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Lapis Lazuli Corridor to boost bilateral trade between Afghanistan, Georgia in coming years

Oil&Gas Materials 19 March 2019 11:42 (UTC +04:00)

Baku, Azerbaijan, March 19

By Fakhri Vakilov – Trend:

Lapis Lazuli has great potential to attract significant amount of freight flows to the corridor as the route passing through Turkmenistan, Azerbaijan and Georgia was identified as the most viable option based on the criteria of time, cost, reliability and safety, Director of Transport and Logistics Development Policy Department, Ministry of Economy and Sustainable Development of Georgia, Ketevan Salukvadze told Trend in an interview.

Salukvadze stated that the Lapis Lazuli Route Agreement which was signed between Afghanistan, Turkmenistan, Azerbaijan, Georgia and Turkey in November 2017 is important not only for the participating countries but also for the entire region as it paves the way for stronger economic and trade relations.

She underlined that under the Lapis Lazuli Route Agreement, the parties commit themselves to take every measure to facilitate transportation through the corridor by streamlining administrative and customs procedures and providing necessary infrastructure facilities. This means improving connectivity and increasing access to global markets.

Director of Transport and Logistics Development Policy Department stressed that growth in international trade between Europe and Asia over the last decades necessitated the development of alternative transit routes to further promote this process.

In 2012, the USAID undertook a comparative analysis of alternative transport route for Afghanistan to reach European and Mediterranean countries. The route passing through Turkmenistan, Azerbaijan and Georgia was identified as the most viable option based on the criteria of time, cost, reliability and safety. Thus, Lapis Lazuli has great potential to attract significant amount of freight flows to the corridor.

Lapis Lazuli Route development is an additional opportunity for Georgia along with other connectivity initiatives to strengthen its transit role and boost trade with countries in the region.

Salukvadze added that Lapis Lazuli is considered as one of the most secure and reliable routes for transportation to/from Afghanistan. However, at this stage it is hard to make accurate traffic forecasts.

It will depend on overall political and economic climate in the region and future improvements in the corridor, she said.

Georgian side has expressed support for the development of Lapis Lazuli route since its initiation and continues active engagement for effective implementation of the Agreement.

Salukvadze said that several meetings have already been held at expert as well as higher level between the parties to discuss further actions for the corridor development. Notably, the first pilot shipment by road was conducted along the Lapis Lazuli Route in December 2018. Thus, there are already some positive developments regarding Lapis Lazuli Route and Georgian side hope to see more progress in future.

She underlined that trade turnover between Afghanistan and Georgia equaled $0.76 million in 2018. Products imported from Afghanistan to Georgia mainly included: turbines, transmission shafts, screws, bolts and nuts, engines and motors, compressors, etc. Lapis Lazuli Corridor shall promote increase in bilateral trade between the two countries in the years to come.

She stated that transportation between Georgia and Afghanistan have been carried out even before signing of the Lapis Lazuli Route Agreement. Around 80, 500 tons were transported in 2018 via rail between Afghanistan and Georgia in transit regime which is a 5.5 percent increase compared to the previous year. Transit goods included gasoline, non-alcoholic beverages and mineral water, meat and sub-products, and were transported mainly from Greece, Italy, Egypt, Turkey and Romania to Afghanistan through Georgia.

Road transportation between the two countries also increased over last years. In particular, about 53,800 tons were transported by road between Georgia and Turkmenistan (mainly in transit regime from the US, Turkey, Italy, Netherlands, Germany) in 2018, showing a 29 percent increase compared to the previous year. Moreover, the trade turnover between Georgia and Afghanistan increased fivefold in 2018 and by 75 percent in 2017 compared to the previous years.

Salukvadze noted that as for cooperation in the international fora, Georgia and Afghanistan both are members of the Central Asia Regional Economic Cooperation (CAREC) Program which involves 11 countries and aims to promote cooperation in the priority areas of transport, energy, trade, and economic corridor development.

Georgian side expect Lapis Lazuli Corridor to further deepen the existing transport and economic cooperation between the two countries, according to Ketevan Salukvadze.

Finally, she said that Lapis Lazuli Corridor will obviously strengthen Afghanistan’s trade opportunities as it provides easier access to foreign markets.

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