Ukraine crisis, situation of the Asian corridors and Iran's opportunities

After the war in Ukraine, the importance of the middle corridor, including the Zangzor Canal, has doubled, and this issue can be considered a threat to Iran, the countries of Central Asia, Russia, and even India. The immediate activation of the North-South Corridor with the cooperation of Iran, Russia, India and Central Asian countries will be the most important measure to curb this threat.
14 August 2023
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Alireza Miryousefi

After the war in Ukraine, the importance of the middle corridor, including the Zangzor Canal, has doubled, and this issue can be considered a threat to Iran, the countries of Central Asia, Russia, and even India. The immediate activation of the North-South Corridor with the cooperation of Iran, Russia, India and Central Asian countries will be the most important measure to curb this threat.

One of the important aspects of the Ukraine war is the long-term effects of this war on the geo-economic situation of the Asian region. Until the Ukraine war, the northern corridor connecting China to Moscow and from there to Europe was assumed to be the most important and economical corridor of Asia-Europe, and other competing corridors, especially the middle corridor passing through the countries of Central Asia as well as the middle of the Caspian Sea, as a complementary corridor and mainly with geostrategic and political goals, and in order to link China and Turkey to the countries of Central Asia. The most important issues of this corridor, compared to the northern corridor, which is mainly based on rail transportation, were: the combined rail-sea and land (road) corridor, the weakness of the infrastructure structures of the corridor and the limited capacity, as well as political considerations due to the concern of China's unipolar domination over Central Asian countries.

However, after the start of the crisis in Ukraine, the importance of the middle corridor is increasing rapidly, and over the past year, the traffic of cargo and goods from the middle corridor has reached 3.2 million tons in 2022, almost all of which has been reduced from the share of the northern corridor and up to a year ago, it was very difficult to imagine such a growth. This corridor has caused serious concerns for the countries of Russia, Central Asia and even India in competition with China. Russia is worried about being bypassed in the Asia-Europe trade and reducing the strategic role of the northern corridor, the main part of which passes through Russian territory. In addition, Russia considers Central Asia as its backyard and is worried about China's control over these regions through investment and using debt as a tool of political domination. Some Central Asian countries share this concern of Russia and also prefer to diversify their access to Europe and open water ports. India, which has been seeking to connect with Central Asia and Russia through Iran for years and has been in geostrategic competition with China for decades, is worried about giving the stage to its rival. Especially after the crisis in Ukraine, when India-Russia exchanges have increased several times, the importance of this connection has doubled. The Americans also support this strategy of India and consider India as a counterbalance to China's influence in Central Asia, the Persian Gulf, the Middle East, etc.

Iran, which for many years has defined itself as the main transit corridor from North to South and the access of Central Asian countries to the Persian Gulf, is worried about the loss of its advantages by the middle corridor and considers this corridor as the main competitor of the International North-South Transit Corridor or INSTC. In addition, the importance of finding a middle corridor has made the efforts of Turkey, Azerbaijan (and possibly China) to implement the Zangezur corridor and economic project and to shorten the middle corridor after the war in Ukraine multiplied, cutting off the land connection between Iran and Armenia and reducing the significance of Iran in linking Nakhchivan with other territories of the Republic of Azerbaijan. Iran's geostrategic competitions and considerations in this region are complementary to our country's geostrategic preferences. Hence, the development of a middle corridor is not considered to be in the interests of our country, and if Iran and other aligned countries do planning and pay special attention to this issue, it can be prevented.

The middle corridor, despite the advertisements and investments made, suffers from many issues compared to the northern corridor as well as the north-south transit corridor. The infrastructure structures of many countries of the mentioned corridor are underdeveloped and insufficient, and their development is time-consuming and expensive, and financing it is difficult. In addition, the multiplicity of the corridor (rail, sea, road) has increased the cost and time compared to the existing or possible alternative corridors. On the other hand, the relatively large number of countries across this corridor and separate and sometimes high tariffs are among other problems of the middle corridor. Most importantly, there is serious doubt about the political interest of all the countries along the corridor to complete and strengthen this corridor if alternative corridors are implemented, especially the North-South corridor, because these countries have political and cultural differences with each other. Finally, despite the fact that China has deliberately strengthened this corridor, especially after the Ukraine crisis, there are doubts about how far it wants to advance the path of independence from Russia. Another consideration of China is Turkey's Pan-Turkist tendencies in the Caucasus and Central Asia, which extends to China's Xinjiang, and China has sensitivity and protection towards it. Therefore, it indicates that if Iran, Russia, and India, in cooperation with the Central Asian countries, immediately pay attention to the activation and capacity building of the North-South corridor, they can share in the important strategic and economic achievements of this corridor.

The main advantage of the North-South Corridor is that it will reduce the traditional 11,000-kilometer route through the Suez Canal to less than 7,000 kilometers, and will reduce costs and shipping time by 30 to 40 percent. This agreement was first made in 2000 between the three countries of Iran, Russia and India, and during two stages, 10 other countries including Azerbaijan, Armenia, Kazakhstan, Belarus, Bulgaria, Turkey, Oman, Kyrgyzstan, Tajikistan and Ukraine joined it. However, despite the passage of thirteen years, unfortunately, this corridor has not yet been implemented. One of the main reasons for this issue, along with the lack of seriousness and interest of the member countries of the agreement, is that Iran alone bears the heavy burden of investing and completing the rail network of this corridor in these years with no participation and investment of other member countries, and hence, the 160-kilometer route of the Rasht-Astara railway has not yet been completed. With the start of the Ukraine crisis and the unprecedented increase in the exchanges between Russia and India, the value of the North-South corridor for other members, especially for the two countries Russia and India, increased significantly, and in addition to appointing special representatives from the two countries, Russia pledged to complete the Rasht-Astara part with an investment of 1.6 billion euros, which, if realized, will be a big step towards the operationalization of this corridor. Of course, the announced time of four years to make this part seems long.

Another route that connects Asia and Europe and is of great importance to China is the CPEC corridor, linking Kashgar in China's Xinjiang province to Gwadar port in Pakistan and 170 km from Iran's Chabahar port. Although CPEC was proposed and implemented many years after the the North-South corridor, the executive operations and investment in this regard are progressing much faster and wider than the executive operations of the North-South corridor. In addition to the China, Persian Gulf countries including the UAE, Qatar and Saudi Arabia have announced heavy investments in Gwadar port.

Although Iranian authorities do not consider Jabahar and Gwadar ports as competitors and have proposed the construction of a 170-kilometer railway between the two ports, they have expressed concerns about overshadowing the importance of Iran's transit route and the North-South corridor. The first one is the possibility of expanding CPEC plan to Afghanistan and Central Asia. Specifically, after the withdrawal of American forces from Afghanistan and the rise of the Taliban, this issue has become more serious than before and has caused concern in some countries inside and outside the region. The second concern is connecting CPEC to the middle corridor and further weakening the northern corridor as well as the north-south corridor. Moreover, the domination of the Central Asian region, which was mentioned earlier in the section of concerns about the prosperity of the middle route.

Another corridor that can overshadow the north-south corridor (as well as Iran's east-west corridor) as a complementary corridor to CPEC is the Dry Canal corridor or initiative that will link Faw port in the Persian Gulf to Turkey and from there, it connects to Europe and Syria by rail and road. The executors of this project have announced that they will make it operational by 2025. This corridor actually complements the Gwadar port and the CPEC corridor and connects China to Europe without the need to pass through the Suez Canal. This corridor will also be one of the main competitors of Iran's transit advantages.

In short, the corridors threatening the transit advantages of the Islamic Republic of Iran are developing rapidly around Iran, and their competition is against time. Any project that can become operational and economic faster will affect the progress of competing corridors. The war in Ukraine (the end time of which is not known) has made some of Iran's partner countries in the North-South corridor, especially Russia and India, interested in investing and making this corridor faster; Therefore, by minimizing administrative and bureaucratic obstacles and short-term organizational and group interests, all related institutions should cooperate together to execute it. With the end of the Ukraine crisis, there is no guarantee that these interests will continue, and the country has no time to lose.

Alireza Miryusefi, senior expert at the Institute for Political and International Studies

(The opinions expressed are those of the authors and do not purport to reflect the opinions or views of the IPIS)

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