Problem: Notwithstanding the fact that China’s Belt and Road Initiative (“BRI”) was first announced a decade ago, the U.S. has yet to articulate a coherent alternative to BRI. The Biden Administration announced the formation of an India-Middle East-Europe Corridor (“IMEC”) in September 2023 at the G-20 Summit. Its viability was in serious doubt even before the outbreak of hostilities between Israel and Hamas in October 2023. First, IMEC does nothing to address the fact that India is surrounded by countries aligned with China and BRI (i.e., Pakistan, Bangladesh, Nepal, Sri Lanka and Maldives). It effectively cedes these countries to BRI without any effort to counter Chinese influence. Moreover, IMEC excludes the major population centers of the Middle East in its entirety – in particular, Egypt and Turkey – and hence, will fail to boost the intra-regional trade volumes necessary to support a new economic corridor with major infrastructure investments. The exclusion of Turkey from every major economic bloc – the European Union, IMEC and BRICS – has created a power vacuum in the Mediterranean, South Caucasus and Central Asia such that Turkey will likely resort to self-help mechanisms, including military, to extend its de facto or de jure boundaries. This may ultimately impact the maritime border between Greece and Turkey. The U.S. also risks further destabilization in Egypt due to lower volumes of trade through the Suez Canal. Egypt needs to diversify its concentrated economic risk in the Suez Canal with an economic interest in a land-based trade corridor. Finally, IMEC is disconnected from the U.S. Central Asia Trade and Investment Framework Agreement encompassing Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan and fails to build any synergies between Central Asia and India. To summarize, IMEC is an incoherent “archipelago” strategy that willfully ignores the economic and geostrategic externalities it creates from the outset.
Strategic Alternative to IMEC in the South Caucasus: Armenia is a democracy in the South Caucasus that should partner with the U.S. to create a viable geopolitical and economic alternative to IMEC for the Greater Middle East. Key objectives include the following: (i) a balance of power in the South Caucasus that does not facilitate Armenia’s reliance on Russia, Turkish hegemony in the region nor Chinese influence; (ii) economic alignment between India and Egypt such that there are robust trade volumes in a Western-aligned economic zone and China has severely curtailed options vis a vis BRICS as a viable economic bloc; (iii) linkages between Central Asia and the West without Turkish, Russian or Chinese disintermediation; and (iv) a balance of power between Egypt (Turkey’s major peer competitor) and Turkey in the Greater Middle East. To accomplish these objectives, the following steps must be immediately implemented: (i) a strategic partnership between Egypt and Armenia regarding the development and operation of the Syunik Corridor in Southern Armenia as a land-based “Suez Canal” and (ii) a strategic partnership between Armenia and India regarding the Syunik Corridor to align economic interests amongst Armenia, Egypt and India and further boost trade volumes. Turkey and Azerbaijan may participate in this Syunik Corridor on the same terms as other countries. The U.S. should create a single customs and border control data architecture aligned with U.S. standards facilitating trade amongst all of these regions rather than demand multiple countries develop duplicative infrastructure that currently cannot be developed or supported at scale. Hence, the U.S. will have a permanent barrier to entry for any competing economic corridors that attempt to dislodge U.S. economic and geostrategic interests.
Risks: If the U.S. builds no strategic alternatives to IMEC that addresses the inadequacies outlined above, the U.S. will precipitate even more instability in the wider Middle East and risk permanent economic and military isolation. Turkey has developed an alternative to IMEC known as the Iraq Development Corridor (“IDC”) that links India and the GCC to Iraq, Turkey and Europe. The IDC is linked to Iran via the Basra-Chalamja Rail project. Hence, IDC is aligned with 3 out of the 4 large population centers in the Middle East (i.e., Turkey, Iraq and Iran). Concurrently Turkey intends on linking the Syunik Corridor with China’s BRI. Collectively these two corridors will permit Turkey to triangulate between the West and China with maximum effect and block key U.S. economic, political and geostrategic initiatives. Armenia will be collateral damage in this larger geostrategic positioning, and India – the 5th largest economy in the world -- can easily be disintermediated by adjacent markets aligned with China. The balance of power between Turkey and Egypt in the wider Middle East will be permanently altered and thereby create even greater instability. The U.S. private sector will not benefit from any new large markets aligned with U.S. standards, and the U.S. taxpayer will be asked to support economically incoherent corridors through U.S. government largesse to large cap U.S. companies currently aligned with U.S. economic isolation. In an era when U.S. spending on its national debt interest now exceeds the military budget, it should be a bi-partisan priority to reconceptualize U.S. global leadership with a carrot rather than a stick.