Majid Raoufi

North-South Corridor: From Victory Bridge to Economic Success Bridge

Date of publication : November 6, 2016 20:55 pm
Azerbaijani President Ilham Aliyev (C) makes a speech during a meeting with his Russian counterpart Vladimir and the Iranian leader in Baku on August 8, 2016.
Azerbaijani President Ilham Aliyev (C) makes a speech during a meeting with his Russian counterpart Vladimir and the Iranian leader in Baku on August 8, 2016.

Three quarters of a century after the Allied powers transported weapons, ammunition and medicine to the former Soviet Union from southern Iran to its northern part, which changed the fate of World War II and caused Iran to be known as the “victory bridge,” the North-South Corridor is expected to play a different role in boosting economies of Europe, Eurasia, the Middle East and South Asia.

The agreement to launch the North-South Corridor was reached among Russia, Iran and India in 2000 through the Saint Petersburg conference and was introduced as an attractive project for regional countries.

Ships were supposed to move from India’s Mumbai port toward Iran’s Bandar Abbas port city from where their cargo would be carried on land toward the Caspian Sea and Bandar Anzali port en route to Russia and then Europe. This route is an alternative for the Suez Canal route, which is much shorter and transportation through which will be less costly. Despite the existence of infrastructural problems and international sanctions against Iran, which made taking advantage of the high capacities of this corridor difficult, Kazakhstan, Tajikistan, Belarus and Oman joined the project in one stage and were followed in the following stage by Ukraine, Armenia, Bulgaria, Azerbaijan, Turkey and Syria.

Due to being landlocked, it is difficult for countries in Central Asia to have access to global markets and especially, they cannot establish suitable trade ties with India despite all cultural commonalities that exist between the two sides. India, on the other hand, does not like Central Asia to gradually turn into China’s backyard.

In the meantime, Russia is also trying to maintain close ties with India despite cordial relations that exist between India and the United States of America. Since 2000, Russia and India have been holding regular annual economic sessions alternatively in Moscow and New Delhi, but the volume of their trade exchanges is still relatively low.

Intense activity by Chinese contractors in Pakistan’s Gwadar port has also doubled India’s motivation to take advantage of the North-South Corridor. The Chinese officials have made huge investment in the Silk Road Belt initiative and are trying to get access to the Indian Ocean. They are also building a highway, which is supposed to connect the city of Kashghar in China’s Xinjiang province to Pakistan’s Gwadar port. By turning Gwadar into a full-fledged trade port, economic and security conditions in Pakistan will change a lot. The highway connecting Kashghar to Gwadar would pass through the disputed Kashmir region. This will give Pakistan the upper hand compared to India in that region. At the same time, China’s access to the Indian Ocean will overshadow India’s control over that region.

By boosting its influence in this region, China is trying to keep a keen eye on close security and economic relations that exist between the United States and India. In addition, China and India have been locked in many cases of territorial disputes, especially in Tibet.

Economic rivalries between these two powerful Asian countries are also ongoing. In view of all these facts, Indian cannot remain idle and let China go on with the development of Pakistan’s Gwadar port and probably get Central Asian countries involved in this project. Although Indians could not take advantage of Iran’s Chabahar port in past years due to international sanctions imposed on Iran, this problem has been solved now and signing an agreement by presidents of Iran, India and Afghanistan for development of Chabahar port, as Iran’s only oceanic port and new Iranian origin of the North-South Corridor, can be analyzed along the same line.

On the north of Iran, the main topic of discussions among presidents of Iran, Russia and the Republic of Azerbaijan during their recent summit meeting in Azerbaijan’s capital city of Baku was development of the North-South Corridor. After a railroad route connecting Iranian cities of Qazvin, Rasht and Astara is made operational, the way would be paved for taking advantage of railroad in order to connect the southern Iranian port of Bandar Abbas to the northern port city of Astara. Further on, with the revival of the Russian railroad to Azerbaijan, consignments sent from Bandar Abbas – and before long from Chabahar port – will reach Moscow aboard freight trains. Germany’s Deutsche Bank has recently indicated its willingness to invest in this corridor. In this way, this corridor is to turn into a bridge connecting three regions of Central Asia, Middle East, and Eurasia.

Majid Raoufi, a Ph.D. student, is the senior researcher of Energy Policy Making Office at Sharif University of Technology.
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