Kazakhstan Boosts Construction of Euro-Asian Transport Corridors

As international efforts to restore the ancient Silk Road gather momentum, Kazakhstan has intensified construction of major transportation arteries across its territory. Astana views the development of transport corridors together with economic diversification as key tools for strengthening its national sovereignty. Moreover, boosting transport and trade along the East-West corridors from China to Europe and opening North-South transport routes toward the Indian Ocean is considered by Kazakh officials to be critical for integrating the land-locked Central Asian states with the global market.

Kazakhstan plans to spend over 2.8 trillion Tenge ($19 billion) on transport infrastructure by 2014, or twice the amount spent in the last decade. The country has also increased its participation in major international transportation projects to facilitate the completion of railroads and highways throughout Central Asia.

As the first direct cargo train was making its way from China to Germany, Almaty hosted on July 5-7 the 6th meeting of the Expert Group on Euro-Asia Transport Links (EATL). This is a joint initiative of the United Nations Economic Commission for Europe (UNECE) and the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP). The meeting was co-sponsored by UNECE, the Kazakh government, and the Organization for Security and Cooperation in Europe (OSCE). More than 50 transport and customs officials and policymakers from 11 Central Asia, South Caucasus, and Eastern Europe countries focused on improving inland transport connectivity between Europe and Asia, reviewed national legislation and methods to overcome non-physical barriers to transport and trade, and explored opportunities for the development of Central Asia as a logistics hub (Kazinform, July 11).
The five Central Asian countries have a vital interest in building and rehabilitating railways and highways from China to Europe as trade along the Euro-Asian corridors and among the Asian countries themselves increases. The importance of inter-continental inland routes was signaled by Kazakhstan’s selection of transport and transit as one of the priorities of its OSCE Chairmanship in 2010. The 18th OSCE Economic Forum in 2010 was dedicated to good governance at border crossings and facilitating international transport by road and rail in the OSCE region. The forum was followed by the publication of a Handbook of Best Practices at Border Crossing and training programs at the OSCE Border Management Staff College, which opened in Dushanbe in May 2009.

A recent analysis by the International Road Transport Union (IRU) demonstrates the importance of the OSCE’s initiative on combating corruption and improving border procedures: 40 percent of transport time along the Silk Road is lost due to inept border procedures and 32 percent of transport costs are unofficial payments and levies at crossing points (https://www.transportweekly.com, June 17).

In March, Astana announced a major government program for infrastructure development. President Nursultan Nazarbayev asserted that Kazakhstan aimed to become a significant transport hub in Eurasia (Kazinform, May 25). The program is financed with state funds and loans from international financial organizations. The Asian Development Bank (ADB) has lent money for the roads linking Kazakhstan to Azerbaijan and Europe via the Caspian Sea, Russia to the north, and Uzbekistan and Turkmenistan to the south. The European Bank for Reconstruction and Development (EBRD) supports the modernization of railroads, and the Islamic Bank of Development plays a key role in providing financial assistance for the construction of a railroad from Kazakhstan to Iran via Turkmenistan (EDM, June 17).

Kazakhstan’s strategic location and abundant natural resources make it central in the development of six road transport corridors linking Asia and Europe. However, despite considerable investment in Kazakhstan’s energy industry, the country’s road infrastructure remains underdeveloped. The Global Competitiveness Report of the World Economic Forum ranked Kazakh roads in 124th place out of 139 countries. At the same time, 20 percent of trade between Asia and Europe passes through Kazakhstan, according to the ADB. Trade volumes are expected to grow to $1 trillion by 2015, which can result in significant gains of about $1.1 billion for Kazakhstan (Business Monitor Online, September 29, 2010).

The Western China-Western Europe highway is a priority for the government and is due to be completed by the end of 2011. The road will open new opportunities for Kazakh businesses. Trade volumes between China and Kazakhstan have reached $20 billion, making China Kazakhstan’s biggest trade partner, surpassing Russia (EDM, July 5). In June, the two countries agreed to double their trade volume by 2015.

Kazakhstan’s railroad infrastructure is ranked 32nd among 116 countries. It is already used between China and Europe since the official launch on June 30 of a direct cargo train from China to Germany. The train loaded with laptops and LCD screens left Chongqing transiting through Kazakhstan, Russia, Belarus and Poland to the German city of Duisburg. The route offers a major shortcut to the traditional sea routes from Shanghai and Guangzhou, cutting travel time to Europe from about 36 days by container ship to just 13 days by freight train (China Daily, July 2). The freight train is scheduled to travel once monthly and eventually once weekly (Kazinfrorm, July 5).

As East-West transport links develop, Kazakhstan and India are pressing for international involvement in the development of North-South transportation, pipeline and trade corridors (EDM, May 11). Routes connecting the landlocked Central Asian republics to the Indian Ocean would allow them access to maritime transportation channels, which though longer, are still cheaper than inland transportation.