Decoding the I2U2: Salvaging Stability in a Region in Flux

On July 16, President Biden concluded his tour of the Middle East amidst the hype of the “return of American leadership” in the region. Whereas his halts in Jeddah and Bethlehem returned little substance, Jerusalem witnessed the formalisation of a new mini-lateral, a renewed attempt at stabilising the Middle East: the I2U2 (Israel, India, USA, UAE). On July 14, PM Modi and UAE’s President Mohammad bin Zayed joined virtually President Biden and PM Lapid in what was the first I2U2 summit. The precursor to the Summit was a meeting of the foreign ministers of the four countries, held virtually in October 2021, to discuss synergies in trade, climate change, public health, energy and maritime security.

During the summit, President Biden underlined the need for a common agenda to combat transnational problems like climate change; he used the forum to launch a stealth attack on Russia for worsening the energy crisis. In the same vein, Sheikh Al Nahyan proclaimed the I2U2 a model for promoting a common defence against such challenges by R&D, space and healthcare cooperation. Israel’s incumbent PM Lapid was lavish in his optimism for mini-lateral groupings as the I2U2, which would enhance quick-response capabilities to challenges and capitalise on “comparative advantages.” PM Modi focussed on its potential for economic growth and business opportunities. The succinct joint statement mirrored the leaders’ confidence in this “long-term strategic partnership,” announcing the launch of two mega-projects in India—USD 2 billion integrated food parks and a 300-MW hybrid renewable energy project—and supporting private capital and joint investments in water, energy, transportation, space, health, and food security. The leaders also reposed faith in exploring connectivity between the Middle East and South Asia.

Why I2U2?

The I2U2 grouping, in its seeding stage in 2021, was being referred to as the “West Asian Quad,” drawing parallels with its Indo-Pacific sibling. However, the Foreign Ministers chose to name it “International Forum for Economic Cooperation”; the MEA too, side-stepped from this analogy with the Quad. Notwithstanding that both are cautiously anchored outside the military component, the I2U2 stands apart from the Quad in one crucial respect: the sheer pace at which negotiations progressed towards the Summit. Because while the Indo-Pacific Quad was conceived in the aftermath of the Boxing Day Tsunami, the first leaders’ Summit came to fruition only by 2021; the I2U2 has materialised in less than a year.

The swiftness in dialing up their bilateral relations to a multilateral arrangement reflects, akin to the Indo-Pacific, the need to contain Chinese influence. Shanghai International Port Group, a Chinese SOE, had lately secured a contract to build the Haifa port terminal, neighbouring the base for Israeli and American naval vessels. China was also rumoured to be developing naval capacities in the UAE’s Khalifa Port, located 20 miles from the Al-Dhafra Air Base, home to 2,000 American troops; the construction was halted after the Americans expressed concern and cautioned the UAE against becoming West Asia’s Djibouti. China has been courted by GCC’s economies since it became a net importer of hydrocarbons from the region in the 1990s; and the new crop of young, ambitious Turks in Gulf monarchies are eager to hedge with China to avail themselves of opportunities to diversify their economies. The Neom city, Prince Mohammad bin Salman’s brainchild, is going to be connected via 5G provided by Huawei. China’s relations with West Asia withstood the pandemic and were rather strengthened by the transfer of medical equipment and skills to and fro.

The US also realises that the Middle East, where it had dictated strategic affairs since the 1970s, is gradually slipping out of its orbit. Partly owing to the shale oil boom in North America, the USA’s energy dependence isn’t as acute as it was in the 1990s. The withdrawals from Iraq and Afghanistan, and the meek response to threats posed by the ISIS and Houthis have emboldened powers like Russia to assume predominance. The Obama Administration won no friends by its support of the JCPOA, but lost trust of its ironclad allies.

President Biden has accurately perceived these lags and is trying to plug them. The US still maintains a formidable military presence in the region, inclusive of over 50,000 troops and the Fifth Fleet. But its unparalleled strength lies in the wealth of diplomatic experience and time-tested alliances. By the I2U2, the US has brought together its security allies in the Middle East—the UAE and Israel—with its Indo-Pacific partner—India—to guarantee human security. Biden understands that apart from housing critical choke-points as the Strait of Hormuz and the Suez Canal, regional (in)stability in MENA determines the prices of brent crude and natural gas. The I2U2 crystallises America’s re-orientation with the region—from a military hegemon to a provider of finance and solutions to transnational problems. Biden’s address to the GCC+3 in Jeddah, and his particular interest in mediation in the Israel-Lebanon maritime dispute, betray no reluctance in staying at the driving wheel.

The US has put its weight behind Israel, and irrespective of mudslinging during the Presidential run-off, President Biden has unequivocally accepted the Abraham Accords signed during Trump’s Presidency. After being attacked by Iran-backed Houthis, the Emiratis have gotten closer to Israel to combat their common enemy. They inked an FTA in May, catalysing the growth of trade that had already touched USD 700 million in November. The Emiratis and Israelis have been cooperating on space, naval exercises, capital markets, and AI; the warming of ties since the Abraham Accords has been on a fast track. The I2U2 backs Israel’s bid to normalise its relations with the region and supports the Negev Forum; it promises to be a union of Israeli innovation, Emirati finance, and Indian and American expertise. 

India’s engagement with the region has for long been restricted to energy imports and secure SLOCs. Now, India’s readiness to step up its involvement in the region alongside the US reflects a complex play of variables. For one, the Indo-American relationship has never been brighter, and both countries, despite a scarred record during the Cold War, have created a comfort zone with each other. The US is India’s largest trade partner, while India and Israel share a close defence partnership, and may soon announce an FTA. India and the UAE recently inked a CEPA and harbour ambitions to double their trade to USD 100 billion in five years. The Other three members of the I2U2 are India’s strategic partners.

What to Expect?

The I2U2 has started on a positive note. It seems to have the panacea to two of the Middle East’s existential threats that have been exacerbated by the cascading crises of civil unrest and wars, and subsequently the pandemic and Russia-Ukraine War: food insecurity and climate change. The I2U2’s joint statement talks about building integrated food parks in India. India is an agricultural power-house, and its wheat export ban, coupled with the war in Ukraine, has heightened anxiety around a possible famine in the offing. Yemen is staring at the worst famine in a century, where millions will succumb to starvation. These food parks, when functional, should be capable of clipping burgeoning food prices and making quality food available to the region, making Middle East food secure.

Creating hybrid renewable energy facilities in India will facilitate decarbonisation, accelerating India’s goal of reaching the target of 500 GW of energy through renewable sources. The success of this project can be standardised for replication in MENA, which is reeling under climate change’s implications like heat waves, water scarcity, and riparian tussles. The I2U2’s contribution to carbon neutrality will endorse the UAE’s efforts at curtailing emissions at a ripe time: Dubai will host the COP-28 in 2023 and the International Renewable Energy Agency is headquartered in Abu Dhabi.

The I2U2 is an attempt at normalising the post-Abraham Accords and holds promise for Israeli-Saudi rapprochement. From threatening to make Saudi Arabia a pariah to a fist-bump with its Crown Prince, Biden has travelled a long distance and sustained a fair share of criticism for betraying human rights. The reversal illustrates that, in addition to oil output, the US is willing to go the extra mile to widen the ambit of the Abraham Accords, creating a cordon of regional allies. Saudi Arabia notably agreed to allow Israeli airliners to use its air-space; Israel is reciprocating by commencing the process of the transfer of Tiran and Sanafir to the Saudis. These developments represent a departure from decades of behind-the-curtains diplomacy between the two, Saudi outreach severely constricted by its support for the two-state solution. With the Abraham Accords and now the I2U2, MENA States are more interested in economic diversification and regional integration, which may speed up Saudi-Israeli normalisation and, perhaps in the foreseeable future, Saudi Arabia’s inclusion into the I2U2, being the region’s largest economy and the leader of the Muslim world.

The I2U2 is, therefore, a welcome addition in a region whose fault-lines are more perceptible than convergences. The US and India have taken efforts to de-link the Quad from the I2U2, but the former’s agenda of critical and emerging technologies, climate and supply chain resilience, and healthcare must be instructive. Instead of embroiling itself in the region’s intractable geopolitics, the I2U2’s consequentiality will be determined by the difference it makes to regional threats to human security.