14 June 2021, 10:14

Executive Director of the Center for Analysis of Economic Reforms and Communication, Doctor of Economics, Professor Vusal Gasimli stated that the Zangezur Corridor will open not only the transportation between Nakhchivan and other regions of Azerbaijan, but also connect the Caspian and Mediterranean basins as a whole, and in a broader sense, Southeast and Central Asia and Europe. He said, “Azerbaijan, which has increased its geo-strategic and geo-economic significance after its victory in the Patriotic War, is carrying out diversification through Baku-Tbilisi-Kars and Zangezur transportation routes over East-West line and turning to the “sorting center” of the great Eurasian geography.

The incident on the Suez Canal has increased the importance of land transport between China and Europe. As the number of vehicles going from China to Europe increases, so does the need for vehicles to operate in the opposite direction for reducing costs. In addition, another factor increasing the interest in Zangezur Corridor is connected with management and capacity limits reached at the cross-border station in Poland/Belarus on the northern land route in Eurasia. From this point, the Zangezur Corridor, offered by Azerbaijan, is beneficial to commercial entities that carry billions of dollars a day over the East-West route and to countries that represent their interests, especially China and Europe.

China and the EU, whose trade turnover amounted to 560 billion euros in 2019, are interested in such alternatives routes as the Zangezur Corridor. At the same time, the Zangezur Corridor is important to the trade turnover between Turkey and Central Asia, which amounted to 6 billion US dollars, as well as prospective economic relations between China and Turkey with a trade turnover of 21 billion US dollars. The Corridor can also create opportunities to strengthen economic relations between Russia and Turkey.

Because of limits in the Oceans by First Island Chains from the Kamchatka Peninsula to the Malay Peninsula and aspiration to develop inland regions on its west, China supports the Zangezur route, which is located on the Middle Corridor and provides opportunities for diversification. Chinese leader Xi Jinping in his letter to the President of the Republic of Azerbaijan Ilham Aliyev wrote, “cooperation between the two countries on the "One Belt, One Road" project is developing successfully and effectively... I am ready to work with you to deepen bilateral friendship and cooperation.”

 

Accepting the Port of Baku as the “Green Port”, Europe also has economic interests in the Zangezur Corridor. By the way, in 2020, despite the COVID-19 pandemic, the turnover of the Port of Baku increased by 20%. That year, the number of large vehicles (TIRs) and containers passing through the port was at a record level for the last 30 years. To be clear, in 2020, the capacity of EU-China Express freight trains increased by 65% compared to the previous year. Compared to the last 5 years, the Port of Baku has seen a 5-fold increase in the number of trucks, 3-fold in containers, and 3.5 times in the volume of cargo transported in the dry cargo terminal.

Russian South Caucasus Railway Company, controlling railways in Armenia, also has a commercial interest in the Zangezur Corridor. Official Tehran is not interested in building an expensive railway route, which is anticipated to cost 3.5 billion US dollars). Zangezur Corridor is beneficial for Iran since it opens new transportation opportunities”.

Nobel Prize-winning economist Paul Krugman’s quotation, “Canada is closer to the United States than it is to itself,” can be applied to the case of Armenia, for “Armenia is closer to Azerbaijan and Turkey than it is to itself.” According to Vusal Gasimli, who put forward this opinion, 2/3 of 1570 kilometers border of Armenia is with Azerbaijan, and more than half of the remaining 1/3 of the length of the border is with Azerbaijan's ally Turkey. He said, “83.2% of Armenia's borders are closed due to territorial claims to its neighbors. Armenia's 44-kilometer border with sanctioned Iran has limited capacity, and the Upper Lars checkpoint, the only way out through Georgia for its main trading partner Russia, has low potential because of seasonal factors. That is why, as Lee Kuan Yew - the godfather of the Singaporean “economic miracle” said: “Don’t fight with neighbors, trade with them”. The launch of the Zangezur road can open some prospects for Armenia’s stagnant economy. Armenia's resistance to the Zangazur Corridor is meaningless in the new geo-economic reality created by Azerbaijan."


Center for Analysis of Economic Reforms and Communication
www.ereforms.gov.az