The Trans-Caspian Fund Is Changing the Balance of Power in the Caucasus Not in russia’s favour

russia has definitively lost its role as the sole external arbiter in the South Caucasus. In the first ten days of August, US Secretary of State Marco Rubio officially announced the launch of the Trans-Caspian Entrepreneurship Fund. With the help of private American investments, this entity is set to become the financial engine behind large-scale infrastructure projects along the Trans-Caspian trade route (the “Middle Corridor”).

It took Yerevan, Baku, and Washington exactly one year to implement the preliminary diplomatic agreements. At the same time, the parties have fundamentally changed the role of the USA in the region: Washington is shifting from being a moderator of peace talks to a co-founder of a new economic environment. The mechanism behind this process is based on the development of the “Middle Corridor” – an alternative to the russian transport artery which connects the markets of China and Central Asia with Europe, bypassing traditional russian routes.

The uniqueness of this global project lies in the fact that each of its participants, regardless of different geopolitical goals, reaps significant economic and political benefits.

The United States is strengthening its role in the region, helping to bolster the independence of the countries of Central Asia and the South Caucasus, preventing China from establishing complete control over Eurasian logistics, and, ultimately, reaping returns on its own investments.

Armenia, in addition to revenue from new infrastructure, will gain new transportation links and the opportunity to diversify its foreign policy, reduce its dependence on specific foreign partners, and better protect the country from various shocks and crises.

Azerbaijan will reap significant benefits from cementing its status as an external hub, which opens up the opportunity for the country to set its own rules of the game in foreign markets.

Ultimately, citizens of the South Caucasus countries will have the opportunity to break free from russia’s monopoly on influence in the region. The fear of various forms of isolation and blockades should finally disappear. This model of “multipolarity” neutralizes russia’s traditional levers of pressure, which for decades have been based on control over transportation and trade routes. At the same time, international businesses gain reliable and uninterrupted supply channels for goods and services, which enhances the resilience of the entire Eurasian trade and economic system.