Restoration of transport communications in S.Caucasus - major infrastructure construction project - Russian expert

By Trend

The results of the trilateral meeting of the Presidents of Azerbaijan, Russia, and the Prime Minister of Armenia on unblocking all economic and transport links in the region are a large infrastructure construction project, Russian political scientist, researcher at the Institute of Economics of the Russian Academy of Sciences Alexander Karavaev told Trend.

“What we understand as transport communication is the main infrastructure of various types of transport, coupled with a network of small roads of regional significance along which economic activity grows,” Karavaev said.

“The construction of such a network, within several years, has become a major center of activity for many sectors of the economy - from the production of building materials and the steel industry to trade and the development of the communal sector. This happens even before the start of the operation, which will also increase gradually, as the interest of serious external companies in the field of logistics,” he added.

Karavaev noted that this agreement is not one-time when everything has been built and launched in a year.

“The construction of this infrastructure can be compared to the Baku-Tbilisi-Kars (BTK) railway line. First of all, it should be noted that this is a major investment in the real economy, in the sectors of commodity production, related services and the expansion of merchandise exports of small and medium-sized businesses. This is the fundamental difference between the investments of this project from investments in oil and gas pipelines, which, in fact, are not so obvious from the point of view of the perception of real citizens in the regions. Pipelines provide strength to governments and corporations, and roads and railways directly improve people's quality of life,” he said.

“All participants in this process will ultimately benefit”, the experts said.

“These include construction contracts, accompanying construction support (subcontracts), expanding the capabilities of construction open pits, cement plants, reinforced concrete factories, and a number of other industries,” said Karavaev.

“Another feature of this project, in contrast to the construction of the same pipelines, according to the political scientist, is that it contributes to the unification of people living in this region, there will be a process of mutual fouling, close ties between regional consumers and producer,” he added.

“The new communications network (rail and road) will connect rural areas with global corridors - the ITC North-South and the trans-Eurasian Belt-Way. That is, there will be an additional demand for the construction of roads to nearby settlements, which will give an impetus to the development of small towns and individual villages,” he said.

Karavaev noted that no obligations arising from this agreement for its participants. The parties are not obliged to create a free field of economic space or free trade zones.

“The Center for Analysis of Economic Reforms and Communications of Azerbaijan has estimated that non-resource exports of goods will increase to 700 million tons. If we talk about the period of operation of this corridor, then I suppose that in the next five years the export of goods will increase by about 30-40 percent. However, before the commissioning of these objects, there will be an increase in the construction sector, car production, growth in the construction of the residential real estate,” he said.

The Russian political scientist stressed that the connection of this transport corridor with the Russian ITC North-South will allow these territories to develop more actively, which will attract additional transit cargo.