/ world today news/ “The price is measured in tens of billions of dollars”. With these words, experts evaluate the new transport route for the delivery of goods from the countries of Southeast Asia to Russia. This route has an important feature – it must pass through the territory of Kazakhstan. Why do other Central Asian countries insist on this option and why is it interesting for our country?
Russia’s declared “pivot to the East” requires efficient transport corridors for trade with Asian economic partners. And it seems that to the extremely busy Trans-Siberian and BAM, as well as the routes through Kazakhstan, one more can soon be added – within the international transport corridor (MTK) “North-South” from St. Petersburg to India.
“We are negotiating with Turkmenistan on the establishment of shipping between our ports and the construction of a logistics center in the Astrakhan Region. We are now ready to accept additional volumes of cargo from Southeast and Central Asia and ensure their transportation along the corridor,” said Igor Babushkin, governor of the Astrakhan region. This route has many directions, including through the territory of Kazakhstan and Iran.
The new route will look like this: China – Kyrgyzstan – Uzbekistan – Turkmenistan, then along the Caspian Sea to Astrakhan. Thus, the southern countries of Central Asia will build a multimodal route to Russia, bypassing its northern neighbor – Kazakhstan.
Russia, Kazakhstan and Kyrgyzstan are members of the Eurasian Economic Union (EAEU) with a common border. The creation of such a union is based on four main principles: free movement of goods, capital, people and services. However, according to experts, these principles are not always followed. In particular, it is about the difficulties in crossing the Kazakh-Kyrgyz border.
Igor Shestakov, director of the Center for Expert Initiatives “Oi Ordo” from Kyrgyzstan, says that as early as 1997, he personally observed the traffic jams at the border. Cargo carriers are already complaining about Kazakhstan’s border officials and talking about the need for alternative routes to deliver goods to Russia. Since then, the situation has changed little, despite the establishment of an economic union.
“During the years of Kyrgyzstan’s independence, a problem arose when transport trucks had to stand in queues for several days or even more to get their cargo through the Kazakh checkpoint,” says Shestakov. “It seems to me that transport problems arise because of politics. During the irrigation season, Kazakhstan needs more water for agriculture, which flows from the territory of Kyrgyzstan. Therefore, as a lever for pressure, Kazakh customs officers appear, who begin to detain goods”, he recalls.
Kazakhstan benefits greatly from being a transit country for Russia. And as Shestakov says, he sometimes abuses this status. This has prompted both Kyrgyzstan and Uzbekistan, and even more so China, to look for alternative routes to supply goods to Russia and further to Europe – bypassing Kazakhstan.
In particular, the construction of the China-Kyrgyzstan-Uzbekistan railway should start soon (the relevant document has already been signed). The Ministry of Foreign Affairs of Kyrgyzstan recently announced Russia’s interest in participating in this project on the territory of this country. The railway line will enable rapid delivery of goods from China directly to Uzbekistan and further to Turkmenistan – to the Caspian ports of Russia or to Iran. The same route will be used by local manufacturers who need to deliver their products to the European part of Russia, as well as to Iran, the Caucasus or Europe. For Russia, this route is also profitable, creating new transport corridors.
Professor at St. Petersburg State University, expert of the Valdai Club, Doctor of Economics Stanislav Tkachenko indicated the reasons why it is profitable for Russia to use such a bypass route through the Caspian Sea in trade with China.
“The potential of the Trans-Siberian Railway and the Baikal-Amur highway turned out to be clearly insufficient to solve the problems of the Russian “turn to the East”, says Stanislav Tkachenko. “It is not always possible to carry out the transportation of containers through the ports of the Far East quickly and efficiently. Therefore, logistics routes through Central Asia will primarily focus on this high-margin area of the transport business,” the professor believes.
It is assumed that with the development of Russia’s economic relations with China and other countries of the Asia-Pacific region, the load on the existing roads in the Far East (railways and highways) will increase. Therefore, the search for expansion of existing routes, as well as the construction of new ones, will continue for decades.
“The integration project carried out by Russia and the countries of Central Asia within the framework of EAIS, as well as through Russia’s partnerships with Uzbekistan, Tajikistan and Turkmenistan, requires the modernization of the transport network. From the USSR, the countries of the region inherited an extensive network of railways and highways, as well as pipelines. But they clearly no longer correspond to the new economic realities, including solving the problems of the development of trade with extra-regional players in the form of China, India, European countries, the South Caucasus and the Middle East. In particular, Kyrgyzstan and Uzbekistan remain among the most closed countries in the world from a transport perspective. Trade between their markets and the outside world is mainly carried out along broken roads or requires the crossing of several state borders, at each of which cargoes can be delayed for many days,” believes Stanislav Tkachenko. Solving the problem of speeding up the transportation of goods and improving the quality of logistics services requires multilateral cooperation. This is exactly what Russia and China are offering the region.
According to the expert, the demand for alternative transport routes between China and Europe (including through Russia) is growing. “The more quality routes there are, the more likely they are to attract the attention of international carriers. For example, at the start of the COVID-19 pandemic, freight rates from East Asia via the Suez Canal to Europe skyrocketed. If carriers then had the opportunity to transport large volumes of cargo through Central Asia, they would have done it,” Tkachenko believes.
Finally, new routes are needed not only from a purely economic point of view, but also from a political point of view.
“The construction of a new railway from China through Kyrgyzstan to Uzbekistan and further to the Caspian coast is an important step to minimize the threat of dominance of these routes by individual countries, depriving them of the opportunity to extract monopoly profits or geopolitical dividends from their geographical location,” says Stanislav Tkachenko. “Russia has reason to fear that Astana will not be able to resist the US in its demands to join the sanctions measures in trade, turning the Russian-Kazakhstan border into a kind of Western “sanitary cordon”, he recalls.
In the event that the delivery of goods important to the Russian economy can bypass Kazakhstan, the authorities of that country will have less opportunity to give in to Washington’s pressure in its sanctions war with Russia.
According to the expert, Astrakhan has great potential as a major transport and logistics center. Being located in the Volga Delta, the Astrakhan seaport and Olya commercial seaport, built at the beginning of the 21st century, could handle a significant part of the transportation of goods on the North-South MTK. Theoretically, the potential of the two ports of the Astrakhan region is huge, and in 2022-2023 their cargo turnover shows positive dynamics. However, the actual numbers are extremely small. Thus, in 2022, they processed and transported less than 10 thousand twenty-foot containers – a very poor indicator for the industry.
In order to develop the ports of Astrakhan, as well as the future transport and logistics complexes, a huge amount of work must be done with the participation of foreign partners. Thus, the capabilities of Iran’s railway network, as well as the ports of Anzeli (Caspian Sea) and Bandar Abbas (Indian Ocean) for transshipment of goods are still extremely small. The thing is that they are in strong competition with road transport. The rapidly developing infrastructure that allows cargo from Russia to Iran and India both along the west coast of the Caspian Sea (via Azerbaijan) and along the east coast (via Kazakhstan and Turkmenistan) makes investment in Russian Caspian ports risky.
“The solution to the problem can be the cooperation of all interested parties, including within the framework of the EAEU and the SCO, since these two integration structures have declared the transport sector as one of their priorities for development. The cost of the issue is measured in tens of billions of dollars, and a successful solution to the problem of the development of the transport network in Central Asia and around the Caspian Sea requires ensuring security and stability in the region,” summarizes Tkachenko.
Translation: V. Sergeev
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