Global trade routes are the next conflict zones, and Arab states must prepare for that

The ferocity of global conflicts – hot and cold - is increasing by the day, especially over attempts to control trade routes and access to infrastructure. These events are now being shaped through economic alliances over shared interests, unlike conflicts of the past that relied on military might and direct occupation.

Take China, for example. It has quietly, but heavily, invested in continent spanning infrastructure projects to ease its way through global trade routes. This was even before announcing its mega ‘Belt and Road’ project, which has taken root in Africa and Asia.

As part of this project, ports will be established in African countries and Pakistan, and, just recently, China signed a $400 billion 25-year investment agreement with Iran, which is believed to be like a mortgage of Iranian infrastructure to China. Yet, this deal sparked opposition within Iran.

A push back

The Chinese efforts, however, pushed other major powers to sound the alarm, especially after their companies attempted to enter some African markets but were unable without obtaining pre-approval from Chinese companies that dominate Africa’s infrastructure space. The same may also happen soon in other countries, and the big powers will not place themselves hostage to Chinese investments and ambitions.

Thus, ongoing efforts are being made to share hegemony over trade routes, especially after the recent disruption of the Suez Canal for about a week showed the extent of damage that could happen to national interests being cut off from one of the main trade routes.

The Canal disruption resulted in shortages of supplies in addition to a huge backlog of ships waiting to unload their cargo, which led to insurers having to bear heavy losses. The Financial Times recently reported that the European Union and India are planning to build joint infrastructure projects, similar to China’s Belt and Road. The Indo-EU project will focus on infrastructure, transportation, energy and digitization efforts, and essentially a mirror image of what China seeks to achieve.

Gaps to exploit

However, it may exploit the weakness of legislative guarantees in China’s gameplan. Other major powers will get involved in their own ways, by announcing new projects of their own or seeking alliances.

India is a traditional rival of China, but it is an ally of Russia and the US. The signs of an incipient conflict has already begun to emerge. At the end of last week, China threatened Australia with retaliation after the latter cancelled an agreement on the Belt and Road project, which Beijing considered as prejudicing to bilateral relations.

Therefore, the decisive factor in such conflicts will be about funding. China has allocated $2 trillion for its project. In addition, Arab and Gulf countries will play a vital role thanks to their financing capabilities and geographical location, being at the intersection of various trade routes. And without whom it would be impossible to imagine supply lines between the East and West.

Arab countries can thus hope to achieve great gains, but will need to do in-depth studies to decide their priorities. National interests must be harnessed in a way that takes advantage of uncertainties.



Previous Post
Next Post
Related Posts