Intersections of influence: IMEC and Europe’s role in a multipolar Middle East

Last week’s G20 announcement establishing the “India-Middle East-Europe economic corridor” (IMEC) – signed by India, the United States, the European Union, France, Germany, Italy, Saudi Arabia and the United Arab Emirates (UAE) – has been hailed as a historic breakthrough by European Commission president Ursula von der Leyen. The project aims to build a railway and, later, digital and electric cables, as well as a clean hydrogen pipeline, from India to Europe via Jordan and Israel. For the West, it represents an effort to compete with growing Chinese influence in the Middle East. As Europeans prepare to deliver a concrete action plan for the project – one which will, first and foremost, need to overcome huge viability challenges – they need to be guided by realistic geopolitical expectations. In a region that is embracing global multipolarity, IMEC can serve as a platform to affirm some Western economic influence and promote stabilising economic growth; it will not, however, be a vehicle to pull regional powers away from Beijing.

IMEC will quickly force the West to confront the mismatch between how they and key Gulf actors see the multipolar world. The West believes it can still cement its regional influence at the expense of China, offering an alternative to Beijing’s Belt and Road Initiative (BRI). But Gulf actors see this agreement within the context of a new global order in which they can balance ties with both China and the West to maximise their own gains. Regional analysts describe the multipolar world as one not conditioned by superpowers, but where superpowers are “likely to be conditioned by middle and smaller powers,” such as the Gulf monarchies themselves.

The Gulf monarchies do not share European and US concerns about the vulnerabilities of economic dependence on China and energy ties to Russia. Instead, they see their geopolitical centrality tied to their position as global hubs, capitalising on their geo-strategic location between Asia, Africa, and Europe. If anything, the Gulf monarchies are looking to further enhance connectivity, which will increase their own reliance on fully globalised supply chains. In this sense, IMEC will align rather than compete with the BRI, with regional actors viewing it in their interest to work with both. As such, it is unsurprising that this agreement was signed just days after Saudi Arabia and the UAE were formally invited to join the BRICS grouping.

Even as IMEC moves forward, the Gulf Cooperation Council (GCC) states find themselves emboldened by their increased geopolitical and economic leverage as the West, China and Russia compete for their partnership following the invasion of Ukraine. As a result, they will resist Western pressure to backtrack on their increasingly strategic embrace of China, as well as ongoing cooperation with Russia. This is unlikely to change even if the Gulf monarchies remain dependent on the US for their security, a dynamic that Washington is now reaffirming – via new naval deployments, a new artificial intelligence security architecture known as Task Force 59, and prospects of security guarantees for Riyadh in exchange for normalization with Israel (the outlines of which may be visible in a new US-Bahrain security agreement). For the US, these security commitments reflect a bid to reverse regional perceptions of a US retrenchment. But it is increasingly clear that regional states feel that US ambitions – driven both by a desire to counter China and Biden’s domestic political aim to widen regional normalisation with Israel – have given them the space to make unprecedented demands of Washington.  

Indeed, it is notable how fast the Gulf’s ties with Russia and China are growing. Since the Ukraine war, the UAE has become a safe haven for Russian capital, as well as a key trans-shipment hub of dual-use technology to Russia. In the first five months of 2023, the UAE exported $233m worth of computer components, and communications and electronic equipment to Russia, compared with $2m in the same period last year. High-level US and European concerns, including those voiced by von der Leyen to her Emirati counterpart Mohammad bin Zayed in a bilateral meeting, have been shrugged off by the UAE, demonstrated by their unwillingness to shift position. Similarly, Saudi Arabia has strengthened its energy partnership with Moscow to keep oil prices high despite Western pressure at the highest level, while also importing record quantities of under-priced Russian oil products.

Meanwhile, China is now the largest single buyer of GCC oil and gas. Despite Western alarm, Chinese firm Huawei dominates the GCC market for digital infrastructure, Beijing has stakes in strategic regional ports such as Oman’s Duqm and Saudi Arabia’s Jeddah Islamic Port, and there is a Chinese naval base in the UAE which could be used for civilian and military purposes.

At the core of GCC relations with Russia and China, there is a shared aversion to Western sanctions, fuelled by global dependency on the US dollar. Beijing is actively discussing de-dollarization measures, including the petro-yuan and the establishment of crypto-currency platforms to circumvent the dollar. The establishment of a new common currency and of tools for joint non-dollar operations, for instance in the New Development Bank, are now key matters under discussion within the newly enlarged BRICS group.

IMEC will not reverse these dynamics. But this is not to say that the project cannot serve European interests. It can still represent a tool to cement economic partnerships and influence with the region, and it may even create leverage to pressure the Gulf to de-risk from Beijing in specific areas. Europeans can stress that excessive dependency on Beijing exposes the Gulf to risks of economic coercion and supply chain bottlenecks, as well as to the repercussions of China’s economic stagnation.

Europeans can also make clear that if Gulf rulers allow their countries to be exploited by Moscow and Beijing as backdoors into Western technology, financial trading, and goods and services markets, it would pose severe constraints on how deep IMEC’s connectivity projects can develop. This would limit the Gulf’s access to sensitive projects, as demonstrated by the hesitation to allow Saudi Arabia to join the UK, Italy, and Japan’s next-generation fighter jet alliance, the Global Combat Air Program, and the UAE’s failure to secure US F-35 jets. More recently, contacts with sanctioned Russian and Chinese defence firms led to the collapse of a mega-deal between Saudi firm SCOPA Defense and US counterpart RTX, that would have provided Saudi Arabia with the technological know-how to build sophisticated air defence systems.

IMEC will likely result in Europe’s increased influence alongside China’s, rather than in its place. This dynamic will be reinforced by the fact that IMEC will emerge as a shared public good, even partly for those it is competing against, such as China (or even the likes of Iran). These states will also look to utilise the infrastructure network, an outcome likely to be supported by Gulf monarchies looking to maximise their own economic gains and cement regional economic de-escalation. But Europeans should be willing to accept this, and actively work with Gulf partners to stress IMEC’s vision as a platform to promote inclusive and stabilising economic growth across the wider region. An exclusive approach that only benefits the UAE, Saudi Arabia, Jordan, and Israel – potentially motivated in part by Biden’s aim to secure Israel-Saudi normalisation – will fail, only heightening regional tensions in the process. Instead, IMEC’s action plan should be left open for extensions towards other regional actors, such as Oman, which could provide wider port access rather than relying solely on the UAE; Turkey, whose inclusion could encourage de-escalation in the eastern Mediterranean; and Egypt, to assuage concerns that IMEC’s major goal is to bypass the Suez Canal. Here, IMEC’s passage through the Strait of Hormuz should also reinforce the case for bolstering regional de-escalation with Iran.

To succeed, IMEC’s participants will also need to ensure that the project materialises and is enticing enough to meaningfully incentivise regional players. The project will cost tens of billions of dollars and face huge logistical challenges, which will require a significant Western commitment. But if pursued with serious commitment, backed by realistic expectations, and tied to a vision of inclusive regional economic integration, IMEC could still play a meaningful role in affirming Europe’s geo-economic relevance in the Gulf region.