The on-going war in Ukraine has raised many problems in different areas and industries. To name a few: the food, aviation, energy, tourism and transport industries have all been affected.
One of these problems spanning beyond the location of the conflict is the trade between Asia and Europe. The usual route from China to Europe passes through Russia, but the war has made this impossible. Thus the Trans-Caspian International Transport Route, also known as the Middle Corridor, surges as a good alternative for the near future.
Cargo transshipment through Central Asia and the Caucasus will grow six times in 2022 compared to the previous year, to 3.2 million metric tons, according to the estimates of an association composed of the major state transportation companies in the region. “This is due to the sharply increased demand for the route against the backdrop of recent events taking place in the world,” the Trans-Caspian International Transport Route Association (TITR) wrote in a May 10 press release. Russian Railways, which had played a major part in China-Europe cargo transportation, has fallen under American and European sanctions.
1. What is the Middle Corridor?
The Trans-Caspian International Transport Route (TITR) is a multilateral institutional development linking the containerized rail freight transport networks of China and the EU, passing through Central Asia, the Caucasus, Turkey and Eastern Europe. The multilateral, multimodal transport institution links Caspian and Black Sea ferry terminals with rail systems in the Asian and European countries. The Corridor starts from Southeast Asia and China, runs through Kazakhstan, the Caspian Sea, Azerbaijan, Georgia and Turkey before moving forward in Europe, depending on the destination. On March 31, 2022 the governments of Azerbaijan, Georgia, Kazakhstan and Turkey signed a declaration on improving the transportation potential through the region.
Sitting at the crossroads of the east-west and north-south transportation routes, Azerbaijan has an already proven potential, as well as new initiatives on further supporting the Middle Corridor.
Vagif Sadigov, Ambassador of Azerbaijan to the European Union
Whilst providing a good option to avoid passing through Russia, the TITR currently only has about 5% of the northern route’s capacity. To develop the corridor’s capacity and facilitate its use a the main transport route, mid-Asian countries have been investing billions of dollars in infrastructure.
Over the last 15 years Kazakhstan has invested approximately $35 billion in the development of the transport industry, which has resulted in more than 2,000 kilometres of railways, 19,500 kilometres of roads, 15 airports and the new port capacities along the Caspian Sea. Moreover, in 2022, Kazakhstan’s President Kassym-Jomart Tokayev announced an investment package worth $20 billion until 2025 aimed at enhancing the diversification of transit and transport routes, as well as the implementation of integrated logistics solutions.
2. Cooperation between Kazakhstan and the EU
Yesterday, the first major discussion on Kazakhstan’s transit strategy and the development of the Middle Corridor took place in Brussels. The event brought together the industry’s top executives and decision makers, rail and logistics professionals, politicians and regulators and institutions from across the continent to discuss the connectivity interests between Kazakhstan and the EU, the conditions for success of land bridges, current state and the future of the multimodal transit route, as well as the development of green logistics along the corridor.
The EU is Kazakhstan’s most significant trade partner, representing 40% of its external trade. We have strong relations with the EU, which in turn, is a vocal supporter of regional development in Central Asia.
Margulan Baimukhan, Ambassador of the Republic of Kazakhstan to the European Union
During the event, Ambassador Baimukhan highlighted how Kazakhstan location between the two continents make it a transit hub, ideally located to facilitate transport between the Est and the West. “The central geographical location between Asia and Europe, continuous investment into the infrastructure, transport and logistics assets since early years of independence, together with our openness to trade and cooperation, make Kazakhstan one of Eurasia’s Largest Transit Hubs – always open to new partners, ideas and approaches that would revive the true spirit of the Silk Road”, he said.
“Currently, Kazakhstan’s exports to the EU are almost entirely in the energy sector and raw materials. We consider our relations with the EU as strategic, and we are in constant lookout for new areas of cooperation. From a broader perspective, the EU-Central Asia Connectivity project and the strategy of Global Gateway are crucial to Kazakhstan”, added the Ambassador.
We are recording explosive growth in container transit and will protect the business interests of everyone working along these corridors. The latest and historic amendments to the Constitution of my country provide the pillars of so-called “New Kazakhstan” where the interests of citizens, businesses, foreign investments are central, guaranteeing everyone a level-playing field for a sustainable growth.
Margulan Baimukhan, Ambassador of the Republic of Kazakhstan to the European Union
“It is a first discussion in Brussels on the development of the Middle Corridor – a route that attracts interests of many of us. I wish and encourage everyone to use today’s opportunity to establish close contacts, pass our messages that will lead into mutually beneficial connectivity in Eurasia”, the Ambassador encouraged the participants.
