Background
A year after Russia launched its military offensive against Ukraine, what began as a regional conflict and had broader global consequences has several important geopolitical implications. These include the "resurgence" of the so-called Middle Corridor. Prior to 2022, the moderately functioning trade corridor could be described as a regional and economic zone encompassing Central Asia, the South Caucasus, and Türkiye, rather than an alternative cargo route between Europe and China or between Europe and Central Asia.
This East-West transport corridor was first noticed by world and logistics experts in 2021, when a container ship stuck in the Suez Canal completely paralyzed global shipping lanes and thus international trade routes for several days. The blockade of the Ever Given container ship also required a quick response from logistics companies, which led to the "rediscovery" of the Middle Corridor transport route, previously considered popular due to logistical underdevelopment and insufficient financial conditions, as well as geographical obstacles.
Looking at the main reasons for the resurgence of the Middle Corridor transport route, we find that the Russian-Ukrainian war has significantly disrupted land connections and logistics routes between Europe and Asia, most of which - now after February 2022 - pass through sanctioned Russian and Belarusian territories. Although the Middle Corridor cannot yet fully replace the significant volume (goods, products, etc.) and quantity of trade relations, the realization of an international transport and trade route across the Caspian Sea could be a real alternative in the long term.
In response to EU sanctions against Russia, Moscow has repeatedly stressed that Europe will soon face economic difficulties if the Kremlin stops Russian energy supplies to the European Union. With this statement, the Russian leaders likely intended to discourage European leaders from supporting Ukraine in any way (especially weapons). In light of Moscow's threats, European Union leaders have begun to reduce economic ties with Russia and explore new opportunities, primarily to reduce energy dependence, ensure Europe's energy security, and diversify international land freight lines.
The Middle Trade Corridor
The Central Trade Corridor or Central Corridor, officially known as the Trans-Caspian International Transport Route (TITR), reflects a kind of Silk Road perspective of Türkiye, the countries of the Caucasus (Azerbaijan, Georgia, Armenia), and the Central Asian countries (Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, Uzbekistan). The eastern end of the trade corridor (which is more of a green investment with land: rail, road and waterways) starts in China and passes through the lowland part (steppe) of Kazakhstan before reaching the Kazakh and Turkmen ports on the Caspian Sea. The rest of the route is then connected by sea to the Azerbaijani ports on the Caspian Sea, continues to Georgia (through the South Caucasus) and then reaches Türkiye and from there the European Union.
The Middle Corridor is a multilateral institutional development that links container rail and, in some cases, road freight networks between the economies of China and the European Union. According to the description of the Middle Corridor, this route could later be suitable for the transfer of freight traffic from Mongolia, South Korea and even the countries of Southeast Asia to Europe, but the goals/aspirations in this direction are still insignificant at the moment.
Challenges, opportunities, developments
Caspian and Black Sea Basin countries often interpret the Middle Kingdom as an additional logistics network to China's Belt and Road Initiative (BRI) and the European Union's Silk Wind Project.
Today, mainly but not only due to the Russia-Ukraine war and the sanctions imposed on Moscow, the Middle Corridor has a great opportunity to take a crucial place in the trade relations between Europe and Asia and, consequently, Central Asia.
A positive development regarding the trade corridor is that the meeting of foreign and transport ministers of Türkiye, Azerbaijan and Kazakhstan on November 25, 2022 in Baku approved the roadmap for the development and operation of the Middle Corridor for the period 2022-2027. Another positive development regarding the transport and trade route supported by Türkiye and the five Central Asian countries is the Organization of Türkic States position paper on the Middle Corridor. At the end of February 2023, the organization designated improving the transport capacity and efficiency of the Central Transport Corridor and its competitiveness in the identified as a priority. Türkiye, Azerbaijan, Kazakhstan, Kyrgyzstan and Uzbekistan supported the development of transport infrastructure in the Central F as full members, while Turkmenistan and Hungary supported as observers, which is outlined in the following three points. First, the development of transport infrastructure (increasing the permeability of ports and the number of ships anchored there, development of container hubs). Second, simplification of transport and transit procedures, including their digitalization. Third, optimization of transport costs (granting discounts for rail and sea transport, reducing transport tariffs, transit fees, etc.).
As a positive outcome for Central Asian countries, the Central Corridor also provides great opportunities for Central Asian and Asian products to enter the Middle East, North Africa and the Mediterranean through Türkish ports by using the capacity of the Türkish merchant fleet.
Leaders of Central Asian countries believe that great economic opportunities will open up for the countries of the region if the potential of the Central Corridor is realized and effectively utilized to benefit from the annual trade flows between China and Europe worth USD 600-620 billion.
Experts highlight Kazakhstan primarily as a bridge between Asia and Europe, connecting the country with Azerbaijan in terms of transit and logistics. The logistic connection between Kazakhstan and Azerbaijan (sea freight) guarantees the feasibility of the Caspian section of the Central Corridor (with a throughput of more than 1 million containers per year).
On the European side, Romania is the biggest supporter of the Central Corridor. The Romanian diplomacy considers Kazakhstan as the "gateway" to Central Asia (and Romania as the gateway to Europe for Central Asian countries). According to Romanian diplomacy, the first European stop on the Central Corridor would be the port of Constanţa in Romania, from which goods would be transported along the Danube toward Austria.[1]
After Russia started its military operations in Ukraine in February 2022, the Central Asian countries were forced to increase their efforts to diversify their foreign trade even more than before. This idea of the countries of the region was confirmed by the example of Kazakhstan. As Moscow has repeatedly temporarily suspended the operation of the Caspian Pipeline, through which about 80% of Kazakhstan's oil exports are transported to the Russian port of Novorossiysk on the Black Sea, citing technical malfunctions, Astana has instructed Kazakhstan's oil companies to create new supply routes independent of Moscow in addition to the existing Russian supply routes, but this does not mean that they will cut off their ties with Russia.
Since economic and trade diversification from Russia is important not only for Central Asia but also for the countries of the Caucasus and Türkiye, the appreciation for the Central Corridor goes beyond the regional level.
However, the project is not without risks and problems. Underdeveloped infrastructure and decades of conflict between Baku and Yerevan over Nagorno-Karabakh are obstacles to transportation (railroads, highways, etc.) in the Caspian and Black Sea states (Kazakhstan, Turkmenistan, Azerbaijan, Georgia). However, if Armenia and Azerbaijan manage to conclude a peace agreement, the K Arabah region will likely be integrated into the Central Corridor infrastructure. Another difficulty is the unresolved Türkish-Armenian relations. However, the conflict between Türkiye and Armenia appears to be slowly normalizing, which could lead to the opening of the long-closed border between the two countries.
From a geopolitical, world economic, and logistical perspective, the main attraction of the Middle Corridor - especially for European countries in the current political situation - is that it does not pass through Russia. Under the current war and sanctions conditions, both Western countries and China see it as a strategic advantage for trade. Despite the deepening relations between China and Russia, Beijing continues to try to build alternative relations with European countries as part of the Silk Road initiative aimed at the continent, thanks to which China's relations with Central Asia seem to be gaining importance.
Russia's invasion of Ukraine and Western sanctions against Russia have also changed Moscow's view of the Middle Corridor. The infrastructural and logistical developments currently taking place along the Middle Corridor in the Central Asian and Caucasus regions also provide Russia with new opportunities to reach international markets through these transport routes. For Moscow, the Central Corridor, and by extension Central Asia, has become an extension of Russia's North-South trade corridor rather than a direct alternative to the Northern Corridor to Europe.
To be continued…
The author is a researcher at the Eurasia Center
[1] Furthermore, within the framework of this project, the possibility of building the Constanta-Trieszt (Italy) oil pipeline is being discussed. The Romanian press called the corridor the strategic axis of the Black Sea-Caspian Sea (axa Marea Neagră - Marea Caspică).
