Window on Eurasia: Proposed Caspian-Black Sea Canal Would Have Enormous Geopolitical Impact

Paul Goble

Staunton, September 28 – A Russian-Kazakhstan working group will present a plan for the construction of building a canal between the Caspian and Azov seas, an enormously expensive “gigantist” project with roots in the Stalinist 1930s and one that, if realized, would have enormous geopolitical consequences.
“In today’s “Izvestiya,” journalist Konstantin Volkov says that what his Moscow paper has been able to learn so far this “new mega-project,” one that Prime Minister Vladimir Putin has supported since at least 2007, “promises to become the most expensive in the entire history of contemporary Russia” (www.izvestia.ru/obshestvo/article3146612/)
In 2009, Volkov says, the European Development Bank provided 2.7 million US dollars to study two possible routes – a “Eurasian” canal just north of the North Caucasus mountain range and a second branch of the existing Volga-Don canal which would pass somewhat further north.
According to the newspaper, the results of the study of the two, although still classified “secret,” are in fact “ready” for a “final” decision by the leaders of the Russian Federation and Kazakhstan, the two countries most immediately affected but hardly the only ones given the other Caspian and Black Sea littoral state and their neighbors.
But as Volkov puts it, “the question immediately arises: why in fact is it necessary to spend billions of dollars for a new link between the Caspian and the Azov?” The existing Volga-Don canal works more or less well for almost all purposes, including those that the backers of the new canal say it would fulfill.
However, as Putin put it, “the appearance of a new canal “would not simply give the Caspian littoral states a way out to the Black and Mediterranean, that is to the world ocean, but also qualitatively change their geopolitical position and allow them to become sea powers” as a result of this link.
Eurasianist Aleksandr Dugin told the paper that “the question here is geopolitical: In exchange for the establishment of the Eurasia canal, Russia will increase its influence in Kazakhstan. And if to these two countries joint also Azerbaijan and Iran, who are also on the Caspian littoral, this will create a new oil cartel that won’t be overawed by OPEC.”
If this canal is built, Russia will gain some immediate economic benefits from transit fees, given that between six and ten percent of the world’s oil is in the Caspian basin. But more important, it will be able to challenge those promoting other pipeline routes such as Baku-Jehan because ships will be able to carry the oil further and less expensively.
Moreover, Volkov continues, “if alongside will be established a transcontinental route connecting the industrial regions of China with the Caspian, then the new artery will become a channel for shipping Chinese goods” and that path could become a competitor to the sea route through the Suez canal.
The projected cost of each of the possible roots is roughly 500 billion rubles (16 billion US dollars), although as Volkov points out, those projections do not include many of the ancillary construction projects that will be needed or take into consideration the possible social costs or likely overruns.
According to the “Izvestiya” journalist, Moscow hopes to get the countries of the region who will be the direct beneficiaries, including not only Kazakhstan, but Azerbaijan, Iran and Turkmenistan, as well as China to help pay for the construction of this canal, a plan that means such a canal will trigger geopolitical tensions even before it goes into operation.
But the possibility this project is already generating controversy inside the Russian Federation, with ecologists questioning its impact and others the opportunity costs of spending money on such a canal at a time when Russia needs to invest in other infrastructure projects, including roads and public health facilities. See, among others the discussions at www.stoletie.ru/lenta/azov_s_kaspijem_sojedinat_2010-09-28.htm and http://www.fondsk.ru/news/2010/09/28/kaspij-soedinjat-s-azovskim-morem.html.)