Interview with Mr. Jemal Inaishvili, Georgian businessman, former President and Advisory Board Member of the Confederation of Asia-Pacific Chambers of Commerce and Industry (CACCI). As part of his visit to the FSPI on April 27, on the theme: “The Middle Corridor: Key Trade Artery in Eurasian Geopolitics.”
FSPI: the trans-Caspian corridor (Middle corridor) is a route of great importance connecting Asia to Europe while circumventing Russia via the Caucasus and the Caspian Sea. At the heart of the geopolitical and economic stakes between Europe, China and Turkey, it has become a bypass that is all the more strategic because since the war in Ukraine, trade routes passing through Russia have become politically and financially very risky. In this context, Europe is thus seeking to secure its energy approach, while China sees the possibility of strengthening the new silk roads. In your opinion, what are the main advantages of this trade route and its structural limits, particularly with regard to infrastructure?
JI: An advantage for Europe and Central Asia is the Middle Corridor’s alternative route, allowing Central Asian countries to export energy, minerals, and raw materials, as well as access European and global markets, bypassing Russia and Iran, countries under international sanctions. However, even before the imposition of sanctions, Russia remained unpredictable and used transit through its territory as a tool of pressure. Therefore, the Middle Corridor undoubtedly plays a crucial role for Europe and Central Asia in terms of their energy and economic security. Although China sees an opportunity to strengthen the New Silk Roads through the Middle Corridor, I don’t see much competition here, as China’s transit through the Middle Corridor is still very limited. However, the main challenge for the Middle Corridor is infrastructure, particularly ports on the Caspian and Black Seas, as well as railways.
FSPI: What are the main political risks (in particular, tensions in the region, Russian influence), and those related to infrastructure vulnerability (notably pressure from China) and access to Central Asian resources that are weighing on the corridor’s commercial development potential, and how do you value them?
JI: Risks certainly exist, and they may originate primarily from Russia. Regarding infrastructure vulnerability, all countries along the Middle Corridor need to join forces to modernize their infrastructure and simplify transit procedures to significantly increase the corridor’s capacity. I believe China is also interested in this, so that it can use the Middle Corridor for its exports in the future.
FSPI: Could the political instability that Georgia has experienced in recent years, namely tensions between pro-Western and pro-Russian political movements on the one hand, and the situation in the separatist provinces of Abkhazia and South Ossetia on the other hand, have a negative impact on Georgia’s role as the central logistics hub for roads and pipelines?
JI: I don’t think so, and I certainly wouldn’t call the current situation in Georgia political instability. Despite the challenges in the region to our north and south, the situation in Georgia remains stable and has demonstrated sustained economic growth for many years. Foreign direct investment is also growing, including in the transport sector. As for Abkhazia and South Ossetia, these conflicts have been frozen for many years and have no impact on the functioning of the transport corridor or logistics hub in Georgia.
FSPI: Azerbaijan, whose position has been strengthened following the end of the conflict over Nagorno-Karabakh and which benefits from Turkey’s support, is known to aspire to become a key energy hub for Europe. How do you see the evolution of the Azerbaijan, Europe, and Turkey triangular relationship?
JI: Azerbaijan and Turkey have always played a key role in the export of energy from the Caspian Sea via Georgia and Turkey to Europe. And given recent events and the end of the conflict, Azerbaijan’s role as a key energy hub for Europe could further strengthen. I also believe this opens up additional opportunities for energy-rich Kazakhstan and Turkmenistan.
FSPI: Armenia is seeking to strategically reposition itself outside the Russian orbit, as Moscow is losing credibility as a source of security in the South Caucasus, and is moving closer to NATO and the EU. In what ways could this realignment of alliances strengthen the crucial role of the Middle Corridor?
JI: Yes, this is exactly what we are seeing now. It is crucial for Armenia to open its borders with both Azerbaijan and Turkey in order to diversify its economy and trade relations, and also to become a transit country linking Azerbaijan with Turkey and Central Asia in the future.
FSPI: What impact might the naval blockade of the Strait of Hormuz, if prolonged, have on the corridor? Could it offer a viable alternative for transporting energy resources from Central Asia to Europe? Will the existing infrastructure (Caspian Sea ports and the corridor’s rail network) be sufficient to accommodate the sudden influx of goods?
JI: The blockade of the Strait of Hormuz continues to have an extremely negative impact on the entire world, including our country. Regarding the Middle Corridor, the situation is as follows: before the conflict, despite strict sanctions against Iran, Iran was carrying out some transit of export and import cargo to Central Asian countries. Now this opportunity has been lost, and some cargo will be rerouted to the Middle Corridor, but we cannot yet say exactly how much. However, this is not enough to disrupt transit along the Middle Corridor.
FSPI: Now that Russia’s dominance in the Caucasus is waning, we are witnessing a certain pivoting of trade routes to Turkey, which is taking advantage of this to strengthen its influence throughout the region. The EU also benefits, as it can diversify its access to energy resources, and the US is seeking to reduce Central Asia’s dependence on Beijing while increasing investment in this alternative route. What do you think are the prospects for this regional geopolitical realignment of the South Caucasus?
JI: I see only positive aspects in this for our region. Increased interest, particularly from the EU and the US, will have a positive impact both on the Central Asian countries and their energy and commodity exports, as well as on the diversification of supplies to Europe. This could also contribute to an increase in freight traffic along the central corridor, leading to investment in infrastructure and the transport sector by both member states and private companies.