Assessing New Transport Corridors and Their Impact on Kazakhstan (II.)

At the beginning of 2023, Russia announced the construction of two new transport corridors from China towards Europe, bypassing Kazakhstan. The first is through Kyrgyzstan, Uzbekistan to Turkmenistan, and then through the Caspian Sea to Astrakhan (South transport corridor). The second is the continuation of the new Moscow-Kazan highway to Novosibirsk, and then through the Altai Republic or Mongolia to China. Experts also add to this list the North-South route through Azerbaijan (restoration of railway infrastructure. Russian investments are estimated at $1.3 billion). In recent months these projects have generated a wave of discussions about the allegedly growing tension in Russian-Kazakh relations.

South transport corridor – A memorandum on its formation and development of the southern transport corridor was signed in November 2023 by participants in the first SCO transport forum in Tashkent (Uzbekistan).

The first route is more the interest of Kyrgyzstan. Bishkek intends to create an opportunity to enter the Russian market, bypassing the territory of Kazakhstan. Among the reasons cited is the need to bypass queues at the Kazakh-Kyrgyz border. But it is obvious that it is not the point. Kyrgyz businesses are the transit of Chinese goods to the territory of the EAEU. And not so long ago, Kazakhstan detained a shipment of drones to Russia. Theoretically, there is no customs border between the EAEU countries and transport with drones should not have been stopped. However, the Kazakh side is in control of the situation. Kazakhstan is the only country in the region that has placed exports and re-exports to and from Russia under the control of American structures. It seems that in Kazakhstan the fear of secondary sanctions from the USA significantly outweighs its own interests, primarily economic ones. Kazakhstan’s position raises many questions about its fulfillment of its obligations within the EAEU and the CIS free trade zone.

The project of creating a route through Uzbekistan, Turkmenistan and further by sea has little economic feasibility, since goods will leave the EAEU zone and then cross the border again, which will obviously lead to higher prices for supplies. There is an opinion that the talks about the Southern transport corridor is aimed to put pressure on Kazakhstan to remove restrictions on the border for transit cargo. Real steps to implement this route will challenge Kazakhstan’s participation in the North-South corridor project. It connects Russia and India and passes through Azerbaijan, Iran, Kazakhstan, and Turkmenistan. Many experts note that the removal of restrictions on the Kazakh-Kyrgyz border and the Russian-Kazakh border on the part of Kazakhstan can at least slow down the implementation of this project.

In the transport corridors under consideration, problems on the border of Kyrgyzstan and Tajikistan fade into the background since interaction goes through Uzbekistan. On the other hand, we witnessed some major changes on their 972 km long common border. The work of the intergovernmental commission has continued since last year, and to date the parties have agreed on approximately 889 km of the state border out of 972 km. Even if the corridor is not supposed to lead across their border, it helps stability in the region and, theoretically, this could create an alternative to existing corridors or those under construction.

The implementation of these projects will be significantly influenced by Kazakhstan’s activity in attempts to comply with sanctions and the development of routes bypassing Russia. Now Russia is not very serious about Kazakhstan’s attempts to develop the Kazakhstan-Azerbaijan route, since its capacity is limited.

The transport industry of Kazakhstan provides about 9% of GDP, which is quite a large amount. According to the Ministry of Industry and Infrastructure Development of the Republic of Kazakhstan, 13 international transport corridors pass through the country. Among them, it is worth highlighting the Trans-Asian Railway (TAR), TRACECA and North-South, all of which in one way or another connect Asia with Europe.

As we know, there have been or are attempts to bypass Kazakhstan due to its control of border crossings. However, since Kazakhstan’s dependence on China is high, the likelihood of a deterioration in relations due to the construction of new corridors is low. Kazakhstan will remain a significant transit partner for China.

Generally, it is unlikely that the development of alternative transport projects will cause any serious political tension in the region. In bilateral relations between Russia and Kazakhstan or between Kazakhstan and other Central Asian countries, transport transit issues are significant but not the most important ones. In the context of geopolitical changes, when regionalization processes became more important than globalization, relations with neighboring countries will become more and more important.

Finally, we can add that a major change for Kazakhstan will be the successful construction of the railway China – Kyrgyzstan – Uzbekistan. Kazakhstan could probably suffer significant losses in the event of the combined implementation of projects on the southern transport corridor and the China-Kyrgyzstan-Uzbekistan railway. Until recently, these were hypothetical planes, but in the last days we come to know that the construction of the railway can begin as early as the end of 2024.