GT Voice: Grand US rail plan might be another road going to nowhere
Published: Sep 11, 2023 10:14 PM
Illustration: Tang Tengfei/GT

Illustration: Tang Tengfei/GT

By unveiling a multilateral railway and port deal linking the Middle East and South Asia over the weekend, US President Joe Biden appears to have started caring about the infrastructure needs of developing countries. But the lip services the US offered in the past have made it hard for the general public not to wonder if this is a new kind of American influencer project aimed at coaxing relevant countries and countering the China-proposed Belt and Road Initiative (BRI).

A memorandum of understanding on the India-Middle East-Europe Economic Corridor (IMEC) was signed by the EU, India, Saudi Arabia, the United Arab Emirates, the US and other G20 partners on the sidelines of the G20 summit in New Delhi, Reuters reported on Sunday. 

While China was not referred to in the deal, the development is widely seen by Western media outlets as a US attempt to fight China's BRI push on global infrastructure by "pitching Washington as an alternative partner and investor for developing countries."

But who can actually believe that the US-led IMEC is intended to promote cross-regional economic integration or regional development and prosperity? The geopolitical underpinnings of the project could not be more obvious. The US is trying to squeeze China's influence out of the Middle East and relevant regions by building large economic corridors as a counterweight to the BRI.

While it remains unclear how the IMEC project will be carried out, as with too many US strategic intentions, it is increasingly looking like a political tool, rather than a pure infrastructure project. This is because given all the political implications attached to the project, it is justified to worry about Washington's sincerity in offering the so-called infrastructure support to developing countries. Not all grand US plans will have to be eventually implemented as planned, especially when the main function is to trick other countries into becoming pawns in the US efforts to counter the BRI.

Leaving aside the political purposes behind the project, the economic issues it raises are also enough to make one wonder about the credibility of its implementation and prospects. For example, which country will pay for the multilateral infrastructure project that will probably cost tens of billions of dollars? Would Americans rather spend a fortune in the Middle East and India, or on improving their own outdated rail network where derailments have become increasingly frequent? The answer is clear. The US government should focus on improving the country's old rail systems that are in dire need of upgrades, rather than concocting plans to contain China.

Then comes the second question: What will the new rail line carry? Will there be enough trade to justify it? Take India. India is the EU's 10th-largest trading partner, accounting for about 2 percent of the EU's total merchandise trade. Moreover, there is convenient maritime transport among India, the Middle East and Europe. So it is highly questionable whether the region needs to build a rail network for the limited trade volume.

If the IMEC is to truly boost regional trade, then it will need to be connected with the trans-Asian or East Asian rail networks, such as the one linking China and Nepal, instead of serving as an isolated rail line. After all, it has to reach the economically active region with large trade flows to play its due role and explore new possibilities. This also means that the IMEC project would not make economic sense if it squeezes out China.

Whether or not these issues can be addressed, the US needs to first offer more practical actions to show its sincerity in pushing regional infrastructure development.

As for India, compared with the multinational rail plan full of uncertainty, maybe what matters most is how the country can modernize its domestic rail system so that it can play a more important role in its economic development domestically.