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Lapis Lazuli Corridor agreement to be inked in near future

in Afghan Business

Lapis Lazuli Corridor agreement to be inked in near future

Afghan Finance Minister Eklil Hakimi in his recent trip to Georgia discussed the Lapis Lazuli transit Corridor with officials from the four countries along the Corridor: Turkmenistan, Azerbaijan, Georgia and Turkey.

According to reports, an agreement is set to be signed between the five parties in the near future.

The sides referred to the Lapis Lazuli transit Corridor as one of the priority projects connecting the transport infrastructure of Afghanistan, Turkmenistan, Azerbaijan, Georgia and Turkey.

Presently, Afghanistan imports non-alcoholic beverages from Georgia but does not export anything to there.

The Afghanistan Chamber of Commerce and Industries (ACCI) said Afghanistan can get connected to the European markets through Georgia and stressed on preparing fully to use the Lapis Lazuli Corridor for exports and imports.

Meanwhile, Finance Ministry’s spokesperson Ajmal Hamid said Georgia has agreed to establish a joint chamber of commerce in addition to expanding economic cooperation.

Its name comes from the fact that Afghanistan’s lapis lazuli and other semiprecious stones were exported through this route to Caucasus, Russia, Europe, the Balkans and Northern Africa over 2,000 years ago. Lapis Lazulli Corridor runs from Aqina in northern Faryab province and Turqundi in western Herat province of Afghanistan to Turkmenbashi of Turkmenistan which arrives in Baku, capital city of Azerbaijan, after passing the Caspian Sea. It connects Baku to Tbilisi, Georgia’s capital, and also the ports of Polti and Batumi of Georgia. The Corridor then connects cities of Kors and Istanbul of Turkey and finally ends in Europe.

The Asian Development Bank has allocated USD 130mn for the implementation of the Corridor which further integrates Afghanistan into the region via road and rail. According to a recent study by the Afghan Ministry of Commerce and Industry (MoCI), transit through Turkmenistan, Azerbaijan, Georgia and Turkey via road and rail is a viable transit route for trade with the EU, Balkans and Eastern Europe. An initiative of the Afghan Ministry of Foreign Affairs, the proposal for the Corridor received approval from the regional countries in March 2014.

The significance of the Lapis Lazuli Corridor was highlighted by the representatives of the concerned countries in the first technical working group meeting of Lapis Lazuli Corridor held in Turkmenistan on 15 November 2014. The Corridor was termed as a “shortest, less expensive, and secure passage” connecting Caucasus and Central Asia. It seeks to improve and streamline transport infrastructure and customs procedures, increase trade, create employment opportunities and bolster economic ties between the concerned nations benefitting from this trade route. The officials regarded the operationalization of the Corridor as a key factor in reviving the New Silk Road. President Ashraf Ghani also reflected on the importance of the Corridor in connecting Afghanistan with the regional countries in his speech to the American congress in March 2015 and said that Afghanistan has “already made significant headway in making the vision of the

Furthermore, the Lapis Lazuli Corridor will provide Afghanistan with an alternative trade route. Afghanistan currently relies on its neighboring countries, mainly Pakistan, for the transit of its goods. Afghanistan’s right of transit through Pakistan was recognized in the Afghanistan- Transit Trade Agreement (ATTA) that dates back to 1965. The agreement was superseded by the Afghanistan Pakistan Transit Trade Agreement (APTTA) which came into force in June of 2011. As per the agreement, Pakistan will allow Afghan trucks to carry Afghan products to the markets of China, India and other countries through the seaports of Karachi, Qasim and Gwadar Ports. However, Afghan merchants have time and again complained about the hurdles caused by Pakistani customs in exports of Afghan goods to international markets by blocking the trade routes or hiking shipping freight rate. In January 2015, as many as 2,000 Afghan containers loaded with food and non-food items were stuck at Karachi port for over two weeks due to unjustified raise in freight rates by Pakistani customs. While Pakistan has always promised to be fully committed in helping to successfully implement the APTTA, Afghanistan finds their promises dubious as transit problems on Pakistan’s soil continue to be a major impediment in boosting Afghan exports. Afghanistan Chamber of Commerce and Industries (ACCI) sees the Lapis Lazuli Corridor as the best alternative trade route for Afghanistan’s goods to reach the international markets and reduce its reliance on neighboring countries.

The U.S. supports the vision of the Lapis Lazuli Corridor which is a key component of the New Silk Road initiative. In addition to strengthening the U.S. presence in the Central Asian and South Asian regions, the Lapis Lazuli Corridor touches upon the economic and political motives of the U.S. in the Caucasus region as well where they have already established a foothold by endorsing the Baku-Tbilisi-Ceyhan oil pipeline. This pipeline is of great significance to the US as it would lessen their dependence on Middle Eastern oil and Russian pipelines, as well as denying Iran a role as a Caspian energy exporter. The Lapis Lazulli Corridor complements this existing infrastructure and further brings the U.S. closer to the Caucasus region.

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