The most important format for cementing regional cooperation between the countries of the Caspian region is the Organization of Turkic States (OTS). Simultaneously, these countries intend to expand regional cooperation through a special UN program – SPECA, which celebrates its 25th anniversary in 2023. Since November 21, within the framework of SPECA week, a transport forum, a meeting of the working group on trade, and a number of other meetings have been organized in Baku. The Summit of Heads of State of the SPECA countries was held at the Heydar Aliyev Center on November 24.
The fraternal relations of the Turkic states, based on cultural, historical, and spiritual commonality, are supported by a coincidence of views on almost all key issues of the political, defense, and regional agenda. It is noteworthy that Kazakhstan, Turkmenistan, and Azerbaijan, which have considerable energy resources, have been actively cooperating for more than two decades in the field of transporting oil and petroleum products to foreign markets.
In turn, with the launch of the Trans-Caspian International Transport Route (TITR) at the end of 2018 and the organization a year later of another Caspian route – Lapis Lazuli, the Central Asian countries and Azerbaijan joined the transit of goods between China, Turkey, and Europe, becoming the basis of the transport and logistics potential of the Middle Corridor.
The series of global crises observed for three years now – pandemic, fuel and raw materials, food, and the outbreak of the war in Ukraine, also transport and logistics, encourage Turkey and friendly states in Central Asia and the South Caucasus to build new platforms for expanding trade and investment cooperation, minimizing external risks and strengthening broad cooperation in the business and humanitarian spheres.
The key instrument for this was the Organization of Turkic States (OTS), within which the basic document Turkic World 2040 was adopted, and agreements were signed to improve the efficiency of regional transport and logistics corridors, mitigate customs barriers, develop preferential trade, implement energy projects, form joint investment funds, etc.
However, the logic of regional cooperation pushes the OTS countries to expand and supplement the format of integration instruments, and the special UN program SPECA, established in 1998, was chosen as an additional platform. This structure was created to develop economies that do not have direct access to open sea spaces, and today unites Kazakhstan, Turkmenistan, Azerbaijan, Uzbekistan, Kyrgyzstan, Tajikistan, and Afghanistan.
The participating states of the SPECA program cover a vast geography with a population of over 130 million people and have considerable economic potential, energy and mineral resources, and transport capabilities. Despite the global crises of the last three years, the Central Asian countries and Azerbaijan were able to maintain socio-economic stability and continue to support each other in the external arena, showing political solidarity; in recent years, they have intensified cooperation in trade, transport, energy, agriculture, tourism, issues of digital transformation, as well as in the field of culture, security, and defense.
“This year marks the 25th anniversary of the UN special program SPECA and Azerbaijan currently chairs this organization. Over the course of 25 years, comprehensive ties between our countries have been successfully developing, but the summit of SPECA member countries is being held for the first time,” said President of Azerbaijan Ilham Aliyev, welcoming the heads of state and government who participated in the summit.
– At my invitation, the prime ministers of Georgia and Hungary and the Secretary General of the Cooperation Council for the Arab States of the Gulf are taking part in the summit today as guests of honor. I am confident that holding the summit with such a composition will open the way to a broader format of economic cooperation.
The president of Azerbaijan recalled that during the formation of the SPECA program, its participants were just taking their first steps as independent states, solving numerous problems, and facing various challenges. Since then, the countries of the region have strengthened their state sovereignty, become full members of the international community, rapidly developed their national economies, and most importantly, consistently strengthened political stability.
“If there is no stability, then there can be no talk of any economic development. Today, wars, conflicts, and bloody clashes are raging in various regions of the world, but peace, stability, and tranquility reign in our countries, and development and construction processes are successfully underway,” President Ilham Aliyev noted, emphasizing that this is a great achievement and success of our states and peoples.
The president especially noted the importance of the economic forum organized in Baku as part of the SPECA week, which will contribute to the development of business ties between the countries; the exhibition held at the Baku Expo Center, which clearly demonstrated the positive development processes of the countries of the region, serves the same purposes.
The president welcomed the initiative of the member countries that proposed the creation of a multilateral partnership trust fund for the effective and timely attraction of financial resources to SPECA projects: this structure is planned to be established under the auspices of the UN, and Azerbaijan is ready to allocate $3.5 million to this fund.
Touching upon the issue of expanding cooperation between the countries – members of the SPECA program, Ilham Aliyev recalled that in recent years, Azerbaijan has invested billions of dollars in its transport infrastructure, thanks to which the country has become one of the logistics centers of Eurasia, located on the East-West and North-South transport corridors.
Today, partners in the SPECA program – Azerbaijan, Kazakhstan, Turkmenistan, Uzbekistan, Kyrgyzstan, and Tajikistan – successfully cooperate in a number of multilateral formats. This partnership primarily promotes regional trade growth. In particular, over the 10 months of this year, Azerbaijan’s trade turnover with the SPECA countries amounted to $1.2 billion, which is 16% more than the same period last year, and despite the fact that 2022 was a record year in this regard: last year’s trade figures reached $1.3 billion, 3.6 times higher than the achievements of the previous year.
It is obvious that cooperation both within the framework of the OTS organization and within the framework of the SPECA program is aimed at solving the transport problems of landlocked Central Asian countries, providing them with transit opportunities and access to world markets. The prospects for transport and logistics cooperation were discussed in detail within the framework of the SPECA week events in Baku, and during the summit of heads of state of this structure. As a key transit hub in the wider region, Azerbaijan is actively participating in these efforts, with a focus on improving efficiency, expanding capacity, and simplifying customs procedures along the Middle Corridor.
In particular, Azerbaijan is financing the modernization of the Baku-Tbilisi-Kars railway, and next year freight traffic on this road will be increased from 1 to 5 million tons. In parallel with this, the capabilities of the Alat port are expanding; during its modernization, cargo handling in the harbor will increase from today’s 15 to 25 million tons. Azerbaijan provides Central Asian countries with a wide range of opportunities in the field of logistics, in particular, the construction of terminals of partner countries in the FEZ located next to the Alat port is very promising. Thus, a memorandum has already been signed with companies from Uzbekistan on the creation of warehouses for transshipment of sugar in the FEZ; similar projects for transshipment of grain and mineral fertilizers are planned to be implemented with Kazakhstan, Turkmenistan, etc.
During the SPECA forum, the efforts of the Caspian countries to improve the efficiency of the supply chain, expand the capacity of the Middle Corridor, simplify customs and cross-border procedures, reduce tariffs, and digitalize logistics operations were discussed. This work is becoming more and more successful: for example, it is expected that the volume of cargo transportation along the Trans-Caspian International Transport Route (TCITR) at the end of 2023 may increase by 17.6%, exceeding 2 million tons. Moreover, as indicated in the road maps signed between Azerbaijan, Kazakhstan, Turkey, and Georgia, by 2025, the route’s capacity will be increased to 10 million tons of cargo per year.
In the future, cooperation between the participating states of the SPECA program will be aimed at developing new vectors: expanding the generation capacity of renewable energy sources (RES) and exporting electricity to the markets of Turkey and the EU, and in the longer term, joint ventures on the supply of “green” hydrogen are possible.
In conclusion, we note that following the results of the Summit of Heads of State and Government of the SPECA participating countries, the Baku Declaration and the Roadmap for the digitalization of the Middle Corridor were adopted.