Regional transportation routes: How Georgia's transit role is changing in light of new realities

Georgia’s changing role in transit

Gita Elibekyan (Tbilisi)

Marlena Hovsepyan (Yerevan)

Georgia plays a pivotal role in connecting Central Asia to Europe, with 1,467 kilometers of international transit roads running through the South Caucasus nation. Freight is transported through Georgia by ship, train and automobile.

Road transport accounts for 59 percent of Georgia’s total freight volume, amounting to approximately 17.2 million tons annually.

From January to June 2024, 249,400 trucks passed through Georgia, generating 87.2 million lari (about $32.3 million) for the state treasury.

Of that, over 40 percent (around $13 million) came from Armenian trucks, which represent about 40 percent of all vehicles using the “Georgian corridor.” The only land route connecting Armenia to Russia (the Mtskheta-Stepantsminda-Lars road) runs through Georgia.

The economic benefits for Georgia are significant. Each transit vehicle pays 350 lari (approximately $130) for crossing the country, a fee that has increased from 200 lari (about $75) since 2022.

The number of trucks crossing the Georgian border has steadily risen: 315,300 in 2020, 322,100 in 2021, 496,300 in 2022, and 520,000 in 2023. In the first eight months of 2024, 336,402 trucks have already crossed.

New Realities: A Perspective from Tbilisi

Recent regional developments pose a threat to Georgia’s long-standing transit role, which has been dominant for decades.

Following the 44-day Nagorno-Karabakh war in 2020, Armenia and Azerbaijan agreed to unblock all economic and transportation routes in the region. Armenia committed to ensuring safe transport connections between Azerbaijan and Nakhchivan to facilitate the unhindered movement of people, vehicles, and goods in both directions. In Tbilisi, there are concerns that the potential unblocking of regional routes and infrastructure could significantly impact Georgia’s transit role.

Major regional events have consistently influenced the volume of transit traffic in the country, notes Paata Tsagareishvili, director of the Georgian Transport Corridor Research Center.

“However, we expect increased competition in the near future. If relations between Armenia and Azerbaijan are normalized, the road connecting Azerbaijan to Nakhchivan and Turkey will open through Armenian territory, presenting a serious challenge to Georgia’s transit route. Naturally, we anticipate a decrease in cargo through Georgia,” he explains.

Tsagareishvili’s research indicates that the renewal of rail traffic through Armenia could lead to the reopening of additional routes as well. This study was conducted amid ongoing regional changes following the Nagorno-Karabakh conflict.

Armenia produces iron, perlite, and other metals, which are transported through Georgian ports to China and other countries. The opening of these routes would result in significant losses for Georgia, particularly in its role as a key railway carrier.

“Georgia is set to lose transit of a substantial volume of cargo—about 1.5 million tons,” says Tsagareishvili, referencing his research.

The country’s transit role may face serious challenges in the near future due to a variety of external and internal factors, including the elections in Georgia on October 26, potential political instability, modernization of transit communications, additional infrastructure projects, and the ongoing Armenia-Azerbaijan dialogue, notes Georgian political analyst Nika Chitadze.

“Georgia’s transit role has undergone some changes, especially in the wake of Russia’s invasion of Ukraine, which has increased cargo transport through Georgia. As for the Nagorno-Karabakh conflict, the Armenia-Azerbaijan agreement has yet to be signed, and despite this, Georgia continues to maintain its transit role. Nevertheless, I believe that this agreement and the unblocking of regional communications, including connections between Armenia, Azerbaijan, and Turkey, serve the interests of all involved countries,” Chitadze asserts.

According to the expert, Georgia’s access to the Black Sea ensures that its geopolitical and strategic position will allow it to maintain a dominant transit role.

Georgia Sees Construction Boom

Georgia has embraced its role as a transit country in North-South and East-West projects. New transport hubs are emerging, and transit roads are being modernized. Transport specialist Paata Tsagareishvili points out that Georgia has yet to fully realize its transit potential:

“Our center conducted a study in 2021 to assess Georgia’s transit potential. Our projections that cargo transport would reach around ten million tons in 2024-2025 have not materialized; the influx of additional transit cargo has not exceeded four to five million tons. This indicates that we have not fully utilized the potential of the transit corridor due to various issues. The conclusion is clear: the infrastructure is not yet fully ready,” says Tsagareishvili.

Currently, Georgia is experiencing a construction boom in both road and railway development. The country will have six major transit corridors: the East-West route (Axis 1), the North-South route (Axis 2), the Southern tourist route (Axis 3), the Kutaisi tourist-industrial route (Axis 4), the route connecting to the Black Sea coast (Axis 5), and the Tbilisi circular route (Axis 6). These six corridors are designed to enhance transit transportation. Tsagareishvili is confident that in five years, Georgia will have seamless, stable, and secure transit roads.

New Realities: A Perspective from Yerevan

Georgia’s advantageous geographic position and access to the sea have established it as a key player in the South Caucasus region. In the post-Soviet period, conflicts involving Georgia’s neighboring states have transformed the country into a vital international communication hub.

Georgia’s transit significance for Armenia becomes increasingly apparent when considering the policies of its two neighbors—Azerbaijan and Turkey—which have effectively hemmed Armenia in. Through Georgia, Armenia connects to Russia and, via Georgian ports, to the European continent, allowing it to integrate into the global economy and maintain essential connections at national, regional, and international levels.

After the 2020 War: A New Landscape

While the South Caucasus may not occupy a significant place on the world map, it has always drawn attention that extends beyond its geographic size. In 2020, following the latest Nagorno-Karabakh war, the region found itself once again at the center of interest from major global players, not only in terms of attention but also in geopolitical rivalry. Western countries have focused on establishing communication channels that bypass Russia.

“As for Central Asia, all countries in this region are currently exporting to global markets through China and Russia. For alternative routes, cooperation with Azerbaijan is essential. One route runs through Georgia to the Black Sea, while another, potentially larger one, would go through Azerbaijan, Armenia, and Turkey. Given these considerations, we need a peaceful agreement between Azerbaijan and Armenia,” said James O’Brien, the U.S. Deputy Assistant Secretary for European and Eurasian Affairs, in a recent interview.

The reconciliation between Armenia and Azerbaijan and the signing of a peace treaty between Yerevan and Baku have gained increasing importance, particularly in the context of unblocking communication channels for key players. This issue is a central point in negotiations regularly held on either Western or Russian platforms.

Following their victory in the bloody 2020 war, Azerbaijan and Turkey are also eager to establish a route through Armenian territory and are pressuring Yerevan to accept their terms.

By labeling the route through the Syunik region as the “Zangezur Corridor,” they aim to gain control over it at Armenia’s expense. Analysts agree that the connection between Azerbaijan and Nakhchivan is crucial for these two countries, primarily from a geopolitical perspective—to extract concessions from the defeated Armenia—and only then do they consider its economic significance.

Additionally, Armenia could benefit economically from the opening of this transit route. However, it opposes the idea of the route operating outside its jurisdiction, as demanded by Baku. Instead, the country proposes that this regional route be unblocked within the framework of Armenian sovereignty. Yerevan has presented its vision for unblocking in the “Crossroads of the World” project.

“This involves four more or less distinct projects aimed at launching a large ‘East-West’ corridor through Armenia, which currently operates through Georgian territory. Since it is under Georgian sovereignty, many are not satisfied with this,” explains political analyst Grant Mikaelyan as he outlines the four main projects put forth by global powers.

“One of these is the Chinese ‘Middle Corridor’ project, which connects Southeast Asia to Europe via various routes, one of which passes through the South Caucasus. The second project can be called Russian: it opens up all infrastructure between Armenia and Azerbaijan, thereby linking all connections between Georgia and Russia, thus further integrating the South Caucasus with Russia. The third project is the Turkish initiative, which aims to grant Turkey seamless access to Azerbaijan and, consequently, the Caspian Sea via Armenia, allowing it to reach Central Asia and become a geopolitical player. The fourth is the Western project, which envisions the South Caucasus as a transit zone bypassing Russia.”

According to the analyst, there is competition between these projects, but there is also the potential for their combination and cooperation among the proposing countries. For example, negotiations are attempting to merge the Turkish unblocking option with Western, Russian, or Chinese alternatives. Turkey is trying to “resell” the corridor to other players as an opportunity, and in many cases, thanks to its intensive and effective diplomacy, it has succeeded, the political analyst notes.

However, from a broader political perspective, a crucial question arises: Are other major players interested in allowing Turkey to achieve its aims? Mikaelyan continues, noting that there is a clear message from Iran and France opposing any Turkish gains.

Thus, if these countries can contain Turkey and if Armenia collaborates effectively with them, it would help. If not, Turkey will undoubtedly attempt to secure an uninterrupted route through Armenian territory. This could happen in two ways: through the occupation of Armenian territories, which is the more likely scenario, or by establishing a corridor through Armenia that remains outside its control, though this is less probable.

Grant Mikaelyan notes that Turkey used the term “Zangezur Corridor” a century ago in the 1921 Moscow Treaty. Turkey has not lost its desire to obtain it, and in the political analyst’s view, the 44-day war aimed precisely at this goal.

Georgia’s Perspective on Transit through Armenia and Azerbaijan

Former Georgian President Mikheil Saakashvili stated in an interview with Mtavari Arkhi that the “Zangezur Corridor” would turn Georgia into an amputated entity on the South Caucasus map, rendering it unwanted by anyone. A similar sentiment was expressed by former Defense Minister Tina Khidasheli.

For Georgia, the opening of communication channels through Armenia could pose several challenges, the first of which is the potential loss of its critical transit role in the South Caucasus, both economically and geopolitically.

Moreover, although Tbilisi traditionally enjoys warm relations with Azerbaijan and Turkey, political analyst Grant Mikaelyan believes there is legitimate concern in Tbilisi regarding the expansionist policies of its neighbors, who lay claim to internationally recognized sovereign territories of other countries.

“Azerbaijan’s aggressive, uncompromising approach to contentious issues from the standpoint of a regional hegemon certainly makes Georgia more vigilant and raises concerns in Tbilisi, regardless of who is in power,” says Georgia expert Johnny Melikyan.

He emphasizes that, despite the lack of public statements, there is certainly concern in Georgia, particularly since the delimitation process with Azerbaijan remains unresolved. Some Georgian territories are marked on Azerbaijani maps as their own, and Baku’s actions can be interpreted within the framework of the so-called “Western Azerbaijan,” which implies encroachments on Armenia’s sovereign territory.

Iran, another neighbor of Armenia, frequently articulates its red lines, explicitly stating that changes to borders in the region are unacceptable. While Georgia does not openly declare its own red lines, this does not mean they do not exist, Melikyan said, stressing the importance for Yerevan to build close cooperation, dynamic relations, and mutual trust with neighboring Georgia and Iran to counter Turkey’s and Azerbaijan’s expansionist policies.

At the same time, the expert is not optimistic about the future of establishing connections through Armenia’s Syunik region, given the deep-seated disagreements among the parties involved and major players.

“Even if the blockade is lifted in five to ten years, I don’t think Azerbaijan will have any real interest in this matter, which means that the Georgian route will remain the primary one for the foreseeable future,” Melikyan asserts.

Political analyst Grant Mikaelyan believes that Turkey and Azerbaijan will seek to establish a corridor through Armenia’s sovereign territory at any cost, with military action being a more likely route to achieving this goal. Although Tbilisi emphasizes its neutral role in the conflict between neighbors and opposes resolving issues through military means, Mikaelyan argues that Georgia lacks the potential to deter possible negative developments. He stresses the importance of maintaining and deepening relations, as well as establishing a new agenda in Armenian-Georgian ties, and advocating for collaborative efforts in this direction from both sides.

In the coming years, Georgia will continue to serve as the exclusive transit route for Armenia.

Armenian analysts agree that the perceived danger of opening Armenian-Azerbaijani communication channels for Georgia is exaggerated. Georgia has a reputation as a reliable partner, which will help it remain a vital player for both regional and non-regional states. Furthermore, even if communication between Azerbaijan and Nakhchivan is established, it is unlikely to meet current demands, particularly from Turkey. The potential of the ports of Batumi and Poti will always be in demand.

Certainly, opening communication routes through southern Armenia may have some effect, but it cannot alter Georgia’s dominant role in the region.

Georgia’s changing role in transit

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