Earlier, VK started discussing prospective spheres of
cooperation in South Caucasian space, particularly in energy. Here is
more about prospects in other spheres.
Transport
Closing borders incites further freezing of transport projects,
creating logistical expenses. Today most of Armenia’s exports go
through Georgia, leading to rising prices for goods. According to
Armenian economists’ calculations, opening the border with Turkey will
drop prices by about 20%-25%. Those significant sums could boost the
Armenian economy, which has suffered from the world financial
recession.
In this case, there are no grounds for speculation about the relative
irrelevance of the Tbilisi-Kars railroad. Based on the principle of
diversifying routes, it is a necessary alternative. At the same time,
no one excludes the possibility of restoring the old transport
communications between Armenia and Turkey. On the contrary, the
Russian side, having taken the Armenian railroad in concession, is
interested in opening the route. It is essential from both an economic
and political perspective.
Establishing the Nakhichevan-Kars railroad route is quite worthwhile.
It will create a closed transport loop in the region, making the South
Caucasus more accessible from a transport point of view. A wider range
of options will make delivery more effective, by adjusting container
through-shipment. It is vital for Azerbaijan to keep economic
activities running in the autonomy, which is in fact in a blockade.
The same approach goes for opening the border between Abkhazia and
Georgia for a railroad connection at the Black Sea. Russia reached an
agreement with Abkhazia, similar to the one made with Armenia, on
railroad exploitation. Now it is lobbying for restoration of
communications, but keeps coming up against the hard-line attitude of
the Georgian authorities. There are even fewer opportunities for
realization of the project since the conflict of 2008.
As for road links, their development is interconnected with the
unsettlement caused by the conflicts. Every side gradually develops a
corresponding infrastructure. We can see for ourselves the grand road
construction in Azerbaijan, with hundreds of millions of dollars
invested. Roads are being built systematically in both Armenia and
Georgia, using loans from international finance structures. It is also
time for Russia to modernize the transport system in the North
Caucasian republics and improve the state of the border crossings. The
region could adopt a common transport strategy, allowing free passage
through borders for civilians and freight. EU efforts to promote the
TRACECA program can set a good example of showing the importance of
those communications. But why should we follow others’ views on
transport routes instead of trying to develop our own concept,
beneficial for the Caucasus itself?
The relatively stable development of air transport should be noted.
Airports in all three capitals have been modernized, and Azerbaijan
has five international air networks. The air security problem has been
solved.
Competition in the transcontinental shipment market is obvious, though
Baku airport has great advantages. Azerbaijan has already become a
network for flights between Europe and Asia and intends to strengthen
its position.
Telecommunications
The sphere of telecommunications and information-communication
technologies (ICT) has jumped into the leading position in recent
years. It is inseparably associated with innovations in new
technologies. In Azerbaijan, ICT is a second priority branch of the
economy. The plans to launch its own satellite is proof of the
seriousness of the approach.
Russia has charted a course towards modernization, the ICT market has
its own priorities. Any kinds of projects are possible in this sphere.
In particular, countries of the region could join the Russian program
of satellite positioning GLONASS. Creating alternate fibre-optic
communication for stable communication between the South Caucasus and
the rest of the world is no less topical. There have already been
crashes disrupting Internet services. Such insurance would prevent
critical situations.
Interpenetration of telecommunication companies in the markets of
neighbouring countries would improve competition, create prospects for
uniting into holdings for joint access to external markets and
provision of traffic services.
Financial and banking spheres
Banks and finance are of special interest. Money is the blood of the
economy. Availability of resources determines the development of the
economy in general. The established banking systems have a xxconcealed
conservative nature. It suits banking institutions to invest outside
their countries. The International Bank of Azerbaijan (IBA) may be an
exception. It opened a branch in Georgia recently, yet its work is
mainly limited to supporting the State Oil Company of Azerbaijan
(SOCAR) on the Georgian oil products market and operating the Black
Sea Kulyov oil terminal, belonging to SOCAR.
Other activities on the market are stimulated by Russian banks,
working in the markets of the three South Caucasian republics.
However, their work is concentrated on aiding Russian companies
operating in the region, and they have no task-oriented investments
into trans-national regional projects. All may change when the
geopolitical situation in the region changes. The saved-up financial
potential may be effectively used on restoring the territories that
have suffered from conflicts. Russia and Europe have made repeated
declarations that they are ready to help solve issues on restoring
economic ties in the South Caucasus when regional conflicts are
solved.
The special role of developing economic ties may belong to share
markets as convenient places for selling goods and services. For
example, uniting grain exchange markets would solve the grain purchase
issues of South Caucasian countries, suffering from lack of own
production. So far, Azerbaijani and Georgian companies are
establishing their own grain terminals, focusing on Kazakh, Russian
and Ukrainian production. Such networks, expanded for other
agricultural produce, would be a good basis for trade with other
countries, including through uniting raw-goods exchange markets.
Traders from other countries could also refer to these markets to
purchase early vegetables and fruit produced in the Transcaucasian
countries.
Caspian-Black Sea bridge and tourism prospects
Here we came to acknowledging the role of the region as a
Caspian-Black Sea bridge, but in the aspect of energy supplies and
transit freight. The South Caucasus may be a full-fledged subject of
relations between Central Asian countries and Europe. The common
population of the Caucasus, including the republics and parts of
Turkey and adjoining regions of Iran, exceeds 30 million people.
Regional cooperation in such a market is gaining special importance.
Tourism may become an important factor in this cooperation. This
sphere has been developing broadly over recent years. Every country is
developing tourist routes independently, with different achievements
and there are no region-wide propositions so far.
There have been many talks on the opening of tourist routes via ships
to Caspian cities. But this idea has failed to find any practical
realization. The potential of the Caspian coasts, unlike the Black
Sea, is used inefficiently. Caspian beaches, based on their natural
features, are similar to those of the Black Sea. Cooperation between
Azerbaijan and Russian Dagestan could produce good results. The
combination of mountains and sea creates unique opportunities for
tourism development in the region. The tourists are not only put off
by poor knowledge about the South Caucasian countries, but also by
fear of flashpoints. Tensions in the Russian North Caucasus are
another obstacle. The Russian authorities have other complicated
problems in re-establishing economic relations in its republics and
reducing unemployment levels.
Opening borders and restoring diplomatic relations between Turkey and
Armenia would simplify access for Armenian tourists to Turkish
resorts. Settling the Nagorno-Karabakh conflict will increase the
number of visitors in the tourist resorts of Sevan in Armenia and will
provide opportunities for Azerbaijanis to peacefully relax in one of
the pearls of the Caucasus – Lake Geygel, situated at a place where
Azerbaijani and Armenian armed forces are concentrated, limiting
access.
Moreover, Nagorno-Karabakh itself is a unique resort and recreation
zone, with mineral water springs and conservation zones. All this will
become fully open to the world. Joint tour-packages for visiting
several countries will definitely be in demand from foreign tourists
seeking exotic experiences.
The same goes for Abkhazia in trying to develop tourism. But the
issues of territorial recognition complicate tourist movement. So far,
Abkhaz beaches are mostly visited by Russian vacationers. Settling the
conflicts in this part of the region would allow the opening of
Adjarian, the Georgian winter and Bakuriani resorts.
The hospitability of the South Caucasus can quickly break stereotypes
and rid peoples memory of difficult conflicts. Our task is to get the
region back to the phase of development and construction, overcoming
conflicts and disagreements.
Alexey Vlasov, Ismail Agakishiyev, Yevgeniy Krishtalyov
