Israel’s war on Gaza is destroying IMEC’s viability
The Resistance Axis seeks not only to ‘boil the Israeli frog’ but also, incrementally, to unravel the US’ biggest geopolitical projects in West Asia, including the India–Middle East–Europe Economic Corridor.
The Gaza war’s impact on Washington’s geopolitical agenda in West Asia is becoming starker each passing week. The region’s Axis of Resistance counter-offensives cast doubt on yet another White House project: the viability of the India–Middle East–Europe Economic Corridor (IMEC), a US-designed route that relies on Israel as a crucial link between east and west.
Security and regional integration
Studies have shown a direct correlation between security and regional integration, indicating that insecurity within a country can undermine its pet regional projects. A recent International Monetary Fund (IMF) report released on 7 May shows countries re-evaluating their trading partners based on economic stability and security concerns.
The study reveals that foreign direct investment (FDI) is increasingly guided by geopolitical risks. It further notes that the Ukraine war has shifted policymakers’ focus towards enhancing economic resilience, which is crucial for maintaining operations during crises. This shift may reduce interest in economic integration projects like trade corridors designed by the west to counter China’s ambitious, multi-trillion-dollar Belt and Route Initiative (BRI).
The report also discusses the heightened geopolitical risk associated with Israel following multiple attacks by the Resistance Axis, notably Lebanon’s Hezbollah, which conducted 1,194 attacks against the occupation state between 8 October 2023 and 5 March 2024 – the highest attack rate in Israel’s short history.
This is in addition to attacks from Iraqi resistance factions, Yemen’s Ansarallah-aligned forces, and Iran’s direct retaliatory strikes on 14 April in its Operation True Promise. These developments have significantly disrupted Israeli port and shipping operations, most markedly at its southernmost port.
In December, the chief executive of the Eilat Port told Reuters that the port’s activity had dropped by 85 percent since Yemeni forces began their attacks on Israeli-linked ships in the Red Sea.
At the onset of the Gaza war, the port of Ashkelon and its oil refinery, the closest to the Gaza Strip, were shuttered. Ashdod Port, located about 40 kilometers (25 miles) north of Gaza on the Mediterranean coast, while continuing to operate, has been partially damaged. According to Eli Bar-Yosef, acting executive director of the latter facility, in the first two weeks after 7 October, Israel was forced to redirect some 11,000 containers bound for Ashdod to other northern ports. Even the port of Haifa has been made vulnerable to attacks from the Iraqi resistance, which undermines the confidence of companies relying on the port as a connecting point between Asia and Europe.
On 27 April, a new party entered the resistance mix. The Bahraini Al-Ashtar Brigades announced its targeting of an Eilat site belonging to Israeli company Trucknet, which is also linked to the massive IMEC project. This raises further doubts about the US-backed route’s viability.
IMEC’s uncertain future
During the G20 summit last September, US President Joe Biden announced the IMEC initiative, which would involve the participation of India, Saudi Arabia, and the UAE, along with Israel, France, Germany, Italy, and the United States.
According to a White House statement, the envisioned trade corridor will feature a rail line, clean hydrogen pipelines, and economic zones stretching from India through the UAE, Saudi Arabia, Jordan, and Israel to the port of Piraeus in Greece.
Since the announcement of its corridor project, US statements have focused on the perceived benefit of IMEC in helping to promote economic integration and partnership within West Asia.
However, the war on Gaza and an ever-elusive ceasefire agreement have raised serious doubts about the feasibility of the IMEC. The project’s success largely depends on regional peace, particularly along the corridor’s route, where current tensions could dampen investor confidence. The Axis of Resistance’s ability to target all Israeli ports further complicates reliance on Tel Aviv as a key corridor hub, most recently Yemen’s intention to extend anti-Israeli operations to the Mediterranean Sea.
In addition, the corridor's success requires formal relations between its parties, which the US administration has been working on for years. Israel’s brutal military assault on Gaza has stalled normalization talks with Saudi Arabia, a key stakeholder in IMEC and other US-backed projects in West Asia.
Israeli Prime Minister Benjamin Netanyahu continues to refuse to implement Riyadh’s conditions for normalization, which include halting the carnage in Gaza and establishing a Palestinian state within pre-1967 borders.
While Saudi Arabia has long insisted that Israel’s approval of the two-state solution was a key condition, it has watered down its demand – despite worsening Israeli behaviors – to merely asking Tel Aviv to agree to “set a path to the establishment of a Palestinian state.” This, of course, was already done in the 1993 Oslo Accords, a deal which Israel promptly set about violating over the next three decades.
With renewed global calls for Palestinian statehood, some skeptics argue that Saudi Arabia’s precondition for normalizing relations with Israel, contingent on this development, might primarily aim to appease Arab public opinion rather than significantly advance the Palestinian cause.
‘Game-changing’ or game over?
According to Gideon Rachman in the Financial Times, there’s a growing debate in the US about whether Israel still serves as a strategic asset or has become a strategic liability – a perspective supported by John Hoffman’s “Israel is a strategic liability for the United States,” published two months ago in Foreign Policy.
The IMEC, announced by Biden as a “game-changing investment,” aligns with Washington’s strategic interests, particularly in countering China’s BRI with significant investments in Asia, including India.
But the Gaza war, heavily supported by Washington, has exposed the challenges Israel’s political instability and military engagements pose to US strategic interests throughout West Asia and beyond. First up on the chopping board of US-backed geopolitical projects may very well be IMEC. It is also unlikely to be the last of Washington’s regional projects to unravel because of Tel Aviv.