Russian alternative to Suez Canal: road opening to the East

At KazanForum 2024, the Kazakhstan authorities announced tariffs for the transportation of goods by rail along the eastern bypass of the ITC

Russian alternative to Suez Canal: road opening to the East
Photo: Динар Фатыхов

“Russia was cut off from using dollars and euros, and restrictive sanctions forced a change in logistics routes. Those who plotted that the economy would collapse were mistaken. This did not happen," stated Deputy Prime Minister of the Russian Federation Alexey Overchuk at the plenary session of the XV Russia — Islamic World: Kazanforum 2024 International Economic Forum. It turned out to be more difficult to build a new logistics infrastructure than a financial one. Why Kazakhstan gives priority to overland routes within the framework of the North-South ITC, what Kyrgyzstan expects from the Russian market, and what the rais of the Republic of Tatarstan, Rustam Minnikhanov, answered to the question of Arab TV journalist Amro Abdelhamid about the future forum — in the report of Realnoe Vremya.

Azerbaijan and Kazakhstan are laying land routes

The development of the North-South international transport corridor is one of Russia's most important projects, Deputy Prime Minister of the Russian Government Marat Khusnullin said. But if at the expert session the concept of the ITC was “tested” with the Russian regions, then in the evening at the plenary session the political heavyweights Kazakhstan and Kyrgyzstan joined the discussion. These two states from the CIS countries are most actively advancing in the expansion of the ITC. They actively cooperate with Russia and participate in the work of the Eurasian Economic Union.

On this occasion, the moderator of the meeting, Arab TV journalist Amro Abdelhamid even noted that integration within the framework of the Eurasian Economic Union is proceeding briskly. But he saw a concern about whether integration with the countries of the Islamic world, which are connected not only with the Russian economy, but also with other foreign countries, can be achieved. Won't there be a contradiction in this?

Russian Deputy Prime Minister Marat Khusnullin said that the unifying force should be the North-South ITC, which is going to connect different states of the Islamic world. He repeated how the project is currently developing on the main routes.

Firstly, the western bypass around the Caspian Sea provides for the expansion of the construction of a railway and automobile communication through the territory of Azerbaijan with access to Iran. According to Khusnullin, Azerbaijan has started designing a railway line to Iran. Turkmenistan has started building a road along the Caspian Sea towards Iran.

Secondly, the eastern bypass provides for the completion of the construction of the Europe-Western China highway. Here, the Russian authorities are working in tandem with Kazakhstan to bring roads into a standard condition. They will lead to Uzbekistan, Afghanistan, and Pakistan. Thirdly, it is a waterway from the Volga–Kama basin with access to the ports of the Caspian Sea, and from there to the Persian Gulf. Although there are still many unresolved issues, the Russian Deputy Prime Minister called it the Suez Canal, which has no alternative in Russia.

16-18 thousand illegal sanctions imposed against Russia

However, the first agreements on the creation of the North-South corridor were reached much earlier, at the end of 2007-2008, it was announced during the discussion. Why did we return to it again? Deputy Prime Minister of the Russian Federation Alexei Overchuk admitted that anti-Russian sanctions had pushed for its resumption, and the Islamic states had received a practical lesson in how illegal restrictive measures can be applied against any undesirable country.

“If illegal restrictive measures are imposed against one country, then other countries think about that the same can be imposed against any country, no one is immune," he said.

However, the sanctions did not ruin the economy of either Russia or the CIS countries, contrary to the targets of the West. “According to various estimates, from 16 to 18 thousand illegal restrictive measures have been introduced against the Russian Federation. They were not formalised by a decision of the UN Security Council, as it must be. Although they are aimed at curbing the economic development of the country," he said.

The fact that they can be imposed in any way is evidenced by a recent incident by the US authorities. “Vladimir Putin, while in China, gave a good example. The US imposed draconian duties on electric vehicles from China simply because they are better. Similarly, duties were imposed on components for the Russian MC-21 aircraft simply because it surpasses Boeing and Airbus in its characteristics," Overchuk said. All this time, Tatarstan State Councilor Mintimer Shaimiev, who was at the origins of the creation of the Russia-Islamic World group, listened attentively to him.

The downside of the sanctions was the shift of the centre of economic growth towards the global south, towards the countries of the world majority, Overchuk noted. Then Russia, which occupies a unique geographical position in the north of Eurasia, decided to take advantage and set about strengthening the connectivity of the vast space. “In the North-South infrastructure project, we closely cooperate with Kazakhstan, Azerbaijan, Turkmenistan, and Uzbekistan in the development of rail and road transportation. This ensures the best competitive conditions for entering the markets of the global south," he said.

45 days by sea or 15 days by rail: how Kazakhstan lobbies for railway

Kazakhstan has become one of the first to meet halfway in building a transport corridor. Deputy Prime Minister of the Government of Kazakhstan Serik Zhumangarin said that the land route along the eastern bypass is almost ready. The authorities have expanded the railway corridor, carrying out a priority reconstruction of border stations. And in general, they lobby for transportation by railway.

How can the cargo from Murmansk reach Mumbai? “It can sail by sea in 45 days or in 15 days by rail through the eastern corridor, and this is the only railway that connects the ports of the Persian Gulf with Murmansk," he clearly outlined his position. According to him, the list of investment projects included in the decision of the intergovernmental council first included a project to expand the Iletsk border station, and then three more border sections. Now everything is prepared on these routes.

Kazakhstan offers low tariffs for transportation across the country. “The tariff for a 20-pound container is 15-18 cents per km, which means that the distance will cost $390. In addition, Kazakhstan gives a 40 percent discount," he added. According to him, the capacity of this route is about 10 million tons of cargo. Last year, a record amount was transported — 2 million tons. Of these, a quarter were Russian cargoes. In the future, it can grow to 120 million tons, he believes.

Kyrgyzstan wants to enter through halal

The Kyrgyzstan authorities expect that they will be allowed to enter the Russian food market. First Deputy Chairman of the Cabinet of Ministers Adylbek Kasymaliev said that Russia now ranks second in the top three main foreign trade partners of Kyrgyzstan, along with China and Kazakhstan. By the end of 2023, the volume of foreign trade with the Russian Federation amounted to $2.9 billion and is planned to be increased to $5 billion. There are 800 enterprises with Russian capital operating in the country. Large infrastructure projects are implemented through the country's development fund.

Cooperation in the field of nuclear energy and generation is being intensified, and the construction of a low-power nuclear power plant is being studied. Direct investments — $147.5 million dollars. The construction of a year-round tourist complex in Issyk-Kul worth $200 million has begun. “The forum outlined proposals that can be implemented," Kasymaliev shared. “Kyrgyzstan is determined to supply meat and dairy products to the Russian market. Moreover, more than 100 products comply with the halal standard," he said.

“The Islamic world always supports Russia, and we highly appreciate it," Rustam Minnikhanov responded. Here he considered it important to clarify that relations with the Islamic world are being built by Russia, which commissioned the creation of the Russia— Islamic World Strategic Vision Group in 2005. Yevgeny Primakov and Mintimer Shaimiev, who was present at the presidium, stood at the origins. Next year, the group turns 20 years. “What are your ambitions for the next forum?" the moderator of the forum asked. “We will ask the Almighty that everyone is alive and well so that we can discuss our issues. Everything is in the hands of the Almighty," Rustam Minnikhanov replied first in Tatar and then in Russian.

Luiza Ignatyeva

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