24/11/2022 GIP

Implications of Russia’s invasion of Ukraine for the emergence of the Middle Corridor as a viable route for East-West trade



Mahammad Mammadov

Publish Date:

Russia’s invasion of Ukraine and the ensuing Western sanctions on Moscow destabilized the traditional rail routes linking China to Europe through Russian territory and pushed major logistics companies to seek alternative modalities for intercontinental trade. Among few options, the Middle Corridor passing through Kazakhstan, the Caspian Sea, Azerbaijan, Georgia, and Turkey (or the Black Sea) emerged as a possible alternative, with capacity to divert a share of cargo traffic away from the northern corridor. The Middle Corridor countries used this opportunity to step up efforts to bolster the hard and soft infrastructure capacity of the route that not only helps them benefit from growing cargo transit but also affords them opportunities to strengthen geopolitical linkages with alternative power poles. In the fast-changing yet complex geopolitical landscape of wider Eurasia, the South Caucasus and Central Asian republics need to use intercontinental rail transportation networks as a strategic tool to strengthen domestic resilience, boost long-term growth, and cement their position as pivotal players in regional affairs.

With the growing demand for the route, the Middle Corridor countries should come up with policy solutions such as deeper customs cooperation, regulatory approximation, better tariff coordination, and more IT solutions to enable the smoother transit of cargo from China to Europe or vice versa. The participating countries also need to coordinate efforts to increase transparency in transactions along the route and liberalize inter-regional and intra-regional trade to attract freight volumes away from the northern corridor. The EU and China should provide financial and technical assistance to the Middle Corridor countries to further develop this route as it will offer a viable intercontinental rail connection in an otherwise highly destabilized neighborhood.

Key words: Russia-Ukraine war, sanctions, Middle Corridor, connectivity, European Union, China

Policy Brief #44 | November 2022

🔗 This policy brief is available in the Azerbaijan language

, , , , ,