The Banking Executive Magazine - October 2023

natives. But the new project would not necessarily undermine China’s global infrastructure project, which has its own independent existence. India was not part of the Belt and Road Initiative, so this initiative gives connectivity to India. Impact on India India will be at the centre of the cor- ridor connecting it to Europe and the Middle East. It will not only improve infrastructure and communication, but also generate new employment opportunities and create new supply chains. This corridor is a major step towards helping India become a developed country by 2047. Impact on Europe India and Europe are expected to gain from the new initiative as they focus on accelerating the growth of their economies and diversifying supply sources away from China. European Commission president Ur- sula von der Leyen stated that the rail ink would make trade between India and Europe 40% faster. Impact on Saudi Arabia India and Saudi Arabia signed eight agreements to boost cooperation in a range of areas from energy to inter- connectivity, digitalisation and elec- tronic manufacturing to finance and security. Saudi Arabia, Crown Prince Mo- hammed bin Salman described IMEC as transformative for the region and the global economy. Speaking in New Delhi, he pointed to the long- run job creation potential of the new project and the expected growth in trade between India and the Middle East. India is already a key trading partner for Saudi Arabia and the two countries are signing dozens of bilat- eral deals to strengthen their trade and investment ties. Crown Prince Mohammed bin Salman lauded the Partnership for Global Infrastructure and Investment and announced Saudi Arabia’s pledge of $20 billion for its projects, while also suggesting the need for in- tegration between it and the IMEC. Impact on UAE The new trade link between India, Middle East and Europe will help the UAE diversify its economy away from oil. It is expected to help the UAE double its non-oil trade by 2031 while benefiting other countries in- volved in the project and boosting trade relations with Europe and India. UAE and G20 non-oil trade up 14% in first half to reach $181.9bn. The new economic corridor will help the Emirates to increase its non-oil trade as it focuses on bolstering its trade relations with different coun- tries around the globe. United Arab Emirates aims to sign 26 comprehen- sive economic partnership agree- ments by 2031 as it seeks to attract more investment and diversify its economy. IMEC will also help to bolster clean hydrogen exports, as part of joint ef- forts to lower greenhouse gas emis- sions, and integrate environmental conservation in the initiative. The UAE aims to become net zero by 2050 and is developing a number of new renewable energy projects. Impact on GCC From a Gulf perspective, the new venture will solidify the region’s his- torical position as the primary trade route linking Asia, Europe and Africa. By emphasizing trade in energy, the project is banking on the region’s comparative advantage in providing cheap and reliable energy to the rest of the world. The venture will solid- ify the Gulf’s historical position as the primary trade route linking Asia, Europe and Africa. Impact on MENA In the medium term, integrating trade infrastructure (ports, airports, logis- tics) in the wider Middle East and North Africa MENA region would lower costs and facilitate intrare- gional trade, leading to greater re- gional integration. Impact on countries on the route Countries along the route also stand to benefit through improved connec- tions with two of the world’s leading markets, which should present nu- merous new business opportunities. THE NEED FOR NEW GLOBAL INFRASTRUCTURE IN CHANGING WORLD POWER IMEC is changing the world balance of power. The world is changing from unipolar to multipolar, where various countries exercise power in shared and collaborative manner. This is very ambitious and need to be supported by a global infrastructure empowered by digital technology and supported by a global legal framework to facilitate trade and in- terconnectivity at a global scale. the BANKING EXECUTIVE 20 ISSUE 178 OCTOBER 2023