Opinion: Kazakhstan needs to turn Middle Corridor into economic growth

As the Middle Corridor, linking China and Europe via Central Asia, is gaining renewed importance to reduce geopolitical exposure, Astana must seize the opportunity, writes Azhar Azam.

Azhar Azam is a geopolitical analyst with a focus on economy, climate change and international security.

Kazakhstan is rapidly positioning itself at the center of the evolving Eurasian trade landscape. Russia’s war in Ukraine has disrupted northern transport routes, while instability in the Middle East has exposed vulnerabilities in maritime chokepoints such as the Strait of Hormuz, accelerating demand for alternative overland corridors between Asia and Europe.

Once considered secondary to the North Corridor, the Trans-Caspian International Transport Route, or Middle Corridor, linking China and Europe via Central Asia, the Caspian Sea and the South Caucasus, has gained renewed importance as a diversification route for states seeking to reduce geopolitical exposure.

For Astana, this represents a significant opportunity. As flows along these routes increase, Kazakhstan can reduce its dependence on hydrocarbons and strengthen its role as a regional logistics hub. The challenge, however, lies in converting greater transit activity into broader industrial and commercial development.

The potential is already evident. Freight volumes along the Corridor have tripled over the past five years, supported by investment in ports, railways and logistics infrastructure. Transit times on several segments have fallen, and capacity constraints at key nodes are being addressed.

Development finance institutions, including the World Bank, have backed rail and logistics upgrades aimed at improving efficiency and raising throughput, reflecting growing institutional confidence in Kazakhstan’s role as a bridge between Asian and European markets.

A 2023 World Bank assessment notes that while the Middle Corridor is unlikely to replace northern routes as a land connectivity option, it could capture a larger share of trade if operational bottlenecks are eased. It highlights its development relevance for Kazakhstan, Azerbaijan and Georgia, particularly in reducing reliance on narrow export structures and low-value commodities.

In a fragmented global trading environment, logistics networks are crucial to competitiveness, enabling economies to integrate into supply chains, meet regulatory requirements and move into higher-value activity. Yet physical infrastructure won’t suffice. Complementary policies, institutional capabilities and a supportive business environment are also essential for economic diversification.

Kazakhstan has begun aligning domestic reforms with these opportunities. Modernization of Kazakhstan Temir Zholy, the national railway operator, includes tariff reform, institutional restructuring, divestment of non-core assets, separation of infrastructure management from freight and passenger operations, and greater private participation in the freight market.

These measures are intended to improve efficiency, strengthen connectivity and enhance Kazakhstan’s role in east-west supply chains. Their ultimate value, however, will not be measured by transit volumes alone but by their ability to attract investment, support industrial development and generate higher-value exports.

Astana is simultaneously diversifying its external partnerships through deeper engagement with the United States across energy, transport and investment, closer ties with China, and continued cooperation with Europe to avoid dependence on any single bloc. This multi-vector approach strengthens strategic autonomy yet also exposes the country to great-power rivalry, with implications for domestic and regional development.

China’s expanding economic presence is a principal driver of regional connectivity. Trade between Beijing and Central Asia has reached record levels, underpinned by investment in transport corridors, logistics hubs and industrial capacity. This is accelerating the development of cross-regional connectivity and reinforcing China’s role as a key economic anchor in emerging supply chains.

At the same time, Kazakhstan remains anchored to legacy export infrastructure. Around 80% of its crude exports still flow through the Russia-linked Caspian Pipeline Consortium, underscoring limited change in its underlying export structure despite diversification in transport routes.

Globally, trade is becoming more fragmented as geopolitical tensions and regulatory barriers reshape supply chains. The UN Trade and Development notes that non-tariff measures such as standards, regulations and compliance requirements now impose higher export costs than tariffs in most economies, making regulatory alignment as important as physical connectivity.

For landlocked economies such as Kazakhstan, these trends elevate the importance of customs efficiency, regulatory compatibility and logistics governance as the primary channels through which connectivity is translated into economic gains.

As global efforts to enhance resilience and reduce dependence on traditional trade and energy routes continue, demand for alternative corridors is likely to grow, reinforcing Kazakhstan’s significance within emerging Eurasian logistics networks. Astana’s position will eventually be defined by whether connectivity leads to broader economic upgrading or the country remains a transit route between larger economies. Geography is creating opportunity; domestic capacity will determine how much of it Astana is able to capture.

Caption: Screenshot from the homepage of the Trans-Caspian International Transport Route (TITR) website [EUalive]