Kazakhstan and Azerbaijan offer Turkey an alternative to Russian route

After Russia imposed a ban on the transit of Turkish trucks, a new, Caspian route has come to the fore as an alternative. Kazakhstan and Azerbaijan already saw an opportunity to cash in on the deteriorated relations. Astana expects an increase in turnover through the Europe-Caucasus-Asia Transport corridor (TRACECA) and an opportunity for Kazakh producers due to directing the Turkish transit to Central Asia through Caucasus. As the trade turnover between Russia and Turkey is now down by 20%, Kazakhstan says Turkish transportation is just stuck on the borders. In response, Astana is considering flexible and better conditions for transporting goods via the Trans-Caspian direction. The TRACECA program which was established in 1993 unites all the three Caucasian states with the five Central Asian ones.

Azerbaijan already came fore as the relations started to deteriorate. National Secretary expressed readiness to ensure the transit of goods from Turkey to Central Asian countries and promised to create appropriate conditions at the border posts so Turkish trucks could easily enter Azerbaijan. The conditions are directed at keeping the transit through Azerbaijan even after the relations are improved. Before about 30,000 out of total 200,000 Turkish trucks were passing through Azerbaijan, but Baku promises the conditions to pass the whole volume by help of Caspian Sea ferries. As a result, Azerbaijan expects 4-5 times increase of the current revenue worth of about $350 million from transportation via TRACECA. In this line Azerbaijan already made 40% reduction in the transit cost of cargo transportations to Kazakhstan’s Aktau and Turkmenistan’s Turkmenbashi posts. The new tariff set is $1,200 for one car with a trailer in one direction and $2,100 for a round-trip.

For Turkey, the alternative route can offer new markets and reduce transportation expenses. But for this extent of involvement, it also needs to urgently complete construction of Kars-Tbilisi-Baku railway, currently 76 kilometers long that will directly connect Turkey, Georgia and Azerbaijan. About $1 billion worth of Turkish foods and vegetables to Russia are now considered for Caucasus and Central Asia. Turkey also hopes to share profits from China-EU trade by being part of the transportation. Current trade volume between the two worth of $615 billion is expected to grow to $800 billion by 2020. The Caspian transit corridor is one of the three routes, which looks prospective as considers less than half of the expenses accrued using the route through Russia.

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News Briefs:

  • Jamestown reports about rising tensions between Belarus and Russia over the Russian airbase issue. Amidst presidential elections, Alexander Lukashenko met the initial proposal by Russia with a tough stand, suggesting Belarus does not need a Russian airbase. However, Moscow has not withdrawn from its plans and continues to pressure Minsk regarding the auspices of a joint command. The reasoning links to boosting defense of Russian western border across Poland and Lithuania and counterbalancing Poland’s air force all in response to Barack Obama’s missile defense plans. Jamestown also reports about other signs of worsening relations, among which is the recent Russia-imposed phytosanitary border control over food imports from Belarus against re-export of banned agricultural products from Europe via Belarus.
  • With fear of terrorist threat, Kyrgyzstan is reinforcing its border control in strengthened patrolling and with eventual goal of eliminating bribery and contraband. The Border Control Service is considering a number of ways to improve border security, including on-the-spot training, fighting corruption and replacing equipment at border checkpoints. Locals and officials from the border control departments stress different issues though. Whilst local control service representatives indicate at citizens’ illiteracy or desperate situations that lead the locals to carry someone else’s baggage without checking or for the sake of money, locals at the bordering towns point at high bribery levels with security guards.
  • Azerbaijan arrested an opposition leader Fuad Gahramanly on charges of inciting racial and religious hatred. Gahramanly who is facing five years in prison, is a deputy chairman of the Popular Front. His arrest is linked to his post on Facebook on the 26 November security operation against alleged religious extremists in the village of Nardaran where seven people were killed. Gahramanly pleaded not guilty and appealed against his arrest. According to rights groups, Azerbaijan particularly raised pressure on opposition after President Ilham Aliyev’s re-election for the third term in 2013. Freedom House reports more than 80 political prisoners in the country.
  • Russia threatens to take Ukraine to court over $3 billion debt upon President Vladimir Putin’s instruction to the Finance Ministry. Ukraine has not responded to Moscow’s offer to restructure the bond, which matures on December 20, but Kiev wants to restructure the bond under the agreement with other creditors that would write down the principal of the debt. The Russian statement followed the International Monetary Fund decision to soften its lending rules and to continue supporting countries that fail to repay official creditors. The Prime Minister Medvedev accused the IMF of meddling without legal basis but with political reasoning. In case of appeal, Russia has to file claims in a London court as the Eurobond was drafted under the British law.
  • The European Union may grant visa-free access to Ukraine and Georgia. The European Commission is expected to provide a report with positive assessments of action plans in mid-December, which will serve as a prerequisite for approval of visa-free regime starting in mid-2016. It was also noted that Kiev still needs to improve performance in some specific areas, including taking actions against corruption until spring 2016. Lifting the visa regime will allow Georgian and Ukrainian citizens to stay in the EU for three months during a six month period, but work and study activity will still require visas.
  • The U.S. is investigating the reported incident that Iran launched a ballistic missile test last month that would be a violation of the U.N. Security Council resolutions. In case it is confirmed that Iran tested a medium-range ballistic missile, the U.S. will bring the issue to the council and take appropriate measure as the U.S. ambassador to the UN Samantha Power said. As Western diplomatic source reported Ghadr-110, a spinoff of the Shahab-3 missile capable of carrying a nuclear warhead was tested near Iran’s border of Pakistan. All ballistic missile tests are banned by the UN Security Council resolution from 2010 that remains valid until the six power nuclear agreement with Iran is implemented.
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