Why is it in the news?

Recently, Memorandum of Understanding (MoU) was signed at the G20 Summit in New Delhi establishing the India-Middle East-Europe Economic Corridor (IMEC).

About IMEC

• IMEC envisions a network of transport corridors to enhance economic integration between Asia, the Arabian Gulf, and Europe.
• IMEC is part of the Partnership for Global Infrastructure Investment (PGII), a joint initiative by multiple countries.

PGII Origins and launch

• PGII was first announced during the G7 Summit in the UK in June 2021.
• Officially launched in 2022 during the G7 Summit in Germany.
• Aims to mobilize nearly $600 billion from G7 countries by 2027 for global infrastructure projects.

PGII Goals and Principles

• Emphasizes transparency, climate-resilient infrastructure, gender equality, and health infrastructure development.
• Aims to diversify infrastructure funding options for developing countries.

Significance of PGII

• Investment Plans for India:
• US International Development Finance Corporation to invest up to $30 million in Omnivore Agritech and Climate Sustainability Fund 3.
• The fund focuses on impact venture capital in agriculture, food systems, climate, and the rural economy.
• Investments aim to enhance food security, climate resilience, and agricultural productivity for smallholder farms.
• Investment Plans for Other countries:
• Similar projects announced in West Africa, Southeast Asia, and South America.
• Several projects announced under PGII, including clean energy and telecommunications initiatives in Indonesia.
• Part of the Build Back Better World (B3W) initiative.
• Announced at the G7 summit.
• Concerns about the inclusion of hard infrastructure projects in the investment portfolio.
• PGII seen as a repackaged version of B3W.
• Significance of countering China’s BRI:
• BRI seen as not just an economic project but a tool for political control.
• Concerns about potential Chinese neo-colonialism and unsustainable debt burdens in partner countries.
• Environmental impacts are also a concern.
• Lack of transparency in China’s BRI agenda.

EU’s Commitment

• The European Union (EU) plans to activate €300 billion for critical connectivity projects through its Global Gateway program.
• Half of this funding is designated for Africa, with over 90 identified projects in various regions.

Competition and future prospects

• The success of PGII depends on various factors, including China’s response and the ability to secure funding and private-sector participation.
• PGII and BRI may compete, potentially benefiting countries seeking infrastructure investments.