TRACECA Corridor: Geostrategic and Economic Potential

The work of the Intergovernmental Commission (IGC) TRACECA is aimed at creating the favorable conditions for all the participants: robust and efficient transport policy of the parties, open access to the market that would take into account the transport security in the countries within and bordering the regions covered by the TRACECA, joint efforts in order to realize their geo-strategic and economic opportunities.

President Nazarbayev of Kazakhstan, within the framework of the Kazakhstan – 2050 Strategy and the Nurly Zhol – Towards the Future National Program, articulated clearly the importance of building and maintenance of the transportation hubs in both the East and West region of Kazakhstan as well as in Asia, the Middle East and Europe.

The challenge Kazakhstan faces shall be addressed on the background of the globalization process. Today, the consequences of economic globalization are:

  • increased global division of labor;
  • constant movement of a number industries from the developed countries to the developing ones and then from the developing countries to even less developed ones.

Globalization inevitably leads to increased importance of transit and boosts the role of the coastal TRACECA states that are aware of the social and economic benefits they can expect.

However, the sea transportation, however, faces a number of challenges. The existing ports are on the edge of their capacities due to the constantly increasing volume of container shipping. As a result, many of them, including the major ports in Asia and Europe, are expected to limit to exclusively feeder services.

These factors influence the storage costs and force to look for the routes and means of transport that would provide the alternative to the established ones. The recent advances in the high-speed technologies make the sea transportation less obvious choice.

Moreover, excessive capacity of the container carriers exacerbates the tariff wars between the shipping companies and routes. Thus, the number of outports decreases.

Apart from that, maritime safety has become alarmingly problematic due to the widespread piracy. This issue is the most pressing in the narrowest locations with the busiest traffic. The revival of piracy in Southeast Asia and the Indian Ocean force shipping lines to choose longer routes. The anti-piracy measures are often costly and inefficient. Therefore, the investment into this sphere is not sufficient. The political instability aggravates the threat each day especially in the Aden and Suez canals.

The other significant factor is the changing balances of production, consumption and trade. The active development of the market of China means that its share in the world trade will inevitably increase despite the general slowdown in the key economies.

Apart from China, it seems sensible to bear in mind that the Asia-Pacific region is one of the fastest growing. According to expert estimates, in the next few decades, the major markets will shift from Europe to Asia where the consumer demand is higher.

These major shifts in the global trade shall impact TRACECA. To date, however, the bulk of the TRACECA international freight is focused on the traditional markets of the Black and Caspian Seas. Strategic decision taken, given that reorientation towards China, would be both timely and cost-effective. The expert estimates foresee the volume of transit from China trough the TRACECA countries to increase from 1.5 to 5 million tones in the medium and long terms.

Kazakhstan is very well aware of these trends and is willing to use them for its good. President Nazarbayev of Kazakhstan initiated the New Silk Road project with the active participation of foreign investors. Kazakhstan’s aim is two-fold: to enhance its transport and logistics infrastructure, and, most importantly, to attract European and Asian countries to use its territory as a transit one for the purpose of the more efficient trade.

Thus, Kazakhstan, while developing its Aktau, Dostyk and Khorgos terminals, is planning the acquisition of some more terminals in the Black and Baltic Seas. Kazakhstan already has quite an extensive network that unites all types of transport and includes the terminal at the port of Lianyungang in China. Additionally, Astana takes all measures to realize its proactive stance on further integration in the TRACECA corridor.

A series of the strategically important railway lines such as the Zhetygen-Khorgos, Uzen- Turkmenistan and Zhezkazgan-Beineu signifi cantly reduce the length and time of delivery. The railway network includes the TRACECA part that stretches for 1,200 kilometers from the Dostyk-Altynkol station to the Aktau port. This will also reduce transportation costs by 25-35%.

Kazakhstan also initiated the Silk Wind project in order to reduce the time of transportation from 16 to 12 days on the Altynkol - Kars route via the ports of Aktau and Baku. The project stipulates for the information exchange and overall coordination of the work of the customs of the participating countries. The ultimate goal of the project is the establishment of an integrated transportation and logistics infrastructure.

In 2013, the expert commission, which included the representatives of the all contracting parties, prepared the draft agreement that is to be signed in the nearest future. The conditions for regulation of the train flow between China and

Turkey is being negotiated.

There are a series of additional measures planned to facilitate the international traffic: to

build multi-lane border crossing points in order to eliminate the "bottleneck” effect and to modernize of the border crossing infrastructure to increase its capacity.

The tonnage of the vessels on the Caspian Sea enables to meet fully the current and expected demand for the rail-ferry and Ro-Ro traffic.

However, despite the relatively high frequency, the existing services cannot be operated with sufficient regularity due to the poor condition

of the ports infrastructure and too complicated border procedures. The other problematic issue is the delays on the railway stations and the rail lines due to their apparent deterioration.

The border crossing problem is rather complex. Firstly, the customs procedures on the border crossings and in the ports have to be considerably simplified and modernized so that

they would meet the international standards stipulated in the documents signed by the TRASECA member states. Moreover, a procedure of prior declaration shall be established. Obviously, this is easier to achieve in the countries that operate the TIR-EPD, PAIES, or NCTS systems.

The second problematic issue is the port processing that includes berthing, loading and unloading; obtaining entry and exit permits; storage; maintenance of the port information systems; launching of user-friendly internet portals.

The additional task is to gradually introduce electronic booking systems and advance payments for the Ro-Ro and Ro-Pax vessels similar to those used in other seas. These will improve the shipping services in the Caspian Sea considerably.

Unification of the paperwork such as CIM SMGS will facilitate uninterrupted international transportation via container trains across the Caspian Sea. Introduction of integrated multimodal platforms would enable the customers to access easily the information on the door-to-door delivery tariffs.

To sum up, given increasing political instability in the world, the multi-vector foreign policy of Kazakhstan proved to be a wise chose. It helps to maintain the favorable conditions for further development of the transport infrastructure in Kazakhstan. A state that is politically stable is safe and, therefore, posses less risk. This is a very important factor for good functioning of the transport sector.

International cooperation based on the principles of openness, equality and mutual benefit pursued for the purposes of the revival of the Silk Road would enable the participating countries to become genuinely integrated into the global economic processes. The joint efforts are the preconditions necessary to achieve effective implementation of the new Silk Road project. The measures taken by Kazakhstan aimed at boosting its transport infrastructure and promoting the growth of the transit traffic are especially important given the overall intensification of transportation along the TRACECA corridor.

Year: 2015
City: Almaty