With the world in ‘turmoil’, a new ‘Quartet’ comes into place | Business and Economics News

New Delhi, India-The first meeting of the Heads of State and Government of India, Israel, the United States and the United Arab Emirates (UAE) – dubbed West Asia’ “will likely see the Quartet announce a joint venture partnership on energy storage facilities from renewable energy sources and another on the construction of food corridors.

Also known as “I2U2,” Thursday’s meeting will bring together the prime ministers of India and Israel (I2) – Narendra Modi and Yair Lapid – and the presidents of the United States and the United Arab Emirates (U2), Joe Biden and Mohammed bin Zayed Al Nahyan. The new alignment is set against a backdrop of economic and political risks in a world of increasing uncertainty with soaring inflation, soaring food and fuel prices, and a pandemic upending established ways of doing business.

Talmiz Ahmed, the former Indian ambassador to Saudi Arabia, Oman and the United Arab Emirates, told Al Jazeera that joining the West Asia Group is part of the “hedging” strategy adopted by a large number of countries. “With the turmoil in the world, no one knows what will work. Countries are hedging their bets and they are “joining up and forming groups that they think will work best for them,” Ahmed said.

The summit meeting is scheduled to take place on the second day of Biden’s three-stop tour from July 13 to 16 in Israel, the occupied West Bank and Saudi Arabia. This is Biden’s first visit to the region since taking office in January last year. Modi will participate in the meeting virtually.

I2U2 aims to “encourage joint investments” in six mutually defined areas such as water, energy, transportation, aerospace, health and food security, according to an Indian government statement on Tuesday. The statement said it intends to mobilize private sector capital and expertise to help modernize infrastructure, develop clean energy for industries, improve public health, and promote the development of important emerging and green technologies, adding that “the projects can serve as a model for economic cooperation and provide opportunities for our entrepreneurs and workers.” .

Briefing reporters last month in Washington, D.C., State Department spokesman Ned Price emphasized the gathering’s economic agenda.

“Both of these countries are technology hubs,” he said, while India was also “a huge market. It is a huge consumer market.”

Expectations from the top

With all leaders participating in Thursday’s summit, this is seen as a move to institutionalize the so-called Quartet in West Asia which in turn provides a framework that helps turn “intergovernmental ideals into concrete programs that allow business to take place,” said Pramit Pal Chowdhury, Fellow at the Center New Delhi-based Ananta Aspen Center Research: “Business Interactions.”

For example, the possible announcement of a project in renewable energy storage.

“Currently there are no technologies for this,” an Indian Energy Ministry official who was not authorized to speak to the media said, adding that electricity generated from a renewable source was immediately connected to the grid without being stored. The official added that the new joint venture will look into critical storage technology.

This could fuel India’s efforts to reach net zero emissions by 2070, a goal Prime Minister Modi announced in Glasgow, Scotland, last year. At the time, India also announced plans to triple its renewable capacity to 500 gigawatts by 2030 from 157 gigawatts in March 2022.

Energy storage technologies play a key role in promoting the decarbonization of the energy and mobility sectors. By helping to manage renewable energy outages [RE] “Generation and storage can facilitate renewable energy penetration deeper into the power grid,” said Arjun Dutt, head of the energy financing program at the Council on Energy, Environment and Water, a think-tank. “Amid a complex geopolitical landscape, increasing the decentralization of supply chains for key technologies is a priority for many countries.”

The summit is also expected to result in the announcement of a food corridor between India and the UAE. The joint corridor revolves around the plans of Emirati investors such as Dubai-based Emaar Group to invest up to $5 billion in mega food complexes in India and another $2 billion in contract farming, the supply of agricultural commodities and related infrastructure. While the idea of ​​the corridor was floated three years ago and aims to ensure food security for the UAE, it has become even more relevant now given the global food crisis, driven in part by grain stuck in ports against the backdrop of the Russo-Ukrainian war. .

The war in Ukraine, rising inflation and food prices are among the topics on the leaders’ table at the summit, along with the Iran nuclear deal.

The idea of ​​creating a common food corridor for food security for the UAE was inspired by India’s Strategic Petroleum Reserve in Padur, southern India, in partnership with Abu Dhabi National Oil Company. Similarly, the UAE could have a food reserve in India, and Indian officials associated with the food corridor project.

“The food corridor between India and the UAE is beneficial for both countries,” said Siraj Hussain, a former agriculture minister.

In 2020, India exported food including grains, sugar, fruits, vegetables, tea, meat and seafood, among others, with a value of $1.89 billion and imported food for $363 million.

With bilateral trade worth $59 billion, the UAE was already India’s third largest trading partner after China and the United States for 2019-2020, according to the latest government data.

With the India-UAE Free Trade Agreement, the trade of goods between the two countries is expected to reach more than $100 billion and the trade of services to more than $15 billion within five years. India is also considering a free trade agreement with Israel, which is likely to give an additional boost to the regional quartet.

“A formal agreement with India can provide long-term food security for the UAE for many foodstuffs,” Hussain added.

India, along with the United States, Australia and Japan, is already part of the current Quartet that came into force in 2017 against China [File: Yuichi Yamazaki/Getty Images]

West Asian “Quad”

The announcements – when issued – are intended to give a certain degree of credibility to a gathering whose critics have denounced it as “without logic” and “without strategic value”.

“We believe there will be many more projects that will emerge to bolster the group’s credentials. These will be practical efforts that will show I2U2 is more than just a talk shop,” said the Indian Energy Ministry official quoted above.

The first meeting of the I2U2 group was held on October 18 last year during the visit of Indian External Affairs Minister S. Anthony Blinken joins from their respective capitals.

An Israeli reading of the October discussions stated that the four countries “decided to establish an international forum for economic cooperation” to explore “the possibilities of joint infrastructure projects in the areas of transportation, technology, maritime security, economy and trade, as well as for additional joint projects.”

I2U2 came together against the backdrop of the momentum created by the Abraham Accords – brokered by the Trump administration two years ago to normalize relations between Israel and Arab countries including Bahrain, the UAE and Morocco.

India, along with the United States, Australia and Japan, is already part of the current Quartet that came into force in 2017 against China, which is seen as a belligerent in the Indo-Pacific region.

Analysts are divided over whether China is a factor in the I2U2 pool in West Asia.

The West Asia group “reflects the sophistication of the Biden administration in its China containment policy,” says Akshoop Giridhardas, an analyst at the New Delhi-based Observer Research Foundation (ORF).

For Washington, there is a classification of enemies: the historical enemies of Iran. rotating in Russia. And the new strategy in China,” he wrote in an article for the ORF Foundation, adding that with Beijing’s increased interaction with the UAE and Israel, Washington wants to “neutralize” the Chinese presence in the region, whether through military or political means, or trade. Despite the long historical alliance with Abu Dhabi and Tel Aviv, there is concern about Beijing’s influence in the region.

Chaudhry of Anantha Aspen does not agree. He says the UAE is the “key driver” of I2U2 with its desire to shape the post-American, post-oil future of the Persian Gulf. “It desires to become an economic and technological hub, which is why India, Israel and the United States are important in this endeavour,” he told Al Jazeera.

I agree with him. Coomaraswamy, Professor at Jawaharlal Nehru University in New Delhi and expert on West Asian affairs.

India has good bilateral relations with Israel, the United States and the United Arab Emirates. This has now been elevated to a regional group. This is new for Israel and India because Israel has never been part of a regional grouping in the region before [the Abraham Accords]Coomaraswamy said.

Prior to the agreements, India had to keep its relations with Israel and the Arab countries separate. Now with the agreements in place, India can enter into a regional agreement that is a “massive departure from the past,” Coomaraswamy said, adding that I2U2 complements India’s desire for a greater role on the world stage. “It is not an anti-Iranian or anti-China group,” he added.

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