Our Analytics 3 november — 14:12

Ilham Aliyev offered Putin and Rouhani new model (Our analysis)



The fanfare did not have time to become silent in connection with the launch of the East-West transport corridor (the Baku-Tbilisi-Kars railway route), as new reports of another, no less important project, North-South came. Each of the two major transport corridors, which have historical significance for dozens of countries in the region and hundreds of the world's largest carriers, at first glance, is a separate route that cannot affect one another. And why this is needed, if annually for each route it is planned to transport millions of passengers and tens of millions of tonnes of cargo.

There is a railway, but there is no trade turnover

But this is only, at first glance. Taking advantage of the fact that both railway routes cross in Azerbaijan, President Ilham Aliyev proposed an effective model for connecting these transcontinental highways. By the way, he clearly stated this during the trilateral summit of the heads of state of Azerbaijan, Iran and Russia held recently in Tehran. But more on that later. Now we turn our attention to the real load of the North-South route.

A number of media outlets gave the Tehran summit the highest rating, despite the fact that no serious agreements were reached at this meeting.

Commenting on such events is always a big problem, as the official media and experts are in time to create a dense information noise from their inflated expectations on their eve. And that's why.

After all, Azerbaijan's share in Russia's foreign trade turnover in 2016 was 0.4178% against 0.5329% in 2015. According to the share in the Russian trade turnover in 2016, Azerbaijan took 44th place (in 2015 it was on the 35th).

Following the results of the same year of 2016, Russia's trade with Iran amounted to $2,184,322,496, an increase of 70.54%. Here everything looks kind of safe, if you don't know that the rise began with the level of trade of 903 million US dollars in 2015. And even with this positive dynamics, Iran's share in Russia's foreign trade turnover in 2016 was 0.467% - 42nd place. Moreover, this year the trade turnover again declined - the period from January to August it decreased by 18%.

Well, for comparison, the volume of Iran's trade with China for 2016 amounted to about $60 billion. In the same year, the volume of trade between Baku and Beijing reached $770 million. And at present China occupies the fourth or fifth place in the trade turnover of Azerbaijan, the third place in imports, and the 12th in exports.

And in addition, they are somehow modestly silent about the fact that at one end of this route is pro-American India, in the middle - Iran, against which the US again intends to introduce the regime of 'crippling sanctions 2.0,' and at the final point - Russia, which is now slow and methodically being squeezed out to the side of the world economy. And in the turnover of which the indicators of the other two partners along the corridor North-South look more like a statistical error than a trade partnership.

Ilham Aliyev insists on global project

An adequate assessment of the situation was given by President Ilham Aliyev, who put forward a very sensible and pragmatic proposal - to pair the North-South Corridor with the Chinese project One Belt One Way, one of the most important sections of which the Baku-Tbilisi-Kars railway was officially launched in operation literally a day before the meeting in Tehran.

Noting that Azerbaijan is taking important steps to create transport corridors East-West and North-South, the Azerbaijani leader stressed: 'All works related to the North-South project have been completed in the territory of Azerbaijan, that is, the entire infrastructure is ready. At the same time, Azerbaijan offers its technical and financial capabilities in connection with the creation of infrastructure in other countries. At present, we are working towards the integration of the North-South and Baku-Tbilisi-Kars transport corridors, and I think this is possible. I am sure that in the future the transport routes North-West and South-West will be commissioned. These two giant projects will connect many large countries.'

Yes, Azerbaijan is the only country in the world that has borders with Iran and with Russia, which is eager for successful cooperation with both Tehran and Moscow both within the framework of international organisations, as well as bilateral and trilateral agreements.

The results of tripartite cooperation in the transport sector, as they say, are obvious. This year, Azerbaijan brought its railway to the border with Iran, simultaneously building and commissioning a 82-metre-long railway bridge over the Astara River. This bridge already connects the Iranian and Azerbaijani banks of the river, and Azerbaijan will use railway facilities in Iranian Astara for at least the next 15 years, as payment for the construction of the railway segment.

Resht - Astara

By the way, during the recent Iran-Azerbaijan meeting in Baku, negotiations on the financing of the railway Resht-Astara, as well as the construction of the 10-km railway section of Astara (Iran) - Astara (Azerbaijan) were completed. Baku agreed to provide 60 million euros for the development of railway facilities in the city of Astara (Iran) and annually transport up to 2 million tonnes of cargo via the Astara-Astara railway.

In addition, Azerbaijan will provide Iran with a $500 million loan for the construction of the railway section of Resht-Astara, the only inaccessible segment for the full operation of the entire North-South railway corridor. If this loan does not cover the cost of building a 164-kilometre railway, the Iranian side will be obliged to provide the necessary funds to complete the project. Iran also assumes obligations on the buying of the lands located along the railway.

Thus, the East-West corridor, we can say, has already been launched, and North-South is almost ready for operation. Both of these corridors, President Ilham Aliyev noted at the meeting in Paris with members of the Business Council of the French Enterprise Movement (MEDEF), passed through the territory of Azerbaijan not only due to its geographical position, but also as a result of the successful government policy. And the president did not hide at this meeting his intention to create a transport hub in Azerbaijan. The country is located between Asia and Europe and attracts great interest with its modern transport infrastructure.

In Azerbaijan, there are 6 international airports, capable of taking all types of aircraft, including large cargo, the country has already become a hub for cargo transportation by air. Azerbaijan has railway communications with all the neighbouring countries. The railway connection with Turkey through Georgia opens the corridor from China to Europe via the Caspian Sea, which reduces the time of cargo transportation by half.

And today the approach of exploitation of the transport corridor South-North is really felt. As soon as the missing section of this corridor is built, a new route will open, which will allow cargo transportation from India to Northern Europe not for 40-45 days, as now, but for 14 days.

And this is what is of special interest in the unfolding transport race. Initially, the East-West transport corridor was called upon to connect China with Europe, and the separately developed North-South project - Northern Europe with South-East Asia. In the event that the two branches are not connected, the North-South will remain in the status of a local project that is not capable of seriously affecting the geoeconomic layouts.

Each project separately was of particular interest from both an economic and a political point of view and was considered an alienated one. But the creative approach to this issue by Ilham Aliyev, who decided to create one of the largest transport hubs in Baku, now extends the significance of these projects.

After all, trains from one corridor can pass to the other corridor, that is, trains can easily integrate in any direction. And by and large the names East-West and North-South can soon be conditional, since trains from different parts of Eurasia will have the opportunity to choose the desired direction in Azerbaijan, which is a difficult task on steel highways.

What else did the presidents talk about?

At the summit, the Russian side also expressed its readiness to supply gas to the north of Iran through the pipeline system of Azerbaijan. However, does Iran need this? After the conflict with Turkmenistan, the Iranians are transferring to the north of the country gas from the fields of the south.

The issue of the integration of the Russian payment system Mir and the Iranian Shetab remained in limbo, the beginning of the first stage of which was again postponed to January 2018. Which is quite understandable: Russian banks do not want to work in the Crimea because of fears of Western sanctions, and in fact they will not be dragged into sanctioned Iran by force.

Well, in an equally suspicious state, the most important issue in the tripartite relationship remained the legal status of the Caspian Sea. In the final statement of the summit it was said that 'Russia, Iran and Azerbaijan plan to cooperate in the field of multimodal transport, sea tourism and conservation of aquatic biological resources of the Caspian Sea.' But with regard to the signing of the convention, it is only planned to 'ensure the speedy adoption of this fundamental document.' The phrase that observers have been hearing from year to year for twenty years.

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