G20 Summit: PM Modi announces India-Middle East-Europe Economic Corridor to counter Beijing’s OBOR

On a Saturday that witnessed a consensus on the leadership declaration, inclusion of the African Union and an international alliance on biofuels at the ongoing G20 intergovernmental forum New Delhi, it was left to Prime Minister Narendra Modi to close the day with the announcement of a new economic corridor to counter China’s One Belt, One Road (OBOR).

In a session co-chaired with US President Joe Biden, Modi said the proposed corridor would emerge as an effective means of economic integration between India, West Asia and Europe.

“In its development journey, India has accorded the highest priority to this area. Apart from physical infrastructure, investments in social, digital and financial infrastructure are taking place at an unprecedented scale,” said Modi.

Even as India’s National Security Advisor Ajit Kumar Doval, seated in the row behind the prime minister intently listened to the deliberations, Modi took a subtle dig at China for using OBOR to cast the net of its ‘debt trap diplomacy’ wide in a bid establish its hegemony over especially resource-rich or strategically important middle and lower-income countries.

“We have implemented infrastructure projects in areas such as energy, railway, energy, water and technology parks in several countries of the Global South as their trusted partner. In these endeavours we have laid special emphasis on a demand-driven and transparent approach,” he added.

He said that using the Partnership for Global Infrastructure and Investment (PGII), the forum could make a significant contribution to reducing the infrastructure gap in countries of the Global South.

He further said that improving connectivity was not only a means to increase trade between different countries but also an opportunity to increase mutual trust by following certain fundamental principles.

“For example, compliance with international norms, rules and laws. Respect for the sovereignty and territorial integrity of all nations; promoting financial viability in place of increasing the debt burden; and following all environmental-related standards.”

China’s ambitious OBOR project, which is estimated at anywhere between $4-5 trillion, seeks to establish a New Silk Route by connecting 65 countries in East Asia, East Africa and Central Europe. The project that is targeted for completion by 2049 is, however, stalled in many countries over fears of cheap Chinese loans eventually mounting into unpayable debts to compromise national sovereignty.

This is a real big deal!

US President Joe Biden said the announcement took forward the US intent to work with its partners like India to address income inequalities across lower and middle-income countries by investing in economic corridors.

“Someone once said on a positive domestic action that ‘It was a big deal.’ This is a real big deal!” said Biden.

He said a key component of the corridor included investments in shipping and rail infrastructure extending from India all over Europe, connected by the UAE, Saudi Arabia, Jordan and Israel.

“Unlocking opportunities that will make it far easier to trade and export clean energy, expand access through reliable clean electricity, lay cables that will connect communities and secure the internet. It will also contribute to a more stable, prosperous and integrated Middle East.”

The project will also involve investments in a new railway line in Africa stretching all the way from a port in Angola to the Democratic Republic of Congo and Zambia, all the way to the Indian Ocean on the other side of the continent.

He further added that it was one of the first game-changing investments proposed by the US, as it will continue to develop such projects across Africa, Asia and the Americas.

“And together with our partners we are working to mobilise trillions [of dollars] of investments needed to close infrastructure gaps around the world including the formation of a new investor forum that the United States will host in a couple of weeks,” informed Biden.

This could perhaps be the most ambitious infrastructure creation programme announced by the US since the 1948 Marshal Plan for the rehabilitation of 17 western and southern European countries ravaged during World War II. It has its basis in the world’s fastest-growing major economy perception as a far more reliable partner compared to China by most countries globally and the global demand for developing resilient supply chains.

For instance, in several African countries, consumers prefer buying Indian automobiles to relatively cheaper products from Chinese automakers for their durability.

Also watch: From selling detergent door-to-door on his bicycle to competing with Unilever and P&G; Meet Nirma founder Karsanbhai Patel and know the tragic story behind the iconic Nirma Girl