Mukhsinjon Kholmukhamedov, Deputy Director of the Center for Economic Research and Reforms under the Administration of the President of the Republic of Uzbekistan
On 11 November, the first summit of the Organization of Turkic States (OTS) at the highest level will be held in Samarkand. Hosting an international event of this scale in Uzbekistan once again underlines the growing role of the country in the region and beyond as a key partner in the development and strengthening of trust and ties between fraternal countries, cooperation in trade, economy, transport, energy, tourism and cultural and humanitarian spheres, as well as in coordinating efforts to ensure peace and security.
The OTS includes Azerbaijan, Kazakhstan, Kyrgyzstan, Turkey and Uzbekistan. Hungary and Turkmenistan involve in the organization’s activities as observers.
Today, new opportunities emerge for mutually beneficial partnership between Member States. Let’s consider one of the most important and promising areas – cooperation in the transport and logistics sphere, which occupies a special place in the adopted strategic document “Vision of the Turkic World – 2040”. The focus is on ensuring the transport connectivity of countries, simplifying customs and transport procedures, including through digitalization.
All OTS member countries have adopted National Digitalization Strategies. In particular, the Strategy “Digital Uzbekistan – 2030” envisages an increase in the share of the digital economy in the country’s GDP by half.
Uzbekistan attaches great importance to the development of cooperation in the field of transport and logistics with the CIS countries. This is due to the following:
– Export-import and transit communication of Uzbekistan is carried out along nine international transport corridors, eight of which pass through at least one member country of the OTS.
– Two of the five countries bordering Uzbekistan – OTS member states (Kazakhstan and Kyrgyzstan) and one observer (Turkmenistan);
– the countries of Central Asia are the key links of the region – the main transport hub at the intersection of routes in the direction of North – South and East – West;
– all Central Asian states are landlocked countries. Uzbekistan is remote from the World Ocean, which significantly increases transport costs.
Studies show that landlocked countries spend twice as much money to pay for transport services. For the Central Asian States, transport costs in many cases reach 60 percent of the cost of imported goods.
Current state of cargo transportation in Uzbekistan
The transport sector plays a strategically important role for the economy of the republic, which accounts for 6.4 percent of GDP, 30 percent of the services sector, and 7.4 percent of investments.
Over the past five years, despite the pandemic and the related restrictions in the transport sector, Uzbekistan has managed to increase the freight transportation by 25 percent (up to 1.4 billion tons).
Over the past three years, due to the liberalization of the air transportation market, the number of companies operating flights to Uzbekistan has doubled. The share of domestic carriers in the international road cargo transportation has reached 62 percent. 300 km of railways have been electrified, 1.5 thousand km of roads have been built.
The transport system of Uzbekistan is on the way to building effective interaction between different modes of transport and the development of multimodal transportation, eliminating natural obstacles and improving transportation management, digitalizing internal, external and transit transportation, introducing digital solutions in logistics.
National digitalization projects
The share of electronic tickets in total volume has reached 40%, and the registration of transportation documents for freight trains has been introduced with the system’s integration with other railways that have similar platforms; activities are underway to monitor and manage cargo flows based on satellite technologies.
An automated traffic management, a single integrated system for processing transport documents, an integrated operational management, an automated booking of electronic tickets and passenger traffic management “Express-3” have been introduced in the railway sector.
A digital platform “Warehouses and logistics centers of Uzbekistan” has been created, which allows an entrepreneur to find out online about the availability of free space on the territory of warehouses.
International transportation
Today, Uzbekistan is a party to more than 70 international conventions and bilateral agreements on transport communications, participates in a number of international programs on the integration of transport systems and digitalization of logistics. Near 18% of regional railways pass through the country, carrying approximately 11% of all regional freight traffic.
International experts have concluded that Uzbekistan can increase its transit potential and receive up to 16 million tons of cargo by charting promising routes, implementing flexible tariffs, and improving infrastructure.
The development strategy of the New Uzbekistan for 2022-2026 provides for the expansion of “digital corridors” and transit opportunities in the transport system to increase the export of transport and logistics services, as well as an increase in the volume of transit cargo transportation to 15 million tons due to the construction of the Termez-Mazar-I-Sharif -Kabul-Peshawar and China-Kyrgyzstan-Uzbekistan railway lines. In this regard, the expanding interaction of Uzbekistan with the OTS countries is of particular importance.
Active measures are being taken in Uzbekistan to realize the transit potential of the country, simplify transport and logistics interaction with the outside world. For example, the republic became the first country in Central Asia to introduce the technologies TIR-EPD, Real-Time SafeTIR, AskTIRweb, and started testing the technology of electronic guarantees for international road transport.
The implementation of the entire package of necessary data exchange with the UNECE under the eTIR procedure has been finalized and testing of various scenarios during transportation under this procedure has been completed. Uzbekistan, for its part, is 100 percent ready to use eTIR.
In November 2020, the first pilot road transport between Uzbekistan and Kazakhstan with the use of e-guarantees took place. Similar transportation was tested between Uzbekistan and Tajikistan, and in March of this year – between Uzbekistan and Kyrgyzstan.
Nowadays, all customs posts engaged in the foreign economic activity are working with electronic guarantees. Customs officials and representatives of the private sector were trained to work with this system. More than 500 carriers used about 350 electronic guarantees for transportation in different directions. According to these indicators, Uzbekistan ranks first in the world.
Active work is underway to connect countries such as Afghanistan, Pakistan, Turkmenistan, Iran and Turkey to existing corridors (in which Uzbekistan is involved) for transportation with e-guarantees. The possibility of using trans-Caspian routes with Azerbaijan and Georgia is being worked out.
Cooperation is also being established on joining the developed digital platforms of the railways (eTIR) of Kyrgyzstan, Tajikistan, Afghanistan, Turkmenistan with the prospect of integration with the railways of Pakistan, Iran, Turkey, China and India.
An information system based on artificial intelligence has been installed at the Keles international checkpoint to determine the weight of wagons without stopping, which will prevent the transportation of overloaded trains and ensure the safety of train traffic.
The strategy “Digital Uzbekistan – 2030” in the transport sector plans to introduce over 280 information systems and software products for automation of management, production and logistics processes at enterprises of the real sector of the economy.
Cooperation with OTS countries
In connection with the above, Uzbekistan strives to take an active part in the implementation of the tasks of digitalization of transport and transit procedures, which are reflected in the strategic document “Vision of the Turkic World 2040”, adopted at the Istanbul Summit in 2021.
In the near future, the main focus is on facilitating transport and transit procedures in the member states of the OTS, including through the use of modern digital tools. These are primarily eTIR, ePermit and eCMR.
As part of the first stage of the introduction of the ePermit electronic system into practice, the transport ministry of Uzbekistan, in coordination with the Turkish side, organized a test rally for the first time. Thus, the convoy that left Uzbekistan on 6 November 2021, arrived in Türkiye on 10 November through the Sarp checkpoint. At the next stage, there is an agreement on the implementation of this project with Kazakhstan.
In addition, work is underway to introduce the eCMR tool in the OTS countries together with the UN Economic Commission for Europe.
Promising areas of cooperation in digitalization
The desire of the OTS countries to expand the use of digital technologies creates conditions for consolidating efforts to increase practical cooperation in the field of digitalization, such as the joint development of electronic interregional trade and commodity exchange.
E-document management, which is a key component of digital logistics, should be given special consideration. According to experts, this allows for a 20-40 percent reduction in costs and delivery times, as well as a reduction in time losses at all stages of the life cycle of registering relationships with customers – both shippers and consignees.
It is necessary to solve the problem associated with the lack of universal documents for multimodal and international transport. For example, in maritime transportation there is a bill of lading – a unique single document of title that allows to track the route of the cargo. However, there is no one that would unite all types of transportation.
In future, the digital technologies will be used in the field of the ecosystem of transport corridors, technical regulation, the use of navigation seals, as well as rail transportation. This will significantly strengthen the connectivity, which will contribute to the further development of trade and economic relations and, accordingly, the growth of the economies of the states.
International transport corridors
The further development of international transport corridors remains relevant, taking into account the geographical and transport potential of the OTS countries. For example, the Baku-Tbilisi-Kars railway corridor, which provides access to Uzbek goods to European and other markets, is becoming more and more in demand for Uzbekistan.
In turn, there is a huge interest in extending the planned construction of the China-Kyrgyzstan-Uzbekistan railway to the Caspian Sea, which will consolidate the transit capabilities of the Trans-Caspian International Transport route. Furthermore, the restoration of the Zangezur Corridor could provide the shortest land route from Asia to Europe, as well as open up and expand the possibilities for international road transport (TIR) to China and the Far East.
The OTS countries also express interest in promoting the Asia-Pacific multimodal transport corridor – China- Kyrgyzstan -Uzbekistan – Turkmenistan- Azerbaijan – Georgia -Turkey – Europe, which will significantly increase the trade potential of all participating countries.
Great prospects are opening up with the creation of the “Trans-Afghan Corridor”: the time of transportation of goods will be reduced and the cost of transportation will be halved.
The integration of digital solutions will make it possible to turn the Central Asian states into a land bridge capable of connecting the OTS countries with China and the South Asian region, as well as to ensure international transit of goods and deeper integration of the regional countries into global supply chains of goods.
Undoubtedly, the first summit of the Organization of Turkic States in Samarkand will be the most important link in expanding mutually beneficial partnership, both in the transport and logistics sphere and in other areas of trade, economic, social and cultural cooperation. ///nCa, 10 November 2022 (in cooperation with Embassy of Uzbekistan in Turkmenistan)