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A study tour to Kazakhstan, Azerbaijan and Georgia aiming at finding opportunities to increase trade along the Trans-Caspian route is being held on May 16-24, 2022 by the U.S. Agency for International Development (USAID).
The great potential of this international transport corridor for trade and business development as an alternative means for transporting goods from Central Asia to Europe is obvious. According to the official website of the U.S. Embassy and Consulate in Kazakhstan, a great focus has been placed by Central Asian governments on increasing the transport of cargo via the Caspian Sea, as traders have growing difficulties in moving their goods through the current transit routes.
USAID’s Trade Central Asia activity is implementing this study tour in collaboration with the Transport Corridor Europe-Caucasus-Asia (TRACECA) and KazLogistics, the Union of Transport workers of Kazakhstan.
According to Robert Parker, USAID/Central Asia’s Regional Trade Officer, Trans-Caspian Corridor route can play an important role as a means to trade goods from Central Asia with Caucasus and European countries. The cooperation of these countries and decisions that will lead to an increase of regional trade and investments are welcome.
The Caspian Sea ports at Alyat and Kuryk, and the Batumi Port on the Black Sea are being visited by a delegation of over 40 customs representatives and staff of transport policy government agencies of Kazakhstan, the Kyrgyz Republic, Tajikistan, Turkmenistan and Uzbekistan, as well as by members of the Central Asia Transport and Logistics Partnership. Each port’s pricing policy is being studied, processes utilized are being reviewed, and digitization initiatives are being studied. It helps to develop recommendations for further simplifying procedures.
Representatives of national associations of road carriers, logistics companies and freight forwarders, seaports and shipping companies from Azerbaijan, Georgia and Central Asian nations, directly involved in international road transport will also join the tour. The organizers invited participants from Bulgaria and Turkey to familiarize them with the possibility of facilitating international road transport through their domestic territories.
At the same time, the shipping of pre-selected cargo along the proposed alternative route, from Central Asia through the port of Kuryk in Kazakhstan via Azerbaijan, Georgia to Turkey has been piloted by USAID, to identify the specific issues carriers may face when transiting these ports.
Improvement of region-wide trade connectivity and harmonization, economic growth’s acceleration and economic opportunity’s increase in Central Asia, through harmonizing customs and border procedures, increasing public-private dialogue on cross-border trade and investment, improving cross-border firm-to-firm connectivity, and addressing gender relevant trade issues is the goal of USAID’s Trade Central Asia activity.

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According to the Center for Economic Reforms Analysis and Communication of Azerbaijan, national exports hit $11.8 billion in January-April 2022 (the non-oil sector amounted to $965.5 million).
Compared to the corresponding period of 2021, non-oil exports grew up by $268.6 million, or 38.5 percent. Fruits and vegetables export rose up by 23.6 percent and reached $162.6 million.
Exports of chemical products showed growth by 9.9 times, aluminum and aluminum products by 90.6 percent, cotton yarn by 19.8 percent, cotton fiber by 6.8 percent, and ferrous metals and their products by 53.3 percent.
Totally, exports in April 2022 reached $3.8 billion dollars. Non-oil exports grew up by 22 percent to $238.3 million. During the reported period, food exports rose up by 6.2 percent and equaled to $51.4 million and non-food exports grew up by 27.2 percent ($186.9 million).
Totally, Azerbaijan’s exports reached $22.2 billion last year, including $2.7 billion in the non-oil sector.
According to Azerbaijan’s Economy Minister Mikayil Jabbarov, the growth in the non-oil products export demonstrates the Azerbaijani economy’s sustainability, in spite of pandemic.
Sustainable diversification of the economy should be set, and a concept contributing to the growth of non-oil exports is to be planned. By 2025 the amount of non-oil goods exports should be doubled.

The first freight train from China via Azerbaijan is launched by Finland.
The launch of the first container route from China bypassing Russia was announced on May 10 by Finnish largest freight operator Nurminen Logistics.
The company reported that Nurminen Logistics’ first full-size container train departed on May 10, 2022, from Chongqing, China, on the new southern trans-Caspian route.
Starting from China, the route passes through Kazakhstan, Azerbaijan, Georgia, and Romania to Central Europe. It was built in two months together with Kazakh railroads. The company’s office in Russia was temporarily closed in March.
According to the company, the new route is in great demand, and the next train, departing on May 25, is already nearly full. Since June departures are scheduled every week.
On March, 16 a commercial use agreement between Nurminen Logistics and Kazakh State Railways was signed in order to develop the Trans-Caspian International Transport Route.
Today logistics is a geopolitical issue but not only an economic one. The Trans-Caspian route, combining rail and maritime transport, perfectly suits the needs of modern transportation chains.
More countries seek ways to bypass Russia, which makes transport routes through the South Caucasus increasingly popular. From this perspective, Azerbaijan is irreplaceable as a regional transportation hub, because different transportation routes, such as Baku-Tbilisi-Kars, North-South corridor, Trans-Caspian international transport route, and the new Silk Road, pass through the country.
A railway route to Germany, allowing trains to bypass Russia, was also launched on April, 13 by China. The route passes through Kazakhstan, Azerbaijan, Romania, Hungary, Slovakia, and the Czech Republic, crossing the Caspian and Black Seas by rail and sea.
The launch of a block train from China to Europe in transit through Azerbaijan was reported by the representative office of German company Hellmann Worldwide Logistics in Azerbaijan and its partners. It will leave from the Chinese city of Suzhou to the border of Kazakhstan by rail, and then will be loaded and shipped from Aktau port to the port of Baku. Cargo will be delivered by the block train not only for transit to Europe but also for the domestic market of Azerbaijan.
Consequently, it is difficult to overestimate the significance of the North-South corridor for Russia now, especially in context of the sanctions.
Azerbaijan is becoming a new leading logistics center in the reorganization of global supply chains in Eurasia, due to its strategic central position between Europe and China and developed aviation, rail, pipeline, and maritime infrastructure.
The Trans-Caspian transport route is a vital trans-Eurasian corridor, running through the South Caucasus. The route, beginning in Southeast Asia and China, travels to Europe via Kazakhstan, Azerbaijan, Georgia, and Turkey. It is the Middle Corridor of the ‘One Belt, One Road’ project, one of the new Silk Road routes. Profitability, safety, reliability, and stability of this transport corridor were proved during the crisis. Consequently, the attention of an increasing number of exporters and importers is attracted by this corridor, running through Azerbaijan.
In light of the present situation, the potential of Azerbaijan to become one of the transport and logistics hubs transferring freight traffic is obvious.

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The company’s plans to service the passengers “from door to door” and the conditions the company has to satisfy before going public were spoken about by Ulf Wokurka, an Independent Director and Member of the Board of Directors of national railway operator Kazakhstan, and Temir Zholy (KTZ) in an exclusive interview with The Astana Times.
The Samruk Kazyna Sovereign Wealth Fund is the sole shareholder of KTZ (est.1997), a national transport and logistics holding, the largest operator of Kazakhstan’s railway network and one of 15 largest railway companies in the world (223 billion tonne-kilometers in 2021).
Over 110,000 citizens are provided with jobs by KTZ.
According to Ulf Wokurka, KTZ has recently adopted a five-year passenger transportation development concept, developed jointly by KTZ and a German consultancy company with the aim to improve the passenger transportation experience.
The passenger train services’ timetables are going to be adjusted according to adjacent transportation service providers (e.g. airlines and bus services) over the next five years.
Both the relevant airline and KTZ are interested in the resulting increased customer satisfaction as it will increase passenger numbers.
A new mobile application of KTZ for passengers will make the new services for traveling “from door to door” ready for booking.
Cooperation with leading taxi service providers, with Air Astana, and with large inter-city bus transportation providers will also be necessary.
The negotiations of a respective agreement with Air Astana, Kazakhstan’s flagship air carrier have already been started.
The construction of several transport hubs around major cities and regional centers is planned and rail tracks and rail stations are going to be modernized, as well as new tracks are going to be constructed.
A second track will be added to the road between the Chinese border and the north of Balkhash Lake.
Alternative sources of financing are necessary for KTZ to reduce its dependence on foreign borrowing. For example, the National Fund (a sovereign wealth fund that is operated by the National Bank of Kazakhstan) can be an important source for these long-term investments into the future.
One of those factors that have so far prevented the company from seeking a public listing has been the significant debt burden of KTZ.
Several companies are comprised in JSC NC KTZ. It is necessary to decide which of them should go public. Profitable segments, such as the provider of freight transportation services, are currently cross-subsidizing less profitable or even loss-making companies within the KTZ group.
The impact of such plans on the company’s future debt service capacity is another implication to be duly considered within any decision making on a possible partial privatization or going-public.
Prior to aiming for an IPO, it is necessary to define the future terms and conditions under which KTZ and other railroad companies will compete for their share in the market for freight transportation services on both domestic and cross-border transportation routes.
The stability of freight transportation passing through Russia has been questioned as a result of the ongoing military operations in Ukraine, consequently, the volume of goods across the territory of Russia has fallen.
Steps to minimize the impact of the military conflict on its operations have been taken by both sides. For instance, external borrowings have been optimized and funding sources have been diversified to mitigate the currency risks. Measures are taken by KTZ to reduce its operational costs, as well as to resume negotiations with suppliers and other business partners in order to prevent unexpected price hikes for purchased equipment, spare parts and services.
One of these measures is developing alternative transportation routes (e.g. Trans-Caspian international transportation route (TITR) which runs through Kazakhstan, the Caspian Sea, Azerbaijan, Georgia and on to Europe and unites around 20 transportation companies, owners of the infrastructure, and carriers from Azerbaijan, China, Georgia, Kazakhstan, Romania, Turkey, and Ukraine). KTZ has been its regular member since 2017 and can provide an alternative to the Russian route for the transit of goods from China to Europe or export from Kazakhstan.

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Uzbekistan and China organized a “business workshop” with the participation of representatives of the authorities and business circles of Karakalpakstan, Namangan region and the Chinese province of Hebei in order to use the potential of the regions and to increase further development of trade-economic and investment cooperation between the two countries.
Thematic presentations were made during the event by representatives of Uzpharmagency, Uzkimyosanoat and Uztuqimachiliksanoat.
The main sectors of the regional economy, their potentials for further development of trade and investment exchange were presented during the meeting, and presentations of projects for joint implementation were made.
A joint work plan with the definition of specific areas of cooperation and activities and preparation of bilateral documents for signing were agreed on by the parties following the event in order to create a legal framework for cooperation. Additional bilateral negotiations between companies in the regions are going to be conducted to discuss in detail the projects proposed during the presentation in such industries, like textiles, chemicals, agriculture, building materials and others.

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According to Kazakh Agriculture Minister Yerbol Karashukeyev, Kazakhstan’s sugar imports will fall by 32% to increase the home-produced sugar supplies at the domestic markets from 7% to 43%.
He also told the Government meeting that annual sugar consumption in Kazakhstan stands at 532,000 tons. Irrigation water scarcity, sugar-beets labor-intensive growing methods, sugar-mills worn-out state, price dumping by Russian producers helped to fabricate 7% out of this amount in Kazakhstan.
The minister also added that an increase of sugar-beet gross yield is expected from 332,000 tons to 1.8 mln tons. Solving the problem of water supplies, an extension of cultivated areas from 14,500 ha to 38,000 ha, technical equipment, as well as launching the projects for updating and construction of a sugar mill with the infrastructure development of the industry will help to attain this result.
The target is to increase sugar production sevenfold up to 254,000 tons, and to reduce sugar imports by 32%.

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Georgian external trade turnover reached $3.8 billion in January-March 2022 (up 37.9 percent).
According to the National Statistics Office of Georgia, the top trading partners of Georgia in its total external trade turnover in January-March 2022 were Turkey ($562.4 million), China ($461.9 million) and Russia ($383.3 million).
In the reported period Georgia’s exported the most to China ($220 million), Azerbaijan ($125.4 million) and Russia ($109.8 million), and imported the most from Turkey ($463.2 million), Russia ($273.5 million) and China ($241.9 million).
Copper ores and concentrates – $271 million (+71), ferro-alloys – $160 million (+91.3) and motor cars – $94.8 million (+9.6%) were the top export items.
Petroleum and petroleum oils – $244 million (+71.6), copper ores and concentrates – $222 million (+52.6%) and motor cars – $211 million (+7.1%) were the three top import commodities.
Georgian external trade turnover reached $3.8 billion in Q1 2022 (an increase of 37.9 percent).
The rise of the value of exports amounted to 43.3 percent and reached $1.1 billion in the reported period, while imports also showed an increase by 35.7 percent, reaching $2.6 billion.
A measure of the negative balance of trade in which imports exceed exports (trade deficit) amounted to $1.5 billion, while the share of trade turnover reached 39.4 percent.

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According to Akorda press service, the meeting focused on the issues of mutually beneficial cooperation between Kazakh regions and the Omsk Region in trade, mechanical engineering, transport, agriculture, was held. President Tokayev said that productive interregional cooperation had a positive influence on mutual trade indicators. According to the President, great attention is paid to the development of interregional cooperation with the Omsk Region. As a result, trade turnover between the Omsk Region and Kazakhstan exceeded $380mln. Kazakhstan is its most important trade partner. A significant fact is that Kazakhs reside in this border region. the Kazakh diaspora in the Omsk land was called by the Head of State a connecting link and, thanks to Alexander Burkov’s special attention and all-round support to it, it preserves a spiritual link with the historic Homeland. The President also thanked the administration and residents of the Omsk Region for perpetuating the memory of the great sons of the Kazakh people Shokan Valikhanov and Saken Seifullin. The Governor Alexander Burkov told in his turn that the region is ready to cooperate with Kazakh companies in the agro-industrial complex, food production, petrochemistry, and construction.

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The Chamber of Commerce and Industry informs that the main categories of products that can be exported to the Iranian market (corn, flower seeds sunflower oil, sunflower oil, dried fruit) were identified after a meeting between CCI head Sergiu Harea and Ambassador of the Islamic Republic of Iran to Moldova Manouchehr Moradi.
According to the Iranian Ambassador, the Qazvin Chamber of Commerce, Industry and Mining in Iran is interested in a meeting with CCI representatives in order to familiarize them with the economic and investment potential of the Republic of Moldova. They decided to organize a business meeting between the representatives of the chamber institutions of both states.
According to Harea, the economic potential between the two countries has not been fully exploited. He said that the involvement of the Embassy of the Islamic Republic of Iran in the Republic of Moldova and the desire of the business environment to explore new markets made Moldovan-Iranian trade relations grow recently. The CCI head added that both states had sufficient capabilities and their cooperation could be even better.
A Memorandum of Understanding with the Chamber of Commerce, Industry, Mining and Agriculture of Isfahan, Islamic Republic of Iran was signed by the Chamber of Commerce and Industry of the Republic of Moldova on January 30, 2018.

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The criteria related to the business reputation, financial condition and professional competence of the operator of international passenger and freight transport by road, and the requirements on the level of training of the operator’s drivers are set out by the rules. The maintaining record of operators by the Land Transport Agency of Azerbaijan under the Ministry of Digital Development and Transport is also regulated by them.
The rules set out that legal entities or individuals wishing to be registered as an operator must be registered for tax purposes, have vehicles registered with the state on the right of ownership, use or lease, and meet certain criteria related to business reputation, financial standing and professional competence.
The new rules will increase the competitiveness of national road carriers by improving drivers’ knowledge and skills and management development, leading to an increase in their share of the bilateral and third country transport market, as well as their share of the West–East and North–South international transport corridors.
The application of the requirements of the Quality Charter of International Transport Forum (ITF) (the leading regulatory mechanism in the field of road transport) is one of the objectives of introducing the rules for admission of Azerbaijani road carriers to international passenger and freight transport by road. Relevant requirements for the institution, business reputation, financial stability and professional competence are set out and entities that meet these requirements to transport are admitted by the Quality Charter. This makes organization of road transport operations efficient, the development of the industry sustainable and investment attractiveness increased.
The process of entering into force of the resolution of the Cabinet of Ministers on the “Rules for admission to international passenger and freight transport by road” will take one year after its publication. Appropriate preparations to maintain records of operators will be made by the Land Transport Agency of Azerbaijan during the year. The service Guide for Carriers will organize meetings with carriers and will provide them with necessary explanations and methodological support.

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The presidential decree promises subsidies to exporters to compensate for expenses, including up to 70% of transportation costs. Young entrepreneurs will get loans.
According to the presidential decree “On additional measures to support participants in foreign trade activities” measures to support and stimulate the export activities of domestic business entities will be strengthened.
For example, from April 1, 2022 until April 1, 2023, subsidies to compensate for transportation costs in the amount of up to 70% are provided to domestic enterprises (their authorized representatives), when exporting high value-added products to the countries of the European Union.
Also from April 1:
ꞏ subsidies are provided to compensate for transportation costs in the amount of up to 50% when exporting high value-added products to neighboring countries;
ꞏ the Export Promotion Agency reimburses expenses related to the accreditation of conformity assessment bodies by an accreditation body that is a member of international organizations ILAC/IAF;
ꞏ 50% reduction of the amount of prepayment required when business entities export goods (except for special types of goods), works and services on the basis of invoices without concluding an agreement is announced.
The Unified Exporter Support Portal will regularly publish an approved list of high value-added products, the export of which will be provided with subsidies to compensate for transportation costs.
They will also cancel the procedure for prohibiting the use of benefits on customs payments during customs clearance of goods that are in the customs warehouse regime for a period of more than six months.
The Young Entrepreneurs Support Fund based on decisions of the Government Commission will allocate loans up to $500,000 in order to support youth entrepreneurship, including stimulating activities for the production of export-oriented products and the provision of services based on innovative technologies.
The Export Support Fund will allocate $10 million to Uztrade and Uzsanoatexport JSCs in order to provide foreign trade companies with working capital.

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