‘Canal War’ Breaking Out in Greater Caspian Region

Turkey’s plan to build a canal bypassing the Bosporus Strait and potentially upsetting the Montreux Convention (see EDM, February 9) along with Russia’s movement of warships from the Caspian to the Sea of Azov via the Volga–Don Canal in order to threaten Ukraine (see EDM, April 13) highlight the ways in which artificial waterways can play a significant geopolitical role—possibly as dramatically as the late-19^th century “Railway Wars” did in the Middle East. Those two developments have attracted widespread international attention in and of themselves. But a broader trend, likely to play an increasing role in the geopolitics of the greater Caspian region, has yet to garner notice. That is the emergence of competition among existing and planned canal systems from the Caspian to the Black Sea, on the one hand, and to the Indian Ocean, on the other.

At present, the only waterway linking the Caspian Sea and the world ocean is the Volga–Don Canal, an aging structure with numerous locks and a low capacity because of the shallowness of many parts of its course and because it is open for navigation for only part of the year (see EDM, August 6, 2020). However, the Russian Union of Industrialists and Entrepreneurs has begun pushing for the canal to be widened, deepened, and provided with more water so that these limitations can be lifted. Such a project would require the investment of enormous resources, on the scale of billions or even tens of billions of dollars (Rossiyskaya Gazeta, April 16; Vestnik, April 22).

Despite its costs, this project has significant support in the Russian government because it would make it possible to export even more raw materials to foreign markets (Yandex Zen, April 11). Two versions of the plan for expanding the Volga–Don Canal (and rechristening it as the “Eurasian Canal”) are now being considered. Both would be expensive and take several years to realize. The first option would cost an estimated $9.2 billion and allow for the transit of ships as large as 10,000 tons; the second would cost approximately $22 billion but then could carry ships as large as 26,000 tons. The first variant could purportedly pay for itself in 11 years; the second in 25.

Even as these discussions are proceeding, however, Moscow is involved in two other competing projects: a new canal across the North Caucasus, from the Caspian to the Black Sea, and another new canal system south, from the Caspian through Iran to the Indian Ocean. The prospects of the first are now sufficiently bright that it has sparked intense competition among various federal subjects in southern Russia, which would benefit or lose if such a canal were built. Indeed, one drawback from Moscow’s point of view is that the beneficiaries in the region would be non-Russian republics like Kalmykia, while the biggest losers would be Russian areas like Astrakhan, which would see its role as a regional economic hub decline precipitously (see EDM, March 26, 2019 and March 3, 2020).

Plans for a much more ambitious joint Russian-Iranian canal between the Caspian and the Indian Ocean are also going forward, despite costs, technical problems, and international opposition. Russia has long wanted to build such a canal—Joseph Stalin unsuccessfully pressed for its approval at Yalta. Yet until the last few months, discussions have been on-again, off-again, and there seemed to be little chance that such a canal would ever be built. Now, however, given that Moscow and Tehran are working together to build a north-south transit path and have road and railway projects moving forward to support it, the idea of a canal is gaining traction (see EDM, March 24, 2020).

As outlined by Russian and Iranian officials, the 700-kilometer-long canal would extend from the Iranian port of Enzeli, along Iranian rivers to the Shatt al-Arab port on the Indian Ocean. A major technical problem is that the Caspian is some 29 meters lower than sea level, meaning that Iran would have to develop pumping stations, possibly powered by nuclear power plants, to put more water into the system so that ships could pass through the locks that will be needed. If completed, this canal could carry at least 20 million tons of cargo in each direction, linking Russia more closely with Iran, India and the broader South Asian region. Moreover, the trans-Iranian waterway could reduce the importance of the Suez Canal for trade between Asia and Europe (Stoletie, April 16).

Given the geo-economic and geopolitical consequences of such a canal, it is not surprising that it has generated intense opposition from the West. In 1997, the United States warned Iran that it would impose sanctions on any company that participated in the construction of such an artificial channel But now that Moscow apparently feels free to ignore such a sanctions threat, Russian firms (with the backing of the Russian government) see this as profitable both to themselves and, importantly, as part of Russia’s standing up to the West. Moreover, Russian officials believe this will help them expand their relations with China, which could make use of this route and limit Beijing’s willingness to use rail lines across the South Caucasus and Turkey (Stoletie, April 16).

The Caspian–Indian Ocean waterway is not the only proposed canal project sparking opposition. Many environmentalists criticize the expansion of the Volga–Don Canal and even more the digging of a new canal across the North Caucasus, viewing both as threats to the unique ecosystem of the Caspian basin. And some Caspian Sea littoral states, Kazakhstan in particular, are worried that if Russia expands the Volga–Don Canal or builds new waterways across the North Caucasus, their own nascent Caspian shipping projects will be overwhelmed and sidelined, costing them much of the economic gain they expected following the delimitation of that body of water (see EDM, August 7, 2018; Nur.kz, April 10, 2021).

At the same time, an even bigger obstacle may stand in the way. Because of global warming, the water level of the Caspian is projected to drop 18 meters by the end of the century—it is currently falling 7 centimeters a year—a development that would make the pumping required for a canal systems to work prohibitively expensive (J. L. Chen et al., “Long-term Caspian Sea Level Change,” Geophysical Research Letters, 44.13, June 2017). Baku is already worried about this (Kavkaz Post, April 28, 2021). But for now, the canal war around the Caspian appears likely to continue.