The Arab Gulf States Institute in Washington's eighth annual Petro Diplomacy conference examined the upheaval in the oil and gas markets following Russia’s invasion of Ukraine and the role of Gulf Arab oil producing states in meeting the sudden demand surge.
The jury is still out on President Joseph R. Biden Jr.’s recent visit to the Middle East. But one definitive outcome was the success of the I2U2 virtual summit, held during Biden’s trip, which included the announcement of collaborative ventures valued at $2.33 billion.
Each of the countries involved – India, Israel, the United Arab Emirates, and the United States – have strained ties with either China or Iran, or both. But the group chose not to let geopolitical differences subvert the scope for strategic economic partnerships. Such partnerships, with middle powers playing a vital role despite strategic differences, provide a valuable model for shaping future regional dynamics in the Middle East and beyond.
Following the summit, the parties issued a joint statement saying: “This unique grouping of countries aims to harness the vibrancy of our societies and entrepreneurial spirit to tackle some of the greatest challenges confronting our world, with a particular focus on joint investments and new initiatives in water, energy, transportation, space, health, and food security.” The group also agreed to pool resources to modernize infrastructure, expand connectivity between the two Middle East countries, promote startups, advance low-carbon development pathways for industries, find new waste treatment solutions, encourage the development of green technologies, and improve public health. The UAE committed to invest $2 billion to develop a series of integrated food parks in the Indian states of Gujarat and Madhya Pradesh, among others, to enhance the UAE’s food security. And the U.S. Trade and Development Agency agreed to set up a $330-million hybrid renewable energy project in Gujarat. The U.S. and Israeli private sectors will offer innovative solutions to promote the sustainability of these projects.
The group’s “partnership for the future” was formed in October 2021, a year after the UAE and Bahrain signed the Abraham Accords agreeing to normalize relations with Israel. The new group took shape amid perceptions of U.S. disengagement from the Middle East and the challenges posed by the coronavirus pandemic. It gathered pace after the Russia-Ukraine war broke out, with a foreign ministers’ meeting in March.
At the time of its formation, one analyst wrote that I2U2 would face “three tests: strategy, sustainability, and substance.” After the summit, however, he suggested “there are encouraging signs on all three fronts.”
Biden said the group will identify new infrastructure projects for joint investment and development. “This meeting is just a first step, a chance to demonstrate the value of this new format for cooperation between our four nations,” he said. The president added that the food parks had the potential to sustainably increase India’s food yields threefold in five years, which would help tackle food insecurity in South Asia and the Middle East.
The food parks will integrate “climate-smart” technologies to conserve water, employ renewable energy sources (wind and solar) complemented by a battery energy storage system, and reduce food waste. This is expected to help India improve its stakes as a global supply chain hub in the food and renewable energy sectors. The renewable energy project would particularly help India meet its climate and energy target of 500 megawatts of nonfossil fuel capacity by 2030.
According to Indian Prime Minister Narendra Modi, I2U2 set a positive agenda at its first summit. “We have identified joint projects in many areas and have also prepared a roadmap to move forward on them. By mobilizing the mutual strengths of our countries – capital, expertise, and markets – we can accelerate our agenda and contribute significantly to the global economy.” To ensure the momentum of engagement, India’s Ministry of External Affairs said that special envoys of the four countries are having “Sherpa-level interactions” to discuss new projects.
UAE President Mohammed bin Zayed al-Nahyan stressed that, “The economy offers the best way to achieve peace, security, and progress, especially when governments and people have the will and courage to build partnerships and face challenges.” Israeli Prime Minister Yair Lapid said that, “In the 21st century, challenges are local, but solutions are global,” and cited the India-UAE food corridor as “a clear example of a solution to a problem we are all facing.”
I2U2 could encourage the formation of similar groupings in the future. Members of this group could forge “minilateral” partnerships with other states, including Japan and South Korea, among others. A workshop in Abu Dhabi, for example, explored opportunities for a UAE-Israel-South Korea collaboration in fields including agriculture, technology, and green energy.
A few ideas that were flagged for active consideration during the workshop were a trilateral Blue Economy Fund to address global issues like carbon neutrality, green energy, and energy security, using artificial intelligence solutions, and developing an “Arabic chatbot” tool for regional agriculture development that would improve food security, which is crucial for achieving sustainable development goals.
Since the UAE signed the Comprehensive Economic Partnership Agreement with India and Israel in February and May, respectively, it is also possible that these countries may convert their bilateral arrangements to trilateral or broader cooperation, which could strengthen the I2U2 in future.
Some have referred to I2U2 as the “new Quad” or the “Middle East Quad,” which is misleading. The Quadrilateral Security Dialogue, informally called the Quad, includes Japan, India, Australia, and the United States. It has a security overtone to it with the aim of countering China’s growing influence in the Indo-Pacific region. I2U2, on the other hand, targets neither China nor Iran, at least thus far.
I2U2’s economic-focused agenda could also help it to develop quickly in contrast to the Quad’s very slow transformation. While it took 15 years after its genesis for the Quad leaders to meet in Japan in May, the I2U2 summit, though virtual, took place less than a year after the grouping was formed.
Ahead of the virtual summit, the White House had said that the meeting would “reenergize and revitalize alliances” across the world by cooperating on issues where the four countries are “important innovation hubs.” The announcement of the $2.33 billion in projects indicates that I2U2’s focus remains on economic partnerships.
Any pressure for the group to assume an anti-Iran or anti-China tone or both could derail its progress, since the UAE, India, and Israel have different views on how to deal with China than the United States.
Even though India fought a war with China in 1962, and the two countries were engaged in brutal border clashes in 2020, it has been the most reluctant member of the Quad in taking an anti-China stance. Despite the unresolved border issues, India and China are important trade partners and active members of the BRICS countries along with Brazil, Russia, and South Africa. The U.S.-China competition has tested the UAE and Israel on several issues, but they have managed to delicately balance their relationships with both superpowers.
India has also not let its good ties with Iran affect its engagement with the other I2U2 partners. In fact, the United States exempted India from sanctions by permitting it to fund and construct the Chabahar Port in Iran.
The UAE, too, has sought to bridge rather than widen the gulf with Iran recently despite fundamental differences on regional issues. During Biden’s visit to the region, Abu Dhabi announced that it is considering returning its ambassador to Tehran after a 6-year hiatus.
The middle powers are also exercising strategic autonomy more than ever before. This was evident in India and the UAE initially not aligning with the United States on the Russian invasion of Ukraine and abstaining in a crucial U.N. Security Council vote in February. Israel also reportedly did not endorse Washington’s request to co-sponsor the same resolution condemning Russia’s invasion.
Thus, while national security issues are often intractable, the strength of this grouping is not in trying to pursue a collective security agenda. Each of the countries will continue to pursue its security goals individually or in other formations, but I2U2 is likely to remain successful only if it is a harbinger for the present and future in the economic development domain and not a prisoner of the past in the security sphere.
is a non-resident fellow at the Arab Gulf States Institute in Washington and a senior research fellow at the Gulf-Asia Program at the Anwar Gargash Diplomatic Academy.
is the head of the Asia Policy Program at the Abba Eban Institute for International Diplomacy at Reichman University (IDC Herzliya).
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Through its careful examination of the forces shaping the evolution of Gulf societies and the new generation of emerging leaders, AGSIW facilitates a richer understanding of the role the countries in this key geostrategic region can be expected to play in the 21st century.Learn More