When analyzing current trends in global transportation routes, geopolitical events such as the war between Russia and Ukraine and conflicts in the Middle East appear to be causing logistics routes to be re-evaluated and changed. The South Caucasus countries are also interested in creating new transport corridors.
Currently, Azerbaijan is working together with Turkey and Central Asian countries to develop the Trans-Caspian International Transport Route (Middle Corridor, TBNM) and increase its cargo transportation capacity.
Armenia also does not want to be left behind in this promising field. Prime Minister Nikol Pashinyan stated that thanks to the implementation of the “Peace Junction” project initiated by his country, revenues of 10 billion dollars can be obtained.
However, these ambitious statements by Pashinyan have no economic basis, because Armenia, even with the most optimistic forecasts, cannot obtain this amount of revenue from transit. Considering the country’s limited transit potential, these predictions seem unrealistic.
In the first six months of this year, Armenia paid approximately $13 million for trucks to pass through Georgian territory. It should be noted that in January-June 249.4 thousand trucks passed through the territory of Georgia and 32.3 million dollars entered the country’s budget. Of the heavy trucks transiting through Georgia, 99,760 fell into Armenia. Armenia paid 12,968,800 US dollars for this transit. A fee of $130 is paid for each truck that passes through Georgia territory.
It should be noted that since January 2021, Georgia’s budget has received a total of approximately 73 million US dollars from transit taxes applied to Armenian trucks. This shows that Georgia has not received $1 billion in truck revenue from Armenia for three years.
Therefore, it is unrealistic for Armenia, unlike Georgia, to earn an imaginary amount of income from vehicles passing through its territory. For Armenia to earn 10 billion dollars, approximately 77 million trucks must pass through its territory. It is practically impossible to reach that figure.
By the way, the Armenian government claims that the Armenian transport system will be able to ensure the transit of 4.7 million tons of cargo in the first year after the launch of the “Peace Junction” project. At the same time, this figure is expected to reach 10 million tons in 2050.
If we take into account that most of the cargo transportation will be carried out by cars, and if we assume that the average capacity of a truck is 10 tons (according to international statistics, this indicator varies between 15 and 20 tons), 26 million Trucks can pass through Armenia in 26 years. That’s only one-third of the number of machines needed to make the $10 billion needed.
Even in Armenia they understand that N. Pashinyan’s ideas in this regard are utopian. For example, in an article published in the publication “Zham.am”, it was noted that the “Peace Junction” project proposed by N. Pashinyan is actually nothing more than deceiving people: “Over time, it can irritate everyone , and the regional states will punish Armenia for such an approach and make a collective decision.
Therefore, given its limited and landlocked transportation infrastructure, Armenia is unlikely to achieve such high transit volumes. Furthermore, the implementation of large-scale transportation projects requires significant investments that are not observed in Armenia. Potential investors consider infrastructure, political stability and integration into regional projects to be key factors for investment decisions. Currently, unlike neighboring countries such as Azerbaijan, Armenia is excluded from major regional initiatives, reducing its chances of attracting capital.
Therefore, the statements of the Armenian leaders about the possibility of significantly increasing transit revenues are justified more politically than economically. While Azerbaijan actively promotes infrastructure projects that integrate it into international transportation networks, Armenia is forced to face serious limitations, such as lack of access to the sea and insufficient infrastructure development. As global transportation routes and corridors continue to transform, a key success factor for countries in the region will be the ability to integrate into existing and evolving logistics systems. Taking advantage of its natural and geopolitical advantages, Azerbaijan already occupies a more favorable position than its neighbors in the South Caucasus.
Information Agency “Informe”
