What triggered the economic development of Central Asian countries?
Experts believe that the development of economic relations between the countries of Central Asia and their neighbors, as well as with other world players, is a positive factor for increasing the volume of cargo transportation. Investments in infrastructure, such as the construction or modernization of roads, railways, ports and cargo transportation terminals, the signing of trade agreements between countries in the region or with other countries can stimulate cargo transportation and transit through Central Asia. Political stability in the region also plays a key role in ensuring security and predictability for cargo transportation.
It is noteworthy that the geopolitical turbulence in the world has expanded the opportunities of Central Asian countries to attract new sources of investment and conclude transport agreements with the European Union. The package of contracts will include not only transport issues, but also insurance, security, information support and other capital-intensive areas of cooperation.
New transport routes
Central Asian countries are ready for significant changes in their logistics, as plans to create new transport corridors gain momentum. Among the key ones is the start of construction of the China-Kyrgyzstan-Uzbekistan railway for multimodal freight transport, which will be an important milestone in the development of regional ties and trade facilitation.
As a follow-up to this initiative, two additional routes are being developed. The southbound route, starting from Bishkek via the Dostuk checkpoint in Osh province, will pass through Uzbekistan and Turkmenistan before crossing the Caspian Sea by ferry and reaching the port of Olya in Russia’s Astrakhan region. It is noteworthy that the transit of goods from Uzbekistan to Turkmenistan will be carried out through the Uzbek checkpoint «Alat-Farap», which underlines the strategic importance of this emerging transport corridor.
Against this background, the upcoming summit of the heads of state of Turkmenistan, Tajikistan and Uzbekistan in Ashgabat, scheduled for August 4, is intended to intensify discussions on the development of transport corridors, especially relevant for landlocked Uzbekistan.
Andrey Grozin, Head of the Central Asia and Kazakhstan Department of the Institute of CIS Countries, Senior Researcher at the Institute of Oriental Studies of the Russian Academy of Sciences, notes that new transport corridors, including the multimodal Southern Transport Corridor, are expected to be discussed, thus the expert emphasizes the region’s commitment to strengthening transport links and trade.
Director of the Center for Research Initiatives «Mano» (Uzbekistan) Bakhtiyor Ergashev notes Turkmenistan’s key role in promoting regional ties, especially in creating the Trans-Iranian Corridor from Uzbekistan to Iran. As the security situation in Afghanistan remains fragile, Ergashev stresses the strategic importance of alternative routes, including the Uzbekistan-Turkmenistan-Iran corridor. Moreover, Turkmenistan’s position as a gateway to the seaports of Turkey and the Mediterranean Sea via the Trans-Caspian International Transport Corridor demonstrates its importance in promoting regional trade and economic integration.
Tajikistan can also benefit from these developments, given its geographical limitations in accessing the Caspian Sea Port. The synergy between Uzbekistan, Turkmenistan and Tajikistan in the development of transport corridors in the southern direction opens up huge prospects for strengthening regional ties and unlocking economic opportunities.
Logistics strategy of Kazakhstan
For Kazakhstan, the development of transport corridors in the southern direction is a strategic imperative, especially in terms of facilitating the transportation of Kazakh grain to Afghanistan via the Turkmen route. As Kazakhstan becomes the largest economy in the region, optimization of transport corridors is designed to strengthen regional trade and economic integration.
In September 2023, President Kassym-Jomart Tokayev outlined an ambitious vision for Kazakhstan to strengthen its position as a key transit hub in Eurasia, which will eventually develop into a powerful transport and logistics power. In his address, the President of Kazakhstan stressed the strategic importance of using the country’s geographical advantage at the intersection of world trade routes to stimulate the development of the transport and logistics industry.
«Dynamic development of the transport and logistics sector is a strategic imperative,» Kassym-Jomart Tokayev said, emphasizing the need to increase the sector’s contribution to GDP to at least 9% over the next three years, compared with the current 6.2%.
To achieve this goal, Kazakhstan intends to launch a number of transformative transport projects aimed at strengthening transport connectivity and facilitating the smooth movement of goods across the region.
The expansion of the Dostyk-Moynty railway line and the construction of new sections such as Bakhty-Ayagoz and Darbaza-Maktaaral will strengthen ties with neighboring countries, in particular with China and Uzbekistan. In addition, plans are currently being developed to build a bypass railway around Almaty to reduce congestion and improve efficiency.
The Trans-Caspian route, which provides a direct link between China and Europe, is the cornerstone of our country’s logistics strategy. The Head of State stressed the need for joint efforts with partner countries such as China, Azerbaijan, Georgia and Turkey to maximize the potential of the route. Agreements have already been signed with Azerbaijan and Georgia, indicating a concerted effort to strengthen regional ties and facilitate trade procedures.
As part of the state visit of the Head of State to Azerbaijan on March 11-12, a significant event was the participation of the Presidents of Kazakhstan and Azerbaijan in the ceremony of arrival of a container block train from the new Kazakh-Chinese transport and logistics center in Xi’an to Absheron station (Azerbaijan) on the route of the Trans-Caspian International Transport Route. Speaking at the ceremony, Kassym-Jomart Tokayev stressed that today, in the context of global geopolitical turbulence, a new transport and logistics framework of Eurasia is being built.
— In addition to resources, the struggle for access to transport and logistics opportunities is now becoming more acute all over the world. This is a strategic area. It is gratifying that both Kazakhstan and Azerbaijan are closely cooperating here as natural partners. And today’s opening ceremony of the railway route from the port of Xi’an through the territory of Kazakhstan to Azerbaijan speaks volumes," the Head of State said.
In an effort to diversify access to sea routes, Kazakhstan is also prioritizing the development of the North-South transport corridor, which provides access to the Persian Gulf and the Indian Ocean. It is planned to start upgrading the Kazakhstan section of the Bolashak-Chelyabinsk railway line, which will pave the way for expanding ties and trade opportunities.
In the light of the growth of sea transportation, the development of an integrated marine infrastructure with an emphasis on turning the port of Kuryk into a full-fledged logistics center, similar to Aktau, is becoming an important direction. Plans are also being developed to create a container hub in Aktau, which will further expand Kazakhstan’s maritime capabilities.
In addition to rail and sea infrastructure, Kazakhstan is ready to revitalize its aviation and highway networks. There is a need to transform airports in key cities into multimodal centers that provide efficient logistics services. At the same time, measures are being taken to address shortcomings in the road sector, with strict regulations and enhanced supervision aimed at ensuring timely and high-quality road construction. Kazakhstan is preparing for a comprehensive reconstruction effort, with plans to reconstruct more than 4,000 kilometers of highways by 2029.
By prioritizing infrastructure development and strengthening cooperation with regional partners, Kazakhstan is ready to become a key player in shaping the future of Eurasian trade and transport.
Cargo transportation volumes are growing in Central Asian countries
Central Asian countries record an increase in cargo transportation. Cargo transit through the territory of Kazakhstan in January-November 2023 alone increased by 21% compared to 2022 and amounted to 29 million tons. Overall, 980.7 million tons of cargo were transported in 2023, which is 4.4% more than in 2022. The volume of investments in the industry increased by more than one and a half times to 1.8 trillion tenge. Most of them are spent on infrastructure development to increase the volume and quality of transportation.
In Uzbekistan, in 2023, international cargo transportation reached 59.2 million tons, or 110.4% of the 2022 figure. At the same time, the flow of imported goods is almost twice as high as exports. 29.7 million tons of cargo were delivered to Uzbekistan, and 15.5 million tons were exported. The growth of indicators is 114.1% and 100.8%, respectively. The volume of transit cargo transported through the territory of Uzbekistan amounted to 13.9 million tons.
In Kyrgyzstan, in 2023, the total volume of cargo transported by all modes of transport amounted to 51 million tons, which is 6.7 million tons more than in the previous year. Of the total cargo volume, 41.2 million tons were transported by road, which confirms the high activity of road traffic. Rail transportation also accounted for a significant share, amounting to 9.3 million tons of cargo.
The head of the Ministry of Transport of Tajikistan reported that in January-November 2023, the volume of cargo transportation amounted to 32.6 million tons, which is 14% more than in the same period in 2022. The volume of international cargo transportation amounted to 2.2 million tons, or 100.5% of the same period last year. International transportation was mainly carried out with China, Uzbekistan, Afghanistan, Kazakhstan, Russia, Turkey and Iran.
One of the most dynamically developing sectors of Turkmenistan’s economy in 2023 is the transport sector. In the first 11 months of 2023, a significant increase in the volume of works and services was recorded in this area — by 21.3%. As the publication vestiabad.ru reports, cargo transportation volumes increased by 3.9%. All sectors showed high growth rates: railway transport — 6.5%, automobile-17%, air-almost twice, sea and river transport-5.2%.
Economic benefits for Central Asia and Azerbaijan
Large-scale production is underway in Kazakhstan and Uzbekistan. Large Western companies that left Russia moved some of their capacities to these countries. European companies are also coming here in search of cheap gas and electricity. Dozens of giants, including Samsung, Nestle, and Glock, have deployed or are preparing to launch production in Central Asia.
Azerbaijani political analyst Ilgar Velizade notes that recently both European and Chinese companies have been actively looking at the Middle Corridor passing through the territories of Central Asia and the South Caucasus.
— The central link of this corridor is the Trans-Caspian International Transport Route. Transportation on it in comparison with last year doubled — up to 2.5 million tons. But this is not the limit. It is expected that this indicator will grow at least twice in the very near future. For this purpose, Azerbaijan, Georgia, Turkey and Kazakhstan signed a road map, according to which each country takes measures to simultaneously develop its own transport infrastructure. Both in China and in Europe are well aware of these plans and declare their support," the political scientist says.
According to the expert, in order to get economic benefits from transcontinental transportation through Azerbaijan, Baku must guarantee peace in Karabakh.
«The complete stabilization of the situation in the South Caucasus creates favorable conditions for further increasing cargo transportation along the Middle Corridor, which will also be facilitated by the construction of the Zangezur transport Corridor,» he believes.
New roads require large capital investments
In November 2023, the heads of railway departments of the member states of the international multimodal transport and transit route CASCA+ (Central Asia, South Caucasus and Turkey — editor’s note) discussed issues of increasing cargo transportation in Ashgabat.
The meeting was attended by delegations of line ministries and relevant departments, as well as logistics companies and enterprises from Azerbaijan, Georgia, Kyrgyzstan, Turkey, Uzbekistan and Turkmenistan. It was noted at the meeting that the multi-modality of the route passing through two seas and the territories of numerous countries makes it possible to effectively use the opportunities of this corridor. Since the launch of the route in 2019, about 30 thousand containers have been transported. The participants of the event noted that their goal is to increase the volume of container traffic to 30 thousand containers this year. In their opinion, this will also help to boost transportation and expand the range of goods along the North-South and East-West transport corridors.
The CASCA+ route was created in 2019 in Tashkent at a meeting of the heads of state railways of these countries. Turkey joined the project in December 2021. The «+» sign in the route name indicates the readiness to accept new potential participants interested in transportation along the route, the ultimate goal of which is to connect the countries of Southeast Asia, in particular, China with Europe.
— The negotiations of the presidents of the Central Asian countries are closely followed in Europe. The transfer of cargo to other routes involves large capital investments in the construction of roads, ports and other infrastructure. The EU understands that in the coming years, most freight traffic from East to West will continue to take the Northern Route through Russia. Therefore, Europe’s attention is focused on expanding the route known as the Middle Corridor or Trans-Caspian International Transport Route (TMTM). It is a multimodal rail, freight and ferry transit system that connects China with Europe via Central Asia and the Caspian Sea. It is estimated that TMTM will be able to transport up to 120 thousand containers annually," reportsVladimir Orlov, a columnist for the Russian media-mig portal.
Events are hurried by economic circumstances. The cargo transportation market in Central Asia has grown 2-3 times over the past year, analysts of the Automobile Cargo Transportation Exchange ATI.SU estimate. Experts attribute this dynamic to the growing transit importance in the global supply chains of Kazakhstan, Uzbekistan and Kyrgyzstan.
