(Read the full article on uzdaily.uz)

A joint expert group from among the staff of the Institute for Forecasting and Macroeconomic Research (IFMR) and Uzbekiston Temir Yullari assessed the importance of the International Conference: “Central and South Asia: regional interconnectedness. Challenges and Opportunities”, which will be held on 15-16 July 2021 in Tashkent, UZ DAILY reported.

The initiative of the President of Uzbekistan Shavkat Mirziyoyev to hold the International Conference on 15-16 July: “Central and South Asia: Regional Interconnectedness. Challenges and Opportunities” is aimed at developing and strengthening constructive and mutually beneficial cooperation between two large, historically interconnected regions – Central and South Asia.

Relevance of the International Conference.

During the meeting, it is planned to consider the state and prospects for the development of interregional cooperation in Central and South Asia, the possibilities of developing transport and communication interconnection in Central and South Asia, including projects to expand existing and build new transport corridors, etc.

Considering the issue of practical interaction with regional partners, an important and fundamental role is assigned to Afghanistan, which acts as a transit country between the Central Asian and Southern regions.

Increasing the volume of trade between the Central Asian countries and the countries of South and Southeast Asia is impossible without the creation of reliable transport corridors that ensure timely delivery of goods.

According to domestic and foreign experts, the event will make it possible to develop concrete proposals for the accelerated advancement of the construction of a new railway line (Mazar-i-Sharif-Kabul-Peshawar, the so-called “Kabul Corridor”) between Pakistan and Uzbekistan through Afghanistan, which is strategically important for the countries. two regions in the development of foreign trade.

Problems of interaction between Central South and South-East Asia

The countries of Central Asia do not have direct access to sea transportation and thus are cut off from the cheapest type of transport routes, in this regard, the development of transport communications in the region remains one of the key problems.

In the practice of forming international transport corridors, there are a number of problems, the main of which is the inconsistency of the regulatory framework of various countries participating in the transportation process:

– lack of a unified standard for a shipping document;

– various technical standards – lack of a unified railway track along the entire route.

The need to develop overland transcontinental trade routes is explained as follows:

– the exhaustion of the capacity of the Suez Canal. The recent blockage of the Suez Canal has shown the importance of promoting alternative transport corridors and raised questions in the expert community about the risks of the world’s over-dependence on this route;

– the congestion of the main world ports of Eurasia;

– dynamic development of the economies of Western China, India and Pakistan.

In turn, Russia is successfully developing its project in the region by forming a North-South transport corridor (EU-Russia-India). The transport corridor is designed to provide communication between the Baltic countries and India through Iran. The main advantages of the North-South transport corridor over sea routes are: a twofold or more reduction in the distance of transportation (7200 km) and a decrease in the cost of transporting containers in comparison with sea routes. The corridor is formed along the following routes:

– Russia – Kazakhstan – Turkmenistan – ports of Iran – ports of Pakistan – ports of India;

– Russia – ports of the Caspian Sea – ports of Iran – ports of Pakistan – ports of India;

– Russia – Azerbaijan – Iran – ports of Iran – ports of Pakistan – ports of India.

When implementing the construction of the Herat-Kandahar-Quetta (Afghanistan) railway line, the route can serve as an alternative for connecting Russia with India along the existing North-South corridors:

– Russia – Kazakhstan – Turkmenistan – Iran – Afghanistan – Pakistan – India;

– Russia – Caucasus – Iran – Afghanistan – Pakistan – India;

– Russia – Caspian Sea ports – Iran – Afghanistan – Pakistan – India.

The route through the Kabul corridor Russia – Kazakhstan – Uzbekistan – Afghanistan – ports of Pakistan – ports of India can serve as a competitive alternative, since it is 500 – 600 km shorter than the existing routes of the North – South corridor.

Estimates of the untapped potential of the countries of Central and South Asia

The Central Asian region today has a huge untapped export and transit potential, which, if used in the future, may increase trade between large regions of the Asia-Pacific region, South and Southeast Asia, Russia and Europe through the implementation of large transport projects.

The Asian Development Bank (ADB) predicts that emerging economies in Asia will grow by an average of 7.3% in 2021, despite the lingering threat of coronavirus. Experts note that the optimistic forecast is associated with hopes for the recovery of the world economy, as well as with progress in the dissemination of vaccines. ADB expects China’s GDP to grow by 8.1% and India’s GDP to grow by 11% in 2021.

According to the report of the international consulting campaign BCG “Investing in Central Asia: one region, many opportunities” (“Investments in Central Asia: one region, many opportunities”) from 2018, the potential of Central Asia to attract foreign direct investment over the next 10 years is estimated in the amount of up to 170 billion US dollars, including 40-70 billion US dollars in non-resource industries.

According to forecasts of domestic experts, by 2025 the volume of traffic between India, Pakistan and European countries, with even the smallest hypothetical redistribution (3%) of a part of the traffic from the existing India-Pakistan-EU sea corridor and back to the Mazar-i-Sharif-Kabul-Peshawar route, will be 5.5 million tons. Revenues from the transportation of transit goods by railways of Uzbekistan are expected to be US$595 million by 2025.