Since 2017, the OECD Eurasia Competitiveness Programme has worked with the countries of the region and with institutional partners like the International Transport Forum and the International Trade Centre to help strengthen trade and transport connectivity. Increased regional economic and trade integration could pave the way for larger inward investment flows, better Global Value Chain integration and the diversification of exports, in terms of both products and markets. The urgency of these issues has risen along with growing interest worldwide in better trade routes connecting Asia to Europe.

Russia’s full-scale invasion of Ukraine in February 2022 profoundly affected regional and global trade patterns, disrupted global supply-chains and transformed trade routes. The Northern Route, used to bring goods from China to Europe through Russia, has been significantly reduced following sanctions, shifting traffic to the Trans-Caspian International Transport Route, also known as the Middle Corridor. Realising the Middle Corridor’s potential and overcoming its lack of competitiveness will require developing it as an engine of trade integration in Central Asia and the South Caucasus, as well as a transit option between Asia and Europe. Increased regional economic and trade integration may be a long-term goal, but governments can move forward together by:

•  creating more favourable conditions for private sector development;
•  developing regional logistics services to support the development of both trade and transit;
•  fostering common standards for a more sustainable approach to connectivity and trade;
• harmonising and digitalising transit and border requirements;
• developing multi-modal capacities for trade routes and border crossing points; and
• building and integrating regional markets in Central Asia and the South Caucasus and to connect them with Europe and Asia.