Kavkazsky Uzel ,Russia
May 25 2018
Economists say Azerbaijan is interested in new trade corridors between Russia and Georgia
by Faik Madzhid
[Armenian News note: the below is translated from Russian]
The project of transporting commodities via [Georgia's breakaway] Abkhazia and South Ossetia is advantageous for Azerbaijan and other countries of the region, experts interviewed by the Kavkazsky Uzel believe. They think that the advantages outweigh the lifting of the economic blockade from
Armenia that is undesirable for Azerbaijan.Kavkazsky Uzel reported that on 9 November 2011, Russia and Georgia signed a bilateral agreement on the customs administration and monitoring of trade in commodities. The Swiss SGS company was charged with controlling the flow of cargoes between Georgia and Russia via Abkhazia and South Ossetia. According to the contract signed on 19 December 2017 between Georgia and the SGS company, transport corridors alternative to the Georgian Military Road [that connects Georgia with Russia] can be used only in force-majeure circumstances.
On 24 May, negotiations were held in Prague between Russian Deputy Foreign Minister Grigory Karasin and Georgian Prime Minister's Special Envoy [for Relations with Russia] Zurab Abashidze. According to preliminary information, they agreed to set up a working group for the implementation of the 2011 intergovernmental agreement on creating trade corridors via the territories of Abkhazia and South Ossetia, Kommersant reported on the same day.
All South Caucasus countries interested in opening trade corridors
"Despite the recent revival of discussions over the opening of the so-called 'trade corridors' between Russia and Georgia via the separatist regions of Abkhazia and South Ossetia, switching the affairs to practical deeds in this direction can hardly be expected in the near future," a member of the Azerbaijani National Public Committee for European Integration (ANPCEI), Togrul Cuvarli, told Kavkazsky Uzel.
He said that for the time being, it was a question of preliminary agreement on setting up a working group on trade corridors. Certain time would be necessary to form the composition of the group, but even the creation of this group was no guarantee that all problems would be resolved very quickly, Cuvarli said. For example, the special working group for elaborating a draft convention on the legal status of the Caspian Sea had worked for almost 20 years now and had held 49 meeting over the period, but the work was still continuing, he said.
Cuvarli also pointed to political difficulties linked to the opening of the trade corridors. The governments of Abkhazia and South Ossetia, whom Georgia does not recognise, insist that they must be mentioned in agreements in the capacity of equal parties. Therefore, a long and complicated process of searching for compromises is still ahead, the expert believes.
Cuvarli also added that many were interested in opening the trade corridors. "Georgia itself hopes to diversify its transport routes and soften relations with Moscow in order to broaden opportunities of exports to Russia. In addition, by restoring economic ties, Georgia may lay foundations for the reintegration of the regions it has lost control over. Abkhazia and South Ossetia have their interests in these projects. The economies of these regions are at a low ebb and in an impasse and their transformation into transit territories could bring them some economic activity," Cuvarli said.
Togrul Cuvarli pointed to the growing goods turnover between Turkey and Russia. Railway routes connecting the Russian Federation and Turkey may meet in Georgia and there may be direct railway deliveries without the need in shifting cargoes from ground transport to maritime transport and vice versa.
Cuvarli believes that the project is particularly interesting to Armenia. "Armenia is probably interested in this more than others. By means of the opening of the corridor via Abkhazia, it counts on removing the railway blockade, which is due to its own actions that led the conflict with Azerbaijan and the lack of relations with Turkey. This could help to add at least some freshness to the Armenian economy. Russia counts on facilitating the resolution of problems linked to delivering supplies to its military groupings in Armenia by using the same corridor," the expert thinks.
Azerbaijan may be dissatisfied with lifting blockade from Armenia
The opening of the corridors for Armenia may raise some questions in relations between Baku and Tbilisi, Togrul Cuvarli noted. Over the past 20 years, Baku has done a lot for developing Georgia economically and supplying it with energy and, of course, it would be desirable that Georgia not take steps leading to the lifting of economic blockade from Armenia, which Azerbaijan is at war with, Cuvarli explained.
"However, in politics, partners never satisfy your interests by 100 per cent. Azerbaijan and Georgia will anyway continue to be economic allies, as they have mutual interests in each other," Togrul Cuvarli said, particularly because, as he added, the opening of the corridors via Abkhazia and South Ossetia does not at all endanger Azerbaijan's economic interests in Georgia.
Natiq Cafarli, a member of the [Azerbaijani] Maclis [Parliament] from the Republican Alternative [ReAl] party, noted that Azerbaijan's attitude towards the plans for opening railway communications between Russia and Georgia via Abkhazia was critical. The functioning of this corridor is advantageous for Armenia that will use part of economic dividends on strengthening its army and will hold a tougher position at negotiations on Karabakh settlement, Cafarli told Kavkazsky Uzel.
However, Georgia's aspiration in itself to restore its positions in the Russian market undermined after the war in 2008, is not at all an alternative to Georgia's cooperation with Azerbaijan in the economic and transport sectors, Natiq Cafarli believes.
Azerbaijan counts on increasing shipments on Baku-Tbilisi-Kars railway
Due to the opening of the trade corridors via Abkhazia and South Ossetia, Azerbaijan will be able to increase cargo shipments on the Baku-Tbilisi-Kars (BTK) railway, the Caspian Barrel Oil Research Centre Head Ilham Saban said. The more cargoes there are, the quicker Azerbaijan will cover its expenditures on the construction of the BTK, as the Azerbaijani side financed construction on Georgian territory, he noted.
According to ZAO [Closed Joint Stock Company] Azerbaijani Railways, about 1,000 containers have been transported on the BTK since it was put into operation [on 30 October 20117]. These have mostly been cargoes from the PRC [People's Republic of China] and Kazakhstan and back from Turkey.
The start of a new international maritime trade terminal in Baku on 14 May must also facilitate an increase in cargo shipments on the BTK, Kavkazsky Uzel was told at the company.
According to Togrul Cuvarli, 1,000 containers is a very low figure. "This is about 40-50 trains – 50-60 tonnes. However, this is just the beginning, as only six months have passed. It is in case of gas pipeline projects that all amounts of shipments are determined many years in advance. Things are different in case of transportation. The BTK has good prospects in light of the opening of new ports on both sides of the Caspian Sea recently. A new port was opened in Baku on 14 May. The Kuryk port in Kazakhstan and the new Turkmenbasi port in Turkmenistan were put into operation before that. The start of new ports will significantly increase flows of cargoes via the East-West corridors," Cuvarli told Kavkazsky Uzel.
The opening of the Baku international maritime trade port located in the Alat settlement 60 km to the south-west of Baku was held on 14 May. The capacity of the port is 15m tonnes of dry cargoes, including 100,000 containers. After the second stage is complete, the capacity of the port is planned to be increased to 17m tonnes of cargoes and 150,000 containers and up to 25m tonnes and 1m containers after the completion of the third stage, Interfax reported on the same day.