The Belt and Road Initiative

The Revival of the Great Silk Road

Yerzhan Issakulov

Adviser, Turkic World Educational and Scientific Cooperation Organization (TWESCO)

The Great Silk Road is a caravan road that in the ancient and middle ages connected Asia with Europe, due to which peoples of these two continents freely traded and communicated with each other for one and a half thousand years. Therefore, it remains in the memory of humanity as an outstanding achievement. The decline of the Silk Road in the 16th century is primarily associated with the development of merchant shipping.

Only at the beginning of the 21st century, this unique experience of mutually beneficial trade was revived thanks to the political will and wisdom of modern leaders of states, who have constructed a new Silk Road through their territory from Pacific Ocean in the East to the Mediterranean Sea in the West.

Kazakhstan and its leader, N.Nazarbayev play a special role in this activity. Thus, after the collapse of the Soviet Union Kazakhstan did not have access to world markets. The first President of Kazakhstan, knowing the unique geographical location of his country and its geopolitical significance in the era of globalization, began to prepare for new conditions of international economic cooperation by reviving the traditions of the ancient Great Silk Road. In a short time he managed to reach an agreement with the leaders of China, Azerbaijan, Georgia, Turkey and Iran on the development of transnational transportation between Europe and Asia, implemented large-scale transport infrastructures within the country: built a Western China-Western Kazakhstan highway with a length of 2,700 km; Alashankou railroad through Kazakhstan to Europe; expanded the seaport of Aktau; introduced the new Kuryk seaport on the Caspian coast; the Khorgos land port on the Kazakh-Chinese border and new railway lines that connected southern Kazakhstan through Almaty and southern cities with Europe, and Western Kazakhstan with Iran. In addition, Kazakhstan had a strategic task to create its own logistics base in China, where sea and land transportation routes would converge. The port of Lianyungang became an ideal springboard for this purpose, and not only because of its geographical location, but it was also a pioneer among Chinese ports on the shipment of containerized cargo to the countries of Central Asia. However, only Kazakhstan could receive its own terminal at this transport and logistics facility that is strategically important for the entire region. This was due to the foreign policy ties brilliantly built by the top leadership and carefully designed programs of infrastructure development of two states; these two premises jointly launched the historical process of reconstructing the Great Silk Road.

During the official state visit of the President of the People’s Republic of China Xi Jinping to Kazakhstan, he proposed this idea for the first time. Today we realize that it was a great idea. This initiative in 2012, when the world had not yet come out of the crisis,was simply necessary. All states supported this idea with pleasure, as they supposed it would help to get out of this crisis. This just stimulated Kazakhstan to adopt Nurlyzhol program, because the way to Europe lies through Kazakhstan. Despite the fact that the world’s largest transport companies, as a rule, do not work with cargo transportation by land, they came to the Central part of Asia and brought significant investments to Kazakhstan. This is indicator of Kazakhstan’s success.

As is well known, the Caspian region has a unique history and diverse culture, the natural wealth and richest human resource sare concentrated here. The sea is also of significant geopolitical importance due to its advantageous geographical location. Strategic transport communications pass through the region.

One of the most important strategic decisions that formed a new sub-regional geopolitical landscape was made by leaders of five coastal states in Aktau in August 2018 through signing the convention on the legal status of the Caspian Sea.

After adopting this convention, the Caspian Sea has become a major international transport and logistics hub, an effective, connecting bridge not only between five coastal countries but also between Europe and Asia. This system allows delivering goods from the east coast of China through the Caspian Sea to any point in Europe, Russia in the shortest possible time.

1. It all starts with the Lianyungang terminal on the east coast of the PRC. Cargoes both from China itself and from the countries of Southeast Asia are formed here.They are loaded into containers, checked, sealed, and put onto railway platforms and sent by rail in the direction of the Kazakh border.

It should be noted that the Kazakhstan port terminal in Lianyungang is also focused on the region of Central Asia, with access to Transcaucasia. The logistics base also works for the needs of Kazakhstan exports.

For example, Kazakhstani grain is imported into Vietnam. In containers that deliver grain, another product is loaded and shipped to Kazakhstan. In the future, the sales market is expected to expand and will include markets of Indonesia, Malaysia, Korea, and Japan.

The delivery time is the main priority of the international trade and logistics policy of the modern world. Especially when it comes to transcontinental transportation. Therefore, the next container train, formed in the Kazakhstani terminal of the Chinese seaport of Lianyungang, immediately sets off, taking the course to the Kazakhstan border, train will reach its destination in five-seven days. When containers get onto the railway platforms, railway administrations of two states become fully responsible for the transportation and delivery times of cargoes.

2. Republic of Kazakhstan, Almaty region, the border with the People’s Republic of China. The Altynkol railway station is one of two transport and logistics hubs through which trains from the PRC enter Kazakhstan and leave it. But this is not its only uniqueness. The reason is that the width of the railway gauge in Kazakhstan is eight and a half centimeters wider than in China. This makes it impossible for Chinese railway cars to move on the territory of our country. But the Altynkol station was built in order to solve this problem. In addition to the required number of tracks (13), the standard for Kazakhstan width, the Altynkol station has 11 narrow-gauge lines for shunting movement of Chinese cars. The reloading of goods that arrived in platforms unsuitable for transportation in Kazakhstan from the People’s Republic of China to our standard trains or automobile trucks takes place here. However, the main purpose of the Altynkol station is the maintenance of the Khorgos - Eastern Gate Special Economic Zone. It is located seven kilometers away, and most of the trains arriving from China are sent there for reloading and processing.

Thus, the next container train formed in the Chinese seaport of Lianyungang reaches Khorgos in seven days, having covered four and a half thousand kilometers. After all the containers on this train are transferred from narrow to wide gauge, they will proceed further. The final destination of this particular cargo is Eastern Europe. Delivery times are clearly regulated, for example, the delivery time from the Altynkol station to the Kuryk port today is not more than 72 hours, taking into account the processing of a whole container train. But the limit has not yet been reached. Today, the railways of Kazakhstan are focused on improving the speeds of container trains. At the moment it is 1000 km per day. That is, from Altynkol to Kuryk, 3,000 km is covered in 3 days. However, before heading further along the route, containers on Chinese cars will briefly enter the land port of the Khorgos-Eastern Gate Special Economic Zone. 5-6 trains are unloaded here per day. The pace and the volume of cargo handled annually increase.

It takes no more than fifty minutes to unload and reload the standard railway car at the site of the Khorgos - Eastern Gate free economic zone.

Each process here is regulated strictly for a minute. No matter how many trains the newest station Altynkol would deliver, the ultramodern land port of the Khorgos - Eastern Gate Special Economic Zone will handle all cargoes as soon as possible and at any time of day.

This object is considered as an international multimodal hub for cargo handling. This project is also significant as an industrial and logistics zone with state benefits of the FEZ. It means that there is an opportunity to create enterprises and factories. All conditions are created here. And therefore this project is unique for its content and future capabilities, and it is unique throughout the world. This is widely recognized. The main partner since the beginning of the project is the DP World company, Dubai. They are our strategic partners. Our second main partner is COSCO SHIPPING, a Chinese company. This is the first company in the world in terms of cargo turnover and the amount of cargo transported; they own 50-49% of the land port. This is a shipping company, but it moved 1000 miles away from the coast to a dry port. This is worth noting.

The advantages of working in the conditions of the Khorgos - Eastern GateSpecial Economic Zone were also appreciated by other domestic and transnational companies. This year, a modern high-tech terminal for receiving, cleaning, drying and storing grains and oilseeds begins its work, which over time will be expanded to 30 thousand tons of one-time storage. As well as a plant for the production of animal feed with an elevator, it is designed for 15 thousand tons of finished products. It is being built by a global food holding with headquarters in Dubai, represented in thirty countries of the world and trading in more than sixty states.

The advantage of working at the Khorgos SEZ is in favorable conditions for export-oriented industries. There are tax concessions and preferences in terms of exemption from land tax, corporate income tax, property tax, as well as exemption from rent for a land plot. The free customs zone also operates here, which suggests the duties-free movement of goods within the economic zone. There is a very large logistics center, construction of an industrial zone is planned, the infrastructure itself is ready to launch any production.

First of all, there are convenient preferences, benefits in SEZ. The most important thing is the proximity of the Chinese market and Southeast Asia; the availability of infrastructure is that the Chinese railway can enter the land port; all these factors constitute defining moments of investing in Khorgos-Eastern Gate.

At the Altynkol station,container train from the People’s Republic of China deals with all customs procedures, coordinates documentation, makes a full cargo check, leaves containers in Kazakhstan and goes back to China in three hours. The next container train is on the way.

3. At the same time, the containers, just removed from the leaving Chinese trains, start their way in the opposite direction - to the west. On the eastern coast of the Caspian Sea, 70 kilometers away from the regional center of the Mangystau Region, protected from natural storms in the natural bay, the Kuryk seaport is built– it is a unique transport and logistics center operating on the most optimal algorithm of the multimodal principle. In the Kurykport, railway cars and trucks, coming by land, without losing precious time for reloading, go directly to the decks of capacious sea ferries, and continue their way towards destination point on the opposite seaside.

Sea railway ferry, in fact, is a huge floating double-deck depot, which can accommodate up to fifty-two standard railway cars.

In the multimodal transport hub Kuryk Port, same as in the Khorgos-Eastern gate port located three thousand kilometers away, every minute is strictly regulated. It takes no more than 12 hours to process the cargo of one such railway ferry, which implies a full cycle of unloading, loading, and processing of all documents. At the same time, the universal ferry complex Kuryk today includes two fully operating rail and two automobile berths, which can simultaneously receive four vessels.

The benefit is that it is a multimodal shipment. That is, you as a shipper pack your goods and unload them in containers in your base or on the basis of your forwarder, seal containers and choose the type of transport. Whether railway or auto transport. The shipper has no further problems. The client paid once, door to door. This is the specificity of the carriage. Loading and unloading operations can lead to cargo damage, commercial damage, packaging damage, and so on. During its work, the new multimodal transport hub Kuryk Port has already demonstrated all advantages over its much older counterpart in Aktau. Able to receive ships around the clock, it is able to serve ships that cannot enter the Aktau sea harbor because of bad weather, which significantly saves the time of cargo transportation. And considering its transit potential, we can state the fact that Kazakhstan has finally got out of the continental trap and has personally erected its Sea Gate, opening access to the world ocean in another important strategic direction.

An international ferry complex for 4 million tons of cargo was commissioned in the port of Kuryk. And now our railroad ferrymen go to Turkey via Kuryk in Baku, the Caucasus, and go to Europe through the Bosphorus. We overcame our isolation. Thanks to the Nurlyzhol state program, we launched a multimodal Eurasian transport corridor. We have finally completed the construction of the international transit corridor, “Western Europe - Western China.” The Kuryk port is a realized novelty of our country, do you imagine? Now we can say that Kazakhstan is not a land country and there is a way out to all seas.

The possibility of building a specialized Kuryk port from scratch allowed to design it takes into account all the mistakes and shortcomings of the existing maritime trade and logistics practice. The configuration of the location of objects, both marine and land infrastructure, and these are 149 buildings and structures of the most varied degree of complexity, built with the calculation of the maximum acceleration of all processes: from administrative on the basis of registration of tax and customs documents for cargo on the principle of one window, to logistic. Assessing the high level and quality of service of the Kurykport, partners in the Trans-Caspian international transport route are beginning to use its services more and more. As a result, the port has already handled about three million tons of cargo in a year.

Today, cargoes go from China to Italy, from Kazakhstan to Mersin, cargoes from Kazakhstan include different grain cargoes, such as wheat, lentils, and peas. It all goes to world markets if before the same grain market was regional, today grain cargoes are transported to countries such as Italy, Spain, and Turkey, and it is expanding quite rapidly.

Cargoes that are transported from China through Kazakhstan become floating in the port of Kuryk, in order to take the course towards the Republic of Turkey through Azerbaijan and Georgia, with the prospect of access to Europe, become the object of multimodal transportation of the Trans-Caspian International Transport Route. The idea of creating this joint project with a number of states belongs to Kazakhstan, but its existence would not be possible without partnership with transport companies mainly from Azerbaijan, Georgia, and Turkey. And the Azerbaijani Caspian Shipping Company is becoming a strategic partner at sea - the company is the only operator in the ferry transport sector in the Caspian Sea. It owns all the ferries involved in the route, capable of carrying trains almost entirely, and this company has built the Alyat port on its part of the Caspian Sea coast, which is similar to our Kuryk port not only by its technical characteristics but also looks same as two drops of seawater.

4. A ferry, which arrived from the Kuryk seaport of Kazakhstan to Azerbaijan’s Alyat harbor, unloads, refuels, checks its technical condition and takes mixed cargo onto its board, while simultaneously accepting both railway cars and trucks.

Here in Azerbaijan, as well as in other countries that represent strategic interests for each other in building a transit route, partnership relations are highly appreciated, on the basis of which such a successful trade and logistics perspective as the Trans-Caspian International Transport Route has been formed.

This corridor got its name as Middle Corridor. Today, cargo owners in order to send their goods from China to Europe or back should not knock 10 or 15 doors and follow their terms. It is enough to contact the maritime office and get the terms from point A to point B.

The geography of users of the Trans-Caspian International Transport Route is expanding from year to year. Italy, Spain, Poland, Ukraine, Romania willingly use the services of the corridor. Well, those who must ensure the smooth operation of the route regularly hold meetings where issues of increasing the efficiency of interaction and shortening the delivery time for goods are discussed by the heads of railway and maritime administrations of the states where the corridor passes. A few years ago, it was hard to imagine at least one such meeting. Now, such meetings are held on an ongoing basis and are an effective tool for generating specific solutions for building a unified modern transcontinental transport and logistics system.

In the 21st century, we should change our focus of this node. What do we mean? It is the digitalization of this process. If we want this corridor to work, to have an effective consolidation, in order for cargo from China to reach Europe on time, the owner knew where his container was, and we need a very good IT system. And when all this is connected, there will be not only a physical corridor but also a digital corridor. Then all products, goods will go through us, and this corridor will develop more effectively.

Meanwhile, the next train, which came across the Caspian Sea through the Kazakhstani port of Kuryk with cargo from the People’s Republic of China and the countries of Central Asia, is moving along the railways of Azerbaijan.

5. After a maximum of 30 hours, the freight train that has left the railway ferry in the port of Alyat will reach the borders of Azerbaijan and Georgia - another strategic participant in the Trans-Caspian International Transport Route.

Another strategically important section not only for Georgia but for the whole our region is the Baku-Tbilisi-Kars railway line. Thanks to this project, the railways of Georgia for the first time merged with the railways of Turkey, which significantly improved the trade turnover between Azerbaijan, Kazakhstan, and Turkey.

The Baku-Tbilisi-Kars corridor was opened on October 30, 2017, and this event is not only regional but also of global importance, because the project offers tremendous opportunities for cargo transportation along the China-Kazakhstan-Azerbaijan-Georgia-Turkey-Europe route and back. Previously, freight was carried by land and partly by sea. But it took from 30 to 35 days. When the Baku-Tbilisi-Kars railway corridor was built, delivery to Kazakhstan took only about 180 hours. This is about 7 to 8 days. Therefore, all exporters, as well as importers, are very pleased with this project.

The fact that now there are more trains from South-East, Central Asia, and the Caucasus at this Turkish logistics base on the coast of the Mediterranean Sea speaks for itself.

The Baku-Tbilisi-Kars railway corridor has become a very strong alternative that can change the configuration of global transport traffic. Since this is a straight route, which significantly reduces the distance and costs, of course, the business chooses this route. Before the launch of the Baku-Tbilisi-Kars corridor, the transportation of wheat from Kazakhstan to Turkey was a very difficult process, now thousands of tons of wheat are exporting. By 2034, it is planned to increase the capacity of this line to 17 million tons of cargo.

Basically, Kazakhstani grain is accepted here, and Chinese tomato paste, as well as other cargoes, are sent for export to Italy. The released containers are filled with Turkish goods and are sent back.

Baku-Tbilisi-Kars railway route is short on the scale of the entire transcontinental route, but at the same time tremendously important, in fact, it is the last strategic link that connects two parts of the huge Continent by land, from the Pacific Ocean in the East to the Mediterranean sea in the West, which can now be reached from the Caucasus bypassing the Bosphorus.

6.Turkey, Mersin seaport and the city of the same name on the Mediterranean coast. The largest transport and logistics hub of the region, the most important link of the Trans-Caspian route. Much of the cargo from China and Central Asia come here, and thanks to the extensive transport system of the Turkish Republic, consumer goods are supplied around the world. They are transported by land and by sea through the Mediterranean Sea, opening up unlimited opportunities to access global markets.

And of course, people are not yet aware of what is happening. But after 5-10 years, looking back in history, we will understand how important these decisions were when each participant-country receives billions of revenue from transit of cargo through its territory and the multivalent effect of the development of transport infrastructure. For example, the Republic of Kazakhstan earns about 1000 dollars from one container. Only in 2019 more than 14 million cargoes were transported through the territory of Kazakhstan.

However, all of us should remember that the Revived Great Silk Road can develop only in terms of peace and stability.