Kazakhstan Overcomes Challenges Facing Landlocked Nations

The recent commissioning of the Zhezkazgan-Beineu and Arkalyk-Shubarkol railways, as well as the upcoming launch of the Kazakhstan-Turkmenistan-Iran railroad, draw a line under the key stage of the transport strategy of our country. Thanks to this, Kazakhstan was able to capture a unique niche in the global market of time and space.

Largest Landlocked CountryLocked by the Land

There are 48 countries in the world deprived of access to the sea. They are cut off from the opportunities of maritime trade, which accounts for about 90 percent, or the lion’s share of world trade. The international merchant fleet, comprising more than 50,000 vessels, forms what we call the global market.

In his book “The Bottom Billion,” influential British economist Paul Collier has identified the lack of access to the sea as one of the main “traps” that hinder the development of countries, condemning them to stagnation. The landlocked countries are home to 40 percent of the “bottom billion”– the poorest group of mankind, as opposed to the so-called “golden billion.”

There are very, very few exceptions to this rule. One of these is Kazakhstan, the largest land-locked country in the world on whose territory the most distant spot from the world’s ocean is located. In the modern history of the world, there is almost no precedent for such an impressive overcoming of a “transportion trap.” Yet, by its example, Kazakhstan has proven that a lack of direct access to the sea is not a reason to be doomed.

Now or never

At the time of independence, our country was stuck in a stalemate. The transportation system inherited by Kazakhstan did not provide access to external markets and also did not allow for the formation of a single internal market. As such, all types of communication did not have a single network. This is not surprising, since the fragmentation of transport routes reflected the fragmentation of the economy.

We not only had to build new roads and pipelines, ports and power lines, but it was necessary to create a new coordination system.

It should be noted that the problem of continuous investments in transport is relevant to all countries. According to the International Energy Agency, by 2050, the global infrastructure will require an investment of $45 trillion.

Meanwhile, in the 1990s, Kazakhstan lacked the money even for urgent needs. The country was at a strategic crossroads: either save on investments in infrastructure until better times or move forward in spite of all costs.

At that time, the political will of President Nursultan Nazarbayev played a crucial role. The head of state was able to look beyond the current economic upheavals and “see the sea behind the waves.” He justified the choice for the infrastructure in his state-of-the-nation address in September 1999. “The history of Central Asia in the second millennium showed that the nations which are in the centre of the continent and do not have access to global communications have no future. The fate of all the peoples of Central Asia, if you remove details, depends on one main thing: whether we will be able to become a transport channel of global significance or will find ourselves on the sidelines again.”

Transportation infrastructure was identified as a priority area on which the future of the country depended. At the same time, the contours of strategic projects were outlined. Most importantly was that the President succeeded in implementing them, although many countries were seeking a way out of the “transportation trap,” and were getting stuck at this very stage.

First, the Caspian Sea capacity was used to the maximum. Modernisation of the Aktau port turned it into a major transportation hub, through which nearly a third of the turnover in the Caspian Sea is now implemented.

Second, Kazakhstan became positioned in the ports of other countries to grow the flow of domestic goods. Currently, the number of foreign port assets includes the Baku Grain Terminal, a Black Sea port of Batumi, a grain terminal in the Baltic port of Ventspils and a Kazakh-Chinese terminal in the Pacific port of Lianyungang. As a result of this advancement, despite being cut off from the sea, Kazakhstan has managed to build a port infrastructure which is diversified in all areas.

Third, even in the most difficult economic times continental-scale investments were allocated for the development of all types of communication. In the pipeline field, new Kazakhstan-China transport corridors were created for the export of oil and gas to one of the largest markets in the world. In addition, the Caspian Pipeline Consortium (CPC) oil pipeline was laid, which has become the main route of oil supplies from the Caspian region.

Equally active construction was carried out in the road sector. The largest transit project of global significance is the 2,700-kilometre Kazakh section of the Western China-Western Europe auto corridor.

The construction of railways saw a major boom on a regional and even a global scale. During the years of independence, 2,500 kilometres of railways were built in Kazakhstan. Sections of the Kazakhstan-Turkmenistan-Iran international line and Zhetygen-Korgas railroad were built, which accelerated the delivery of goods between China and Europe. New roads linking Zheskazgan-Beineu, Arkalyk-Shubarkol, Aksu-Degelen, Khromtau-Altynsarin and Shar-Ust-Kamenogorsk directly tied the northern, central, western and eastern regions of the country to each other, reducing the distance by hundreds of kilometres. The capacity of the Aktogai-Dostyk key transit area was increased.

Unprecedented construction of railroads gave birth to railway engineering, an entirely new industry for the country, and breathed life into a wide area.

Thus, the strategic task to turn Kazakhstan into a transport hub of Eurasia and make the deadlock a crossroads was promptly solved. Transport did not become a “bottleneck” for economic development. On the contrary, it was one of the most effective among its incentives, creating a strong demand for goods, services and labour.

All roads lead to Kazakhstan

There is another result of the transport strategy pursued by President Nazarbayev.

What is the global transport infrastructure? According to the Organisation for Economic Cooperation and Development (OECD) definition, it includes international maritime trade and transport routes, major ports and gateways and their connections by overland transport corridors as well as continental footholds. Kazakhstan, in fact, was out of this infrastructure, “on the sidelines” so to speak. But if we impose all projects realised in recent years on the strategic transport world map, we can see a clear picture.

First, access to seaports in the east and west was obtained. Second, our own footholds in the country were established. Thirdly, two international continental transport corridors were built. Thus, all links on implementation of the task to include Kazakhstan in the global transport infrastructure were formed. This is the case of “the mountain coming to Muhammad.”

Entering into the major transport game in a timely fashion, Kazakhstan has managed to build a foundation for development as a global transit power. This can be called a decisive economic achievement of our country at this stage. In addition, all the prerequisites were created in order to avoid the “middle income trap.” Economists estimate that countries which achieve a GDP amounting to $16,000 per capita typically get stuck at this stage. According to forecasts, Kazakhstan will reach it in 2016. The created infrastructure space and the rapid development of transport engineering suggest that “the problem 2016” will be successfully resolved.

Without any exaggeration, one can say that the historical choice of the transport strategy made by President Nazarbayev has paved the way for us into the future. This path involves acquiring new, bolder targets, including the Nurly Zhol project. After all, success is not a destination, it is a way, and Kazakhstan is confidently moving along this way.

The author is the advisor and press secretary to the President of Kazakhstan.

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