Covid-19 has boosted Asia-Europe rail freight traffic during 2020, as Chinese exports have soared amid the global economic slowdown. However, it remains to be seen if the surge in traffic and rise of emerging routes will endure after the pandemic recedes.
While most heads were turned to the East-West transport arteries spearheaded by China’s Belt and Road investments, activity along the lesser known North-South corridors has been slowly gaining momentum. Like their East-West cousins, the North-South routes consist of a bundle of land and sea multimodal corridors and connect South Asia to Northern Europe via the Persian Gulf and the Caspian region. Unlike the China-sponsored Belt and Road Initiative (BRI) projects, however, the development of the North-South corridors follows a more multilateral and multi-stakeholder approach.
The International North-South Transport Corridor (INSTC), examined in the first part of this series, has developed slowly but steadily during its twenty years of existence. Although mired by political and financial difficulties, including new sanctions on Iran (and Russia) placed by the Trump administration, the corridor will retain its potential for the actors involved. Today, the INSTC is complemented by two other initiatives: the Chabahar International Transport and Transit Corridor; and the proposed Russia-Pakistan (Ru-Pak) Corridor. The two projects are discussed below, followed by a brief evaluation of the potential impact of the full roll-out of these emerging North-South trade routes.
The signing of an MoU during a March 22-24 by Chinese president Xi Jinping has made Italy the first G7 nation to join China’s sprawling Belt and Road Initiative, but Rome will be wise to devote sustained long-term resources to the negotiation, implementation, and follow-up of whatever comes out of these memoranda to avoid the mistakes of other BRI partners.