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Road transport as a factor in the regional development of East-Central Asia: The case of the NELTI project

For hundreds of years, maritime transport has played the leading role in economic exchange between Europe and Asia. There is no doubt that in today’s economic reality, given current logistical conditions and the present level of technical and technological development, the international maritime transport system is serving the Far East market at the limit of its capacity. Globalization and the resulting enormous momentum in the development of trade exchange on the Eurasian macro-continent force us to seek alternative solutions to meet the growing needs for cargo mobility in this geopolitical area. The rapid activation of other modes of transport on the Asian continent offers an opportunity to improve the conditions for the functioning of the international transport market.

Given the high costs of air transport, the only viable option today is land transport, specifically road transport. The concept of using road transport to ensure the economic development of Asian countries has been a topic of discussion in international forums for over a decade. The result was the launch in 2008 of the NELTI project (New Eurasian Land Transport Initiative), which enables commercial transport along three different corridors of the ancient Silk Road.
The article provides a comparative analysis of the main characteristics and presents the opportunities and threats of using these corridors to stimulate trade exchange in Eurasia. The results of the analysis prove that there is huge potential for the development of such transport and that it can constitute an economically justified supplement to existing cargo transport systems between Europe and Asia, based on the principles of compatibility and reasonable economic competition.

The importance of road transport for the development of Central and Middle Asia
Analyzing the issue of activating the regions of Central and Middle Asia, one can rely on the concept of regional development and the theory of international trade. One of the most well-known model hypotheses, the gravity model of trade (Isard, 1954), assumes that the growth of trade between countries is directly proportional to their GDP and inversely proportional to the geographical distance separating these economies (Krugmann, Obstfeld, 2007). It seems that in the era of globalization, characterized by significant progress in all technical infrastructure, geographical distance is no longer as important an obstacle as it once was. Economic distance, understood as the ability to participate in the process of production as well as the distribution of goods and services—which is now practically possible anytime and anywhere thanks to the availability of the Internet—is beginning to play a much greater role in the economy. Therefore, instead of the classic distance between selected points in two countries (for example, between capitals), expressed in kilometers, it is worth paying attention to measuring distance through the level of road infrastructure or access to the Internet.

The results of theoretical analyses and feasibility simulations for transport on the routes of the currently reactivated Silk Road, conducted both at the international level (UN, CIS, IRU) and at the national level in the countries where such transport is to be implemented (China, Uzbekistan, Kazakhstan, Iran, Russia, Turkey, etc.), are very promising. But every theoretical deliberation, regardless of its degree of credibility, requires practical verification. In this case, the development of trade exchange is an inevitable process; however, determining its pace and the length of the period required to reach a relatively satisfactory level of wealth for the inhabitants of individual countries in the region remains problematic.

To this day, only 1% of trade exchange between Europe and Asia passes through Central Asian countries. The primary reason for this state of affairs is the relatively low awareness of the fact that only road transport, offering high-quality door-to-door transport services, is capable of creating a network of connections between all economic entities in all regions, from the Far East to Western Europe. If intercontinental road transport proves possible, then all transport on individual segments of this route will also be possible.
The level of development of modern transport infrastructure on the Asian continent is currently good enough that it has already led to the unblocking of the Asian road transport market. This happened, among other things, thanks to the initiation in 2008 of regular road transport in various regions of Asia, as part of a pilot road transport program between Asia and Europe covered by the NELTI project. It constitutes a very important step in implementing a strategy aimed at the economic integration of the economies of all Asian countries. As part of this project, many international road transport companies, with the support of various international organizations and institutions as well as the governments of interested countries, have begun commercial transport of industrial goods and consumer goods on routes located between the central part of China and Europe.

The article comes from the journal “Logistyka” 5/2009.

SL2009-5s34.pdf