Lapis Lazuli Transit, Trade & Transport Route

The Lapis-Lazuli Transit, Trade & Transport Route (also known as the “Lapis Lazuli Corridor”) aims to enhance regional economic cooperation and connectivity between the countries of Afghanistan, Turkmenistan, Azerbaijan, Georgia, and Turkey, thereby expanding economic and cultural links between Europe and Asia. In doing so, the initiative seeks to improve transport infrastructure and procedures (including for road, rail, and sea), increase exports, and expand the economic opportunities of citizens in countries benefiting from this new transport corridor. Barriers to regional trade and transit and transaction costs will be reduced, in part, through a new Custom Integration Procedure and, between Afghanistan and Turkmenistan, a new Cross-Border Transport Agreement. Its projected impact is considerable not only because most of the needed infrastructure is already in place, but also because most of the investment required will focus on improving policy and governance. The Economic Rate of Return and Net Present Value still need to be established, but with a discount rate applied at 12%, the overall returns are expected to be positive. The Lapis Lazuli Corridor will connect with Turkey’s Middle Corridor Project (“East-West Trans-Caspian Trade and Transport Corridor”).

Current Status

Three technical discussions on the Lapis Lazuli Corridor (which encompasses a large part of CAREC Transport Corridor #2) agreement have been held, with the most recent occurring on 31 March 2016. The corridor shall begin from Aqina in northern Faryab province and Torghundi in western Herat (both in Afghanistan), and continue to the port (on the Caspian Sea) of Turkmenbashi in Afghanistan; after passing the Caspian Sea, the route continues on to Baku, capital of Azerbaijan, and then connects onward to Tblisi, capital of Georgia, as well as the Georgian ports of Poti and Batumi; finally, the corridor will connect to the cities of Kars and Istanbul, Turkey, at the entrance of Europe. The name “Lapis Lazuli” is derived from the historic route that Afghanistan’s lapis lazuli and other semiprecious stones were exported along, over 2,000 years ago, to the Caucasus, Russia, the Balkans, Europe, and North Africa. The project will serve to reinforce the Afghan Government’s Infrastructure  and Connectivity Development, Energy, and Private Sector Development National Priority Programs.

Recommended Actions by RECCA-VII and Beyond:

  • Following the immediate need to finalize the Lapis Lazuli Corridor, associated feasibility studies, and consideration of the project’s long-term infrastructure maintenance (O&M), the financing needs to be sourced for the corridor’s Afghanistan related infrastructure requirements.
  • Other major actions needed include: 1) improvement of road conditions and transit facilities along major highways; 2) expand rail links between Afghanistan and Turkey and beyond; 3) improve multi-modal land ports in each of the five Lapis Lazuli Corridor countries; and 4) undertake a Cost-Benefit Analysis on establishing Cross-Border Economic (Tax Free) Zones between the countries along the corridor.

 

Budget & Funding Status Current project estimates exceed USD $2 billion
Institutional Partners China (including the Bank of China), the Kyrgyz Republic, Tajikistan, Afghanistan, Iran, Turkey (including its Foreign Economic Relations Board), the Asia Development Bank, World Bank, and United States

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