Salzburg, Reform Group Conference 27.08.2012

Jacopo Pepe, PhD Candidate, Berlin Centre for Caspian

Region Studies

jacopo.pepe@zedat.fu-berlin.de

The New Geopolitics of

Eurasian Railways and

Russian Foreign Policy

toward Central Asia

Outline

Historical Background

Relevance

Key Questions

Key Facts on Transport/Logistics in

Eurasia/CA

RZD Strategy and Russia Transport

(Foreign) Strategy

Historical Background

What is new for Russia in the

geopolitical and geoeconomic power

constellation of XXI Century Eurasia?

A bit of eurasian history….

Russia as late comer in Eurasia

power play:

since 1555-57 expansion toward north-eastern Eurasia

Only since the XVIII century projects power to the South

as late as in the XIX Century conquest Central Asia (step by step)

As it happens:

a) major eurasian powers in relative decline (Quing-China, Savafid Iran, Moghul India, Ottoman Empire) confrontation with external Power GB

b) Contintental Trade was broken up and disappeared

Russia: long time no part of eurasian history

Russian Expansion 1

Source: The Dalton School, http://blogs.dalton.org/rome/map-resources/

Russian Expansion 2

Source: The Dalton School, http://blogs.dalton.org/rome/map-resources/

After End of SU Russia confronted with two processes, taking place at the same time:

a) Slowly trade reintegration of the CA-Region in the eurasian southern, south-western and south-eastern region

b) confronting simultaneously: rise up of assertive new-old powers (China, India, Iran, Turkey plus US/EU)

Relevance

No analysis of potential gains and geoeconomic/geopolitical implication of regional and transcontinental conventional transport infrastructure ongoing projects for reintegration CA and Russia in Eurasia (beyond energy/pipeline politics)

Necessity of modifying classical analysis of Eurasian Geopolitics, of the relations RU with CA, embeeding empirical evidence and historical analysis

Aim of the Project:

a) Theory Framework Modification/Renaming Classical Geopolitcs Mackinder/Spykman

b) Analysing strategies and interests in russian FP toward CA with a new focus on:

- Transport Strategy and Development (non-energetic infrastructure)

- Role of transport infrastructure for military strategy (planned not started yet)

Key Questions (draft, modification possible)

Which geoeconomic and geopolitical factors are affecting the

eurasian transport revolution? Are there conflicting or converging interests between Russia and

main central Asian states in developing ITC on rail?

Is (rail) transport becoming a factor in shaping Russian foreign strategy toward Central Asia? Is a “transport diplomacy“ (parallel to energy diplomacy) taking shape in russian foreign policy?

If yes, has Russia been using RZD/Rail Infrastructure/Logistics as a power tool toward central Asia?

If not, why?

Key Facts on Transport&Logistics in

Eurasia/Central Asia

Chinese rapid industrialisation of the north-western regions. Boom in expansion of inland rail network

Steady, rising rentability of overland transportation to Middle East/Europe

Overloaded Chinese Ports Capacity

Steady Rise of CA- China Trade Turnover 2007:15 times higher than 1990s)

Steady Rise Europe - Asia Trade Turnover (UN-ESCAP: 2010 17,7 Mio. TEU; 2015 26 Mio. TEU)

Slowly CA reintegration in inter-asian trade (Iran, Turkey, China, India (?) )

Transcontinental Transportation

Links: Re-linking CA Constraints …

Physical barriers (rail secotor):

- Different Rail Gouge Systems 1520 mm/ 1435 mm (break of gouge at Boarder Crossing Points)

- the obsolescence and shortages of rail cars, containers and locomotives

- poorly developed logistics

- high transportation costs

Non Physical Barriers:

-Slow custom procedures

-Boarder crossing delays

and Potentials of continental trade routes…

Time-Savings

Relief of congestioned southeastern asian ports

Minimalising security risks

Possible tarif-competitivness on the North-South Route

Rising turnover of eurasian overland trade According to ADB:

-2000: less than 0,3 %

-2008: 1% of total Europe-Asia trade flows overland

-2011: 1,5 -2%

-2013-15: to reach 5-8% of total Europe-Asia trade turnover

Transcontinental and regional overland transport Routes: no alternative but complementary to Maritime Routes

Potentials of continental trade routes for CA: as most relevant regional and continental transit countries being not yet full exploited

…and Russia : existing infrastructure: modernization needs, not yet full exploited

Schematic Map of Eurasian

Transcontinental Corridors Source: Emerson/Vinokurov,2009

Chinese Rail Network (Stand:2011)

Iranian Rail Network

Development (Stand:2011)

Turkish Railway Network

Development Stand:2011

GR-

AZ

Iran

Istanbul-

Ankara Ankara-

Sivas-

Kars

Marmara

Project

Central Asia: Dynamics of cargo fright volumes

and ITC-Development (Source:

Transshipment of Container at

Dostyk Boarder Crossing Point (TEU) Source: Kazatransservice

Time Saving on the Route China-

Kasachstan-Europe (Source:RZD)

Regional Rail Infrastructure.

Existing, planned and in building Source: Kazlogistics,2011

Kasachstan: the main player

Usan-Gyzlagaya-Gorgan Rail

Line (Source: ENR.com)

Ongoing Realisation of Logistic

Centres (Source: MinTransport Kazakhstan)

CHINA-KYRGYZSTAN-UZBEKISTAN

RAILWAY…. (Source:Kyrgyzstan Rail Company)

…….in the eurasian railsystem

(concurrent routes)

Multilateral Initiatives

ADB/CAREC- Corridors: Second Eurasian Land Bridge

EVRASEC-Corridors- Eurasian LandBridge

TRACECA-EU

UNECE/UNESCAP-EATL-Transeurasian/Trans-Asian Rail- and Roadway

IDB /ECO

Most relevant and implemented ADB/CAREC Corridors (since 1997)

CAREC Corridors (Source: CAREC Institute)

Road and Railway Progress of

CAREC-Corridors

Source: CAREC, 2010: Transport and Trade Facilitation Progress Report 2010

And Russia? RZD Strategy and

Russia Transport (Foreign) Strategy

Shifting part of Asian‐Pacific transit container freight flows from trans‐ocean routes to the Trans‐Siberian Main Line (competition with central and south eurasian rail lines)

Creating integrated rail infrastructure for the East –West and North –South International Transport Corridors

a)Reconstrucitng of Transkorean rail-line (ongoing)

b)Construction of Kosice-Vienna 15200 mm Gouge Rail

c)Backing Iran-Turkmenistan-Kasachstan Railway (only partly over RF Territory)

d)Backing Iran-Azerbajian-Russia Railway

Improving cooperation and interaction with partners to implement logistics and intermodal schemes for container transportation

Concentration in rising competitiveness and modernization of own infrastructure, expanding on the east-western axis (Eastern Siberia-China)

RZD: ITC-Ongoing Projects (Source: RZD)

RZD acting as an economic actor, but aware of geopolitical consequences of transport transformations in Eurasia

Until recently, the rail asset has not been considered an instrument of russian foreign strategy.

This has been changing. RZD, Transport Ministry, Presidential Administration and Foreign Ministry are acting more closely.

“Transport Diplomacy” is emrging

Coordination of transport strategies in the 1520 space (RAIL Commission of CSI-States

Since 2012: (Eurasian) Custom Union (Belarus,Kasachstan, Russia)

Central Role of Rail Transport, New unifed rail transport code approved

Completing Rail Reform ( privatisation plans to rise financial means starting from 2013)

Thank you for your attention !