Connectivity and Competition in the South Caucasus: Geography as a Source of Power

The three states of the South Caucasus—Armenia, Azerbaijan, and Georgia—are located at the crossroads of Europe, Asia, Russia, and the Gulf.

Global and national, current and planned transport routes play a key role in the region’s geopolitical positioning, as well as the economic and political trajectories in each of the participating states.

It is, therefore, crucial to get a clear picture of the current routing, relevance, and viability of each of the (proposed) international transport routes passing through the region. By examining the Middle Corridor and the International North-South Transport Corridor (INSTC), this study offers a deeper understanding of how transport connectivity is shaping the geopolitical landscape of the South Caucasus today and tomorrow.

The Middle Corridor and the INSTC share several common characteristics. First, both are more geopolitical rather than purely economic projects. Their relevance surged after Russia’s invasion of Ukraine, with the Middle Corridor presenting a way of alienating and sanctioning Russia. By contrast, the INSTC gained momentum as a Russo-Iranian response to western sanctions. This geopolitical nature, however, makes both routes volatile due to shifting international dynamics, thereby making long-term planning and investment commitments challenging and private investors hesitant.

Second, the Middle Corridor and the INSTC are marked by political ambitions that are slow to materialise into concrete action. Both routes suffer from regulatory inconsistencies, customs inefficiencies, poor transit infrastructure, and competing national priorities that impede smoother (co)operation.

The significance of both routes—and of the South Caucasus as a transit hub—meanwhile depends on the persistence of western sanctions and trade policies. The EU and Russia have the most immediate stakes, followed by Türkiye, Iran, India, and China. Still, the significance of the Middle Corridor and the INSTC cannot be reduced to external competition alone—both serve as regional connectors. Furthermore, the Trump Route for International Peace and Prosperity could fundamentally reconfigure transit dynamics in the Caucasus.

The future (success) of the corridors thus hinges not only on the commitment of participating states but also on the evolution of great power relations and regional conflicts that shape the strategic landscape in Eurasia.