Ambassador Zviad Kvatchantiradze

Executive Secretary of the Permanent Secretariat Intergovernmental Commission (IGC) TRACECA

In past several years potential of the international transport channel Europe-Caucasus-Asia - TRACECA, that runs via South Caucasus to connect Central Asian countries with continental Europe and West, at large becomes a factor stimulating development of trade-economic cooperation between Europe and Asia and at the same time economies of country-partners of this intergovernmental project. In fact, in past several years TRACECA turned from a project into the program consisting of specific projects of development of transport-communication infrastructures of the above regions.

After South Caucasus and Central Asian regions got independence they began looking for additional ways to get access to world markets. Realization of their plans became possible very through TRACECA program which from the very beginning was encouraged by the European Union.

But, let’s have a look at perspectives of development of TRACECA.

Analyze of main versions of development of world economy shows that main finance, trade and information flows in 21th century will center on USA-Europe-Asia triangle. Hence, important task of company-partners of TRACECA (Azerbaijan-Armenia, Bulgaria, Georgia, Kazakhstan, Kyrgizistan, Moldova, Romania, Tajikistan, Turkmenistan, Turkey, Uzbekistan, Ukraine) is to put their geopolitical and economical abilities into practice through development of transport-communication networks....

Today’ trade turnover between Asia and Europe exceeds $2 trillion a year, at that, share of transport expenses amounts to $200 billion.

TRACECA runs along a high road linking Europe and Asia, and is on the core of world trade triangle, important today and in the coming decade.

Having looked at TRACECA through development of trade relations between Europe and Asia and location of main commodity producers of Asia and consumers of Europe, on the one hand, and birth of goods turnover of possible country-owners of goods on the other hand, the conclusion arrives that goods delivery to Europe via TRACECA transport channel (East -West) are much more attractive than other alternative routs. Suffice it to say that distance from Yokohama to the largest western European ports (Rotterdam, Hamburg, Antwerp) along the main trans-oceanic rout is two times longer than along TRACECA rout.

Today the corridor of TRACECA, to a certain extent, through investments and technical aid of the European Union and other international finance institutes, has constantly developing transport network and international sea ports aimed at transit shipping. After signing of “Basic Multilateral Agreement on International Transport for Development of the Corridor Europe-Caucasus-Asia” (TRACECA) on September 9, 1998 by 12 countries of the region there was created and modernized legal base to organize transit shipping on higher level.

Most important is another circumstance: TRACECA transport network runs over territories of countries enrich with promising mineral and energy resources. These regions have not as far lost highly experienced manpower. In the future development of transit in these countries will surely help rising production and employment. Regardless of political or economical changes in today’s world, the international transport corridor TRACECA selected, evaluated and tried in experience remains a stabilizing factor that creates investment climate and positively drives global processes.

Headlong development of telecommunication and informational processes in 21th century that at the same time undermines development of electron trade through the world network Internet, drastically rises importance of transport. But there is also another factor - growth of electron auctions gives birth to another problem of rising speed and service of delivery of ordered goods and consigns. Fast shipping technologies will most likelihood meet needs of air, truck and railway transport. At that, there should be analyzed huge number of factors - speed and safety of shipping, distance necessary to be overrun by forwarder, mode of transport. It is necessary to emphasize that on the market of transport service first roles are to be held by transit, new short transport routs, high forwarding stndards and attractive and competitive tariff, that is wide-known in transit shipping “commercial triangl” (Time-Service-Tariff). Nevertheless, in the future the sea transport will secure its positions on transoceanic routs. Moreover, it is necessary to note that some shipping companies carry researches and negotiations with shipbuilders about building of container ships of new generation.

TRACECA program like any other has both supporters and opponents.

In addition to TRACECA partners among supporters of development of TRACECA corridor are first of all the European Union and the USA. Probably, among supporters of TRACECA are should be named Chine, Japan, Republic of Korea and other countries which support close economic cooperation between East and West.

Today, the European Union is the main donor of TRACECA. Particularly, since 1994 to present, within the scope of budget lines of the European commission 120 million Euro were granted to realization of 50 technical and investment projects. Chief purpose of EU-TRACECA program is deepening of regional cooperation between TRACECA countries and creation of terms and conditions to integrate the transport corridor TRACECA with Trans-European transport nets (TEN’s).

The USA adopted a special law “Silk Road Strategy Act” which also supports development of regional countries of TRACECA. This Act pays great attention to development of transport-communication infrastructures. The Act considers necessary to develop the transport corridor, in order to strengthen the new independent states on the one hand, and on the other hand - to provide regular, continues outlet of Caspian energy resources to international markets.

Like any large project of inter-regional importance, TRACECA has its competitors, this even greater proves its economic importance. Hence, in September 2000 in St. Petersburg, Iran, India and Russia signed an agreement about creation of transport corridor “North-South” initiated by Russia commissioning of which will require about $2,8 billion in coming 5 years, reported the Transport Ministry of the Russian Federation. We think there is no direct competition of this Russian project with TRACECA because goods shipped along TRACECA rout (Central Asia-Europe and vise versa) will never follow “North-South” rout which earned the name the new Russian project. The matter concerns cooperation of transport agencies rather than competition, receding political ambitions into the background and being guided by economic interests of these agencies.

The matter concerns cooperation between agencies rather than competition, receding political ambitions and into the background being guided by economic interests of these agencies.

Nevertheless, even if politics prevail in development of new transport routs there should be taken into account that economy is a very stubborn thing. Recently, on one of meetings in Kazakhstan Russian expeditors said, if this is economically efficient they are prepared to carry freight along the whole TRACECA corridor even from Vladivostok to Moscow. In fact, Russian capital somehow or other has its important role in TRACECA corridor and interests of TRACECA countries to develop cooperation with Russian transport companies are unshakable. We just have to get used to the idea that each country has its sovereign right to independently develop its transport relations and has its own alternatives. In consideration of many publications of TRACECA opponents which filled out main Russian mass-media and internet-sites and point to competitiveness of Trans-Siberian railway trunk and transport project “North-South” compared with transport corridor of TRACECA can unambiguously state that transport channel TRACECA has come about, exists and develops.

... Russian capital somehow or other has its important role in TRACECA corridor and interests of TRACECA countries to develop cooperation with Russian transport companies are unshakable ...

Sharp growth of transit shipping evidences of TRACECA’s consistency. Compared with 1996, in 2001 goods turnover grew over 200%.

In addition, during historic summit convened on September 9 in Baku after signing of the “Basic Multilateral Agreement on International Transport for Development of the Corridor Europe-Caucasus-Asia” there was founded Intergovernmental Commission TRACECA, executive organs of this commission are - Permanent Secretariat of the Intergovernmental Commission (IGC) TRACECA and representative offices in TRACECA countries which will maximally help bringing TRACECA’s goals to reality.

In the foreseen future, 2003-2005, TRACECA countries are going to realize projects at the amount of over 70 million Euro. These projects include both investment plans and technical support to further development of the infrastructure. Main goals envisaged in future projects could be grouped as following:

1. Introduction of new modern forms of investments, tried and applied in many countries (consessions, “build-operate-give”);

2. To allot most part of international grants and loans to development and reconstruction of transport and communication infrastructures;

3. Take measures of reasonable protectionism toward transport companies, ship-owners, ports, railways and other entities of transport infrastructure which were part of transit shipping;

4. Develop international cooperation in transit shipping, first with countries which due to their geopolitical situation are declined toward transit by TRACECA corridor. For this aim great importance will play coordinated support of the MFA of TRACECA countries in solving problems related with development of transport cooperation, purposeful diplomacy attempts to solve problems pulling dawn perspectives of transit (soon solving of Abkhaz, Karabakh and Dnestr conflicts).

Development of transit shipping by TRACECA channel is the task of governmental and national importance and is directly dependant on changes of structure policy and economic strategy of countries which signed “Basic Multilateral Agreement on International Transport for Development of the Corridor Europe-Caucasus-Asia” (TRACECA) . Rational decision of this task will drastically drive geopolitical activity of these countries and has a chance to become one of those factors that stimulate development of transport complex and economy of these countries, as well as globalization of regional integration processes in order to achieve long-term political stability.

Project’s information and photos used in the above article are helpfully provided by the Permanent Secretariat of the Intergovernmental Com-mission (IGC) TRACECA.