The Middle Corridor: How Europe Can Transform Central Asia
Now that the process of regional trade and integration is underway, the European Union can give this process a boost through strategic investment in supporting the development of logistics to move resources, products, and human capital through the “middle corridor” across the Caspian, over the Caucasus, and through Turkey into Europe.
Central Asia is a tough neighborhood. A colonizer to the north, an economic behemoth to the east, international pariahs to the south, and distances that are continental in scale, it sometimes seems an impossible task to integrate this economically diverse and culturally rich region without running into trouble with its neighbors. However, the region has not surrendered itself to the whims of these neighbors. For the past several years, the Central Asia region, once one of the least integrated in the world, has taken great strides to increase regional trade. Now that the process of regional trade and integration is underway, the European Union can give this process a boost through strategic investment in supporting the development of logistics to move resources, products, and human capital through the “middle corridor” across the Caspian, over the Caucasus, and through Turkey into Europe.
For thousands of years, the route from Asia to Europe went overland through the countries of Central Asia. Indeed, China and the Asian Development Bank spent considerable time and effort to recreate this route. However, it is a mistake to see the countries of Central Asia and the Caucasus as transit points and not a destination in and of themselves for strategic European Union investment. From cotton and fabrics produced in Uzbekistan to the natural resources of Kazakhstan and to the potential for significant development of tourism and cultural exchange, the middle corridor will offer Central Asia and the Caucasus opportunities to diversify their markets and attract accountable investment from a diverse array of European firms. This middle corridor, envisioned as a way for the European Union, Central Asia, Caucasus, and Turkey to come together, as opposed to an overland route for Chinese goods, would bring prosperity, peace, and opportunity to each nation along the corridor. From gas pipelines to digital ones, the nations of the middle corridor have tremendous potential as a market and partner for the European Union.
On August 12, 2018, the five littoral states around the Caspian Sea signed the Convention on the legal status of the Caspian Sea, resolving ambiguous territorial claims since the dissolution of the Soviet Union in 1991. The agreement allows a direct link between Kazakhstan, Turkmenistan, and Azerbaijan under the Caspian. These over-sea routes are already being expanded given Russia’s obstruction of Kazakh oil using the Caspian Pipeline Consortium pipeline, which carries a significant portion of Kazakhstan's oil output to all points west. While Russia and Iran claim that any pipeline would have to be approved by all five littoral nations, the legality of their claims is, at best, ambiguous. With the support of European finance, insurance, and technical capacity, the pipeline can offer a diversity of throughput to Central Asia while offering Europe a broader diversity of suppliers of critical energy and material resources.
In its weakened state and moral position in the region, the Russian Federation cannot bear the burden of ensuring peace between Azerbaijan and Armenia. This presents an opportunity for the European Union to promote peace through trade in the Caucasus in consultation and coordination with the ever-contentious partnership with Turkey. Following a model developed in the Western Balkans, Europe can seek to tie together the nations of Caucasia and Turkey through economic integration and trade facilitation. The European Union must make the participation of Armenia an imperative. Armenia cannot be left out of the middle corridor, or it would likely seek closer relations with Russia or Iran, and the corridor would constantly be under threat. While the conflict between Armenia and its neighbors goes back centuries, only the prosperity and interconnectedness of trade and investment can begin to resolve it. The European Union has spent significant time and resources to be a partner in brokering peace. The additional factor of trade and investment may further entice parties to take the next step.
As the nexus of this transcontinental middle corridor, Turkey plays a vital and unique role. Business ties between Turkey and many nations along the corridor are already deep and diverse. With the addition of a purposeful deployment of European capital and strategic support, Turkey could be both a beneficiary and a key player in the middle corridor. In the wake of Russia’s invasion of Ukraine, we already seek the nascent progress of this relationship outside of the commercial sphere, with Kazakhstan and Turkey sharing intelligence and potential arms deals. For over a decade, the European Union has been wavering in its relationship with Turkey. The middle corridor is an opportunity to give this relationship shape, purpose, and direction.
While many may scoff at the idea of the middle corridor due to the complex politics and relationships along the route, the opportunity to deliver prosperity, peace, and progress is there if one chooses to seize it. Russia’s war in Ukraine will end in defeat for Russia one way or another. Its material and moral authority as a broker in its “near abroad” is all but nonexistent. Shifting the dialogue around the middle corridor from one of bringing Chinese products to European markets to that of connecting Central Asia and the Caucasus to Europe allows the European Union to take a clear role in developing new markets for its products and services while providing peace and prosperity along the entire corridor. Complexity and danger abound in building the middle corridor, but nothing worth doing is easy. The middle corridor is the project of the twenty-first century for Europe.
Eric Hontz is the director of the Center for Accountable Investment at the Center for International Private Enterprise (CIPE).