As global trade dynamics shift, Central Asia and the Caucasus are racing to establish themselves as key transit hubs. Following the onset of the war in Ukraine in early 2022, European nations are increasingly seeking trade routes that bypass Russia, thus placing a spotlight on the strategic positions of Central Asian countries.
Investment in infrastructure and competition among nations
Countries like Azerbaijan, Armenia, Georgia, and Turkmenistan are significantly investing in their railways, highways, and ports to attract east-west trade. However, while there is some alignment in ambitions, there is also fierce competition, resulting in a complex interplay of collaboration, rivalry, and geopolitical tensions.
Kazakhstan has been at the forefront of this transit race for over a decade, leveraging its geographical advantage as a crucial hub for goods moving from China to the European Union. Currently, around 85% of these goods transit through Kazakhstan, thanks in large part to the Trans-Caspian International Transport Route (TITR), also known as the Middle Corridor. The importance of this route surged post-2022, with the volume of goods transported along it increasing by 20% in 2024, reaching an impressive 3.3 million tonnes. Additionally, Kazakhstan benefits from the Transport Corridor Europe-Caucasus-Asia (TRACECA), which also circumvents Russia, giving it a significant head start over neighboring countries that are just beginning to develop their transport infrastructures.
Emergence of Turkmenistan and Uzbekistan’s strategic developments
Historically, Turkmenistan maintained a neutral stance and engaged minimally in regional affairs. However, recent leadership changes have prompted a proactive approach toward establishing various transport corridors. Ahead of the recent EU-Central Asia Summit, EU officials visited Turkmenistan to discuss a new branch of the Middle Corridor. The nation is also in talks with Azerbaijan, Georgia, and Romania to develop the Caspian-Black Sea international transport route, while revitalizing the Lapis Lazuli Corridor, which connects Afghanistan to Turkey through Azerbaijan and Georgia. Turkmenistan’s port on the Caspian Sea at Turkmenbashi is an additional asset, though the country must address gaps in its infrastructure and implement necessary reforms in the transit sector.
Uzbekistan, like its Central Asian counterparts, is diversifying its transport corridors to enhance connectivity. It is promoting the China-Kyrgyzstan-Uzbekistan Railway, set to commence construction in July 2025, which will link to the new branch of the Middle Corridor through Turkmenistan. This development aims to facilitate the movement of goods from China without necessitating passage through Kazakhstan. Furthermore, Uzbekistan is working to reduce its reliance on Russia and Kazakhstan by establishing direct routes to Europe via Azerbaijan and Georgia, and to Turkey through Iran, as well as to India through Afghanistan and Pakistan. However, the country’s plans hinge on cooperation with Turkmenistan, which is crucial for these initiatives.
Kyrgyzstan and Tajikistan are also vying for a competitive edge in establishing transit routes. Both nations share borders with China and aspire to create pathways to Uzbekistan. Kyrgyzstan is actively developing the China-Kyrgyzstan-Uzbekistan Railway, which seeks to circumvent Kazakhstan and reduce its dependency on Russian trade. In contrast, Tajikistan is leveraging its proximity to Afghanistan to foster connections with the Persian Gulf, having signed a memorandum to strengthen ties with Iran’s Chabahar port. Although both countries are somewhat behind in the transit race, recent border agreements could enhance regional connectivity.
Azerbaijan, possessing the only port on the western Caspian Sea in Baku, holds a strategic advantage in the transport route competition. The Middle Corridor, North-South Corridor, TRACECA, Caspian-Black Sea route, and Lapis Lazuli Corridor all traverse Azerbaijan, facilitating trade from Central Asia to Europe. Together with Georgia, which boasts major Black Sea ports and a border with Turkey, Azerbaijan is well-positioned. However, should Azerbaijan and Armenia reconcile their differences, Georgia’s role in the transit network may be jeopardized.
Finally, Mongolia faces challenges due to its geographical positioning between China and Russia, which limits its transit capabilities. The Steppe Corridor, connecting Mongolia to both nations, is less viable in the short term due to ongoing sanctions against Russia.
The upcoming decade is poised to be pivotal in determining the dominant transport routes across Eurasia. If political stability is maintained and infrastructure projects reach fruition, the Middle Corridor could emerge as a formidable alternative to Russia’s traditional transport networks, positioning Kazakhstan, Azerbaijan, and Georgia at the epicenter of global trade.