ECO May Eventually Become the “Third Pole” of Greater Eurasia’s Economy – INTERVIEW

July 8, 2025 | 18:16 Baku, July 8, Tamilla Mamedova, AZERTAC AZERTAC presents an interview with Kyrgyz expert Iskender Sharsheev, head of the Electric Transport Users Union "ElTrans," founder of Sharsheev & Partners, co-founder of the PEAK Foundation, economist and political scientist. Tamilla: How do you assess the current state of economic relations between Kyrgyzstan and Azerbaijan? Which areas of cooperation seem most promising to you today? Iskender: The trade and investment dynamics between Kyrgyzstan and Azerbaijan have shown a noticeable "reset" in recent years. In 2022, the trade turnover was a symbolic $10 million, but by 2023 it had reached approximately $65 million, increasing more than sixfold. Notably, in just January–February 2024, Azerbaijan supplied petroleum products worth nearly $18.2 million to the Kyrgyz market, making Kyrgyzstan one of Baku's top five hydrocarbon export destinations. This growth became possible largely thanks to the Azerbaijan-Kyrgyz Development Fund established in 2022. In April 2024, its charter capital increased from $25 million to $100 million, and the fund has already begun financing joint projects in agro-processing, light industry, and renewable energy. In practice, the greatest potential lies in forming a textile cluster: raw material production and garment manufacturing in Kyrgyzstan, with investment and sales in the Azerbaijani market. Cooperation in solar and small hydropower using Azerbaijani technologies also looks promising. Significant opportunities also open up in the logistics of fresh agricultural products and honey, thanks to the launch of a new refrigerated transport route through Baku. Tamilla: In your view, what role does ECO play in shaping a new economic balance in Eurasia? Can the organization become an independent center of economic attraction beyond larger blocs like the SCO or EAEU? Iskender: The organization has institutional tools that give it the potential to transform into an independent economic center. Chief among them are the ECO Trade and Development Bank, the ECOTA trade agreement, and the Transit Transport Framework Agreement (TTFA). If member states can raise intra-regional trade to at least 15% and ensure full implementation of ECOTA, ECO may eventually become a "third pole" of the Greater Eurasian economy, with its own logistics, trade rules, and investment coordination. Tamilla: Which areas of cooperation within ECO could become drivers of sustainable growth for member states, including Kyrgyzstan and Azerbaijan? Iskender: The most dynamic development within ECO today is in the transport and logistics sector. The so-called Middle or Trans-Caspian Corridor, passing through the Caspian Sea, transported 4.5 million tons of cargo last year (a 63% increase) and 50,500 containers in TEU equivalent (a 2.6-fold increase). Its annual capacity now reaches 6 million tons and 100,000 TEU. For Azerbaijan, this reinforces its status as a key regional hub, linking the sea port in Alat and the railway junction. For Kyrgyzstan, this corridor offers the shortest path to the Black Sea, reducing logistics routes for exports like textiles and fruits by 1,500–2,000 kilometers. The next fastest-growing area is the integration of energy systems and the green transition. In 2025, the Clean Energy Centre was officially opened in Baku with support from UNIDO and ECO. It coordinates renewable energy projects, hydrogen technologies, and energy grid modernization across the region. A third major area is the digitalization of supply chains. The harmonized introduction of electronic transit documents—e-TIR and e-CMR—on key ECO routes such as TITR, KTAI, and ITI is already significantly reducing border crossing times. This is especially important for small and medium-sized enterprises (SMEs), as digitalization cuts costs and provides additional tax advantages to small exporters. Tamilla: To what extent do ECO countries currently demonstrate real coordination in response to global challenges such as supply chain disruptions, energy transformation, or food security? Iskender: ECO countries’ response to global challenges—whether supply chain disruptions, energy transition, or food security—remains uneven. The main agenda is set by major players like Turkey, Iran, and Kazakhstan. However, it's important that the organization has already developed roadmaps for "sustainable supply chains" and operates a regional food reserve program. This creates opportunities even for smaller economies like Kyrgyzstan, giving them access to mechanisms for joint procurement of grain and fertilizers, and investments in infrastructure such as ports and dry terminals. While many of the declarations and agreements from the 2023–2024 summits remain largely symbolic, the first practical steps have been taken. For example, test shipments using a single electronic waybill on the Baku–Aktau–Almaty–Bishkek route have already been regulated. Results show border crossing times were cut by nearly one-third—a significant precedent for the entire region. Tamilla: How can Kyrgyzstan and Azerbaijan jointly enhance ECO’s institutional effectiveness? Are bilateral or trilateral project formats possible within the organization? Iskender: Under current conditions, Bishkek and Baku can give ECO an additional push. The existing Azerbaijan-Kyrgyz Development Fund is already a model for practical cooperation. Building on it, the parties can propose "small packages"—investment projects in the range of $20–30 million in solar energy, dry logistics ports, and agro-processing. These areas fit naturally into existing funding mechanisms such as ETDB windows or EBRD programs and can quickly yield tangible results. Moreover, Baku and Bishkek could initiate a joint expert audit of the ECO Vision 2025 strategy, focusing on segments relevant to SMEs and digital services. The goal would be to establish clear, measurable KPIs in areas like e-logistics, data exchange, and procedural simplification. Mini-coalitions within ECO deserve special attention. The Kyrgyzstan–Azerbaijan–Kazakhstan trio has already proven productive in digital transit along the Middle Corridor. This experience could be scaled to other initiatives within the organization. Tamilla: How do you assess ECO’s potential to support SMEs, digitalization, and sustainable agriculture in member countries? How can synergy be enhanced between Kyrgyzstan’s and Azerbaijan’s national development strategies within multilateral platforms like ECO? Iskender: Supporting SMEs, digital transformation, and sustainable agriculture are precisely the areas where synergy between Kyrgyzstan and Azerbaijan can deliver quick, tangible results. In Kyrgyzstan, SMEs already account for about 40.5% of GDP. This opens the door to bilateral exchanges in microfinance, accelerator programs, and entrepreneurship promotion. At the ECO level, infrastructure is already in place: ETDB offers specialized credit lines for SMEs, and international financial institutions like the EBRD and ADB are running initiatives like Women-in-Business and the Green Economy Financing Facility. Within these platforms, Bishkek and Baku could jointly launch a $5 million Challenge Fund targeting agri-tech startups, green solutions, and logistics innovation. Potential co-financing from ETDB would boost the scale and resilience of such initiatives. To strengthen digital integration, mutual recognition of electronic signatures could be implemented. Using the "Tunduk" platform (Kyrgyzstan) and "ASAN Bridge" (Azerbaijan) would significantly simplify SMEs’ cross-border access to government and commercial services, reducing transaction costs and opening new markets. Tamilla: What role can the development of transport corridors, including the Middle Corridor and other logistics routes, play in strengthening economic ties between our countries? Iskender: Transport corridor development remains a key binding factor in both bilateral and multilateral agendas. The Middle Corridor is becoming the backbone of all Eurasian logistics. Its expansion through a railway line connecting Kyrgyzstan via Kazakhstan opens up real integration opportunities. A practical step already taken is the launch of a multimodal refrigerated service from Baku to Bishkek, which not only lowers export costs for Kyrgyz fruits, honey, and textiles but also expands the presence of Azerbaijani equipment, agro-raw materials, and chemicals in Central Asia. In parallel, the Kyrgyzstan–Tajikistan–Afghanistan–Iran (KTAI) corridor project is advancing and could become a strategic route. For Azerbaijan, it offers land access to Indian Ocean ports, including Chabahar and Gwadar, while for Kyrgyzstan it opens doors to the consumer markets of Pakistan and India. Therefore, if Baku and Bishkek align their national development strategies with ECO's transport, energy, and digital priorities, the organization has a chance to transcend declarations and become a true center of economic gravity at the crossroads of the Caucasus and Central Asia—a sort of "Turan Corridor" connecting East and West, North and South into a unified transport and logistics artery. https://azertag.az/ru/xeber/oes_sposobna_so_vremenem_stat_svoego_roda_tretim_polyusom_ekonomiki_bolshoi_evrazii____intervyu-3648403