Azerbaijan Talks Up Zangazur Corridor Amongst Armenian Concerns As Transit Trade Grows
EU energy needs may override Armenia’s geopolitical issues
Azerbaijan has been talking up the need for the contentious Zangazur Corridor development as the country expands its freight and energy transit capabilities. Transit cargo traffic through Azerbaijan increased by nearly 30% in H1 2022, while feeds through from Baku to the INSTC grew up to 300%. Azerbaijan’s geographical position and its established infrastructure have enabled the country to become an increasingly important transit logistics hub.
Developing that further comes with some tricky political problems, with the proposed Zangazur Corridor, which would create a direct link between Russia and Iran, and improved access between the EU and Asia becoming a hot political and infrastructure development topic.
The problems lie with its location – a Zangazur corridor would give Azerbaijan unimpeded access to Nakhchivan Autonomous Republic without Armenian checkpoints, via Armenia’s Syunik Province, and, in a broader sense, create a geopolitical corridor that would connect Turkey to the rest of the Turkic world thus “uniting it”. The concept has been increasingly promoted by Azerbaijan and Turkey since the end of the 2020 Nagorno-Karabakh war, while Armenia has steadily objected to it, asserting that “corridor logic” deviates from the ceasefire statement trilaterally signed at the end of that war.
Azerbaijan, Turkey and Russia essentially have the upper hand over Armenia here, although none will wish to provoke Yerevan too far into a resumption of hostilities over the Nakhchivan disputed region. The irony is that should the corridor become functional, Armenia would benefit as it would than have rail connectivity connection through to Russia, as well as Turkyie and Iran. The region is the collision point between Orthodox Armenia and Russia, and Islamic Azerbaijan, Iran and Turkyie and has the potential to flare up. Diplomatic solutions need to be found to bring Armenia on board – paying for its rail connectivity, or persuading the EU to do so under the auspices of diverting more Azeri gas to the EU would probably help.
There has been progress, albeit slow. In November 2021, the Deputy Prime Minister of Russia and the co-chair of the trilateral task force dealing with cross-border connections, Alexei Overchuk said that “Armenia and Azerbaijan will retain sovereignty over roads passing through their territory”. The Russian Foreign Ministry confirmed this, commenting on the media speculation about the “Zangazur corridor”. The chairman of Azerbaijan’s Center of Analysis of International Relations Farid Shafiyev said that if Armenia does not want to say “corridor”, then an alternative term can be used, but insisted that unimpeded access for unimpeded movement to Nakhchivan must be given without any Armenian checkpoints, with the security of transport links provided only by the Russian border guards. According to Anar Valiyev, the dean of the Azerbaijan Diplomatic Academy, “What Azerbaijan wants is no checkpoints, not to have to stop at the border . . . We are in a situation where we have leverage, we have time, and we can dictate terms.”
In December 2021, in Brussels, during a press conference with NATO Secretary General Jens Stoltenberg, Valiyev expressed a view that the “Zangazur corridor” should function as the Lachin corridor. During this, he said that the opening of the Zangazur corridor “is provisioned in the 10 November 2020 ceasefire agreement”, adding that just as Azerbaijan assures security and entry to Lachin corridor, Armenia should provide the same unhampered entrance to the Zangazur corridor, without customs enforcement, and threatening that “if Armenia insists on customs points to control the movement of goods and people over the Zangazur Corridor, then Azerbaijan will insist on the same conditions in the Lachin corridor”. In response to this, Armenia’s Prime Minister Pashinyan said that “Azerbaijan is trying to take the process of unblocking the regional connections to a deadlock” and that “the parallels made to the Lachin corridor do not have even the slightest connection to discussions and announcements signed to this date, and are unacceptable to Armenia.”
Negotiations are continuing.
The end of the 2020 Nagorno-Karabakh war also came with promises to upgrade older Soviet era railway lines that bisect the region. During 2021 trilateral peace talks held between Armenia, Azerbaijan and Russia, Armenia expressed willingness to participate in rebuilding the Soviet-era railway links historically connecting Azerbaijan and Nakhichevan, which Azerbaijan interpreted as Armenian consent to the Zangazur corridor. According to Russia, the third party, what is being discussed is unblocking regional communications, and not creating a “corridor” – a term unacceptable to Armenia as it implies part or all of Armenia’s Syunik Province are part of Azerbaijan. Diplomatic word-play will be needed on all sides to reach a compromise.
The Zangazur Corridor would serve as a regional hub in uniting the North-South, East-West, South-West transport corridors, and the Trans-Caspian International Transport Routes, all of which feed through Baku from either Armenia, Turkyie, Iran and Russia through to the INSTC, and either to India and South Asia via Iran’s Chabahar port, or the Middle Corridor route east to China via Kazakhstan.
With the EU also approaching Azerbaijan for increased gas supplies, the route would also provide additional EU options for gas pipelines and freight as it struggles to find Russian alternatives.
Azerbaijan has been actively involved in the process of developing intra-continental cargo transportation, and especially against the backdrop of events in Ukraine, as traditional routes have become blocked, and countries are looking for new opportunities to implement the supply chains.
Azeri justifications for the corridor come via expanding the national transport network in Azerbaijan, with increasing numbers of participants showing interest, in particular, the European Union, China and India as Azerbaijan becomes better integrated into the Eurasian economy between East and West.
Azerbaijan has built a pipeline infrastructure for transportation of oil and gas, and a railway through Georgia to Türkiye which can be used to reach the EU Black Sea Ports in Bulgaria and Romania, and has also been building infrastructure in advance of any agreements to develop connectivity, including roads, bridges, and tunnels.
Azerbaijan also plans to export hydrocarbons, ‘green’ electricity and internet services to the EU, and the country wants the Zangazur corridor to be integrated into other corridors passing through the country – to the INSTC and Middle corridors. How this is managed may depend today given the new 2022 geopolitical situation on how much the EU is prepared to pay in one way or another for Armenia’s assent.
Chris Devonshire-Ellis is the Chairman of Dezan Shira & Associates. The firm assists British and Foreign Investment into Asia and has 28 offices throughout China, India, the ASEAN nations and Russia. For strategic and business intelligence concerning China’s Belt & Road Initiative please email firstname.lastname@example.org or visit us at www.dezshira.com