IN THE MIDDLE

Kazakhstan 2016 | TRANSPORT | FOCUS: TRANSPORT HUB OF EURASIA

With global trade becoming more and more integrated, Kazakhstan finds itself in the perfect place between east and west as well as north and south.

Of the 48 countries without access to the sea, Kazakhstan is the largest. It has forced the country to find creative ways to not lose clot in the international trading market, especially since it is located between the two main world markets. Kazakhstan has thus discovered its role as a transit country and has developed a transport and logistics infrastructure that may become the key stopover point and hub for trade between Europe and Asia. The growing trade relations between European and Asian countries only makes Kazakhstan's position more strategic.

It is located at the junction of Europe and Asia, and thus has significant transit potential, providing to Asian countries a critical link to link to Russia and Europe. Traversing through Kazakhstan provides a significant reduction in distance and time—cutting out 1,000km by avoiding Russia, and arriving in half the time compared to sea transit. Kazakhstan has the potential to significantly reorient the current flow of trade. This potential lies primarily in the unique transit possibilities of the country

An effective national transport infrastructure and its integration into the global transport system is a determining factor for economic growth. Today, the Kazakh transport sector takes up 7.5% of GDP. In 2015, the volume of cargo carried by all modes of transport was 288 million tons. One of the most ambitious projects currently being carried out in the country is the modernization of all existing railways and highways, and the building of a high-speed railway that will connect Minsk, Moscow, Astana, and Almaty. Special emphasis is being placed on western roads, which will create a channel to the Caspian Sea and beyond to the Black Sea.
The reconstruction of the international transit corridor connecting Western China and Western Europe was undertaken by an international consortium of consulting firms from Kazakhstan, Israel, and Russia. The president of Kazakhstan recently stated that this road has the potential to provide great opportunities for foreign and Kazakh entrepreneurs. He also exemplified the country's dedication to effective infrastructure, saying that between 1997 and 2006, the Kazakh government spent some KZT280 billion on building and renovating nearly 4,000km of highways.

In China, the country will soon have its own terminal in China's port of Lianyungang. Construction has already begun, and it is poised to be an integral part of the new Silk Road. The Central Asian country had been using China's port for freight transport since 1995, and in 2015 the two countries agreed on a plan to provide Kazakhstan its own terminal. In February, Kazakhstan's Temir Zholy, which operates the country's railway network, and the Lianyungang port company signed an agreement regarding the joint management of the logistics terminal at the port. It is a joint venture in which Kazakhstan will own a 49% stake and China a 51% stake. The cost of construction of the terminal is estimated at $99.3 million.

These initiatives have been carried out under the framework laid out in Kazakhstan's industrialization program and have made strides in turning the republic into a logistics hub for the region. The country is currently in the planning stages of building a grain terminal at the border with Turkmenistan in order to export eastbound grain. There are also plans to put into operation a new railway line that will connect Kazakhstan and Iran through Turkmenistan. With all the transportation infrastructure the country has planned and is re-purposing or renovating, Kazakhstan is taking full advantage of its lucrative geographic position.