(MENAFN- Trend News Agency)
BAKU, Azerbaijan, August 5. Azerbaijan acts as
a key node in the Trans-Caspian International transport Route
(TITR, or Middle Corridor), James Sharp, the former UK's Ambassador
to Azerbaijan, Kazakhstan, and Kyrgyzstan, told Trend in an exclusive
interview.
"The regional economic development that the Middle Corridor
upgrades will boost is not simply about easier exports of raw
materials, but-even more importantly-how to use their position in
the Middle Corridor to create diversified, value-added economies.
This is where hubs have a particular advantage. One of the lessons
from the ancient Silk Road is that the hubs along the route
developed into important trading centers. To my mind, the most
obvious hub in the Middle Corridor is Alat, the port of Baku. Alat
is the key node in the Middle Corridor; all of the proposed routes
go through it, and it is the only place in this unique situation.
Furthermore, it is situated on a potential North-South Corridor
between Russia and Iran. For sure, that raises issues about
sanctions at the moment, but over the long term, progress could
mean that businesses located in Alat-and, by extension,
Azerbaijan-have fantastic access to a wide range of markets. Once
again, Azerbaijan would be recreating its role as a crossroads," he
said.
As the former ambassador noted, Kazakhstan is the other country
through which most routes pass, and here one could imagine hubs
developing close to Almaty, and also in Shymkent, where the route
from Uzbekistan - and perhaps further to the south - joins the
Middle Corridor.
Growing significance of the Middle Corridor
Sharp pointed out that since the outbreak of the war in Ukraine,
there has been a significant change in attitudes in Europe towards
transporting goods via Russia.
"This has sparked renewed interest in the Middle Corridor, or,
more specifically, the Trans-Caspian International Transport Route.
Interestingly, it's not only the war in Ukraine that has increased
interest in the Middle Corridor. The events in the Red Sea, where
the Houthis have been launching missiles and drones against
commercial shipping, have also made governments and companies aware
of the need to diversify transport routes. I think there are
several reasons why investing in the Middle Corridor makes sense as
an additional way of linking Asia and Europe, and it's clear that
the region's governments, supported by the EU and international
financial institutions, have definite plans to boost its potential.
I very much support this. Of course, the Middle Corridor will not
replace the other routes, but it will provide an alternative route.
Of course, there is still a significant amount of work to be done.
As well as the obvious bottleneck caused by the need to switch
between rail and maritime transport when crossing the Caspian Sea,
a significant amount of work needs to be done due to the fact that
the route crosses so many countries," he said.
Required measures for development of the
route
The former ambassador believes that both investment and
cooperation are required for development of the route.
"There are issues around both what you can call "hard
connectivity" and "soft connectivity". Hard connectivity includes
things such as the building or upgrade of railway lines, purchase
of rolling stock, and port infrastructure. Soft connectivity is
more about customs procedures, transit fees, standards and
regulations. Broadly speaking, one can say that hard connectivity
needs investment, soft connectivity needs cooperation. As regards
investment, that is definitely happening, with the EU hosting a
Global Gateway meeting earlier this year at which pledges of around
10 billion euros were made. And as regards cooperation, we're
already seeing regional governments and organizations start to
tackle the issues raised in the World Bank and EBRD reports. So -
while there's still a long way to go - I'm optimistic that we'll
see a lot of progress," Sharp said.
As James Sharp noted, one really important point to remember is
that the benefits of the Middle Corridor are not simply about
transporting goods between China and Europe.
"There will be even bigger benefits to the countries of the
region thanks to better connectivity between the region and
Europe/China, and also between the countries of the region
themselves. Better rail and maritime connections allow more trade,
and exports from these countries. So this needs to be the main
focus - how can the regional countries use the Middle Corridor to
support their own economic development?", the former ambassador
noted.
Shipping of Kazakh oil through Azerbaijan
Speaking about oil supplies through Azerbaijan, James Sharp
pointed out that the truth is that the shipping of oil from
Kazakhstan to Azerbaijan across the Caspian is - like the Middle
Corridor - a reaction to concerns about relying totally on
Russia.
"The CPC pipeline from Kazakhstan to Novorossysk is clearly the
most cost-effective and efficient way to export oil westwards, but
events over the past couple of years have caused clear concern
about the vulnerability that creates. So I can see that - for
strategic reasons - Kazakhstan and the oil companies operating
there want to develop alternative export routes. So, as with the
Middle Corridor, I doubt the trans-Caspian route will replace the
CPC pipeline, but will instead provide diversity of export routes.
It also helps Azerbaijan by making more use of the BTC pipeline at
a time when Azerbaijani oil export volumes are predicted to
decrease," he said.
As Sharp noted, again, hard connectivity improvements are needed
on both sides of the Caspian, but he believes that the shipping of
oil on this route will continue
Green energy trends in Kazakhstan and
Azerbaijan
"I'm very pleased to see both countries boosting their renewable
energy capacities. To my mind, as oil and gas producers, they have
a special responsibility to support green energy. It was clear from
a study that the British Embassy funded that Azerbaijan has huge
potential for offshore wind energy. And Kazakhstan is such a huge,
empty country that there is massive scope for onshore wind and
solar power. But there are clearly issues around the distance from
the main markets, and how this will affect the economics of
renewable energy," he said.
The former ambassador noted that it's encouraging to see the
countries talking to Georgia and EU countries about green
electricity lines to Europe.
"Another economic issue in the case of Kazakhstan is the
availability of cheap coal, and here, despite the signature of
renewables contracts, it's disappointing to see contracts awarded
for new coal-fired power stations, especially since at COP26 hosted
by the UK in Glasgow there was an agreement to phase down the use
of coal power. As regards British companies, the main example is
bp's construction of a solar power plant in the Jabrayil region of
Azerbaijan. This is part of bp's own commitment to reach net-zero
by 2050, a commitment which I hope both Azerbaijan and Kazakhstan
will also make at COP29 this year," James Sharp concluded.
MENAFN05082024000187011040ID1108516301
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.