At the end of January, the Minister of Industry, Trade and Energy of the Astrakhan Oblast Ilya Volynsky announced the construction of a new container hub in the Caspian cluster[1]. Already this month, Iran recalled its commitments regarding the construction of the Shalamche-Basra railway line, saying that it hopes “to finalize this project with the budget allocated by the Iraqi government in the coming days.[2]” And just this week, Russian President Vladimir Putin called on representatives of domestic business to finance the construction of a route from Russia to the Persian Gulf.
“We can find them inside the country, <...> from our potential investors. I appeal to everyone here: keep in mind – this is a very good project, profitable, preferential, many of our partners, including in the Arab world, show the most active interest in this, it will work,”[3] the head of state said at the congress of the Russian Union of Industrialists and Entrepreneurs. The President also added that the project is extremely marginal for investors and, when completed, will greatly expand the possibilities of selling goods and products.
Vladimir Putin at the Congress of Russian Industrialists and Entrepreneurs
What unites all these statements? Firstly, it is a demonstration that in the conditions of modern challenges and threats, states are striving to create new transport corridors, which are a kind of guarantee in the consolidation of diplomatic relations. Secondly, all of them are aimed (perhaps with the exception of Iran in this case, but about its projects next time) at creating infrastructure for the so-called “North-South” international transport corridor.
“The growth of cargo turnover was achieved thanks to the intensification of transportation along the Trans–Caspian section of the North–South ITC,” says the head of the Ministry of Industry and Trade of the Astrakhan Oblast [4]. The President remarks: “Despite the complexity of geopolitical layouts and various contradictions between the countries of the region, which always arise between neighbors, everyone agrees that it is necessary to build this route.”[5]
Some of the modern analysts exploring the prospects for the development of this logistics network draw an interesting historical parallel[6]: the current global North-South project is extremely similar to the path from the “Varangians to the Persians”. That’s why the Russian merchant Afanasy Nikitin went on his famous “A Journey Beyond the Three Seas”.
Monument to Afanasy Nikitin in Tver
The modern history of the trade route begins at the turn of the century. The most important in a series of related events was the signing of an agreement on the establishment of international transport communications on September 12, 2000. Two years later, in 2002, a solemn ceremony of ratification of the agreement on the opening of the transport corridor between Russia, India and Iran took place[7].
Today, the development of a new transport corridor is gaining new importance, says Anna Rostovtseva, a specialist in the operational work of NOVELCO. If for decades, progress in the development of the ITC was carried out extremely slowly, then in the “roaring twenties” it simply became necessary for all key players of the agreement, as well as for most states with which there is an agreement on the construction and transportation of goods. In 2022, the need for a new path became not just obvious, but extremely obvious. India faced the consequences of the pandemic and the conflict with Pakistan, Russia and Iran – with a sanctions policy restricting the delivery of goods from old partners. Thus, 7 thousand kilometers of ITC have become quite a promising alternative for conducting trade relations.
“The main advantages of the ITC over other routes, in particular over the sea route through the Suez Canal, are: a reduction in two or more times the distance of transportation, as well as a reduction in the cost of transporting containers, compared with the cost of transportation along the main sea route,”[8] says Anna Rostovtseva. It follows from this that the North-South corridor should not be considered solely as a way out of the “plight”: Rather, these are new opportunities and prospects opening up for the economies of several countries.
It is worth noting that due to geographical features, the ITC is divided into three routes: the previously mentioned Trans-Caspian, as well as the Western and Eastern Routes. The first one passes through the domestic ports of Astrakhan, Olya, Makhachkala, as well as through the Iranian Anzali, Nowshehr and Amirabad. The Western route is interesting primarily because it is in the sphere of interests of Azerbaijan, since it passes through its territory. Finally, the eastern route passes through the Kazakhstan – Turkmenistan – Iran railway[9].
Despite the fact that today, in international terms, the construction of infrastructure for the transport corridor does not cause problems (approx. – for example, Vladimir Putin said during the RUIE congress that the head of Azerbaijan expressed interest in the development of the ITC), yet not everything in the development of the new logistics network is going “smoothly”. Naturally, first, difficulties in transporting goods arise due to the width of the railway track. If in Russia its size is 1520 mm, then in India it is 1676. Part of the port infrastructure is still in an unfinished state, which, for example, the Makhachkala commercial port is facing today[10]. The lack of general memoranda and agreements on the regulation of the status of the transport corridor also causes problems. As noted in MGIMO Consulting, the North-South ITC still resembles “this is a broken chain of transport sections working inconsistently with each other; a “patchwork” infrastructure, worn out and not used at full capacity.”[11]
However, there are no engines for international projects stronger than the national economy and the threats that it may face. Therefore, we can say that now we are watching the development of a new promising route, which is likely to become the basis for the creation of a large and sustainable interstate trade alliance.
The author of the article is Sofia Chernopyatova
[1] https://embassylife.ru/post/17874
[2] https://embassylife.ru/post/23553
[3] https://tass.ru/ekonomika/17286533
[4] https://embassylife.ru/post/17874
[5]https://tass.ru/ekonomika/17286533
[6] https://cyberleninka.ru/article/n/istoriya-i-sovremennost-v-razvitii-mezhdunarodnogo-transportnogo-koridora-sever-yug
[7] https://eabr.org/upload/iblock/c69/EDB_2021_Report_5_INSTC_rus.pdf
[8] https://novelco.ru/press-tsentr/multimodalnye-perevozki-tekushchee-sostoyanie-izmenenie-geografii-postavok-novye-marshruty/
[9] https://index1520.com/upload/medialibrary/588/OTLK-N_S-RU.pdf
[10] https://rg.ru/2022/07/19/reg-skfo/mahachkalinskij-port-stanovitsia-sviazuiushchim-zvenom-so-stranami-azii.html
[11] http://eurasian-strategies.ru/wp-content/uploads/2019/08/Sever-Jug.pdf
