Wider Eurasia
How the Transport Framework of Eurasia Can Be Strengthened

Resolving transportation issues is a crucial aspect of increasing trade between Russia and Central Asian countries, both with each other and with other countries. To further enhance trade, it may be beneficial to consider reducing existing barriers to trade as well as expanding the network of free trade agreements within the EAEU and the Ashgabat Agreement to create an international transport corridor with other countries, writes Akbope Abylkasimova, a member of the Assembly of People of Kazakhstan.

The development of the transport infrastructure in Eurasia is a priority for Russia’s foreign policy. The Central Asian region, in particular, is an important area for Russian interests. For the countries of Central Asia, Russia represents a key strategic partner and ally. This is due not only to their shared borders, but also to the historical ties that have developed over time, as well as the fact that they lack direct access to the sea. This has been a weakness in their geographical position for some time.

Recent events, such as the closure of the Suez Canal and global instability, have helped strengthen the position of countries in the region. These events have disrupted cargo supply chains, creating favourable conditions for the restoration of influence that once existed during the era of the Silk Road.

Russia, facing sanctions from Western countries, has turned towards the East. In response to this, China has begun to diversify its risks of maritime supply chains and has announced the Belt and Road initiative, aiming to establish land-based transport routes from the East to the West. This initiative is supported by countries such as India, Iran (which is under sanctions), and countries in the Persian Gulf region, as well as potentially countries in North Africa. These countries are interested in establishing a transport network for Eurasia.

Currently, there are three major geographic areas within the Belt and Road framework:

1. The Northern Belt: This route passes through Central Asia and then extends into Europe. 

2. The Central Belt: This extends across Central and West Asia, eventually reaching the Persian Gulf and the Mediterranean Sea. 

3. The Southern Belt: This covers a route from China, through Southeast and South Asia, to the Indian Ocean, with Pakistan as a key transit country. 

The Belt and Road Initiative has been attracting an increasing number of participants. To date, 148 countries and 31 international organizations have signed cooperation agreements with China. The projected total investment in this project is significant: according to analysts at Morgan Stanley, Chinese banks with state involvement could allocate up to $1.3 trillion in preferential terms by 2027 to countries and businesses wishing to take part in Belt and Road initiatives.

Russia – Central Asia: No Alternative or Natural Partnership?
On May 14–15, 2024, in Ufa, the very heart of Eurasia, the 4th Central Asian Conference of the Valdai Discussion Club took place. One of the participants lauded it as “a feast of intellectual thought.” We invite our readers to explore what was said, because not all discussions were open to the general public, and the most interesting things happen, as we know, behind closed doors. We will open this door for you.
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For Russia and Kazakhstan, the North-South Transport Corridor is one of the top priority projects. The main routes of the corridor include the Western route (via Russia and Azerbaijan), the Eastern route (via Kazakhstan and Turkmenistan), and the Trans-Caspian route (via the Caspian Sea). 

The main benefit of the North-South International Transport Corridor (ITC) is that it accelerates cargo delivery by up to two times compared to sea routes through the Suez Canal. For instance, shipping goods from Mumbai to St. Petersburg via the Suez Canal can take 30-45 days, whereas shipping along the Western route can take between 15 and 24 days and along the Eastern route between 15-18 days. 

Russian Deputy Prime Minister Marat Khusnullin has announced plans to double the cargo turnover along this route by 2025, up to at least 30 million tonnes, and to 35 million tonnes by 2030. This represents a 155% increase compared to 2021 levels. 

The North-South multimodal transport corridor also provides an opportunity for effective connection with the East-West routes, including the international transportation route between Europe and Western China, the TRACECA international transport corridor, and the CAREC (Mediterranean-East Asia) corridor, also known as Trans-Caspian. This will help increase the geographical reach and expand trade relations among all countries in the region. 

This integration further strengthens the role of the transport corridor in providing a macro-regional transportation and logistics system, and contributes to the establishment of a sustainable and efficient infrastructure for the transportation of goods across Eurasia. 

It is also important to note unresolved issues that may hinder cooperation. These include trade barriers, inconsistent customs procedures, variations in transport legislation, territorial disputes, international sanctions and restrictions, deteriorating infrastructure, limited adoption of modern technologies in the transportation sector, competing logistics systems, congestions in transportation infrastructure, and variations in railway gauges. 

It is possible to accelerate the process of bureaucratic procedures through the creation of a unified digital ecosystem, particularly among the member countries of the Eurasian Economic Union (EAEU), and the implementation of intelligent transport systems. Kazakhstan aims to utilize artificial intelligence (AI) elements in railway transportation by 2025, as a practical measure. 

At the recent EAEU Summit on May 8, 2023, President Kassym-Jomart Tokayev suggested implementing a mechanism for remote validation of all shipping documents using QR codes and the mutual recognition of digital documents as a means to facilitate the process. This digitalization initiative will benefit foreign trade by increasing the volume, simplifying border crossing procedures, reducing cargo delivery times, and lowering transportation costs. 

In order to maintain the uninterrupted functioning of the Eurasian transport system, Kazakhstan intends to carry out repairs on 11,000 km and construct additional 5,000 km of new railway tracks. The nation has embarked on a comprehensive upgrade of international border crossings. Over the past 15 years, the country has invested over $35 billion in transportation infrastructure. This investment will enhance connectivity with China, South Asia, Russia, and Europe. 

Resolving transportation issues is a crucial aspect of increasing trade between Russia and Central Asian countries, both with each other and with other countries. To further enhance trade, it may be beneficial to consider reducing existing barriers to trade as well as expanding the network of free trade agreements within the EAEU and the Ashgabat Agreement to create an international transport corridor with other countries. 

It is also important to note the cooperation between Russia and Central Asian countries in matters of industrial collaboration, which can take place in the form of establishing large joint ventures as well as jointly training scientific and technical staff for these enterprises. Potential areas for developing industrial cooperation include petrochemicals, energy, education, and the development of artificial intelligence and digital services. A notable example of such cooperation is the project to construct the first integrated gas chemical complex in Kazakhstan, involving KazMunayGas, Sibur, and Sinopec, with a capacity to produce 1.25 million tons of polyethylene per year, accounting for 1% of global capacity. Petrochemicals and gas have seen a rapid increase in value added along their supply chain, and moving up the production stages allows for a significant increase in added value. The price difference between raw materials and finished polymer products can be more than 20 times. This knowledge-intensive process requires the attraction and training of skilled personnel. 

Another example of industrial cooperation is an agreement between Kazakhstan and Russia on the construction of three power plants. Central Asian countries face a significant shortage of electricity, and similar projects may exist in other regions. Therefore, integration between Central Asia and Russia is an essential and promising step under current circumstances. Common interests promote stability and prosperity for both parties. Developing economic ties will lead to the development of educational ties and greater regional unity, as well as solving social, employment, and migration issues, which will strengthen regional security.

Wider Eurasia
Cooperation Between Good Neighbours
On May 20th, the Valdai Club hosted an expert discussion titled “Russia and Central Asia in new strategic conditions” following the 4th Central Asian Conference that took place in Ufa on May 14-15. The discussion was moderated by Timofei Bordachev, Programme Director of the Valdai Discussion Club.
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Views expressed are of individual Members and Contributors, rather than the Club's, unless explicitly stated otherwise.