Kazakhstan-Turkmenistan-Iran railway meets Kazakhstan’s new economic policy requirements

Kazakhstan-Turkmenistan-Iran railway meets Kazakhstan’s new economic policy requirements

Baku, Azerbaijan, Dec. 3

By Elena Kosolapova - Trend:

The Kazakhstan-Turkmenistan-Iran railway, put into operation by the presidents of three countries on December 3, is fully in line with Kazakhstan's new economic policy, Kazakhstan's "Risk Assessment Group" director Dosym Satpayev told Trend.

Referring to the announcement made by President of Kazakhstan Nursultan Nazarbayev to the Kazak people, Satpayev said, "In this message, strong emphasis was placed upon the active development of infrastructure, including transport infrastructure."

Satpayev underlined that Kazakhstan has a large territory. But at the same time it is a landlocked country, which has limited access to waterways. Therefore, the country is interested in expanding this way, supporting various transit or transportation projects.

"Therefore, Kazakhstan from the very beginning supported this project proceeding from its economic interests," he said. "There is little politics. There was more economic interest of Kazakhstan, which wanted to find an additional route for the transportation of its goods."

"Turkmenistan also has its economic interest in this project. In particular, the country is interested in the benefit from the transit of goods through its territory. At the same time, Iran does not greatly need the transit of Turkmen and Kazakh goods and raw materials. This railway project is rather of an image nature for it."

"Iran is now trying to strengthen its positions in Central Asia," he said. "We must understand that the neighboring region and the Caspian Sea are a zone of vital economic and political interests for Iran. The support for such projects shows that Tehran is ready to strengthen its cooperation with the regional countries."

"Symbolic participation is more important here. That's to say, the country needs to show that Iran is an important partner and a very good friend of the Central Asian region," said the expert.

The expert believes that Kazakhstan will use the new railway not only for exporting its goods, but it will also try to attract its partners in the European Union (Russia and Belarus).

"While joining the Eurasian Economic Union, Kazakhstan was initially stating that it is important for increasing its transit potential," Satpayev said.

"Naturally, Kazakhstan is interested in joining of other countries, including Russia in this project," the expert said, adding that Russia could use this route to supply its goods and other products to Iran.

Russia can also be interested in transportation of its goods via the Kazakhstan-Turkmenistan-Iran railway, since the rules of the Customs Union and the Eurasian Economic Union give it opportunity to transport its goods on Kazakh territory free of duty, according to Satpayev.

Moreover, this project is a priority for Kazakhstan, since it is Russia's partner in the Eurasian Economic Union, said the expert.

Satpayev added that grain is the main product that Kazakhstan can export via the new railway.

"Grain is a branded product of Kazakhstan, while Iran is one of the large buyers of Kazakh grain," he said.

Satpayev said this project can also be used for the transportation of Kazakh oil. He reminded that earlier, Kazakhstan and Iran were implementing swap operations on oil. Later, this cooperation was suspended, however, recently, it was reported that Iran and Kazakhstan are going to resume the swap exchange, said the expert.

"So, Kazakhstan will be able to sell oil to Iran's northern regions [transporting it via the Kazakhstan-Turkmenistan-Iran railway], and Iran will be able to sell oil from its southern ports on behalf of Kazakhstan," he said.

Regarding other products, the expert said Kazakhstan currently has few opportunities, adding that the country can essentially offer only raw materials in this regard.

"But Iran itself has no problems with raw materials," he added.

"Therefore, there should be some processing products of the sectors of mining and metallurgy, minerals industry, consumer goods ... It is necessary to actively support in Kazakhstan the development of not only the mining, but also the manufacturing sector," Satpayev said.

He further noted that Kazakhstan has not been able to take even some trade niche on the Russian market, which emptied due to sanctions.

In general, the expert says, the Kazakhstan-Turkmenistan-Iran railway is beneficial to Kazakhstan, but this project has certain risks.

"Iran is constantly under threat of new sanctions," he said, adding that hypothetically thinking, the sanctions can be tightened if the relations between Iran and the West get seriously complicated.

"In this case the project can be halted," the expert noted.

Therefore, Satpayev says, it will be beneficial for Kazakhstan to have as many of these routes.

"The railway from Kazakhstan to the southern ports of China is of particular interest," he added.

In case of tougher sanctions against Iran, Kazakhstan will have to refocus on the eastern direction through the ports in southern China.

Aside from that, the Chinese market is much larger that the Iranian market and it is ready, unlike Iran, to consume different types of products, Satpayev said.

Edited by CN

Elena Kosolapova is Trend Agency's staff journalist
Follow her on Twitter: @E_Kosolapova

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