In early June, China unveiled a new transportation corridor when a rail cargo of 230 tons of electrical appliances worth some $2,6 million arrived in the Uzbek capital of Tashkent. Though distant from the South Caucasus, the development nevertheless has a direct impact on the geopolitics of the South Caucasus energy and transport corridor.
For centuries, Central Asia has been notorious for the lack of connectivity. Highways, railroads and pipelines were solely directed northwards towards Russian heartland. Geography also constrained the development of alternatives, but the problem is that other routes were also purposefully neglected during the Soviet times. Therefore, nowadays breaking these geographical boundaries equals to decreasing Russian influence in Central Asia.
Indeed, over the past 30 years, crucial changes have taken place where newly developed east-west transport links (from China to Central Asia, then South Caucasus) allow the region to be more integrated with the outside world. The primary motivator for this is China. The country strives to involve itself into the region’s economics and politics and, specifically, build ties with arguably the region’s most important geopolitical player – Uzbekistan. Beijing has already taken several important steps. For instance, China has become Uzbekistan’s top economic partner through growing trade and direct investment. Take the most recent example, Beijing-backed Asian Infrastructure Investment Bank (AIIB) will lend $100 million to Uzbekistan to help deal with the coronavirus pandemic and future public health disasters.
The new China-Uzbekistan corridor is some 295 km shorter and cuts five days off the standard 15 days-corridor which goes through Kazakhstan and Russia to reach Europe. As different forecasts indicate, the Kazakhstan-Russia corridor could lose some 10-15% of Chinese freight per year to the new China-Uzbekistan route – a significant number considering the massive amount of goods that move between between Europe and China.
What is crucial here is that the only viable route to ship freight to Europe from Uzbekistan is across the Caspian to Azerbaijan, Georgia and the Black Sea. Another possibility would be sending goods via the Turkmenistan and Afghanistan, then Iran and Turkey. However general insecurity along this route makes the Caspian option more promising.
These infrastructure changes in distant Central Asia as well as steady growth of shipments from China will further boost the fragile South Caucasus transport and energy corridor, which struggles to compete with enormous trade routes which go through Russia and elsewhere.
What makes the Caspian routes more interesting is the progress made in port development in Azerbaijan and Georgia. The ports of Baku and a small city of Alat have notably improved their infrastructure over the past several years. Located to the south of Baku, Alat is particularly promising as an estimated transshipment of the new port complex is potentially up to 25 million tons of cargo and 1 million TEU per year.
Similar trends of improving infrastructure take place along the rest of the South Caucasus corridor. In March, the Georgian government granted the APM Terminals a permit to start the expansion of Potin port. Essentially the project, which will add more than 1000 local jobs, involves the construction of a separate new deep-water multifunctional port (officially still a part of Poti port).
The project consists of two major phases: first stage of $250 million will take nearly 2-2,5 years to complete and will involve the development of a 1 700-meter-long breakwater and a quay with a depth of 13.5 meters. A 400-meter-long multifunctional quay for processing dry bulk cargo and further 150 000 TEUs will be added; the second stage envisages a 300-meter-long container quay. If all goes as planned, 1 million TEU yearly container capacity could be expected. What is more important for the infrastructure of the eastern Black Sea region and the geopolitics of transcontinental transshipment, the expanded Poti port would have the capacity to receive Panamax vessels.
Expansion of Poti will have regional implications. The port already enjoys the role of the largest gateway in the country and a major outlet for Azerbaijan’s and Armenia’s trade with Europe. For instance, liquids, passenger ferries, dry bulk and container traffic go through Poti. Moreover, Poti port also serves as an alternative route for exporting wheat from Central Asia to the Black Sea and elsewhere.
As the work on the Poti expansion speeds up similar developments are taking place in Batumi. In 2019 Wondernet Express, Trammo and the government of Georgia announced plans to build a new terminal with total investment cap of 17,5 million euros. More importantly, the new facility will store up to 60 000 tons of mineral fertilizers coming from Central Asia through Azerbaijan.
From a wider geopolitical perspective, both port expansions enjoy US government support as American business interests are deeply intertwined. PACE terminals, a company which operates in the port of Poti for almost 30 years, is partially owned by a US-based company. This connection raises a possible longer-term vision of Poti’s and Batumi’s development as gateways not only for Georgia, but generally for the South Caucasus and Central Asia.
Overall, these connectivity trends will reinvigorate Trans-Caspian shipping. Moreover, though considered by many as unrealistic, the dormant Trans-Caspian Pipeline (TCP), could gain traction. There is more to the story. I have mentioned the US support for the Georgian ports. Europe and Turkey share an identical position. All parties are interested in breaking Russia’s grip on gas export routes from Central Asia. Support for the east-west corridor across the South Caucasus has been present since the break-up of the Soviet Union, but rarely there have been such promising trends as there are now: steadily increasing China-Europe shipping; Chinese Belt and Road Initiative’s expansion into Central Asia; gradually improving rail-road and ports infrastructure in Georgia and Azerbaijan.
On a negative side, much still remains to be done. For instance, in Kyrgyzstan, through which the new China-Uzbekistan route goes, Chinese cargo has to be shipped by road which complicates shipment operations. Nearly the entire 400 km of the Kyrgyz section of the railway still needs to be built. So far, no solution is in sight as difficult mountainous landscape and Russian opposition complicate the issue. But the overall picture, nevertheless, is clear. Central Asia is gradually opening up, shipment across the Caspian increases and the expansion of the Georgian ports takes place creating a line of connectivity.
Author’s note: first published in Caucasuswatch
Unintended Consequences: A heyday for the geopolitics of Eurasian transport
When Russia invaded Ukraine, it took itself off the map of Eurasian transport corridors linking China and Europe. At the same time, it breathed new life into moribund routes that would allow goods to travel across the Eurasian landmass without traversing Russia. It also opened the door to greater Russian connectivity with the Middle East and South and Southeast Asia.
Next month’s summit of the Shanghai Cooperation Organisation (SCO) in the Uzbek ancient Silk Road trading hub of Samarkand could provide a lynchpin for alternative routes.
The SCO, which groups China, Russia, India, Pakistan, Kyrgyzstan, Uzbekistan, Kazakhstan, and Tajikistan, is certain to set the scene for an expansion into the Middle East as well as agreement on the construction of a crucial Central Asian railroad.
The summit is expected to finalize Iranian SCO membership at a time when the Islamic republic stands to benefit from shifts in the geopolitics of Eurasian transportation.
The summit will further welcome Saudi Arabia, Qatar, Egypt, Bahrain, and the Maldives as dialogue partners and Azerbaijan and Armenia as observers. The United Arab Emirates has recently also expressed interest in an association with the group.
Kyrgyz officials believe that leaders of the Central Asian nation and China have agreed to sign an accord at the summit to build a 523-kilometre China-Kyrgyzstan-Uzbekistan railway that has been on the drawing board for 25 years. The railway would link the three countries with Turkey, Iran, and Central and Eastern Europe.
Lack of political will coupled with logistical and technical obstacles, particularly in mountainous Kyrgyzstan, and the high cost caused delays that now appear to be perceived as less problematic because of the fallout of the Russian invasion of Ukraine.
Uzbek President Shavkat Mirziyoyev predicted that the railway would “open new opportunities for transport corridors linking our region with markets in the Pacific Ocean area. The move will add to the widening of existing railway routes connecting East with West.”
Uzbekistan has long asserted that the railway would offer the shortest route from China to markets in the Middle East and Europe, while China sees it as a way of evading the risk of violating US and European sanctions that continued transport through Russia could invoke.
The new railway would feed into the rail line connecting Uzbekistan to Turkmenistan’s Turkmenbashi International Seaport on the Caspian Sea.
From there, it can feed into the Caucasus, Turkey, and the Black Sea via the Azerbaijani port of Baku or Iran, India, the Gulf, and East Africa through the International North-South Transportation Corridor (INSTC) that makes use of the Iranian port of Anzali and potentially Chabahar.
The Baku port agreed in July to let Turkey’s Albayrak group, which has close ties to President Recep Tayyip Erdogan, manage the facility, expand its cargo handling capacity, and build a terminal for fertilizers.
The INSTC, a 7,200-kilometre patchwork of independently operated railroads, highways, and maritime routes, also provides a corridor northward to Kazakhstan and Russia.
The patchwork could prove important to Kazakhstan, which has stood against the invasion of Ukraine despite its dependence on Russian food, fertilizer, petrochemical, and iron imports.
Kazakh President Kassym-Jomart Tokayev has explored diverting oil exports to Europe from traversing Russia to flowing through Iran and Turkey.
Adding fuel to the fire, Kazakhstan has also not shied away from seeking to turn sanctions against Russia to its advantage, including by offering an alternative to Western businesses leaving Russia.
Earlier this year, Iran and Qatar announced regular shipping lines between the two countries as part of the INSTC. Similarly, Iran’s Ports and Maritime Organization (PMO) announced the launch of shipping lines between Chabahar and Dubai’s Jebel Ali Port.
Chinese analysts expect that the railroad, which would start in Kashgar, will help transform the economy of Xinjiang, the Chinese troubled north-western province that is home to brutally repressed Turkic Muslims.
Moves to bolster Central Asia as a critical node in East-West and North-South transportation corridors come amid increased public discontent in the region and stepped-up jihadist activity.
In January, Kazakhstan invited the Russian-led Collective Security Treaty Organization (CSTO) to help restore law and order amid mass anti-government protests. Six months later, protests in Uzbekistan’s autonomous Karakalpakstan region turned violent.
Operating from Afghanistan, Islamic State militants vowed to wage a jihad in the region that would initially target Uzbekistan and Tajikistan.
Islamic State militants hailed rocket attacks in recent months against targets in the two countries as the “great jihad in Central Asia” that would unite the five former Soviet Central Asian republics with Afghanistan, Pakistan, and India in a caliphate.
A United Nations report warned in July that members of the East Turkistan Islamic Movement, a Uighur jihadist group that garnered notoriety in Syria, had defected to the Islamic State because Afghanistan’s Taliban leaders prevented them from launching cross-border attacks in Xinjiang.
“Although ETIM/TIP (Turkestan Islamic Party), like al-Qaeda, has been keeping a low profile for now, it is really a ticking time bomb for China in its neighbourhood,” said Faran Jeffery of Islamic Theology of Counter Terrorism, a UK-based Muslim counterterrorism group.
Russia’s Waning Influence in Central Asia is Inviting Regional Actors to Fill the Vacuum
As the Kremlin seems preoccupied with the war in Ukraine and as the region’s leaders re-evaluate their relationship with Moscow, other regional powers sense the opportunity to exploit it.
The geographical ‘underbelly’, as it is called, Central Asia is a region where Moscow enjoys sizeable economic, political, and soft power influence. However, the war in Ukraine has created understandable consternation in the region.
The CARs have neither condemned nor condoned the Russian action. They have been hesitant and apprehensive about supporting Russian President Vladimir Putin’s aggression. In fact, certain actions indicate resistance to Moscow. While all of them are authoritarian states, they have neither outlawed any anti-war demonstrations in prominent locations nor clamped down on gatherings of solidarity with Ukraine. Kyrgyzstan, Tajikistan, and Uzbekistan rebutted Kremlin readouts that professed tacit support from their leaders. Uzbekistan warned its migrants in Russia of punitive measures, if they subject themselves to recruitment in the Russian army. As Russia’s military assault faltered and the magnitude of human misery in Ukraine became clearer, countries have moved from reticent statements of concern to more explicit criticism.
As the region’s leaders re-evaluate their relationship with Moscow, this has opened the door to new chances for China and Turkey, two states with historically significant ties to Central Asia.
For China, the Eurasian landmass constitutes the heart of its flagship Belt and Road Initiative. In other words, Beijing’s path to dominance goes through Central Asia. Shipping containers from China traditionally traversed through Russia to Europe (Northern route). But following the war, the western sanctions and the trade disruptions that ensued have forced a rethink in Beijing’s strategic calculus.
As a result, Chinese carriers are increasingly choosing the Trans-Caspian International Transport Route to bypass the Russian route to reach Europe. This route is also dubbed as the ‘Middle Corridor of the BRI.’ According to the Trans-Caspian International Transport Route Association, cargo traffic across Central Asia and the Caucasus is predicted to have a significant increase in comparison to the previous year. Discerning the geopolitical churn and change in the Eurasian political climate, logistical companies such as Denmark’s Maersk and Finland’s Nurminen kicked off new train services along the middle corridor. Several Chinese logistics companies, that had initially dismissed the Middle Corridor as unviable, also adapted to the changing circumstances.
Apart from this, to reassure Beijing’s economic interests, Chinese Foreign Minister Wang Yi visited Kazakhstan to meet his counterparts in the third annual China-Central Asia foreign ministers meeting (C+C5).
China is also concerned about security issues and has advocated stability in the region, primarily to secure its economic interests and to prevent any spillover effects that could foment unrest in the Xinjiang province. For years, Russia and China have had an unofficial division of labor, where Moscow would take the driver’s seat in security issues and Beijing would do the same in economic concerns. However, Russia’s preoccupation in a protracted war juxtaposed with Beijing’s growing ties with the region could translate and give China the necessary incentive to supplant Russia as a security guarantor.
Analysts have described the Russia-China partnership in Central Asia as one of ‘Cooperation and Competition,’ but the war has pushed Russia to a precarious position where it will find it increasingly difficult to compete, leaving it with no option but to show indisposed cooperation with China in the future.
Turkey is another power in the region that is striving to increase its presence against the backdrop of Moscow’s waning influence. In recent times, Ankara’s push for more influence is evident after being on the margins for decades.
Two weeks following ex-Foreign Minister Komilov’s public support for Ukraine’s territorial integrity, Erdogan paid a visit to Uzbekistan. During his two-day visit, he concluded ten agreements and pledged to increase bilateral trade. Subsequently, similar agreements were concluded with Kazakhstan when Tokayev paid a state visit to Turkey. Both the leaders signed a joint statement that had reference to raising the relationship to the level of ‘enhanced strategic partnership’
Turkey’s hard power more than its soft power, especially its Bayraktar drones, has attracted the attention of the CARs. The use of Turkish drones by Azerbaijan to tip the scales in the Nagorno-Karabakh conflict has improved Ankara’s long-dormant reputation. Turkmenistan has long been a purchaser of Turkish weapons, particularly drones. In 2021, Kyrgyzstan also purchased its own drones in response to a border dispute with Tajikistan. While Kazakhstan and Turkey have opted to jointly produce drones in Kazakhstan.
The potential for trade, though, is possibly the biggest that Turkey and Central Asia can offer one another. The scope of Ankara’s economy and the resources it has access to are indeed circumscribed. Even so, a more significant Turkish engagement is currently supported in the region and is well-positioned to substantially fill the vacuum made possible by Russia after the invasion of Ukraine.
Turkey specifically seeks to establish itself as a credible and feasible alternative to Russia’s position along China’s Belt and Road Initiative (BRI). In the light of shifting geopolitical equations and trade route disruptions, the Central Asian States are also looking for greater participation from Ankara for purposes of connectivity and balancing the power competition in the region.
Declining Russian hegemony along with assertive responses of the CARs is giving impetus to powers like China and Turkey to play a greater role in the region. More importantly, the sanctions imposed on Russia are having reverberations throughout the region because of its ties with Moscow. Hence, for the CARs to strategically re-evaluate by inviting more regional actors is an opportunity to extricate themselves gradually from Moscow.
Tashkent‘s Historic Opportunity to Emerge as a Regional Leader
The people of Uzbekistan look to President Shavkat Mirziyoyev with hope that would have seemed impossible under the 27 year despotic regime of Islam Karimov. Since taking office in 2016, President Mirziyoyev has “astonished and delighted his citizens with his enthusiasm for reform.” In 2019, Mirziyoyev decisive efforts to end forced labour in cotton fields earned Uzbekistan the honor of being named ‘Country of the Year’ by The Economist magazine. The U.S. State Department recently recognized Uzbekistan’s efforts to “prosecute, convict, and sentence more traffickers; prosecute officials allegedly complicit in forced labor in the cotton harvest; and identify more victims;” in the 2022 Trafficking in Persons Report.
President Mirziyoyev reforms have unlocked potential for Uzbekistan to assert its status as a regional power. With a largely ethnically homogenous population of close to 35 million in 2021, Uzbekistan stands out as a natural leader in Central Asia. Against the backdrop of the ongoing war in Ukraine, President Mirziyoyev benefits from not being part of the Moscow-led organizations of the Eurasian Economic Union (EEU) and the Collective Security Treaty Organization (CSTO). Earlier in July 2022, President Mirziyoyev demonstrated his ability to respond to mass protests in Karakalpakstan with adequate action: personally traveling to Karakalpakstan, cancelling the objectionable constitutional reform, calling for the de-escalation of violence perpetrated by security forces against civilians, and dismissing unresponsive government officials. These steps represent a significant departure from the actions of his predecessor and his neighbors in the region, who met protests with excessive violence and turned to Moscow for support.
President Mirziyoyev’s work, though admirable, is far from complete. Uzbekistan still must guard against pervasive efforts of Russian influence in order to effectively exercise its regional power and stake its claim as a nation on the rise in both liberty and prosperity.
Alisher Usmanov, an infamous Russian-Uzbek billionaire metal magnate and early Facebook investor, is known by many as a tool that President Putin uses for his influence in Uzbekistan. Usmanov is “entrusted with servicing financial flows” for Putin. Many recall Usmanov’s emotional plea directed at Putin’s nemesis, Alexei Navalny, in a cringe-worthy attempt to demonstrate his loyalty. In addition to Usmanov’s ties to Putin, he is also known to be a close ally of Kazakh President Tokayev, an old classmate at the Moscow State Institute for International Relations in the 1970s.
Usmanov is one of Putin’s favorite oligarchs, and was heavily sanctioned by the United States, European Union, and United Kingdom following Putin’s irredentism in Ukraine. The most heartbreaking loss for Usmanov is surely his Dilbar: a $600 million yacht named after his mother which was seized by German authorities. The largest yacht in the world by gross tonnage, the Dilbar is complete with two helipads and one of the biggest indoor pools ever installed on a yacht. Usmanov, as well as his two sisters who face related sanctions, each filed legal appeals in April in attempts to overturn the EU sanctions. These appeals were denied.
Usmanov, more so than most oligarchs, inspired the establishment of a special sanctions enforcement task force in the UK, and a special “KleptoCapture” unit in the US: groups comprised of interagency experts dedicated to building cases, tracking assets, and enforcing sanctions against oligarchs. This effort was characterized by UK Foreign Secretary Liz Truss: “Our message to Putin and his allies has been clear from day one – invading Ukraine would have serious and crippling economic consequences. Sanctioning Usmanov and Shuvalov sends a clear message that we will hit oligarchs and individuals closely associated with the Putin regime and his barbarous war. We won’t stop here. Our aim is to cripple the Russian economy and starve Putin’s war machine.”
Russia’s Foreign Minister Sergei Lavrov is set for an official visit to Tashkent, Uzbekistan on July 28 and 29 in conjunction with a meeting of the Shanghai Cooperation Organization (SCO). Lavrov’s visit comes at a pivotal time for President Mirziyoyev to assert Uzbekistan as a leader in Central Asia amidst war in Ukraine and instability amongst its neighbors.
President Mirziyoyev should be wise in his dealings with both Lavrov and Usmanov, as onlookers will perceive an embrace as a sign of Russia’s growing influence in the country. Usmanov’s participation and investment in Uzbek national projects will deter multi-lateral development bank financing and other Western capital inflow. A continued relationship with Usmanov is not the key to Mirziyoyev’s prosperity. Uzbekistan has a historic opportunity to strengthen its role on the global stage under President Mirziyoyev’s leadership. Lavrov’s visit comes at a crucial time to show that Tashkent is not under Moscow’s thumb. President Mirziyoyev has begun his term by galvanizing the Uzbek people in hopes of reform. As is made crystal clear in Ukraine, embrace of Russian influence, whether diplomatic or oligarchic, dims this light of hope.
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