🏔 Caucasus Perspectives
Zangezur-Transit (TRIPP): economic leverage or geopolitical tripwire?
August 28, 2025
Author: Dietrich Schartner
On August 8, 2025, Armenia and Azerbaijan announced a framework agreement in Washington that, among other things, provides for exclusive US development rights to a strategic transit corridor - the so-called Trump Route for International Peace and Prosperity (TRIPP), often referred to in the debate as the Zangezur Corridor. The deal presents the South Caucasus with an opportunity for economic remapping: it could permanently change transport routes, energy and digital infrastructure as well as trade.
The Zangezur Corridor is intended to connect Azerbaijan's heartland with its exclave Nakhichevan and create a direct land link to Turkey. The planned infrastructure includes rail and road connections as well as energy and fiber optic lines - elements that would integrate the South Caucasus more closely into Eurasian transport routes (the so-called "Middle Corridor"). Turkey has already begun to prepare its own construction measures: Ankara laid the foundation stone for a rail link in the east of the country at the end of August 2025 and, according to official information, secured external funding in the double-digit billion range for sub-projects. Such investment commitments are indicative of the economic policy objectives: reducing transport costs, shortening transit times and expanding logistics functionality.
In economic terms, a functional transit corridor offers several levers. Firstly, direct sources of income are created through transit fees, logistics services and jobs in construction and operation. Secondly, lower transportation costs can open up new markets in Europe and Central Asia for exports of regional raw materials and agricultural products (especially from Azerbaijan). Third, the installation of fiber optics and energy infrastructure would improve the digital connectivity of Armenia and South Caucasus countries and thus increase investment and location attractiveness. Studies and policy analyses indicate that integrated corridors can significantly increase the competitiveness of smaller economies, provided that security and governance risks remain limited.
At the same time, the risks should not be underestimated. Infrastructure projects in conflict-prone areas suffer from political uncertainties: Contracts must be legally robust, financing secured and the protection of critical facilities guaranteed. External players such as Iran and Russia have openly expressed concerns; a political confrontation with Tehran or a strategic countermeasure by Moscow could deter investors and drive up costs. In addition, the domestic political balance in Armenia is fragile: perceived concessions to Baku or foreign developers could fuel domestic political opposition, which in turn could jeopardize project stability.
In the short term, the obvious winners are the transit players: Azerbaijan gains territorial connectivity and transit revenues, Turkey strengthens its role as a logistics hub, and international infrastructure and energy companies receive orders. For Armenia, the opportunity lies in transit margins, jobs and investment inflows - provided that sovereignty issues and legal certainty are regulated transparently. Possible losers are states that currently earn money from existing routes (such as Iran for transit in the region), as well as local economic sectors that could be negatively affected by the rerouting of existing trade flows. There is also a risk that Armenia will become too dependent on transit fees and external players if the economy does not diversify in the long term.
Economically, the Zangezur transit has the potential to transform the South Caucasus into a Eurasian hub: shorter supply chains, new export opportunities and infrastructure modernization would provide a noticeable boost to growth. However, whether this becomes a sustainable positive development path depends on three conditions:
If one or more of these conditions fail, there is a risk of political backlash, investment freezes and a resurgence of tensions - with serious consequences for the economic prospects of the entire South Caucasus. In the coming months, observers should pay particular attention to the actual contract design, financing flows and security measures: These elements will determine whether TRIPP becomes an economic engine or a geopolitical tripwire.
