region are also showing interest in it – the USA, Germany, Japan, Ukraine, Moldova. The EU is paying more attention to North-South connectivity between EU member states located between the Baltic, Adriatic and Black Seas.
Although the ongoing conflict in the Middle East is a challenge for IMEC, the US will not give up on it, as it is through it that they oppose the influence of Russia and China in the Middle East.
