1. Home
  2. Blog
  3. UPSC
  4. International Relations

India-Middle East-Europe Economic Corridor (IMEC)

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.

Get free UPSC Updates straight to your inbox!

Discover more from AMIGOS IAS

Subscribe now to keep reading and get access to the full archive.

Continue reading