Georgia should not fear new transit routes in the South Caucasus

There has been a lot of discussion regarding the possibility of new regional transit corridors in the South Caucasus in the aftermath of the second Karabakh War.

Azerbaijan was the clear winner during the war. Russia and Turkey have also benefited greatly from the new geopolitical reality on the ground. Armenia was the clear loser from the conflict. However, the possibility of improving, restoring, and constructing old and new regional transit infrastructure is something from which everyone can benefit.

After a 44-day pummeling on the battlefield, Armenian Prime Minister Nikol Pashinyan had no choice but to sue for peace on Nov. 9, 2020. Much of the focus on the subsequent nine-point ceasefire agreement brokered by Moscow has been on the creation of a Russian peacekeeping force inside parts of Nagorno-Karabakh. However, another aspect of the peace deal worth examining closely is the potential unblocking of “economic and transport” links between the two warring countries. 

The ninth point of the ceasefire deal signed by Russia, Azerbaijan, and Armenia states: “All economic and transport links in the region shall be unblocked. The Republic of Armenia shall guarantee the safety of transport links between western regions of the Republic of Azerbaijan and the Nakhchivan Autonomous Republic to organize the unimpeded movement of citizens, vehicles and cargo in both directions. The Border Service of the FSB of Russia shall exercise control over the transport communication. Subject to agreement by the Parties, the construction of new infrastructure linking the Nakhchivan Autonomous Republic with regions of Azerbaijan shall be carried out.”

On Jan. 11, 2021, another agreement was signed in Moscow between the three respective leaders specifically about infrastructure and transport. In addition, a working group was established by the three countries to create a wish list of projects and timelines for regional transport connectivity.

For years, Georgia has played a vital role in East-West trade through the South Caucasus. With tensions high in Nagorno-Karabakh, Georgia was the only show in town when it came to stable, secure, and predictable transport linking Azerbaijan with Turkey. Therefore, it is not surprising that some in Georgia are concerned that new transit corridors passing through the Nakhchivan Autonomous Republic, Armenia (Syunik province), and Azerbaijan might take away from Georgia’s strategic importance. However, this is unlikely to be the case for three reasons.

First, the existing transit routes through Georgia are established, paid for, and built on years of trust and confidence between Ankara, Tbilisi, and Baku. This cannot be replicated or easily reproduced elsewhere in the region. More than a billion dollars has already been invested to upgrade the Baku-Tbilisi-Kars (BTK) rail line. Other large investments have been made to modernize and upgrade the E60 motorway which is the main East-West road running through the South Caucasus. Also, the region’s main energy pipelines currently run from the Caspian, through the Ganja Gap, and through Georgia—and have done so since the pipeline was constructed in 1906 connecting Baku with Batumi. It is inconceivable to think that Georgia’s importance for regional transport will change anytime in the near future. This is especially true considering that the Southern Gas Corridor has just recently come operational.

Second, the new proposed route through Armenia’s Syunik province would require billions of dollars in investment, years of construction, and a degree of trust and goodwill between Armenia, Azerbaijan, and Turkey that simply does not exist right now. Linking the Azerbaijani city of Horadiz to the Armenian border with new roads and rail lines will be no easy task. This will require a massive infrastructure and construction effort that could take years due to the destruction left behind from Armenia’s almost three decades long occupation in the region. A sizeable section of the existing E002 road that passes through Armenia’s Syunik province, and would serve as the main transit artery, is unimproved and in some cases gravel. Hardly suitable for the largescale road transport of goods.  

In terms of rail links in the region, the situation is even more complicated. It is expected that Turkey and Azerbaijan will build rail lines up to their respective borders with Armenia. What is not clear yet is if Armenia will allow these rail lines to join across its territory. The last sentence of the ninth point of the November ceasefire agreement makes it clear that Armenia has a veto: “Subject to agreement by the Parties, the construction of new infrastructure linking the Nakhchivan Autonomous Republic with regions of Azerbaijan shall be carried out.” 

It is worth adding that, per the November 9 agreement, Russia could veto any infrastructure project that it thinks undermines its national interest too. This is why talk of a new natural gas pipeline along this route through Syunik is probably a non-starter for now.

Some have suggested that the Nakhchivan–Meghri–Baku legs of the old Kars–Gyumri–Nakhchivan–Meghri–Baku (KGNMB) rail line could be used as a template for a new rail link, but even this would prove to be very costly and take years to construct. According to a report published in 2014 by the NGO International Alert, the section of rail running from Horadiz in Azerbaijan, though Armenia’s Syunik province, and to the border with the Nakhchivan Autonomous Republic is a “category 4”—meaning that the rail line is completely wrecked and requires total restoration. One should not forget that the BTK railway project had been ongoing for more than two decades, vastly ran over its initial budget before it was finally completed, and is now struggling financially. There is no reason to assume that a new rail link connecting Baku with its Nakhchivan Autonomous Republic through Armenian territory would be any different.

Finally, the current transit routes through Georgia enjoy access to major ports at both termini. Obviously, there is no connection to a major port on the western terminus of the new proposed transit corridor through Syunik. Whereas the existing transit corridor through Georgia connects to Poti, Batumi, and Trabzon (and in the case of the BTC pipeline, Ceyhan). Therefore, Georgia remains strategically placed for transport in the South Caucasus.  

It is true that one reason Georgia is important to the West is because of its geostrategic location. Georgia has acted as a key transit route for regional economic activity, for the transit of oil and gas that has benefited the energy security of Europe, and for the safe passage of goods and troops for U.S. and NATO forces to Afghanistan.

However, there are many other reasons why Georgia is important to the Euro-Atlantic community. In a region of instability, Georgia has become a beacon of hope. Yes, its path toward democracy since the end of the Soviet Union has been a bumpy one, but this is true of any country in the history of democracies. Georgia is also a strong champion of economic freedom and free trade. At a time when many leaders in the West are advocating for, or pursuing, protectionist trade policies, Georgia’s commitment to free trade stands out.

Georgia is also a dependable partner for the U.S. and NATO. Even though it is not yet in the Alliance, it has contributed greatly to its security operations. In the case of Afghanistan, Georgia has taken the most casualties per capita of any country fighting there, for example.

It is impossible to calculate how many billions of dollars in foreign direct investments the almost 30-year-old frozen conflict between Azerbaijan and Armenia has cost the region. Now that there is some degree of peace and stability, the U.S. should renew regional energy and infrastructure projects in the region.

This could help boost the economic prospects of the region and help build an enduring peace between Azerbaijan and Armenia. Georgia should have nothing to fear from this. Instead, it should welcome and embrace the possibility of better regional interconnectivity.

However, where Georgia should be concerned is with talk of a new so-called “3+3” regional format for cooperation consisting of the three countries of the South Caucasus plus Russia, Iran, and Turkey.

Tbilisi should not support such an initiative and should keep up its guard. It would be naive in the extreme to believe that such a format could ever work with Russia and Iran’s track record in the region.

For Georgia, it should continue its strategic partnership with Turkey while pursuing a policy of Euro-Atlantic integration.  

Luke Coffey is the director of the Allison Center for Foreign Policy Studies at The Heritage Foundation. The views expressed here are his own. 

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