New Delhi: Biden’s Surprising Turnaround in U.S.-Saudi Arabia Relationship
Saudi Arabia’s Double Dipping and the Opportunities for Other Economies
The Biden-Led Ship-to-Rail Economic Corridor and its Implications
Fragmentation of the World Economy and the Complex Matrix of Relationships
The Risk and Opportunity Cost of Exclusion
China’s Belt and Road Initiative vs Biden’s Infrastructure Pact
Biden’s Attempt to Reboot U.S. Influence in the Middle East
Cautionary Lessons from China’s BRI and Debt Risks
The Strategic Alternative and Biden’s Smart Maneuver
The Rise of Middle Powers and India’s Global Leadership
Even for those who are familiar with the ups and downs of the U.S.-Saudi Arabia relationship, it was surprising to see President Joe Biden shaking hands with Saudi Crown Prince Mohammad bin Salman at the recent G20 leaders’ summit in New Delhi. Just a year ago, Biden had warned of “consequences” after Saudi Arabia decided to cut crude production and increase oil prices during Russia’s war in Ukraine. However, Saudi Arabia’s actions since then have shown a shift in alliances and economic opportunities.
Saudi Arabia, along with five other countries, has joined the China-dominated BRICS coalition. Additionally, Saudi Arabia has signed a pact led by Biden for a ship-to-rail economic corridor that will link India with Middle Eastern and European Union countries. This corridor is seen as a counter to China’s Belt and Road Initiative. These developments highlight the economic and strategic opportunities that exist for countries caught between the competing influences of the U.S. and China.
Major Western nations, including the U.S., are looking to reduce their economic dependence on China due to national security concerns. However, this shift has led to a fragmentation of the global economy and a rise in protectionism and nationalism. As a result, countries are forming complex alliances and pursuing their own self-interests.
This is not a simple case of a BRICS vs G7 world, as both groups are navigating their relationships with each other and with China. While China has secured additional countries to join the BRICS coalition, these countries do not want their membership to constrain their existing diplomatic and economic ties with G7 members.
The exclusion from economic corridors, such as the one proposed by Biden, poses a greater risk and opportunity cost for countries like Turkey. The promise of investment in infrastructure projects is attractive for developing economies, as it can address infrastructure gaps and boost trade connectivity. However, cautionary lessons can be learned from China’s Belt and Road Initiative, which has led to debt issues and high-risk projects.
Biden’s infrastructure pact aims to reboot U.S. influence in the Middle East. However, China’s BRI, which has been in operation for 10 years, has already established strong relationships and investments in the region. The U.S. will need to navigate these existing dynamics to achieve its goals.
One of the challenges for Biden’s infrastructure plan is financing. BRI deals typically involve loans from Chinese institutions at higher interest rates, along with construction and equipment by Chinese companies. Large-scale infrastructure projects can be high-risk and may not generate returns in the short term. The lack of investment in these projects was due to weak commercial cases. The involvement of multilateral banks in debt restructuring negotiations is a positive step.
Biden’s plan focuses on connectivity and investment, which is a way for the U.S. to overcome domestic challenges with trade liberalization. This approach also allows India to position itself as a leader of the developing world and advocate for the interests of the Global South.
In conclusion, the shifting dynamics between the U.S., China, and other countries are leading to new alliances and opportunities. Biden’s infrastructure pact aims to counter China’s influence, but cautionary lessons should be considered. The rise of middle powers, like India, is reshaping global leadership and presenting new possibilities for cooperation.