Strategists and analysts recognize that developing the Middle Corridor is a sensible response to the disrupted logistics in the region today. It serves as a means to enhance the economic resilience of the region’s independent states and fosters cooperation and trade among them. Ultimately, the Middle Corridor also helps to strengthen these countries’ independence and reduce the likelihood of conflicts between them.
Globally, the Middle Corridor acts as a counterbalance to China’s Belt and Road Initiative. Although it doesn’t completely overlap with Chinese strategies, it doesn’t contradict them either. It complements them, with greater regional and Western involvement than the main Belt and Road routes. Notably, the Middle Corridor passes through countries that are not targeted by Western sanctions.
The term “Middle Corridor” emerged around the same time as the Belt and Road Initiative, signifying its role as an alternative route. However, international support for this corridor predates this term by about 25 years, with the EU and US backing the TRACECA (Central Asia-Caucasus-Europe corridor) headquartered in Baku. While TRACECA still exists, its impact has been limited by a consensus rule in its charter and a long period without substantial support from international entities. Its niche has since been filled by the ~TMTM~ TITR (an alliance of regional transport operators), the Turkic Council, and various bilateral and multilateral agreements among regional countries.
The EU is currently making a significant effort to reengage with the region’s transit and connectivity agenda. At the Central Asian Investment Forum in Brussels in early 2024, the EU pledged an impressive €10 billion for sustainable regional connectivity. The press release referred to the Trans Caspian Transport Corridor, essentially a rebranding of the Middle Corridor. This initiative appears to be an attempt by the EU to reinvent and relaunch the project, but it remains unclear how this large program will be implemented, and no deadlines have been specified. Notably, the pledge to Central Asian countries was not matched by similar commitments to South Caucasus nations like Azerbaijan and Georgia, which are crucial for the corridor’s functionality.
The Middle Corridor primarily serves as a regional conduit for goods from Central Asia, including natural resources aimed at the ports of the Black and Mediterranean Seas or markets in Turkey, the Middle East, and Southeastern Europe. These goods range from oil and oil products to metals and fertilizers, while incoming goods include automobiles, equipment, construction materials, and food, among others.
Originally envisioned as an alternative transport bridge extending to China, and even Korea and Japan, the corridor currently sees minimal cargo from these regions. In 2023, container traffic from China along this route dropped to fewer than 700 containers for the entire year. Although there has been a slight increase in early 2024 due to a new train service from the Chinese border with Kazakhstan, the volume remains negligible compared to the 200 million containers annually transported via the sea route between China and Europe.
Despite these modest figures, there is substantial growth *by almost 60%* in freight transported by trucks along the route. Truck traffic from Europe and Turkey has significantly increased in the last three years, with diversifying routes through the Georgian-Russian and Iranian-Turkmenistan borders also showing impressive growth. This suggests that trucks, often quicker and offering better value for money, are preferred by cargo owners.
Additionally, there is notable growth *by more than 60%* in air transit over the region *during the pandemic*, with Azerbaijan emerging as a regional hub. This is evidenced by the recent inauguration of a new international cargo airport in the Alat Free Economic Zone near Baku.
In contrast, rail traffic along the Middle Corridor, predominantly managed by state-owned enterprises, has shown considerable decline by 18% in 2023, indicating that private sector operators in trucking and air freight are better positioned to capitalize on increasing transit demands.
This situation underscores the need for governments to focus on improving transit regimes and procedures along the corridor while allowing the private sector to handle the actual business of transportation and expediting.
Thus, while the Middle Corridor remains underdeveloped, it is increasingly necessary, not just for transit but also for connecting the region to external markets to enhance economic security and competitiveness. The dynamics of the Middle Corridor illustrate the pressing need for increased integration among regional countries, more decisive actions by the EU and US, and a better balance between state-owned enterprises and the private sector, which is better equipped to develop the corridor, provided there is strong government support.
Ramazan Samadov is a professional with over a decade of experience in the banking sector.
