Azerbaijan emerges as rising global transportation hub with key strategic projects

Transportation and logistics play a pivotal role in the global economy, serving as a backbone for international trade and economic cooperation. In recent years, globalization and technological advancements have reshaped the way these sectors operate, placing new demands on national economies and their transport networks. Azerbaijan, strategically positioned at the crossroads of Europe and Asia, has long been a central hub for trade and logistics, maintaining its vital role despite the shifting tides of political and economic relations. In response to modern challenges, the country has undertaken several ambitious projects to further bolster its transport infrastructure and secure its place in the evolving global landscape.

Azerbaijan's strategic role as a transport hub

Historically, Azerbaijan has acted as a bridge between the East and the West, facilitating trade between the regions. With its favorable geographical location, Azerbaijan has continued to leverage its position to facilitate the movement of goods between Europe, Asia, and beyond. The country’s integration into a rapidly evolving global transport system ensures its continued relevance in international trade.

In recent years, Azerbaijan has been actively pursuing multilateral initiatives to modernize and expand its transport sector. A number of significant projects, such as the “Action Plan for 2024-2026 on Increasing the Transit Potential of International Transport Corridors Passing Through the Territory of the Republic of Azerbaijan” and the State Program for 2025-2030 aimed at improving Baku's transport infrastructure, are key to achieving this goal. Additionally, agreements like the “Agreement between the Government of Azerbaijan and the Russian Federation on Cooperation in Developing Transit Cargo Transportation along the North-South International Transport Corridor” underscore Azerbaijan’s commitment to advancing its transport capabilities.

Azerbaijan also continues to be an active participant in various international forums and organizations. For instance, the country was represented at the Caspian Economic Forum held on February 17-18, alongside Russia, Kazakhstan, Turkmenistan, and Iran.

PM Asadov highlights growing economic cooperation and environmental challenges at Caspian Forum

In his address, Azerbaijan's Prime Minister, Ali Asadov, emphasized that the Caspian Economic Forum serves as a vital platform for addressing key economic and trade cooperation issues among the countries bordering the Caspian Sea. He highlighted that the Joint Communique from the Second Forum, held in Moscow in 2022, reaffirmed the participants’ commitment to increasing trade volumes, boosting the region's investment appeal, and enhancing the economic competitiveness of the Caspian Sea nations. Asadov underscored the dynamic development of economic and trade relations between Azerbaijan and the Caspian countries.

"It is encouraging to note that by the end of 2024, Azerbaijan’s trade turnover with the Caspian countries has grown by more than 6 percent," the Prime Minister remarked. He also noted the significance of the 2023 entry into force of the Agreement on Economic and Trade Cooperation, signed in Aktau in 2018, between the governments of the Caspian littoral states. Asadov expressed confidence that the agreement's implementation will foster growth in key sectors such as trade, industry, agriculture, tourism, and more.

In addition, Asadov pointed out that several collaborative frameworks and mechanisms are currently in place between the Caspian Sea countries, laying the groundwork for comprehensive sectoral cooperation. Substantial progress has been made in executing decisions and agreements at the highest engagement levels.

"Undoubtedly, the 2018 Convention on the Legal Status of the Caspian Sea, signed in Aktau, remains the cornerstone of our collective efforts in the region," he added. Following the Second Forum, significant agreements were reached, paving the way for the transformation of the region into a major international transport hub, with a robust infrastructure in the transport sector.

Forum participants were briefed on Azerbaijan’s role in advancing the "East-West" and "North-South" international transport corridors, which align with the interests of all regional countries. Furthermore, Asadov emphasized that, given the increasing volume of cargo passing through Azerbaijan’s territory, the country is investing substantial funds to enhance the capacity of these corridors by modernizing its transport infrastructure.

"We firmly believe that the Caspian Sea countries must continue their efforts to ensure that the Caspian remains a sea of peace, harmony, good neighborliness, and effective international collaboration. This will require decisive actions to guarantee security and stability in the region," the Prime Minister affirmed.

Asadov also highlighted the promising future unlocked by initiatives in green energy and digital technologies, stressing that cooperation in these essential sectors ensures a sustainable and environmentally secure future for the region. He further noted the significance of the COP29 climate conference, which was hosted for the first time in the Caspian region. The conference’s success affirms the region's importance on the global climate agenda and plays a pivotal role in attracting investments in clean technologies and sustainable development.

Additionally, the Prime Minister addressed the growing environmental concerns surrounding the Caspian Sea, particularly its shrinking water levels. He called for a unified approach to tackling the ecological challenges facing the Caspian. "The issue of the Caspian Sea's shallowing was comprehensively discussed at the VI Caspian Summit. In order to identify the causes and determine measures to prevent further shrinkage, President Ilham Aliyev of Azerbaijan proposed the creation of an expert group," Asadov explained. He expressed hope that the necessary agreements for organizing the first meeting of this working group in Baku will be finalized soon.

During the forum, key figures, including Iranian Deputy Minister of Roads and Urban Development Said Rasuli, highlighted the importance of developing digital transport corridors to enhance cooperation between Caspian littoral states. This initiative reflects Azerbaijan’s ongoing efforts to modernize its transport networks while promoting regional cooperation.

Key transport projects and initiatives

Azerbaijan is deeply involved in several high-impact transport projects that connect various regions, contributing to the global trade ecosystem. Among these, the North-South International Transport Corridor (NSTC) is one of the most significant and promising initiatives.

North-South International Transport Corridor

The North-South International Transport Corridor, which links Southeast Asia with Russia and Northern Europe, has become increasingly important for facilitating trade and transport. Originally launched in 2000 through an agreement between Russia, Iran, and India, the corridor saw Azerbaijan join in 2005. Since then, Azerbaijan has been positioned at the crossroads of key transcontinental corridors, enhancing its status as a crucial transport hub within Eurasia.

The NSTC’s expansion has been driven by significant infrastructure improvements and the simplification of border-crossing procedures. As a result, the volume of cargo transported along the corridor has increased significantly, with 9.3 million tons of cargo passing through the corridor in 2023, a growth driven by continued cooperation and the optimization of logistics. Over the past 17 years, cargo transport along the corridor has increased eightfold, with 814,000 tons of transit cargo passing through Azerbaijan, marking a 28 percent increase over the previous year.

Ashgabat Transit Agreement

The Ashgabat Transit Agreement aims to create a comprehensive framework for facilitating transport cooperation between participating countries in the Caspian region. The agreement enhances trade efficiency by fostering infrastructure improvements, harmonizing customs procedures, and encouraging multimodal transport solutions. Azerbaijan's participation in this initiative further strengthens its position as a regional transport leader, connecting multiple transport corridors across Central Asia, the Caucasus, and Europe.

Transport Corridor Europe-Caucasus-Asia (TRACECA)

The TRACECA (Transport Corridor Europe-Caucasus-Asia) initiative, initiated in 1993, is another major project that underscores Azerbaijan's critical role in global transportation. This corridor connects Eastern Europe with Central Asia and the Caucasus, providing a vital link for trade across the continents. Azerbaijan’s infrastructure upgrades and active involvement in TRACECA contribute significantly to the diversification of trade routes, offering an alternative to traditional maritime and overland transport options.

Economic and Trade Cooperation of the Caspian Littoral States

Azerbaijan is also involved in the Agreement on Economic and Trade Cooperation of the Caspian Littoral States, which fosters closer economic and transport ties among the countries bordering the Caspian Sea. By enhancing bilateral and multilateral transport arrangements, Azerbaijan supports regional stability and economic growth, boosting the flow of goods and services across the Caspian and beyond.

Membership in global organizations

Azerbaijan's participation in key international organizations further solidifies its role in global transportation networks. As a member of the BRICS (Brazil, Russia, India, China, and South Africa) group and the Shanghai Cooperation Organization (SCO), Azerbaijan benefits from enhanced cooperation in transport, trade, and infrastructure development. These platforms offer new opportunities for Azerbaijan to collaborate on digital innovations, such as the development of digital transport corridors that could streamline cross-border logistics and reduce bottlenecks in trade flows.

Additionally, Azerbaijan’s membership in the Economic Cooperation Organization (ECO) and its observer status in the Eurasian Economic Union (EAEU) allow the country to influence regional policies, ensuring smoother integration with major trading blocks and further improving its transport infrastructure.

In conclusion, Azerbaijan’s concerted efforts to modernize its transport infrastructure and collaborate with global partners are poised to yield significant benefits. The country’s strategic position, combined with its ambitious transport projects, will allow Azerbaijan to remain a central player in the evolving world of international trade and logistics.