A geopolitical analysis of two major infrastructure initiatives
Ambassador Stefano Pontecorvo
I have been a diplomat and civil servant for the better part of 40 years. During that time, I have watched principled international initiatives and economically driven ones, political grand designs and practical infrastructure projects. I have sat across negotiating tables in capitals that no longer exist on maps, and I have seen what happens when political convenience collides with the hard economics of moving goods across difficult terrain. Most of what I have watched has gone nowhere.
This is exactly why I am looking with great interest and considerable skepticism at one of the latest major international initiatives: the India-Middle East-Europe Economic Corridor (IMEC). On the surface, it is politically convenient. India is a rising power that the West wishes to tie into its strategic architecture. The Middle East remains essential to global energy and trade. Europe needs alternatives to Chinese infrastructure. The geometry looks sound. But geometry is not economics, and political convenience is not sustainability.
I believe IMEC, whatever its political utility today, is simply not sustainable. CPEC, the flagship BRI project, has, by contrast, proven itself economically resilient — a distinction that matters more than most analysts acknowledge. Before explaining why, it is worth recalling what these initiatives actually are and why one works while the other likely will not.
The Belt and Road Initiative: Context
To understand CPEC’s significance, it is worth stepping back to understand the Belt and Road Initiative itself. Launched by China in 2013 under the banner of reconnecting ancient Silk Road trade networks, the BRI is far more than infrastructure marketing.
It represents a deliberate strategy to reshape global connectivity on terms favorable to Beijing: reducing China’s dependence on Western-controlled shipping lanes, creating markets for Chinese capital and labour, establishing political influence across Asia, Africa and the Middle East, and building alternatives to institutions such as the World Bank and IMF.
The initiative encompasses more than 150 countries and more than $1 trillion in committed or planned investments across ports, railways, highways, energy infrastructure and digital networks.
The track record is mixed. Some BRI projects — particularly in Southeast Asia and Central Asia — have generated genuine economic returns and trade growth. Others have become cautionary tales: ambitious ports in Africa sitting underutilised, railways carrying minimal cargo, and debts that cannot be serviced driving countries into dependency relationships with Beijing.
The distinction is usually economic, not political. Projects rooted in genuine demand and built by and for exporters with real trade volumes have survived. Projects built primarily to advance Chinese geopolitical interests or to deploy Chinese capital without regard for local economic absorptive capacity have stalled.
CPEC, launched in 2015, belongs to the first category. This is why it merits close examination. It is the proof of concept that Chinese infrastructure investment can be economically self-sustaining. It is also the standard against which other initiatives — including IMEC — should be measured.
CPEC: The baseline
The China-Pakistan Economic Corridor (CPEC) is the flagship project of China’s Belt and Road Initiative in South Asia. Launched formally in 2015, it comprises roughly $62 billion in committed investment across port development, road and rail networks, energy infrastructure and special economic zones.
Its centerpiece is Gwadar Port on Pakistan’s Arabian Sea coast, positioned to handle traffic that might otherwise move through the Strait of Malacca — a chokepoint through which roughly one-third of global maritime trade currently transits.
The logic is straightforward: China gains a shorter shipping route to the Middle East and Europe, reduces its dependence on a single maritime chokepoint and gains a strategic foothold in the Indian Ocean. Pakistan receives infrastructure investment, port revenues, energy capacity and employment. Third parties move goods more efficiently across Asia and into Europe via rail and road networks that did not exist before.
Has CPEC worked economically? The answer is qualified but real.
Gwadar Port handled significant cargo volumes in 2024, up from negligible figures a decade ago. The Karakoram Highway upgrade has cut travel times between China and the port from weeks to days. Pakistani energy capacity increased substantially through Chinese-financed coal and hydro projects, although the electric grid remains weak.
Chinese investment in special economic zones around the corridor has created manufacturing hubs, alongside tensions between the local population and Chinese citizens. These tensions have been exploited by the Balochistan Liberation Army, a militant group opposed to Islamabad.
The critical metric is trade flow: Chinese goods, Pakistani goods and third-country goods all move through these networks. This is not simply a one-way extraction. More importantly, the network generates revenue independent of Chinese capital inflows.
Gwadar Port collects fees. Special economic zones generate tax revenue. The corridor has become, by most measures, economically self-reinforcing.
Why? Because there is genuine demand. Goods move through Gwadar not because mandates dictate it, but because the routing is cheaper and faster than alternatives.
The economics work.
IMEC: The problem
The India-Middle East-Europe Economic Corridor is a more recent initiative, formally launched in 2023 with endorsements from India, Saudi Arabia, the UAE, Bahrain, Oman, Kuwait, Qatar, Egypt, Israel, the Palestinian Authority, Jordan, Greece, Cyprus and the European Union.
The vision is similarly ambitious: integrated rail, port and digital networks spanning three continents, cutting shipping times between Asia and Europe and positioning the Gulf as a crucial logistics hub.
On paper, the ambition is not unfounded. The Middle East sits at the intersection of Europe, Africa and Asia. Port infrastructure in the Gulf is world-class. Rail and road corridors could theoretically compete with existing routes. The political coalition appears diverse and deep.
Yet here we encounter the first serious problem, and it is not subtle: the corridor has no built-in economic driver comparable to CPEC’s core logic.
CPEC works because Chinese manufacturers produce goods that move efficiently through it. The corridor is built by and for economic actors who have an immediate incentive to use it. The shortest sea route to Europe matters to Chinese exporters because they are moving tens of millions of containers of consumer goods annually. The demand creates the justification for capital investment.
IMEC does not have this anchor, or at the very least not yet.
Who are the primary exporters using an India-Middle East-Europe corridor? Indian manufacturing is growing, but India’s export profile is fundamentally different from China’s. India exports software services, pharmaceuticals, agricultural products and increasingly apparel and light manufacturing. With the exception of a few sectors, these do not move via container ships in the volumes that would justify the capital intensity of IMEC’s proposed infrastructure.
Consider the consumer goods test: How many “Made in India” goods have you bought in the last year, and how many “Made in China”? The answer for most consumers and businesses in Europe is telling.
Chinese manufacturing dominance in consumer and intermediate goods is not ideological; it is structural. It drives physical trade volumes.
IMEC’s proponents assume that building corridors will generate trade. The reverse is more often true: trade drives corridor development.
This is not a failure of ambition. It is a failure of foundation.
