23 August 2023 16:00 (UTC+04:00)

Rena Murshud Read more

Offering access to new markets with an estimated population of over 80 million along the route, the Middle Corridor, also known as the Trans-Caspian International Transport Route, is gaining popularity as a key East-West connection. Obviously, following the Russo-Ukrainian war and subsequent sanctions, demand for opening the project became huge.

Besides, the Middle Corridor offers a route that is at least 2,000 kilometers shorter than the Northern Corridor, which passes through Russia. This translates to reduced travel time, with the potential to shorten the journey between China and Europe to as little as 12 days, while the Northern Corridor currently takes 19 days. The development phase of the route also opens up new opportunities for B2B and B2C engagements in logistics, transportation, and infrastructure construction, as the countries strive to modernize and expand their railway systems and seaports.

Despite all this, there are still certain knots in the full operation of the Middle Corridor project. Today, it still exists mainly on the corridor passing through the South Caucasus, that is, Zangazur.

It is a fact that the Zangazur Corridor is also considered the most important segment of the Middle Corridor project. Nevertheless, it is regrettable to note that the still unresolved conflict in the region is lingering the realization of many important prospects related to the Middle Corridor.

Middle East economist Kanan Guluzade in an interview with AZERNEWS spoke about the economic situation in the region, as well as the influence of other countries on the development of corridors.

Q: As we know, the South Caucasus is considered the most geostrategic region constituting part of the Middle Corridor. However, the factor of Iran and Russia raises questions about the Zangazur segment of this corridor. Iran, in particular, impedes the opening of the corridor. How do you think Iran's influence can be reduced here?

A: The approaches of Iran and Armenia to the Zangazur corridor are different. It can be seen that Russia is playing a positive role in the relevant process. With the opening of the Zangazur corridor, a logistics corridor was created as a result of connecting Turkiye with the railway through Azerbaijan. The trade turnover between the two countries is about 30 billion US dollars. Here Russia acts rather as a seller. Shortening the road, connecting the railway, that is, a cheaper means of logistics, to the corridor, equipping the railway between the two countries is directly in the interests of Russia. Thanks to this logistics corridor, Russia can sell various types of its products both to Turkiye and through Turkiye to European countries.

As for Iran, there are two main reasons why the country opposes the project to open the Zangazur corridor. The first reason is that Iran provides logistics for Azerbaijan's Nakhchivan. The second and more important reason is that if the Zangazur Corridor is opened, the Middle Corridor will become relevant. Prices for logistics in the Middle Corridor will reduce the importance of Iran's logistics hub in the region. Thus, Iran will be deprived of its annual dividends. Therefore, Iran directed all its political power against this project. So, some time ago, this prompted the Islamic Republic of Iran to open a consulate in Gafan, which is the territory of present-day Armenia, but historically considered Azerbaijani land. In an unrenovated building, Iran opened its consulate and installed the flags of the two countries there. This means that the Zangazur corridor is completely contrary to Iran's interests. However, Azerbaijan has demonstrated its political will. This project is scheduled to be completed as soon as possible.

Q: There are also countries that are interested in this corridor. However, today they play a passive role against the backdrop of the Azerbaijani-Armenian conflict which is the key for opening the corridor. In other words, the decisive nuances do not appear within the framework of support for conflict resolution. What do you think is the reason?

A: In fact, the opening of the Zangazur corridor is a positive moment for the countries interested in the project. However, this project does not require strong political will. If they were, other countries would also be interested. For example, Kazakhstan. This country is considered the leading country in terms of reserves of natural resources and the 9th country in terms of area. Kazakhstan also took over the leading part of the "Middle Corridor". At the moment, along with Kazakhstan, Uzbekistan also plays a big role in raising the relevance of the Middle Corridor and the Trans-Caspian International Transport Route. During the visit of the President of the Republic of Azerbaijan Ilham Aliyev to Tashkent, Samarkand, as part of an extensive visit by the head of state of Uzbekistan with Shavkat Mirziyoyev, and government agencies, various documents were signed. And these documents show that relations between the two countries are at a very high level. I want to note that Uzbekistan is one of the first countries to recognize the territorial integrity of Azerbaijan. Also, trade relations between the two countries, especially in the field of logistics, are at a very high level. The relevance of the issue of logistics in the Zangazur corridor is considered an important issue for Uzbekistan.

Q: How do you think the end of the Russo-Ukrainian will affect the Middle Corridor project?

A: Currently, cargo terminals for various purposes, and multimodal terminals are being built along this corridor, and the number of containers, trucks, and ships in the Caspian basin is increasing. If the project is in full swing in the near future (construction of two ports in Uzbekistan, expansion of the Alat port, development of the Endijan multimodal terminal, purchase of cargo ships in the Caspian), the Middle Corridor will be able to maintain its relevance even after the end of the war. So to my thought, the end of the Ukrainian-Russian war will neither have any negative nor positive effects on the development of the "Middle Corridor". This road is the shortest between East and West. The trade turnover between China and the EU countries is more than 700 billion US dollars. Here the positive balance is on the side of China. China exports more products to Europe. Thus, lower logistics costs reduce the cost of multipurpose goods shipped from China to Europe. At the same time, I would like to inform you that the operation of the Chinese railway, the Russian railway, as well as the Yiwu-Madrid railway line (13,000 km long), operated by Deutsche Bank, which operated before the Russia-Ukraine war, is currently limited due to the ongoing conflict. In addition, insurance companies have suspended insurance of products passing through Russia. Also, the sanctions of the Russian railway Company also paralyzed this project.

Q: As is known the full operation of the Middle Corridor (including Zangazur) depends on the resolution of the conflict. Do you think the conflict will find its final solution?

A: It depends on the final resolution of the conflict. However, in the current situation, President Ilham Aliyev's demonstrating his political will, as well as the fact that Azerbaijan has become a winner and a leading state in the region for several years, and, moreover, the provision by Azerbaijan of its rights not by international law, but by force, is a guarantee that the Zangazur Corridor will be opened as soon as possible.

I think that President Ilham Aliyev has fully shown his full political will in this direction. We recognize the territorial integrity of the other side, and at the same time, Armenian Prime Minister Nikol Pashinyan has repeatedly made a statement on the recognition of the state borders and territorial integrity of Azerbaijan. I think that the current progress toward a peace agreement is moving very quickly. The signing of an appropriate agreement between the two countries leaves no politically contradictory situation. Since the railway going west from Azerbaijan along the transit route, which includes various modes of transport, it can easily pass through the territory of Armenia (Nakhchivan-Turkiye-Europe). At the same time, after the peace agreement, Armenian citizens can use the territories of Azerbaijan to move to a third country. In the future, economic relations between the two countries may also develop. The products of the other side can be easily sold on the territory of Azerbaijan, just as products for various purposes produced in Azerbaijan were once sold to Armenia (in the former Soviet period). I think that if peace is signed, the war-torn country in a short period of time will turn into two peoples living in peace and friendly relations.

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Rena Murshud is AzerNews’ staff journalist, follow her on Twitter: @RenaTagiyeva

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