Central Asia’s location at the heart of the Eurasian landmass means the five republics are strategically positioned on key transport routes across the vast continent. These not only run from east to west — as the historic silk routes from China to Europe did — but increasingly from north to south as well, potentially opening up a large array of new markets to the Central Asian countries. 

At the same time the region faces disadvantages from being landlocked and far from international ports. Markets that are geographically close, such as India, the world’s most populous country, are hard to access due to a combination of difficult terrain and political instability. Overall, transportation costs for landlocked countries are currently 1.4 times higher than for coastal states, according to research by the Eurasian Development Bank (EDB). 

However, there are ambitions to change this, with multiple new routes planned. The Central Asia region is part of the Eurasian Transport Network, a complex system of interconnected transport corridors and routes spanning more than 50,000 km, according to a concept developed by the EDB. 

It is described by the bank’s chief economist Evgeny Vinokurov as a "network of aligned corridors, crisscrossing from west to east, north-south, that provide connectivity inside the sub-region, South Caucasus, Central Asia, and transcontinentally throughout the huge Eurasian continent”. 

The current state of the Eurasian Transport Network. Source: Eurasian Development Bank. 

According to the EDB, development of the Eurasian Transport Network is setting the stage for Central Asia to become a significant transport hub. Given the vast distances between trade partners, the creation of multimodal transport and transit corridors is the only practical solution for Central Asian nations, the report says.

Chief along the corridors are the Northern, Central, and Southern Eurasian Corridors, Transport Corridor Europe Caucasus Asia (TRACECA) and the International North-South Transport Corridor (INSTC), but there are many smaller routes. 

Demonstrating the importance of Eurasia for international transport, EDB analysts found that in 2023, international freight traffic along the five main corridors reached 260mn tonnes, including 3.6mn 20-foot containers (TEU), according to the development bank’s 2024 "The Eurasian Transport Network" report. 

One important change is that compared to 2013, the volume of international container traffic has more than tripled, driven significantly by foreign trade and transit container shipments involving China. Since 2013, the number of container trains to and from China via the Eurasian Economic Union (EAEU) and Central Asia has increased 200 times.

"The Central Asian corridor is the shortest and most efficient to transport containers from China to EU," said Alexander Zaboev, head of the EDB’s Centre for Integration Studies, at a presentation of the new report in Almaty on June 27. This, he added, may even lead to capacity constraints requiring upgrades to border crossings and the opening of alternative crossings with China. 

At the heart of Eurasia 

The development of the Eurasian Transport Network is particularly crucial for the landlocked region, where improved intra-regional connectivity will result in lower transportation costs both within the region and to seaports.

According to the EDB, freight traffic along the three primary corridors traversing Central Asia is projected to grow 1.5 times, reaching 95mn tonnes by 2030. Container traffic is expected to increase even more dramatically, by nearly two-thirds, to 1.7mn TEU.

Long-term growth in international trade — despite disruptions during the recent pandemic — is steadily increasing the demand for transportation. But it is also a factor of the improved transport links across the region; as the EDB points out, major infrastructure projects, the construction of new railways, highways and border crossing points, enhancements in transport and logistics infrastructure, and the introduction of efficient container services that have shifted some freight traffic from deep-sea routes to Eurasia’s land transport links. 

Geopolitics is also a factor. Eurasia’s overland routes have, for example, seen an increase in traffic after disruptions on Red Sea shipping routes. "Each time there is a new set of instability in the Arabian Peninsula, our corridor works as insurance for world logistics," said Vinokurov during the EDB's annual meeting and business forum in Almaty at the end of June.

Access to India 

As pointed out by Vinokuriv, there is an increasing emphasis on north-south as well as east-west routes. Europe and China are already established markets, but there are other opportunities for Eurasian producers, not least in India, as well as other countries such as Pakistan. 

“Even during the time of the Silk Road, trade routes in Central Asia were predominantly latitudinal, in the east-west direction. Building new north-south transportation links is a historic opportunity for Central Asia. This is an opportunity to become the continent’s transport hub, unlock new production niches, and improve conditions for foreign trade, especially with West and South Asia,” said Vinokurov. 

A model developed by the International Trade Center estimates that the unrealised trade potential between India and Central Asian countries is twice their actual trade over the past five years, primarily due to the current inadequate transport connectivity and high transport costs.

"India lacks trade with our countries due to sub-standard logistics. Now our region trades a very small amount with India, but land corridors could solve this problem," said Vinokurov. "When there is the opportunity to cut transport time from 40 to 17 days and reduce costs by two times, this gap with India and Western Asia will be reduced.”

Elaborating to bne IntelliNews on the sidelines of the conference, Vinokurov said: “The dynamics of the north-south corridor are spectacular but it's based on the already existing routes ... in order to see the real groundbreaking dynamic we need to wait for both hard infrastructure and soft infrastructure.

“In 10-15 years time the new logistics on the north-south axis, in particular from Central Asia to India and Pakistan, will be game-changing and will help South Asia and India to lower the trading gap with Central Asian states,” he added. 

Also among the projects and initiatives for further development of the Eurasian Transport Network are southbound routes such as the Trans-Afghan Corridor from Uzbekistan via Afghanistan to Karachi, Pakistan. Zaboev mentioned that the 1,500 kilometres from the Tajik capital Dushanbe to Karachi is the shortest distance to a sea port, “this is very important for a landlocked country”. 

Asian breadbasket 

Not only India, but other markets in Asia and beyond could become customers for Central Asian agricultural products if more routes are opened up. 

"Improved transport connectivity will also create momentum for realising the region’s agro-industrial potential. The Eurasian region is one of the world’s breadbaskets and can provide food for 600mn people through agricultural exports," says the EDB report. 

”However, to achieve this, the region’s countries must properly develop their transportation and logistics infrastructure. Of particular importance is the development of soft infrastructure within the Eurasian Transport Network. Specifically, integrated logistics services can shift the focus from competition between corridors and modes of transport to interaction between them. Implementing integrated multimodal logistics technology can reduce transportation costs by 15%."

Vinokurov talked of an "agro-industrial nexus" including Azerbaijan and Uzbekistan as well as the EDB members. However, while the region can be a significant source of calories, these "calories need to be delivered to the markets”. He added: "The North-South corridor is prioritising the agro-industrial complex. We are working with the Middle East, India, and other areas."

Improvements needed 

Overall, as outlined by the EDB, development of interconnected and complementary Eurasian transport corridors will to improve connectivity, lower trade costs, and facilitate international market access, particularly for landlocked developing countries (LLDCs) and inland areas.

Infrastructure investments can include entire new highways or railways, as well as new sections to improve and link existing routes. Among them is the Big Almaty Ring Road (BAKAD), which opened in June 2023, and has already had a big impact on drawing heavy traffic as well as light passenger vehicles out of the city of 1.7mn people.

Construction of the BAKAD was crucial not only for the city of Almaty — which has seen a reduction in vehicle emissions and noise — but also for the transport routes within Kazakhstan and across the Eurasian region. Road traffic through Almaty had intensified since the city lies on one the five key international transport corridors. The city is around 300km from the Khorgos special economic zone on the border with China, and the Nur Zholy border crossing. 

Over the next 15 years, the volume of cargo transported along the BAKAD is projected to rise by 87%, reaching 35.9mn tonnes, according to the EDB, which co-funded the project alongside fellow international development banks led by the European Bank for Reconstruction and Development (EBRD). 

Soft infrastructure 

Physical infrastructure like the BAKAD is just part of the puzzle. Also required is investment into soft infrastructure and a vital shift towards digitalisation. Developing soft infrastructure within the Eurasian Transport Network is crucial, says the EDB. 

For example, by integrating logistics services, the emphasis can shift from competition between different corridors and transport modes to collaboration. Implementing integrated multimodal logistics technology has the potential to cut transportation costs by 15%. Enhancing soft infrastructure offers benefits similar to those gained from physical infrastructure development. 

The EDB projects that exports from Central Asian countries could increase by 18% if cargo and vehicle delays at border crossings are reduced by half. Adopting digital technologies and electronic shipping documents could save up to four days at border crossings for international freight.

What is most important, EDB officials said, is for all the countries along a particular route to work together. "Transport is like electricity. You cannot reduce the voltage on one part of the line and have it working in other lines,” said Zaboev. "A comprehensive approach is required."