Egypt will lose “massive” amounts of much needed financial revenue generated by the Suez Canal if the India-Middle East-Europe economic corridor is established, Israel’s economic Globes newspaper said.
The paper quoted Yoel Guzansky, a senior researcher at Israel’s Institute for National Security Studies (INSS) specialising in Gulf politics and security, as saying that Egypt, which controls the Suez Canal, through which ten per cent of the world’s trade and seven per cent of global oil shipments pass, will be the main loser as a result of the project, explaining that revenue from the Suez Canal shot up to $9.4 billion in the fiscal year 2022-2023, from $7 billion the previous year. For Egypt, he explained, which has debt to the International Monetary Fund (IMF) amounting to $12.5 billion, this revenue is “vital”.
“A reduction in the dependence of Europe and India on the Suez Canal, and a shortening of the time taken to transport goods between them by means of the new transport corridor, is liable to be a critical blow to Egypt,” he added.
According to the Israeli expert, Russia and Iran will also lose because of the US-led initiative, after constructing the International North-South Transport Corridor to circumvent sanctions and boost revenues. The project is also expected to reduce China’s influence in the Middle East in general, and in Saudi Arabia in particular, whilst shortening the supply chain.
On Saturday, Saudi Arabia, the UAE, India, France, Germany, Italy, the US and the EU signed a deal during G20 meetings in New Delhi to establish the India-Middle East-Europe Economic Corridor (IMEC). The IMEC will comprise two separate corridors: the east corridor will connect India to the Arabian Gulf and the north corridor will connect the Gulf to Europe.
Guzansky said the project is expected to begin in the port of Piraeus in Greece, and from there, it is expected to head by sea to the Israeli port of Haifa, then by railway to Saudi Arabia and the UAE via Jordan. From the UAE, goods will be loaded onto ships that will make their way to Mumbai in India. He added that in addition to the main road, it is expected that roads will be built to other countries in the region, including Bahrain and the Sultanate of Oman.
“There is another issue that will affect the project’s future, which is the political situation in Israel. Such a project will require large investment on Israel’s part, and so Prime Minister Benjamin Netanyahu will have to secure broad consent to it within his coalition, and possibly from the opposition as well. Netanyahu could find himself trapped between his coalition partners, such as Bezalel Smotrich and Itamar Ben-Gvir, and the opposition, which seeks to deny him any diplomatic achievement that might improve his standing,” he explained.