The Middle Corridor could bring Azerbaijan billions of dollars: World Bank forecast

Realizing the full potential of the Trans-Caspian International Transport Route (TITR, Middle Corridor) could provide Azerbaijan with additional GDP growth of 1.84%, which at current prices amounts to approximately 1.3 billion US dollars.

As Report conveys, this is stated in a World Bank (WB) report titled "Integration: World-Class Trade Logistics Along the Trans-Caspian Transport Route."

The expansion of the corridor's operations will also contribute to an increase in total employment in the country by 1.5%. The key drivers of economic growth for Azerbaijan will be the increase in revenues from transit freight transportation, the rise in business activity in the port and railway sectors, as well as the deepening of trade ties with Central Asian and European countries.

The bank's analysts emphasize that achieving these targets requires Azerbaijan to continue modernizing its port and railway infrastructure, along with implementing digital solutions to accelerate customs procedures.

According to the report, the development of the TITR could increase the aggregate GDP of participating countries by 3.3% over the long term, equivalent to 58 billion US dollars at current prices. Total employment in the corridor countries (Azerbaijan, Armenia, Georgia, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, Turkey, and Uzbekistan) will increase by 2.9%.

The maximum absolute GDP growth is projected for the region's large economies: Turkey (+47.1 billion dollars, or 4.11%) and Kazakhstan (+6.14 billion dollars, or 2.22%). For Azerbaijan, a GDP increase of 326 million US dollars (0.43%) is expected. In relative terms, the greatest benefits will be gained by small landlocked economies, primarily Kyrgyzstan (GDP growth of 4.83%) and Georgia (+3.61%).

The WB indicates that unlocking the corridor's potential will require not only investments in infrastructure facilities but also comprehensive institutional reforms encompassing digitalization and the restructuring of state-owned transport companies.

"Although Armenia is not currently among the TITR host countries, it is expected to establish direct physical connections with the route in the 2030s. Since the analytical framework of this report covers the period from 2023 to 2040, Armenia is included in the calculations conducted," the World Bank notes.