New Economic Corridors in the South Caucasus and the Chinese One Belt One Road

Source:TEPAV Date:23Oct2023

A good answer to the question of whether peace  and prosperity can come Caucusus by fellows of Turkish think-tank TEPAV

Armenia desperately needs connections and investments. The present situation offers a number of openings for Armenia. The increased energy along the Middle Corridor, most significantly instigated by Chinese presence in Georgia and Azerbaijan, will have spillover effects on Armenia (Sections 5.2, 5.3). Membership in EAEU, by making Armenia part of a larger market, could make Armenia attractive for Chinese investments (Sections 2.4, 4.1). The EAEU and the collaboration between Kazakhstan, Russia and Belarus it enabled, led to the success of the Northern route, linking China to EU (Section 2.2). Another pull factor for Chinese investments would be Armenia’s comprehensive agreement with the EU, signed in November 2017 (Section 4.1). Lastly, lifting of sanctions in Iran and Iran’s interest in membership in EAEU will provide spillovers to Armenia from Iran’s development, for instance, participation in new corridors accessible through Iran (i.e. the North-South corridor) and European investments in Iran (Section 4.1). Turkey aspires to be a logistics hub in the region, especially for east-west trade, attracting investments in transport infrastructure, most significantly from China (Section 3.2). For Turkey, opening to the east is also important for the development of its eastern regions (Section 3.1). At the same time, Turkish investors and exporters are involved in markets in the South Caucasus and Central Asia, especially in the construction sector. The Middle Corridor, prioritized by the Turkish government, is part of these aspirations. Turkey has channelled big investments in transportation infrastructure including in high-speed railway projects and bridges, underwater rail systems crossing the Istanbul and Canakkale straits (Section 3.2). It has a customs union with the EU, which may be an attraction point for further Chinese investments. Turkey also has a history of strong economic relations with Russia (i.e. substantial Turkish investments in Russia and as export and import partners) and is looking to sign an agreement with the EAUE (Section 1.4). As was the case for Armenia, another important opening for Turkey is relations with Iran (Sections 2.2, 3.2). However, the Iran –Turkey opening is not a substitute for Turkey’s Middle Corridor priority given instability in the Middle East.

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