The Kazakh-Russian joint working group is expected to present soon a proposal
for the construction of a "Eurasia" canal linking the Caspian and Azov seas
(which in turn would give access to the Black Sea). The project entails
far-reaching geopolitical ramifications, from expanded trade and transit across
Eurasia to new energy projects and maritime access for landlocked Central Asia,
with Russia, Kazakhstan, and China among others, standing to benefit from
growing energy trade and economic relations between Europe and Asia.
The 700 kilometer planned waterway has an estimated price tag of 4.5 billion
euros (US$6.3 billion) and annual freight transit capacity of 75 million
tonnes. It will, according to one version, traverse Russia's areas of Dagestan,
Kalmykia, Stavropol and
Rostov province, and will serve as a conduit for trade in oil, as well as other
commodities and products. The Eurasian Development Bank has earmarked US$2.7
million for a feasibility study of the "Eurasia" canal and "Volga-Don-2"
shipway - another possible yet more costly and lengthy option.
The idea to build a canal linking the Black and Caspian seas is not new. Russia
considered building a similar waterway at various times, but complications,
including recurring wars, have often stood in the way. At least 30 related
projects were under review in the days of the Russian empire alone. Today, the
construction of the shipway is a real possibility, though not without concerns
related to potential financial constrains, lack of water to fill the canal, and
its adverse ecological impact.
Opponents further argue there is little need for the canal because the Caspian
Pipeline Consortium, and the Baku-Ceyhan, Atyrau-Samara, and Baku-Novorossiysk
pipelines have plenty of room for any necessary expansion, while some Russian
ports and the existing Volgo-Don shipway (an old canal with annual transit
capacity of 11 million tonnes) are allegedly still underutilized.
Russia and Kazakhstan, however, seem determined to launch this geopolitically
ambitious project. In 2007, then Russian president Vladimir Putin called for
the expansion of inland waterways within the country, stating that a canal
connecting the two (Caspian and Azov) seas "will not only provide the Caspian
bordering countries with access to the Black and Mediterranean Seas, but
qualitatively change their geopolitical position and allow them to become the
maritime powers". The project is expected to contribute to the development of
Russia's southern regions and the Caucasus.
In the same year, Kazakhstan President Nursultan Nazarbayev expressed the
country's interest in the project: "We need different routes: naturally, these
commodities - oil and gas - will follow the routes that will prove to be
economically sound for us. The construction of a new 'Eurasia' shipway from the
Caspian to the Black sea can become a landmark project. ... This canal would be
a powerful outlet for the entire Central Asia seaward across Russia."
The Caspian shelf is home to 20 oil and gas fields and more than 250 oil lands.
Oil deposits in the area contain about 6% to 10% of the world reserves. If
built, the shipway will reportedly create competition for the TRACECA transport
corridor and Baku-Ceyhan pipeline projects. The canal will allow Russia to
enhance its leverage in the dynamically developing Kazakhstan and, according to
Alexander Dugin, might lead to a "new oil cartel equal to OPEC" should Iran and
Azerbaijan join the scheme.
Whether the "Eurasia" canal initiative fails or not, the regional states can
explore in parallel other transport options involving China, Azerbaijan,
Georgia, Afghanistan, and Iran to reach regional and global markets by both
land and sea. As Nazarbayev noted, if Kazakhstan does not secure access to the
"seven seas", "we [the country] will be forced to seek other alternatives". Of
the 20 largest oil producers and 15 oil exporters, Kazakhstan is the only
country that does not have access to seas.
The landlocked yet resource-rich Kazakhstan - keen on attracting foreign direct
investment, pursuing deeper integration into the wider global economic
networks, and diversifying foreign economic and political relations - is
seeking to create a Eurasian Transit Center, with the "Eurasia" waterway being
one of its many other initiatives. The "Eurasia" shipway will enable both
Russia and Kazakhstan to diversify their trade routes, especially considering
projected increase in the oil and gas production in the Caspian.
Kazakhstan alone is expected to produce 150 million tonnes of oil by 2015,
doubling the current annual oil production of 76 million tonnes.
The canal's construction will also open the way for expanded transit of cargo
from Central Asia and China into the Black Sea and Europe. Today, China and the
European Union engage mostly in sea-based trade, with overland trade
representing merely 2% of total cargo flowing between Europe and Asia by sea.
Asia's trade with Europe, therefore, offers immense potential for Eurasian
countries, particularly Russia and Kazakhstan, which can capitalize on their
geographic position and benefit from expanding their regional and continental
infrastructure in the area of energy, trade, and transport.
Kalmyk authorities in Russia have already held negotiations with India and
China on engineering works and hydro-construction. Beijing, in turn, has
expressed its desire to fund the construction of the "Eurasia" canal. The
latter may have an international status and is expected to be much cheaper and
faster, generating millions of dollars in transit fees for Kazakhstan and
Russia. To put this in perspective, if the "Western Europe - Western China"
road connecting China, Russia, and Kazakhstan obtains a 5% transit share of
current Europe-Asia sea cargo, the transit countries could receive around $3
billion in transit fees annually.
The proposed "Eurasia" canal is but one manifestation of the expanding economic
space on the Eurasian continent in general and Central Eurasian area in
particular. This expansion proceeds in the fields of transport, energy, and
trade, driving geopolitical changes in the Caspian and Central Asian regions
where Russia, China, and Kazakhstan are positioned favorably to capitalize on
their roles as trade, energy, and transit centers. If completed, the canal has
the potential to augment these trends and roles, producing yet another
configuration on the Eurasian chessboard.
Roman Muzalevsky is an international affairs and security analyst. He can
be reached at muzalevsky@hotmail.com.
Head
Office: Unit B, 16/F, Li Dong Building, No. 9 Li Yuen Street East,
Central, Hong Kong Thailand Bureau:
11/13 Petchkasem Road, Hua Hin, Prachuab Kirikhan, Thailand 77110
