BAKU, Azerbaijan, January 18. Azerbaijan is located in a highly advantageous geographical position – at the crossroads of the most important transportation arteries.
This is a big advantage in and of itself, but making the right and timely decisions in this area, as well as the capacity to grab emergent chances as a result of abrupt geopolitical shifts, necessitates considerable skill.
Under the leadership of President of the Republic of Azerbaijan Ilham Aliyev, the country has taken a number of significant initiatives to improve its transportation infrastructure and services.
Corresponding programs and projects are being developed and implemented successfully. The head of state's decisions and directives serve as the legal foundation for enhancing the management and servicing of the country's transportation system, responding to international requirements, and integrating the national transportation system into the global transportation network. As a result of successfully implemented choices, projects, and programs, the Republic of Azerbaijan's modern transportation system is transforming into a critical transport and transit center.
Since 2003, President Ilham Aliyev has laid the groundwork for the development of software in many sectors, including transportation. Industry-specific and regional programs across the entire country have been adopted and successfully implemented. Infrastructure is improving, new highways are being constructed, and appropriate international collaboration is being enhanced and expanded.
In 2005, Azerbaijan officially joined the North-South transportation route. As a result, the country's prospects for becoming a vital transportation center between Europe and Asia at the crossroads of the East-West (Great Silk Road) and North-South transit lanes improved. Azerbaijan is the only country involved in both the North-South and East-West transportation corridor initiatives. As the region's primary transportation project leader, Azerbaijan prioritizes the building and reconstruction of internationally significant railways.
The Baku-Tbilisi-Kars (BTK) railway, which is a prime example of this and is regarded as one of the world's 100 largest projects, was built under President Ilham Aliyev's direct guidance and strong resolve. The BTK has expanded the possibilities for intercontinental transportation. The favorable conditions produced by this railway, which is the quickest route between China and European countries, have piqued the interest of many countries, particularly in the East.
The BTK is the shortest and most convenient route between Asia and Europe, decreasing goods transport time by more than twice. The Baku-Tbilisi-Kars railway connects Central Asian countries - Turkmenistan, Kazakhstan, Uzbekistan, Kyrgyzstan, Tajikistan, and Afghanistan - to European and international markets.
Speaking during the 5th Consultative Meeting of Central Asian Heads of State in Tajikistan in September 2023, President Ilham Aliyev stated that Azerbaijan is renovating the Baku-Tbilisi-Kars railway to fulfill increased demand for cargo transit via the East-West route.
Noting that the cargo volume via that road will be increased from one to five million tons, the head of state emphasized that, in parallel to that, the capacity of the Baku Trade Port is also being expanded from the current 15 to 25 million tons.
Under the leadership of the head of state, numerous programs covering various directions have been successfully implemented, including the "State Program for the Renewal and Development of the Road Network in Azerbaijan for 2006-2015," "State Program for the Development of the Transportation System in the Republic of Azerbaijan (2006-2015)," "Additional Action Plan for Improving the Transportation System of Baku for 2008-2013," "State Program for the Development of the Railway Transportation System in the Republic of Azerbaijan for 2010-2014," and subsequent programs and plans.
The success of the measures taken in this area is clearly reflected in the indicators over the last 20 years. For example, the volume of freight transportation increased by 2.1 times in 2023 compared to 2003, from 110 million tons to 230.2 million tons. The volume of external trade turnover grew from $5.2 billion in 2003 to $51.2 billion in 2023, showing a 9.8-fold increase.
The added value in the transportation and storage sectors has increased from 568.5 million manat ($334.4 million) in 2003 to 7.6 billion manat ($4.4 billion) in 2023. Investments in fixed capital in the transportation and storage sectors have risen from 337.8 million manat, or $198.7 million, in 2003 to nearly 4.76 billion manat ($2.8 billion) in 2023. Passenger transportation has grown by 2.1 times over the past 20 years, from 921 million people to over 1.9 billion people.
Azerbaijan is determined to continue the progress achieved over the last 20 years and has already laid solid foundations for this.
In this context, the "Action Plan to Increase the Transit Potential of International Transport Corridors Passing through the Territory of the Republic of Azerbaijan and Stimulate Transit Freight Transportation for 2024-2026," approved by the decree of President Ilham Aliyev on November 23, 2023, holds great significance. It envisages the implementation of various measures in specific directions, transforming transport-transit-logistics services into one of the main sources of budget revenue, and utilizing the potential of existing transport services in our country more efficiently.
It is worth noting that projects started and involving Azerbaijan benefit not only the country but also contribute significantly to regional development. After the armed conflict in Ukraine began in February 2022, new geopolitical realities arose, particularly in the Eurasian region, altering the transportation-logistics map and interrupting established supply routes. With the Northern Corridor's declining relevance, there was a need for alternative transport corridors, and the Middle Corridor, which passes via Azerbaijan, emerged as one such option. Azerbaijan is taking aggressive steps to expand the capacity of this route for the benefit of the entire region.
The advantages and geographical coverage of the Middle Corridor allow it to serve as the main transport artery for the countries of the Turkic States Organization. The Middle Corridor, starting from the China-Kazakhstan border, is a route connecting Asia with Europe, traversing the countries of Central Asia and the Caspian Sea through the territories of Azerbaijan, Georgia, and Turkey. The Middle Corridor is the shortest and most convenient route between Europe and Asia. Thanks to the Middle Corridor, it is possible to travel 7,000 kilometers from China to Europe in 12 days instead of 10,000 kilometers. This demonstrates how advantageous and secure the corridor is for global trade between Asia and Europe.
At the same time, there are prospects for the development of the corridor in the eastern Zangazur region. After the opening of the Zangezur Corridor, Azerbaijan's transportation opportunities through the Middle Corridor will further expand. This will create new opportunities for all the states in the region.
The Zangezur Corridor holds significant regional and international importance because it serves as a crucial artery connecting the North-South and East-West transport corridors.
Azerbaijan has taken concrete measures for the swift opening of this corridor.
The ceremony of laying the foundation of the automobile bridge and border-customs infrastructure between Azerbaijan and Iran was held in Azerbaijan’s Aghbend town of the Zangilan district on October 6, 2023, within the framework of the "Memorandum of Understanding signed between the government of the Republic of Azerbaijan and the government of the Islamic Republic of Iran on creating new communication links between the Eastern Zangazur economic region of Azerbaijan and the Nakhchivan Autonomous Republic through the territory of Iran.".
The automobile and border-customs infrastructure being created will serve to increase transit cargo transportation through the territory of the countries and facilitate entry and exit to the Nakhchivan Autonomous Republic.
According to information as of December 2023, work on the construction project of the Horadiz-Aghbend railway (part of the Zangezur Corridor) has been completed by 45 percent, and the project will be completed in 2025.
We also note that the implementation of the Zangezur corridor will connect the Turkic world through land transport. Türkiye and Azerbaijan are carrying out systematic activities to implement the Zangezur corridor, promoting the attractiveness of the project within the framework of international meetings.
Armenia is trying in every way to evade the implementation of this project, to its own detriment, because Azerbaijan can open this corridor with Iran.
As President Ilham Aliyev said in an interview with local television channels on January 10, first of all, Armenia must give Azerbaijan unimpeded passage in the area between Zangilan and Ordubad.
"It is their responsibility. I have already said it, and I want to say it again: cargoes, citizens, and vehicles going from Azerbaijan to Azerbaijan should pass there freely without undergoing any inspection or customs clearance. As for cargo moving from other countries, for example, from Central Asia to Türkiye through the territory of Armenia or even cargo sent from Azerbaijan to Türkiye, of course, all customs duties must be paid. This is a very fair position. Another important issue is the safety of this road. I have repeatedly told the Armenian leadership that Armenia's guarantees would not be sufficient for us. The statement of November 10 indicated that Russian border guards would provide security and control in the 42-43km area, and this obligation must be fulfilled. Armenia wants to shy away from this now. However, this is not logical either. Russian border guards are at the airport of Yerevan in Armenia, at the Armenia-Iran and Armenia-Türkiye borders. Why can they be deployed there but not here? It is simply an excuse for not opening this road. We have been waiting for three years. They have accused us of planning to use force to open that road. However, this was an absurd accusation," the head of state said.
President Ilham Aliyev said that if this route is not opened, then Azerbaijan does not intend to open the border with Armenia in any other place.
"Therefore, my advice to the Armenian side is not to engage in manipulations here. Their proposed route from the main part of Azerbaijan to Nakhchivan is completely useless, and it will not be possible to use that route throughout the year. The weather conditions and natural terrain there are very harsh. The most appropriate option is through the Mehri area. Back in Soviet times, a railway passed through it, and a highway was being built there as well. Both the railway and the road should pass through there. People and goods should pass from Azerbaijan to Azerbaijan, as I said, without any inspections. Otherwise, Armenia will remain in an eternal deadlock, and if the route I mentioned is not opened, we are not going to open our border with Armenia anywhere else. So, they will do themselves more harm than good," the head of state noted.
Azerbaijan is not only a country located at the crossroads of international transport corridors but also a nation engaged in extensive infrastructure development. Specifically, the location of the Alat Free Economic Zone (FEZ) is strategically chosen to intersect all modes of transportation, various roads, and different routes. Alat serves as the intersection point for the North-South and East-West corridors, as well as the Middle Corridor. The establishment of the Alat FEZ aims to increase the volume of local and foreign investments in the non-oil sector of the country.
The Alat FEZ has legislation that exempts foreign specialized people from income tax, social insurance payments, and other similar taxes and fees. Companies in the FEZ are immune from all customs charges and taxes, including VAT, on the export of goods and services overseas. President Ilham Aliyev signed a proclamation in October 2023 outlining additional measures to boost the Alat Free Economic Zone's activities, which included expanding the FEZ territory by 23.74 hectares.
Infrastructure construction and service enhancement efforts that have been consistently undertaken in Azerbaijan for many years are already showing benefits as freight volumes into the country increase. The fact that Azerbaijan has contemporary infrastructure and is a dependable partner provides circumstances for developing freight transportation in multiple directions.
The coverage by international transport corridors not only helps the country use these corridors as a transit nation, but it also opens up new options. Azerbaijan's transition into a major transportation hub has been made possible by timely and forward-thinking policies adopted under President Ilham Aliyev.