“Baku-Tbilisi-Kars” has the ability to change the economic geography of Eurasia”

“Baku-Tbilisi-Kars” has the ability to change the economic geography of Eurasia”

08 November 2017, 18:47 8044
Launching of Baku-Tbilisi-Kars railway was not only a historic event for Azerbaijan and the regional countries but also has global importance. BTK starts in Baku and passes through Tbilisi and Akhalkalaki in Georgia and travels to Kars in Turkey, connecting Azerbaijan with Turkey, the East with the West. The implementation of BTK railway was only possible with the support of the Azerbaijani side.  The railway was inaugurated on October 30 in Baku with the participation of Azerbaijani and Turkish presidents, prime ministers of Georgia, Kazakhstan, Uzbekistan and Turkmen and Tajik delegation. And on November 1, Ilham Aliyev held a summit with Hassan Rouhani and Vladimir Putin in Tehran.  Various regional issues, as well as North-South, East-West transportation corridors were discussed during the meeting. MP Tahir Mirkishili answered our questions about these important events, international projects implemented by Azerbaijan, their benefit for our country and region and economic-political significance. 

- Mr. Mirkishili, what role do Baku-Tbilisi-Kars railway, as well as, North-South project to be implemented in the future, play in Azerbaijan becoming a transit hub? 

- First of all, I’d like to note that there are two major economic power centers in Eurasia. These are the EU in the west and China in the east. The trade relations and cargo transportation between these two economic centers is expanding by year. The trade turnover between the EU and China is more than 500 billion dollars at the moment. The volume of cargo transfer every year between these powers is over 100 million tons.  These expanding ties promise huge economic benefits for transit countries. Currently, the cargo transfer between the EU and China is transported through Trans-Siberia in the north and Indian Ocean-Suez canal in the south. North railway route passes through Russia which has tumultuous relations with the EU countries. And as the southern railway rouse takes a long time, it cannot adjust to the increasing dynamics of trade. It is expected that 50% of cargo carried through ground routes will be done through railways in 2050.  Railway cargo transfer is expected to rise 87% compared to the figure in 2005. Taking all these into account, there emerged a need for a route that would be shorter, pass through political stable areas and would help the development of the regions. Considering these potentials, the national leader Heydar Aliyev hold an international conference dedicated to the restoration of the SilkWay which was attended by Azerbaijani, Bulgarian, Georgian, Kyrgyz, Moldovan, Romanian, Turkish, Uzbek and Ukrainian leaders where a treaty on international transportation for development of Europe-Caucasus-Asia corridor was signed and Baku Declaration was adopted. The treaty was signed by 12 countries including Azerbaijan, Georgia, Armenia, Bulguria, Romania, Moldova, Ukraine, Uzbekistan, Kazakhstan, Kyrgyzstan, Tajikistan and Turkey. This very Baku Declaration laid the political basis for Baku-Tbilisi-Kars project.  Azerbaijan, Turkey and Georgia signed a treaty on implementation of Baku-Tbilisi-Kars railway in 2007, with the support of Azerbaijani economy and at the initiative and political will of Ilham Aliyev.  It should be noted that back then Armenian leadership and their patrons spared no effort to prevent the implementation of this project.  They came up with Kars-Gyumru-Tbilisi project. Some parts of this project were already done.  But the power of the state of Azerbaijan, Azerbaijani president’s influence and the economic potential of Baku-Tbilisi-Kars project crushed Armenian proposal. The third biggest project after Baku-Tbilisi-Jeyhan and Baku-Tbilisi-Erzurum, Baku-Tbilisi-Kars has the potential to change the economic geography of Eurasia.  Baku-Tbilisi-Kars railway can also be called "Railway Silk way”. North-South transit corridor, soon to be launched, and Baku-Tbilisi-Kars project will lead to intersection of international transportation corridors in Azerbaijan and this will give us the opportunity to get the maximum political and economic benefits out of these projects. 

- What economic dividends will such projects bring Azerbaijan?

- Baku-Tbilisi-Kars railway has the capacity carry 1 million passengers and 6.5 million tons of cargo in the initial phase. The railway has the potential to carry 3 million passengers and 20 million tons of cargo yearly. BTK passes through Marmaray in Turkey in the West and through Eurasian tunnel and is integrated into railway network of the EU. In the east, it will extend to China via Eastern ports. It should be mentioned that, Aktau port in Kazakhstan has reached the cargo load limit of 19.5 million tons. Baku International Trade Seaport being built in Alat will have the load capacity of 20 million tons.  According to international standards, it costs 0.1 dollar to carry a ton of cargo to 1 km. Azerbaijan has the potential to make over 1 billion dollars from carrying 20 million tons of cargo, based on these standards. 
At present, the volume of foreign trade between Turkey and Georgia-Azerbaijan is $ 4.2 billion. According to preliminary calculations, the volume of trade between the three countries will reach $ 10 billion after the launch of the BTK railway. With the full project launch, the revenue from the transit of cargo from Azerbaijan will be over $ 1 billion. This project will also enable Azerbaijani exporters to get access to new markets at faster and cheaper costs, which will give a great boost to the country's export policy. I would like to note that the biggest obstacle to Turkey's export to the Gulf and Central Asian countries is the issue with transportation. As the route between Turkey and Iran can not fully meet modern requirements, the Baku-Tbilisi-Kars railway will play an important role in ensuring the trade turnover between the two countries. Thus, scheduling 1 million tons of cargo per year over the railways between the two countries will create an incentive for transportation companies to dismiss these routes and to switch to the Baku-Tbilisi-Kars railroad because of the delay in the Van Lake and Saraks. At the same time, Turkey and Russia are expected to carry over 16 million tons of cargo annually over the northern line via the Baku-Tbilisi-Kars railway, which is more favorable for speed and tariff. An important result of the commissioning of the Baku-Tbilisi-Kars railway will be a new energy corridor in the region. The possibilities of delivering petrochemical products from Azerbaijan to the whole world will increase considerably. In addition, existing transportation agencies that carry out cargo transportation between Turkey and Central Asia will want to take advantage of this line. The Baku-Tbilisi-Kars railway will provide a great boost to employment and small trade in all three countries. The possibility of processing freight along routes, creating additional values, creating new areas for export and service will increase further, which will ultimately lead to greater people's well-being.

- How does implementation of economic projects of international significance change the perceptions about Azerbaijan in the world? 

- Azerbaijan has long been known as a reliable partner in the international arena. Every initiative of Azerbaijan, who has been valuable in the development of the region, ensuring the energy security of the EU and acting as a reliable trade route between Asia and Europe. Because Azerbaijan’s initiatives are pragmatic and are mutually beneficial. It’s no coincidence that implementation of such projects increase our political influence in the international arena. 
- But how politically important is the implementation of the aforementioned projects? 

- Armenian leadership and their patrons have for a very long time tried to prevent the launch of this project. They really believed that it would not be implemented. But the project become a reality with the political influence of Azerbaijani president and economic power of the state of Azerbaijan. This was a political victory for Azerbaijan. On the other hand, this project increased the partners of Azerbaijan. The participation of Central Asian countries in the project will make those countries closer to us politically too. 

- How will these projects affect the development of the region in the future?

- BTK and North-South transportation corridors will integrate the region to European and Asian markets. The investment in the region, technology and knowledge flow will increase, and on the other hand, regional exporters will have a favorable access to foreign markets. These projects will increase the competitiveness of the region.  Moreover, construction of a railway between Kars and Nakhchevan will create great opportunities for removing the Autonomous republic from economic blockade. 

- Armenia has been left out of several regional projects including BTK railway. How do you assess the significance of these projects in that regard?

- Primary issue of Azerbaijan is the occupied territories and Nagorno-Karabakh conflict. One of the main reasons behind the development of the country is to put an end to the occupation policy of Armenia and restoration of justice. Armenia is left out of such projects because of their aggressive foreign policy. And they are paying the price for it. Armenia is on the verge of collapse as an independent state. We hope that their leadership will soon end their policy of occupation against Azerbaijan and will try and benefit from political and economic opportunities our country has created in the region. As I mentioned earlier, this can only be possible if Armenia ends the occupation. Otherwise, the future of Armenia, isolated from all projects, remains uncertain. 

Rufik Ismayilov