Editor's note: Djoomart Otorbaev is a former prime minister of Kyrgyzstan, a distinguished professor of the Belt and Road School of Beijing Normal University, and a member of Nizami Ganjavi International Centera, NGO in Azerbaijan. The article reflects the author's views and not necessarily those of CGTN.

Sanctions on Russia, imposed by Western countries due to its "special military operation" in Ukraine pose a massive threat to the development and very existence of the Eurasian railway route connecting China with Europe. All countries along the route have analyzed the potential negative consequences of restrictions and possible suspensions of operations. There is a global rethinking of regional development, security and investment strategies. Many agree that Kazakhstan will feel the most severe long-term consequences of a restriction or suspension of the logistics chain.

Rail traffic across Russia proceeded on schedule during the first few weeks after the outbreak of hostilities in Ukraine, as the operators had placed orders for transport in advance. And while transit through Russian railways, which are subject to sanctions, is still technically possible, a growing number of Western logistics companies are effectively suspending their operations on the overland rail route .

Western logistics firms avoiding Russia

As a state-owned company, Russian Railways is on the sanction lists of both the EU and the U.S. But these are financial sanctions related to the capital markets. Legally, doing business with the company is still possible and logistics companies can still use its services. But the point is not the legal restrictions but the moral and reputational motives of the participants in the transportation market. The Western world is now focusing on ethical decisions and values. 

For example, on March 9, German logistics company Hapag-Lloyd confirmed that it is no longer accepting orders where Russia, Belarus and Ukraine are involved. The next day, DB Schenker, another major logistics provider, announced that it was temporarily suspending land, air and sea transportation to and from Russia. However, the most severe threat to the very existence of the land bridge was the statement by the administration of the German dry port of Duisburg, which is the leading European hub for transportation from Asia. It noted that, in all likelihood, international insurers would stop insuring goods in transit through Russia or Belarus.

The economic and financial impact of sanctions and traffic restrictions will hurt all countries along this route.

Xinjiang's special role

Similar risks associated with sanctions and restrictions on transit traffic exist in China's interaction with Central Asia. China's 13th Five-Year Plan (2016-2020) specifically said that the task of Xinjiang Uygur Autonomous Region in northwest China, which borders Central Asia, was to "strengthen infrastructure development along major routes and at major ports of entry." And that it was necessary to "work on the development of Xinjiang as the core area of the Silk Road Economic Belt." China's strategy also emphasized greater economic integration with Central Asia to promote confidence, security and stability along China's northwestern borders.

The leading country in Central Asia, through which massive traffic of goods between China and Europe passes, is Kazakhstan. The government has included strengthening transit trade in all recent development strategies. The significant growth in this trade in recent years has dramatically impacted the development of its economy and the increase in budget revenues. Even during the pandemic years, trans-Eurasian rail traffic grew. In 2021, there were 22 percent more trains on the China-Europe route than a year ago - about 15,000 trains, carrying 1.46 million TEU, up 29 percent from a year ago.

Impacts on Kazakhstan

The Kazakh economy has already been hit hard by Western anti-Russian sanctions since Kazakhstan and Russia are in a single economic bloc - the Eurasian Economic Union - and Kazakhstan has a significant trade turnover with Russia. In March inflation in Kazakhstan exceeded 12 percent, twice the pre-sanction level, and the Central Bank of Kazakhstan spent more than $990 million from its gold and foreign exchange reserves to support the tenge, the national currency(1 tenge=US$0.0023). The government also imposed restrictions on the export of foreign currency and gold.

The country had not yet recovered from the sanctions on Russian oil when it faced another big problem. An accident occurred on the main oil pipeline in Kazakhstan in March. Russian Deputy Prime Minister Alexander Novak said due to the failure of mooring facilities at the terminal in the Russian Port of Novorossiysk, Kazakhstan's Caspian Pipeline Consortium (CPC) completely stopped loading its oil and transporting it through the pipeline.

It could be a considerable problem for Kazakhstan as approximately 80 percent of Kazakh oil is sent abroad via this pipeline. In 2021, 53 million tons of oil passed through the pipeline.

According to preliminary estimates, if the CPC operation shutdown drags on for two months, Kazakhstan may lose about $500 million. Though Energy Minister Bolat Akchulakov says the accident will not affect budget revenues, since oil prices are high this year, officials are concerned, especially as the country has yet to recover from a painful period of instability in January.

Finding alternative routes

What are the alternatives for rail transport between China and Europe through Russia's territory? Many experts believe that these cargo flows will switch to other routes. It is possible to use the railway corridors outside Russia through the Trans-Caspian International Transport Route (TTITR) via Kazakhstan, Turkmenistan, Azerbaijan, Georgia, and Turkey. Still, this would be a rather expensive solution.

Traffic on the TTITR has been growing steadily since its launch in 2017. In the first half of 2021, there were more than 7,000 containers. The main contributors to traffic volume growth were Chinese companies, which consider the TTITR a profitable and faster transportation option than crossing oceans. Recently, Turkey has been paying attention to this direction, bearing in mind the increase in its trade with China and Central Asia.

In the medium term, restrictions on transportation through Russian territory may increase interest in constructing the southern and shortest Eurasian railway route from China through Kyrgyzstan and Uzbekistan and further through the countries of the South Caucasus and Turkey to Europe. While these may be viable plans, ending the Ukraine conflict and anti-Russia sanctions should be the way out.

(If you want to contribute and have specific expertise, please contact us at opinions@cgtn.com. Follow @thouse_opinions on Twitter to discover the latest commentaries in the CGTN Opinion Section.)