Navigating the Challenges of the "Middle Corridor": A Reassessment of Strategies Needed

Despite the initial buzz surrounding the "Middle Corridor" – the ambitious overland route connecting Europe and Asia through the Caucasus and Central Asia – tangible results have been elusive. As concerns grow over the vulnerabilities of maritime routes, particularly in light of the ongoing Red Sea crisis, the focus shifts to the imperative of fostering intraregional trade and establishing robust connections to key global trading hubs.

Azerbaijani expert in banking and consulting Ramazan Samadov, in an op-ed for commonspace.eu, contends that the countries in the Central Asian and South Caucasus regions should redirect their efforts towards enhancing connectivity with significant trading hubs such as the Mediterranean ports of Turkey, the Black Sea ports of Georgia, Persian Gulf ports of Iran, and Baltic ports. This shift, Samadov argues, is crucial not only for transit and export but also for elevating the competitiveness of their economies, especially for landlocked nations.

The "Middle Corridor" gained attention amid the crisis in Ukraine, with stakeholders anticipating the ramifications of sanctions against Russia and disruptions in the supply chain. While rail transit volumes through the Azerbaijani railway section initially surged, peaking at over 400,000 tons monthly in mid-2022, they gradually declined through 2023. Factors contributing to this decline include a return to conventional business practices after the logistics frenzy driven by sanctions subsided, increased Chinese overland exports to Russia, and the prevalence of cheap sea freight throughout 2023.

Despite the enthusiasm around the "Middle Corridor," it still represents less than 1% of the maritime alternative – the sea route from China to Europe. Moreover, the majority of cargo traversing the corridor originates from or is imported to the Central Asian and Caucasus regions, with minimal transit through the corridor to destinations like China or Europe.

Samadov underscores the need for a reassessment of strategies, asserting that the region should focus on more intraregional trade and fortified connections with major global trading hubs. He emphasizes that relying on short-term, revenue-driven transit policies, where railways continuously raise tariffs without improving service quality, hampers the corridor's potential for wider transit geography and diverse cargo.

The op-ed argues that the region, especially Azerbaijan and Georgia, should collaborate more closely on transit initiatives. Cooperation on coordinating ports and terminals, implementing cargo-friendly tariffs, and reviving under-utilized projects like the Baku-Tbilisi-Kars railway are identified as essential components for the success of the "Middle Corridor."

In conclusion, Samadov contends that the region should look inward for solutions and concentrate on bolstering intraregional ties, positioning itself as a key player in global trade. The success of the "Middle Corridor" lies not in Western support but in the collaborative efforts and strategic alignment of the countries within the region.