New Silk Road, from Kazakhstan to UAE

Some 43 countries in the world are landlocked: 15 in Africa, 14 in Europe, 12 in Asia and two in South America. This list contains all the countries of Central Asia: Kazakhstan, Uzbekistan, Turkmenistan, Tajikistan and Kyrgyzstan.

Lama-SharifHowever, some landlocked countries do not suffer from their inconvenient geographic locations. For example, landlocked Switzerland is among the top 10 countries of the world in terms of economic competitiveness. Austria, also cut off from the open sea, has very high levels of economic development and public welfare in comparison with its coastal neighbours.

Another example is Kazakhstan, the largest landlocked country in the world, which is bordered by two inland seas: the Caspian and Aral Seas.

For Kazakhstan, being landlocked is not an obstacle to its economic development, since its location in the centre of the Eurasian continent predetermines its geopolitical role as a bridge between Europe and Asia.

In recent years, the centre of gravity of world trade and production has been shifting to Asia, objectively increasing the value of the transport component of interstate cooperation. Kazakhstan occupies a unique position as the most comfortable and safe transit route from Europe to Asia.

Currently, Kazakhstan’s territory is crossed by four international transport corridors connecting China and Europe, including the TRACECA (Transport Corridor Europe-Caucasus-Asia). As they say, now all roads lead to, or rather, through, Kazakhstan.

Today, China’s rapid economic growth, particularly in its western regions, requires the delivery of various products to world markets. Therefore, in the near future, it is expected to put into operation a new international highway, the Western Europe – Western China corridor. The total length of the road will be 8,445 kilometres, of which 2,787 km will be in Kazakhstan. This transit corridor will reduce by almost 3.5 times the time it takes to transport goods from China to Europe, as compared to the sea route (from 40 days by sea to 10 days by land). Moreover, it’s expected that in the next 10 years, the volume of cargo transportation through Kazakhstan’s territory will more than double.

In this regard, the first major breakthrough in the field of logistics development is the establishment of the Khorgos-East Gate special economic zone (SEZ) on the border with China, which will operate as a “dry port” in the international transport and logistics sector.

As part of the strategy of the New Silk Road, the Kazakhstan Temir Zholy national railway company has already established a partnership with global port terminal infrastructure operator Dubai Port World (DP World). With DP World, the Kazakh company has designed a general line of vehicle interaction with the seaport of Aktau and its linkage with the Khorgos-East Gate project in the organisation of global supply and the integration of Kazakhstan’s infrastructure services into the world trade and transport chain.

 

Currently, the two companies have been establishing the necessary legal framework for cooperation, including a management agreement for the Aktau seaport on the east coast of the Caspian Sea and the Khorgos-East Gate SEZ.

At the same time, taking into account their favourable locations, as well as the relevance of the historical revival of the Silk Road, Kazakhstan and other countries are making every effort to create a transcontinental transport link between Central Asia and the Gulf region.

The Gulf region is of key importance for Kazakhstan in maintaining growth in foreign trade. This is dictated by at least three defining factors.

First, the Gulf region is the epicentre of interests for a growing number of shippers in Asia and Europe. Experts predict that a large amount of traffic from China to Europe, the Middle East, Central Asia and the Caucasus will soon be reoriented to the Gulf region.

Secondly, port and storage capacity at the world’s largest transport hubs and international container carriage will provide the shortest routes to Southeast Asia, the African continent, India and beyond.

Finally, there is the possibility of expanding Kazakhstan’s export potential due to the region’s high demand for food products (the Gulf is 80 – 90 percent dependent on food imports). The great importance of the potential of the UAE’s port capacity, which takes on the role of the south gate in the North – South international transport corridor, must be highlighted. This is one of the priorities of the Eurasian routes, including the transport network in Kazakhstan.

Kazakhstan’s President Nursultan Nazarbayev, speaking at the World Islamic Economic Forum in Dubai in October, noted that more than 10,000 km of roads and 2,500 km of railways have been built and rehabilitated in Kazakhstan, so the distance between China and the Gulf has been reduced by 1,200 km.

Moreover, in the next few days, the new Kazakhstan-Turkmenistan-Iran railway will open, which is an important component of the North – South international transport corridor. The new railroad will provide convenient and cost-effective transport for goods from Kazakhstan to the Emirati ports in the Gulf.

The North – South project, with the assistance of the Asian Development Bank and the Islamic Development Bank, is based on a signed agreement between Turkmenistan, Iran and Kazakhstan from 2007. Implementing the project will also open up access to European and Asian countries in Central Asia and the Gulf region. A similar opportunity will appear for the transit of goods from South and Southeast Asia to Northern and Eastern Europe through Iran, Turkmenistan, Kazakhstan and Russia. President Nazarbayev highlighted that this transnational project has historical significance. “The new track is the shortest route for goods delivery and transit and, in the future, for commuters. Nowadays, time is a critical factor. In this regard, shortening turnover provides a significant competitive advantage. This advantage is reflected in business and, eventually, in increased prosperity for our countries,” said the President.

Opening transit and foreign trade cargo traffic within the North – South corridor is a profitable alternative to existing means of transportation.

It is 120 nautical miles or 221 km from the port of Bandar Abbas to the UAE’s Hamriyah port. Thus, the total developed length of the new Silk Road from Kazakhstan to the Emirates is 3,377 km, two times shorter than the air corridor from Dubai to Shanghai.

The new route, according to experts, will reduce the length of transit by 10 – 12 days compared to the traditional sea route from Asia to Europe via the Mediterranean Sea and the Suez Canal, which takes 35 – 40 days. With appropriate transport infrastructure, this will allow us to reduce transportation expenditures by 30 percent.

There is also great potential for the construction of transport and communication infrastructure meeting international standards to be built along the rail routes, bridges and other related facilities, including residential complexes for staff.

Due to changes in the geopolitical situations of countries with their own access to the Black Sea, the Caspian Sea’s role has increased. There are objective prerequisites for the transformation of the Caspian Sea and the coastal areas as an important transit centre between Europe and Asia. We are talking about the powerful traffic flow from Asia to Europe and back. According to preliminary estimates, 3 – 5 million tons of cargo per year will be shipped on the main line from the Caspian Sea to the Gulf initially, and volumes will increase to 10 – 12 million tons. Today, Kazakhstan ranks among the world’s leading exporters of ferro-alloys, copper, lead, zinc and mineral fertilisers. Our country has also reached the top position in the world for the export of flour and wheat.

During his meeting with Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and ruler of Dubai, President Nazarbayev said that Kazakhstan could become a global centre for food security. The total area of agricultural land in Kazakhstan is 90 million hectares, of which 25 million hectares is arable land and 61 million hectares is permanent pasture.

With the new international Kazakhstan-Turkmenistan-Iran railway, the export of Kazakh wheat has the potential to increase by five times. According to experts, the UAE are also ready to buy up to 500,000 tonnes of mutton from Kazakhstan.

An effective catalyst in the promotion of bilateral trade and economic cooperation will be the main traffic artery of the 21st century, connecting Kazakhstan with the UAE.

The author is Ambassador Extraordinary and Plenipotentiary of Kazakhstan to the UAE.