Middle Corridor: The New Silk Road Bridging East and West

TIME PRINTER July 03, 2024

Middle Corridor: Paving the Way for the New Silk Road

The Middle Corridor, also known as the Trans-Caspian International Transport Route (TITR), is a trade route that connects China to Europe through Central Asia, the Caspian Sea, and the South Caucasus. It serves as a crucial alternative to the Northern Corridor that passes through Russia. Rooted in the strategic initiative to enhance connectivity between China and Europe, the Middle Corridor represents a significant multilateral effort involving key regional players such as Kazakhstan, Azerbaijan, and Georgia.

The journey towards establishing the Middle Corridor began with a crucial agreement signed on November 7, 2013, during the Second International Transport and Logistics Business Forum "New Silk Road" in Astana. The leaders of the railways in Kazakhstan, Azerbaijan, and Georgia came together and signed an agreement to develop the Middle Corridor transportation route. They formed a Coordination Committee to work on this.

By 2014, the Coordination Committee had expanded to include other important transport and port authorities from these countries. This collaboration aimed to improve logistics and increase trade flows across the region.


Trans-Caspian International Transport Route (Middle Corridor): A multimodal transportation network connecting China to Europe through Central Asia, the South Caucasus, and the Caspian Sea.
Image Credit: Wikimedia Commons, Middle Corridor


Notably, Turkey is actively involved in the Middle Corridor through various cooperation agreements and initiatives with regional countries, including the signing of a "Common Cooperation Protocol" by the Transport Ministers of the Turkic Council member states. The Middle Corridor initiative aims to revive the ancient Silk Road. This connects well with China's Belt and Road Initiative, which aims to improve connections between the East and West. Within this framework, Turkey supports China's Belt and Road Initiative on a "win-win" basis.

One of the significant milestones achieved through the coordinated efforts of the committee was the establishment of the "Nomad Express" container service. Pilot container trains were tested on routes connecting China, Azerbaijan, Turkey, Ukraine, and Kazakhstan. These demonstration trains showed the potential of the Middle Corridor to provide efficient and reliable cargo transit between Asia and Europe.

The collective initiatives led to the formation of the International Trans-Caspian Transport Consortium and the subsequent establishment of the International Association "Trans-Caspian International Transport Route" in December 2016. By February 2017, this association had commenced its activities, symbolizing a unified commitment to leveraging the Middle Corridor for enhanced regional connectivity and trade integration.

The primary land trade route between Europe and China has been the Northern Corridor (Trans-Siberian Railway), which goes through Russia. However, after Russia's invasion of Ukraine, the Northern Corridor has become a political and financial liability, especially for NATO allies. As a result, bypassing high-risk regions and fostering regional cooperation, the Middle Corridor will alter Eurasian trade, and this will lead to a new era of economic growth and geopolitical significance.


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Middle Corridor to Strengthen EU-Central Asia Relations:

The Middle Corridor, integral to China's Belt and Road Initiative, traverses Turkey, the Caucasus, and Central Asia. This route not only provides a strategic alternative to the Northern Corridor through Russia and the Southern Corridor via Iran but also offers a more stable and economically viable option for global trade. The Middle Corridor's ability to bypass high-risk regions has made it a preferred choice for businesses looking to mitigate geopolitical uncertainties.

Central Asian countries are eager to revive their heritage as key trade routes to diversify their economies and reduce reliance on Russia and China. The Middle Corridor offers them a means to future-proof their economies, enhancing regional connectivity and reducing dependence on fossil fuels.

The EU has a strategic opportunity to support the Middle Corridor development, positioning itself as a major geo-economic player in the region. By investing in this infrastructure, the EU can not only bypass Russia but also create new trade routes and economic partnerships in Central Asia, addressing the region's renewable energy potential and integrating it into European value chains.

While challenges remain, the EU can leverage the Middle Corridor to gain influence in Central Asia, ensuring compliance with EU export controls and reassuring Turkey of its crucial role. This initiative can deepen economic, political, and energy ties, potentially curbing rival influences from China and Russia and strengthening Europe's geopolitical stance.


Ilham Aliyev inspecting the Baku-Tbilisi-Kars railway, a key rail link in the Middle Corridor connecting the Caspian region to Turkey and Europe.
Image Credit: Wikimedia Commons, Baku-Tbilisi-Kars railway line

The route is particularly significant in light of the ongoing geopolitical instability in regions traditionally used for East-West trade. By circumventing areas prone to conflict and political volatility, the Middle Corridor ensures a more reliable and predictable flow of goods. This predictability is crucial for global supply chains, which have been severely disrupted by recent events such as the COVID-19 pandemic and Russia's invasion of Ukraine.

Middle Corridor Improvements in the Caucasus and Central Asia:

Azerbaijan has recently completed the 184-kilometer section of the Baku-Tbilisi-Kars (BTK) railway line, a key component of the Middle Corridor infrastructure. To further bolster this regional connectivity, Azerbaijan and Georgia are establishing a joint venture to manage the operations and development of the BTK railway.

Significantly, cargo transportation on the BTK linehas commenced from May 20th, 2024, marking an important milestone.  Azerbaijan is proactively promoting the Middle Corridor route, coordinating with railway administrations and cargo operators across Central Asia and Europe to facilitate seamless cargo movement along this strategic trade artery. 

The Baku-Tbilisi-Kars Railway, coupled with substantial investments in Turkish ports and rail networks, have transformed the region into a crucial hub for transcontinental trade. These investments underscore Turkey's strategic vision to become a central player in the global supply chain.

The Baku-Tbilisi-Kars Railway, for instance, has drastically reduced transit times between China and Europe. This railway line connects the Azerbaijani capital of Baku with the Georgian capital of Tbilisi and the Turkish city of Kars, creating a seamless transport link that bypasses the congested and politically sensitive routes through Russia and Iran. Additionally, the modernization of Turkish ports and the expansion of railway networks have further bolstered the corridor's capacity to handle increased cargo volumes.

In Kazakhstan, infrastructure improvements such as the trans-Kazakhstan rail project have significantly enhanced the country's connectivity with both China and Europe. This project, along with other infrastructure upgrades, has positioned Kazakhstan as a critical transit country within the Middle Corridor, facilitating the smooth flow of goods across its territory.


China's Middle Corridor Strategy:

The Middle Corridor's rise is closely linked to the geopolitical tensions and economic sanctions affecting traditional trade routes. Russia's invasion of Ukraine and the subsequent sanctions have disrupted supply chains, compelling Europe and Asia to seek alternative routes. The Middle Corridor, with its strategic positioning and robust infrastructure, has emerged as a viable solution to these disruptions.

The sanctions on Russia have particularly impacted the Northern Corridor, traditionally a major route for transcontinental trade. With many logistics firms suspending their services through Russia, the Middle Corridor offers a secure and reliable alternative, free from the geopolitical entanglements that plague other routes. This shift is not only a response to immediate geopolitical challenges but also a strategic realignment that reflects the changing dynamics of global trade.

China has a strong interest in developing the Middle Corridor, a key trade route connecting Europe and Central Asia. Beijing views the emergence of new Eurasian trade routes as broadly beneficial, as they provide greater access to international markets for Chinese industries and enhance China's geopolitical influence in Central Asia, a region where it haslong competed with Russia for influence.

While China's influence on the Middle Corridor's development isn't entirely clear, Beijing has invested in important infrastructure supporting the corridor. This includes the Khorgos Gateway and the Khorgos-Eastern Gates special economic zone, a major rail hub on the China-Kazakhstan border.

China's interest in the Middle Corridor is driven by its desire to have a trade route that is not dominated by Russia (as in the case of the Northern Corridor) and cannot be directly interdicted by the United States (as in the case of the traditional maritime route). This aligns with China's broader strategic objectives of diversifying its Eurasian trade networks and reducing its dependence on routes that may be vulnerable to geopolitical disruptions. Overall, China's proactive development of the Middle Corridor is a key part of its strategy to expand economic and geopolitical influence across Eurasia.


Enhancing Trade Connectivity and Fostering Regional Integrations:

The Middle Corridor not only enhances trade connectivity but also fosters regional economic integration. Central Asian countries, including Kazakhstan and Azerbaijan, are leveraging this route to diversify their trade networks and reduce dependency on Russian transit routes. This diversification is critical for their economic stability and growth.

The Middle Corridor's development has spurred economic cooperation among the countries it traverses. Turkey, Azerbaijan, and Kazakhstan have all invested heavily in infrastructure projects that enhance their connectivity and trade capabilities. This regional cooperation is not only beneficial for the countries directly involved but also for the broader region, as it promotes economic integration and stability.

Furthermore, the institutionalization of the Turkic Union has played a significant role in advancing the Middle Corridor. This union, which includes Turkey, Azerbaijan, Kazakhstan, Kyrgyzstan, and Uzbekistan, has facilitated greater economic and political cooperation, enhancing the corridor's development and operational efficiency.

The establishment of a joint $300 million investment fund between Kazakhstan and Azerbaijan is a notable example of this regional cooperation. This fund will drive the development of trans-Caspian trade infrastructure, further strengthening the Middle Corridor as a strategic trade route between China and Europe.

While challenges remain, such as balancing economic interests with neighboring powers, the countries along the Middle Corridor are demonstrating a strong commitment to regional integration and trade diversification. This collective effort has the potential to transform the region's economic landscape, fostering greater prosperity and resilience in the face of global uncertainties.


World Economic Forum, speaking on the Eurasia’s Middle Corridor
Image Credit: Flickr.com, World Economic Forum, speaking on the Eurasia’s Middle Corridor


Challenges and Opportunities of the Middle Corridor:

The Middle Corridor, a trans-Caspian trade route bypassing Russia, is growing in importance due to the Russia-Ukraine conflict and resulting sanctions. Despite ambitious investments, it cannot fully replace land transport via Russia in the medium or long term. However, these investments are essential to enhance competition and diversify transport routes.

Uzbekistan stands to benefit from the Middle Corridor's expansion, improving access to European and Asian markets. The Middle Corridor, a multimodal land and sea route, stretches from China through Kazakhstan, Uzbekistan, Turkmenistan, across the Caspian Sea via Azerbaijan and Georgia, to the Black Sea. 

Compared to traditional routes, the Middle Corridor offers a significant advantage by being the shortest overland path, saving 2,500 km and taking just 10 days—half the time of the Northern Corridor. With annual trade between China and Europe valued at $600 billion, the Middle Corridor presents exciting opportunities due to its faster, more direct, and diversified trade route. Additionally, its capacity is set to double by 2030, making it an increasingly vital link between the two economic giants.

The corridor faces challenges, including low capacity—only 5% of the Northern Corridor's capacity—shortages of transport vessels, locomotives, and wagons, and unstable transport prices. To increase transport volume, expanding ship availability, railway infrastructure, and digitalization projects are necessary. Current efforts include new container trains and shipping connections, and improvements in rail transport.

For Uzbekistan, Europe plays a minor role in trade, but the Middle Corridor's expansion could facilitate better integration into international value chains and markets. The Middle Corridor's growing importance is welcomed for strengthening competition and reducing dependence on Russia. The Middle Corridor cannot fully replace the Northern Corridor as the primary China-Europe trade route, but actively helpful for both sides. Uzbekistan also is likely to benefit from better integration into global trade networks.

Broader geopolitical risks also influence the corridor's future. Regional conflicts, such as potential hostilities between Armenia and Azerbaijan, and external geopolitical interests can impact the corridor's stability and progress. The evolving geopolitical landscape, shaped by the Russia-Ukraine war, will play a crucial role in the corridor's development.


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Middle Corridor Crossroads: Prospects and Geopolitical Complexities

The Middle Corridor aims to diversify trade pathways, enhance connectivity, and reduce reliance on Russia, especially in light of the Russia-Ukraine conflict. While there is optimism for its potential, several challenges and competitive dynamics need to be addressed for the Middle Corridor to achieve its full potential.

The Middle Corridor faces competition from the International North-South Transport Corridor (INSTC), which connects the Indian Ocean and the Persian Gulf with the Caspian Sea and onward to Europe. Backed by Iran and Russia, the INSTC offers shorter trading times for these countries, positioning it as a potentially more cost-effective alternative. India's significant role in the INSTC as a southern access point strengthens its relations with Central Asia and the South Caucasus, posing a challenge to the Middle Corridor's development.

Key players like Turkey and China have expressed strong interest in the Middle Corridor, driven by their respective strategic goals. Turkey sees the corridor as a way to strengthen economic ties with Central Asia, while China views it as part of its Belt and Road Initiative (BRI), enhancing connectivity for trade and economic growth with Europe. Both nations are investing significantly in the corridor's infrastructure, including roads, ports, and railways. However, there is potential for future friction between China and Turkey as they pursue their long-term interests.

The Middle Corridor promises significant trade and economic opportunities. It offers a viable alternative route for international trade, especially given the disruptions in traditional routes like the Suez Canal and Northern Corridor. However, the corridor's success depends on overcoming challenges such as competition from the INSTC and addressing the varying benefits among participating countries.


Turkey: The Mastermind behind the Middle Corridor

Since the Russia-Ukraine conflict, cargo traffic in the Middle Corridor has grown to nearly 3.2 million tons in 2022, as goods shifted from the Northern Corridor. Turkey positions itself as a key player between China and Europe through the Organization of Turkic States for the Middle Corridor. The Middle Corridor is the shortest route from China to Europe, with cargo transportation increasing six fold in the last decade. This growth supports Turkey's ambition to lead in container freight and increases the transit capacity from 6 million to 50 million tons, aligning with China's ‘Iron Silk Road’ vision and boosting Turkish influence.

Turkey also plays a key role in the European value chain due to its strategic location. Central Asian countries balance economic growth with Europe and China's 'Westward March' through the C+C5 Summit (China, Kazakhstan, Kyrgyzstan, Uzbekistan, Tajikistan and Turkmenistan).

Turkey invests heavily in port infrastructure to become a top Mediterranean outlet, including $0.38 billion in Mersin, $0.15 billion in Filyos, and $1.2 billion in Izmir. China owns two-thirds of the Kumport terminal and has helped build the Yavuz Sultan Selim Bridge and Marmaray Tunnel, reducing transit time from two months to two weeks along the Middle Corridor.


Turkey leverages the Organization of Turkic States to strengthen regional influence, aligning with China's 'Iron Silk Road' vision while positioning itself as crucial to both Chinese and European power blocs.
Image Credit: Wikimedia Commons, Summit of the Organization of Turkic States in Astana


Moreover, European powers receive critical gas supplies through the ‘Southern Gas Corridor’ from the Caspian Sea via Türkiye. This corridor is set to double its capacity by 2027, as promised to Brussels. Additionally, the underwater ‘Black Sea Electric Cable’ will share wind and solar energy from the Caspian Sea through Azerbaijan.


Transcontinental Trade: Strategic Expansion of the Middle Corridor

The Middle Corridor, or Trans-Caspian International Transport Route (TITR), linking Central Asia to Europe, has seen substantial growth and investment. In 2023, cargo transportation along the Middle Corridor surged by 88%, reaching 2 million tons in the first nine months. This growth underscores the corridor's significance as an alternative to routes controlled by Russia and traditional sea routes via the Indian Ocean.

The European Bank for Reconstruction and Development (EBRD) estimates that the Central Asian part of the Middle Corridor requires €18.5 billion in infrastructure investment. This includes road, rail, ports, and logistics sectors. Short-term investment needs are around $7 billion, according to the World Bank. The corridor’s total throughput capacity is 5.8 million tons of cargo annually, with current container traffic potential at 80,000 TEUs, up from 33,000 TEUs in 2022. Kazakhstan aims to increase the Middle Corridor's capacity to 10 million tons by 2030. Agreements have been signed with Azerbaijan, Georgia, and Turkey to address bottlenecks. Key projects include a joint venture between Kazakhstan, Georgia, and Azerbaijan railways to develop multimodal services, a memorandum between German company Rhenus and Kazakhstan Temir Zholy (KTZ) to enhance cargo flow, and new agreements with Lithuanian and Austrian transport companies to join the TITR association.

At the Global Gateway Investors Forum for EU-Central Asia Transport Connectivity in Brussels, held on January 29-30, 2024, European and international financial institutions pledged €10 billion to develop sustainable transport connectivity in Central Asia, with a focus on the Middle Corridor (Trans-Caspian International Route). The investment aims to enhance infrastructure, customs procedures, and cargo capacity to optimize the route, reducing transport duration to 15 days. Key agreements were signed by institutions like the European Investment Bank and the European Bank for Reconstruction and Development with Central Asian countries to support these efforts. The EU's increased cooperation with the region underscores its commitment to developing a competitive, sustainable trade route, despite challenges like limited current capacity and the need for further development.

Significant infrastructure projects in Kazakhstan include the construction of the second line at the Dostyk-Moiynty section, expected to enhance China-Europe transit traffic by five-fold, the new Bakhty-Ayagoz railway line to increase throughput capacity at the Kazakhstan-China border, the Almaty Station Bypass Railway Line to reduce cargo delivery times, and the Darbaza-Maktaaral railway line to improve connections between Kazakhstan, Uzbekistan, and beyond.

Kazakhstan has invested $35 billion in transport and logistics over the past 15 years. The country aims to boost the transport sector's contribution to GDP to 9% within three years. Transit transportation increased by 19% from 2022, with Kazakhstan targeting 35 million tons of transit cargo by 2029. The Aktau and Kuryk seaports have a combined capacity of 21 million tons per year, handling oil, grain, and general cargo.


The BRI and MCI: Paths to Complementary Development

The Belt and Road Initiative (BRI) and the Middle Corridor Initiative (MCI) are pivotal for enhancing transregional economic cooperation and market integration. Both China and Turkey, through their strategic partnership established in 2010, have committed to various projects and agreements, such as the New Silk Road Connection and the Railway Cooperation Agreement. These initiatives have led to significant infrastructural developments, including the Eurasia Tunnel and the Marmaray submarine railway.

The BRI focuses on creating seamless freight transportation from China to other regions, with projects like the Edirne-Kars High-Speed Railway Line aimed at connecting China to Europe via Turkey. The Middle Corridor, particularly the Baku-Tbilisi-Kars (BTK) railway, complements this by shortening the travel time between China and Europe to about two weeks.

In the maritime sector, Chinese investments in Turkish ports such as Kumport Terminal and potential projects at Çandarlı and Mersin Ports aim to boost connectivity across the Suez Canal and North African markets. Additionally, energy sector collaborations, including the expansion of the Salt Lake Gas Storage Facility and potential nuclear power plant projects, highlight the mutual benefits of this partnership.

Culturally, initiatives like the Turkish Culture Year in China and the increasing number of Chinese tourists to Turkey underscore the importance of people-to-people exchanges. Institutions like Confucius Institutes in Turkey and planned Yunus Emre Institutes in China further promote cultural understanding.

These extensive collaborations suggest that the BRI and MCI are not in competition but rather complement each other, fostering economic and structural synergy between China and Turkey. The political leadership in both countries needs to continue building on this cooperation to realize the full potential of these initiatives.


Conclusion:

The Middle Corridor offers substantial time savings, promotes regional integration, boosts trade among transit countries, and supports economic diversification. In 2022, the volume of cargo transported via the Middle Corridor increased by two and a half times, highlighting its growing importance in global trade. Additionally, this route is becoming increasingly significant due to disruptions in traditional routes like the Suez Canal, which has been affected by Houthi attacks, and international sanctions on Russia following its invasion of Ukraine.

Despite its benefits, the Middle Corridor faces challenges related to infrastructure. Significant investments are needed to improve existing parts of the route and develop new infrastructure to realize its full trade potential. Addressing limitations in both soft and hard infrastructure, as well as focusing on green and digital transitions, are critical for its future success.​ 

The Middle Corridor revives the ancient Silk Road, connecting Europe and Asia through a historic trade route. This geopolitically important corridor strengthens economic ties between the two regions. The Middle Corridor traverses several countries, including China, Kazakhstan, Azerbaijan, Georgia, and Turkey. Each of these countries plays a vital role in facilitating the smooth transit of goods along this route, contributing to the corridor's effectiveness as a major trade highway. The corridor promises reduced transit times, increased security, and economic opportunities, positioning it as a crucial alternative for global trade in the future.

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