World Economic Journal Issue 43 September 2024 | Page 46

[ ECONOMY ] Investment | INFRASTRUCTURE | Megacities | Digital Assets & Currencies | Markets

F or decades , Central Asia — a region home to approximately 70 million people across five post-Soviet states : Kazakhstan , Kyrgyzstan , Tajikistan , Turkmenistan and Uzbekistan — has remained largely uncharted on the global logistics map . Domestic demand was largely met by facilities inherited from the Soviet era . With few exceptions , there was minimal need for modern warehousing facilities , and infrastructure development attracted little interest .

However , over the past ten years , the development of regional logistics and warehouse infrastructure was spurred by new impulses :
• The development of China ' s Belt and Road global infrastructure initiative since 2013 , including one of its key components , the Trans-Caspian International Transport Route ( aka Middle Corridor );
• The Covid pandemic , in 2019-2021 , which fuelled a surge in e-commerce , resulting in a sharp increase in demand for quality warehousing facilities ;
• The region ’ s rapid economic growth 1 , driven by a young and tech-savvy population ;
Starting from 2022 , the imposition of international sanctions against Russia — a key trade partner of the region at Kazakhstan ’ s northern border — which prompted the development of existing or new transit routes .
All this gave the region a unique opportunity to position itself as a major transport and logistics hub across the continent , revitalising the ancient Silk Road in a modern economic context .
FROM 53 TO 18 DAYS
Bypassing Russia , the Middle Corridor 2 — which consists of about 4,250 km of rail lines and about 500 km of seaway via Kazakhstan , Azerbaijan and Georgia — is the shortest transport route from China to Europe . Cargo is routed through the Caspian Sea , using the ports of Aktau ( Kazakhstan ), Baku ( Azerbaijan ) and Poti ( Georgia ), before reaching Türkey or continuing to the EU Black Sea ports of Burgas ( Bulgaria ) and Constanța ( Romania ).
In 2023 , this route facilitated the delivery of 2.76 million tonnes of various goods , marking a 65 % increase from 2022 . In 2024 , the traffic is expected to reach 3.29 million tonnes . While the cargo transit time has already been reduced from 38-53 days to 18-23 days , it is highly likely that this period will soon be further shortened to 14-18 days , with only five of those days spent within Kazakhstan ' s borders .
PHOTO : AXP PHOTOGRAPHY / UNSPLASH
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WEJ | September 2024