Azerbaijan as a Regional Hub in Central Eurasia : strategic assessment of Euro-Asian trade and transportation

Abstract

The present study is the result of a year‐long research project commissioned by the Azerbaijan Diplomatic Academy as part of its “Azerbaijan 2025” series. The official start date of the research is May 2010, though my personal interest in the subject goes back to 2006, when I first authored a chapter on Azerbaijan’s transport sector for The New Silk Roads: Transport and Trade in Greater Central Asia (published by the Central Asia‐Caucasus Institute at the Johns Hopkins University in 2007). The initial goal of this study was to assess current and potential Euro‐Asian trade and transportation links and answer one simple question: What are Azerbaijan’s chances of becoming a transportation hub in Eurasia? The aim was to do an in‐depth investigation of Euro‐Asian commerce and to produce an independent and comprehensive work on how, if at all, Azerbaijan could be developed into a transportation hub in Eurasia. Soon, as I got deeper into the research, I became convinced that the issue of transportation cannot be studied in isolation from Azerbaijan’s overall development strategy, in general, or from its non‐oil economy in particular. For this reason the study you are about to read is no longer merely an assessment of the transportation sector per se, but a comprehensive blueprint for Azerbaijan’s grand hub vision that goes beyond the issue of transportation. This vision requires an integrated ‘bird’s eye approach’ in developing the non‐oil economy in a way that mobilizes all of the country’s resources and projects towards achieving one goal: Building Azerbaijan of 2030. Once a vibrant route for the Silk Road trade, Central Eurasia is poised to regain its historical role as a commercial bridge between east and west, north and south. Azerbaijan has the ingredients to become one of the major commercial and transportation hubs in the region and to be the country that facilitates regional transformation. Its location, abundance of natural resources and dynamic new generation will help realize this vision. But for this vision to unfold, one must have a clear understanding of the vision itself and how to achieve it. The present study will offer one of many views about what this vision of the future might be and how it could be successfully implemented. The ideas sketched out here are by no means set rules and should not be viewed as fixed propositions. It is rather a logical framework analysis that has been built upon a year‐long investigation in attempt to contribute to the understanding and development of Azerbaijan’s hub vision. The question of envisaging the future of Azerbaijan and the region of which it is part has been at the heart of this study, thus, its main focus is on transportation, logistics and issues associated with non‐oil sector development such as Free Economic Zones (FEZ). I hope that I have done due diligence when drafting the hub strategy for Azerbaijan and while examining the structure of Euro‐Asian commerce, comparing alternative Eurasian land corridors, transport and logistics sectors and proposing the FEZ concept for the country.