Armenia's "Crossroads of Peace" initiative

Author: Dietrich Schartner

Armenia presented the "Crossroads of Peace" initiative at the Tbilisi Silk Road Forum in October 2023. The aim is to open up Armenia's isolated transport infrastructure and turn it into a transit hub in the South Caucasus. The core objective is to expand or reactivate roads, railroad lines, pipelines, power lines and fiber optic cables to neighboring Turkey, Azerbaijan (including Nakhichevan), Iran and Georgia. The aim is to facilitate trade and the movement of people between the Caspian Sea, the Mediterranean, the Persian Gulf and the Black Sea. The Armenian government emphasizes that all infrastructure in the respective host country should be operated under its sovereignty and control (border, customs and security control remain national), and that the use should be reciprocal and equal for all parties involved. The initiative is seen as part of the peace agenda following the Karabakh conflict, with the aim of promoting economic integration and trust and reducing Armenia's dependence on Russia.

Planned infrastructure projects

Numerous concrete transport and energy projects are planned as part of the Crossroads of Peace initiative. These primarily include new or reopened border crossings and transport routes:

• Road border crossings: Five new crossings with Azerbaijan (including at Kayan, Sotk, Karahunj, Angeghakot, Yeraskh) and two with Turkey (Akhurik, Margara).
• Railway border crossings: Four new level crossings with Azerbaijan (Nrnadzor, Agarak, Yeraskh, Kayan) and one with Turkey (Akhurik).
• Railway lines: Reopening and upgrading of disused sections - e.g. Nrnadzor-Azerbaijan, Agarak, Yeraskh, Kayan).e.g. Nrnadzor-Agarak (43 km) in southern Armenia, Hrazdan-Kayan (80 km) in central/northern Armenia, each with a connection to Nakhichevan (Yeraskh, 1 km) and Turkey (Gyumri border, 6 km). Special focus is placed on the planned Yeraskh-Julfa-Meghri-Horadiz railroad, which would connect the Caspian Sea directly with the Mediterranean/Black Sea.
• Roads/highways: Expansion and new construction of national highways through Armenia to the south (Iran) and west (Turkey) in cooperation with neighboring countries.
• Energy infrastructure: Expansion of oil and gas pipelines as well as power lines to be connected to the networks of neighboring countries. For example, Armenia is participating in a planned 1,000 kV submarine cable project between Anaklia (Georgia) and Constanța (Romania) as part of the EU Global Gateway Initiative.
• Digital infrastructure: Laying fiber optic cables to establish fast internet connections between the neighboring countries.

Armenia expects that up to 4.7 million tons of goods and around 300,000 passengers could be transported via the newly revitalized rail and road network in the first year of operation. Economic experts see enormous potential for efficiency gains in freight transport between Europe and Asia as well as for tourism and commuter flows in the region.

Regional traffic and transport corridors

The Crossroads of Peace initiative links several international corridors:

• Trans-Caspian "Middle Corridor": The envisioned Yeraskh-Julfa-Meghri-Horadiz railroad would create a direct route from the Caspian region to Europe. Goods could be transported from the Caspian Sea via the Black Sea or the Mediterranean, enabling shorter transit times and bypassing geopolitical hotspots.
• North-South Corridor: Armenia is to become part of an axis from the Persian Gulf (via Iran) to the Black Sea ports of Georgia (Poti/Batumi). A key project is the 461 km long road through southern Armenia, which connects the Iranian border crossing with the Georgian ports. This corridor would give Armenia direct access to important sea loading points.
• East-West axis: The East-West connection between Central Asia-Azerbaijan-Armenia-Turkey will enable goods to be transported from China and Kazakhstan via Georgia and Armenia to Turkey and onwards to Europe. The "Zangezur" route (also known as the US-initiated Trump Route/TRIPP) also aims to open up Azerbaijan to Europe via the Armenian South Caucasus.

All in all, the planned connections complement existing axes and position Armenia as a potential transit country for freight traffic between Central Asia, Russia, Iran, Turkey and Europe. The initiative could, for example, enable goods from Kazakhstan or Turkmenistan to reach Western Europe via Lake Caspian and Armenia (or Georgia) instead of taking the traditional route via Russia.

Trade links and investments

The opening up of new transit routes promises significant economic effects. Faster and more direct routes will reduce trade costs and delivery times. Experts anticipate a significant increase in throughput in the southern Caucasus: the reactivation of connections would strengthen the "Middle Corridor" and could enable thousands of new transports. Countries such as Azerbaijan and Turkey would have better connections to EU markets as a result; Armenia itself would generate transit fees and customs revenue.

Important players and investors have already signaled their interest:

• European Union: The EU is promoting better connectivity through its Global Gateway Initiative. Around 2.5 billion US dollars in infrastructure investments are earmarked for Armenia. The EU Commission expressly supports the project and sees it as a contribution to European supply security and the development of new markets.
• USA: The United States supports the concept diplomatically. US diplomats and think tanks emphasize the importance of the initiative for stability and economic diversification in the Caucasus.
• Multilateral development banks: The Asian Development Bank (ADB) has already invested over USD 1.8 billion in Armenian infrastructure projects and has expressed interest in the Crossroads Initiative. ADB representatives stated that the idea is "very important and in line with our concept". EBRD and EDB are also mentioned as possible investors.
• China: Beijing is very interested in alternative trade routes to Europe. If Armenia opens its borders (e.g. for the Trump route) and implements the Crossroads plans, the country could become an important transit hub for Chinese exports. This would motivate China to invest in Armenian transportation infrastructure.
• Regional partners: Iran welcomes potential new connections to European markets. Turkey shows growing willingness to invest in transportation projects (especially in Trans-Caspian routes). Countries such as Kazakhstan and Azerbaijan have also given positive signals or could be interested in cooperating along the new axes.
• Private and bilateral funds: Armenia promotes public-private partnerships and relies on EU funds (e.g. co-financing of roads/rails). Bilateral development programs (e.g. USAID) and financing from Gulf states are also conceivable.

These investments and new trade flows would greatly stimulate Armenia's economy in sectors such as logistics, construction and tourism. The government expects an increase in freight transport of millions of tons and significant passenger traffic in the first few years of operation. In the long term, the country should strengthen its domestic market and play a role as a regional hub in Asia-Europe supply chains.

Armenia's role in regional trade

The "Crossroads of Peace" could transform Armenia from a largely isolated periphery into an important transit hub. Until now, borders with two of its neighbors (Azerbaijan and Turkey) have been permanently closed, severely restricting trade and freedom of travel. Opening up as part of the initiative would fundamentally change this: For the first time, Armenia would have a land route to Turkey, direct connections to Nakhichevan (Azerbaijan) and better roads to Iran.

In terms of economic policy, this would greatly strengthen Armenia's position. As a transit country, it could generate revenue from tolls and customs duties, create jobs in the transportation and construction sectors and bring its goods to foreign markets more quickly. At the same time, the supply chain for imports would improve - for example through lower transportation costs for fuel and consumer goods. This could also benefit sectors such as IT and agriculture, which would gain access to larger markets.

Armenia could also reduce its dependence on Russia. Direct access to the Middle Corridor and the South Caucasus would open up alternative trade routes. In future, gas and oil imports could increasingly come from Iran or Azerbaijan, reducing the monopoly position of Russian suppliers. Overall, the country would assume a "bridgehead" function according to the plan - as a link between Central Asia, Iran, Russia and the EU.