Russia planned a new transport route with Iran through Azerbaijan to India. If this project is implemented, it will "cancel" the Suez Canal for Russia and become a real political tsunami for the West, warns economist Oleksiy Kush.
About the new "North-South" logistics corridor. Will it become an alternative to the Suez Canal for the Russian Federation and India
I will immediately note that I wrote about this project and the fact that its appearance should be analyzed in the context of risks for Ukraine, a long time ago.
In general, I try to carefully analyze new logistics routes, because they determine both the economy and geopolitics.
So, what is it about?
The North-South (NS) project is an international transport corridor (ITC) between Russia, India, Iran and neighboring countries (includes 11 countries).
It reduces the time of cargo transportation by several times, as compared to the route through the Suez Canal.
Even last year, an agreement was signed between the Russian Federation and Iran on the construction of the railway section Resht-Astara (a city in Iran). The task of the project is to connect the existing railway network of Iran, Azerbaijan and the Russian Federation (Moscow – Astrakhan – Makhachkala) into a single transport system.
The problem was that the track width is different in Azerbaijan and Iran: the Russian track is 1435 mm and the Iranian track is 1520 mm.
To create a single system of railway communication, it is necessary to build a section 165 km long. It was decided to lay it with two types of tracks.
Within this route, goods from the Russian Federation will go to Azerbaijan, then to Iran, and from Iranian ports by sea to Mumbai (India).
The construction of the Astara-Resht railway will begin in 2024 and end in 2028. The estimate is more than 2 billion dollars: Iran builds, finances Azerbaijan and the Russian Federation.
Azerbaijan has granted Iran a concessional loan of 500 million dollars, and Russia plans to allocate 1.5 billion dollars.
I analyzed the project itself in detail last year, and the other day a large analytical article about it was published in the NYT (the author is Ivan Nechypurenko, who traveled the entire route). The article provides data on trade turnover between the Russian Federation and the countries of the Global South, which will be part of this project:
“……… from 2021 …. Russia's trade with China is set to grow by about 63 percent to more than $240 billion in 2023. Trade with India is also growing, reaching $65 billion, more than quadrupling from 2021. Russia's trade with both countries in 2023 surpassed its pre-war trade with the European Union, which amounted to $282 billion in 2021."
The author of the article cites Putin's words that "...the new route will reduce the delivery time of goods to Mumbai from St. Petersburg to just 10 days, compared to the current 30-45 days.
Russian officials call it a "breakthrough revolutionary project" that will compete with the Suez Canal.
But the main thing is not even this - the article says that this route will be completely invulnerable to the influence of Western sanctions on trade with the Russian Federation.
You can make sure of this by looking at the map: now Russian goods to India go through the Baltic Sea, the English Channel past Britain and France, then through Gibraltar to the Mediterranean Sea, then to the Suez Canal, from there to the Red Sea and, finally, to Indian Ocean.
A large part of the route passes NATO countries, a particularly vulnerable section at the exit from the Baltic Sea. It is about the factor of the "Danish Straits" between the Scandinavian and Jutland peninsulas, which connect the Baltic Sea with the North Sea (the Little Belt, Big Belt, Öresund, Kattegat and Skagerrak straits).
The Danish Straits are the main sea route connecting the ports of the Baltic Sea with the ports of the world ocean. Blocking Russian oil tankers there is quite simple.
In the "North-South" route, in addition to direct access to the Indian Ocean, there is another "sub-project" - the revival of the Baku-Yerevan railway, which was dismantled in 1990. It will connect the Russian Federation with Turkey, bypassing Georgia, which currently does not allow Russian-sanctioned goods.
In fact, it is about the same Zangezur Corridor, which is now being forced to open Armenia (connecting Azerbaijan with the exclave in the form of Nakhchivan and Turkey).
In this context, the Russian Federation's sluggish assistance to Armenia in its war with Azerbaijan and Armenia's "turn" to the West (discussion of the possibility of joining the EU, NATO, suspension of Armenia's membership in the CSTO, etc.) become completely understandable.
No longer Armenia, but Azerbaijan is becoming a strategic ally of Russia in Transcaucasia (based on logistical goals).
On the other hand, complete dependence on Baku also does not suit Moscow - that is why the East Caspian route will also be implemented within the limits of the "North-South" route: through Kazakhstan and Turkmenistan.
Iran is becoming the key logistics hub in this "Caspian" transport and logistics model, and India is turning into one of the largest trade partners of the Russian Federation.
In fact, a new geopolitical axis may be formed — Moscow-Tehran-Delhi.
The Russian Federation, as a land empire, aims to control the land routes, while Britain and the USA (as maritime empires) aim to control the straits.
Therefore, the Russian Federation is building railways to China and Iran, and the USA and Britain are strengthening the fleet.
A kind of struggle between thalasates (thalas - sea) and telluriates (tellurium - earth).
The consequences of this project include:
- A significant transformation of the geopolitical niche of Armenia and the system of relations in Transcaucasia in general (with the strengthening of Turkey and Azerbaijan).
- Iran's entry into global logistics chains.
- A closer economic union between India and the Russian Federation.
- The "uselessness" for the Russian Federation and Iran of the Suez Canal, which can be completely blocked due to the actions of such Iranian "proxies" as the Houthis in Yemen.
Can the West stop this project? Yes, it can.
For example, the "Spice Route" project from India to the EU, trade privileges for Indian goods on the European market and Western investments — in exchange for refusing to participate in the "North-South" project.
Blocking navigation from Iranian ports. The defeat of the Houthis.
"Influence" on Azerbaijan in exchange for the opening of the Zangezur Corridor (and here already influence on Armenia).
But in order to realize everything mentioned, the West needs to "harness" to the full in this topic. It should be a systematic, long-term, structured and very multifaceted policy.
Such a master class was possible for Kissinger, Reagan, even the Bushes (junior and senior). To be honest, I still don't see an adequate assessment of these risks and politicians in the EU and the US who could stop this obvious geopolitical tsunami.
But if it is not stopped, the consequences will be colossal.
