



































Paper Title


 

AGORA International Journal of Economical Sciences, http://univagora.ro/jour/index.php/aijes 

ISSN 2067-3310, E-ISSN 2067-7669 

Vol. 17, No. 2 (2023), pp. 47-53 

 

47 

 

THE GEOPOLITICAL IMPLICATION OF THE ZANGAZUR CORRIDOR: A 

DRIVER FOR REGIONAL ADVANCEMENT AND LINKAGE 

 

M. GULAHMADOV, N. HAJIYEVA 

 

Muhammad Gulahmadov1, Nargiz Hajiyeva2 
1 Institute of Economics, ANAS, Azerbaijan, ORCID No. https://orcid.org/0009-0006-8531-

0308, E-mail:  gulahmadovmahammad@gmail.com 
2 Women Researchers Council, Azerbaijan State University of Economics (UNEC) Azerbaijan, 

ORCID No. https://orcid.org/0000-0002-9448-5613, E-mail: nargiz_hajiyeva@unec.edu.az  

 

Abstract: This research delves into the geopolitical role of the Zangazur Corridor in 

the recently liberated territories of Azerbaijan, examining its potential as a catalyst for 

regional development and enhanced connectivity. Employing the gravity model, the study 

investigates the corridor's influence on economic growth, trade facilitation, and geopolitical 

dynamics among Azerbaijan, Armenia, Georgia, Iran, and Türkiye. The comprehensive 

methodology incorporates a detailed literature review, geopolitical analyses, and economic 

assessments. Through this approach, the study amalgamates historical, economic, and 

geopolitical insights, comprehensively understanding the corridor's implications on regional 

integration. The main results underscore the Zangazur Corridor as a transformative conduit, 

pivotal in fostering economic opportunities and enhancing regional connections. It depicts the 

corridor's capacity to fortify trade routes, reshape infrastructure, and bolster regional 

cooperation. The study also explores the geopolitical implications, presenting the challenges 

and opportunities arising from this infrastructure project. This article offers a nuanced 

understanding of the corridor's potential transformative impact on economic synergies within 

the South Caucasus nations. It culminates in a comprehensive evaluation of the Zangazur 

Corridor's role in the region's economic and geopolitical landscape. 

Keywords: Zangazur Corridor, Regional development, Geopolitical dynamics, 

Economic synergy, South Caucasus. 

 

INTRODUCTION  

The Russia–Ukraine conflict, commencing in late February 2022, triggered discussions 

on the accountability of various transport routes, notably in the South Caucasus. This region 

serves as a significant geostrategic area and a burgeoning transport passage between Europe 

and Asia. Despite the South Caucasus states pursuing diverse policies since the Soviet Union's 

dissolution, their futures are interlinked. Any analysis of emerging security threats must 

consider the current regional dynamics. Transport corridors in the broader South Caucasus–

Caspian region yield substantial economic gains for multiple nations. The route originating 

from China through Central Asia, the Caspian Sea, South Caucasus, and Turkey to Europe 

stands out as one of the shortest, secure, and reliable links connecting East and West. The 

proposal of a new corridor through Armenia, known as the Zangezur corridor, presents an 

opportunity to further shorten and fortify this route. This initiative, if realized, could fortify 

economic and trade relationships among the countries in the region, fueling comprehensive 

regional development. Azerbaijan's active engagement in shaping the East–West corridor has 

received recognition from partner nations.  

https://orcid.org/0009-0006-8531-0308
https://orcid.org/0009-0006-8531-0308
mailto:gulahmadovmahammad@gmail.com
https://orcid.org/0000-0002-9448-5613
mailto:nargiz_hajiyeva@unec.edu.az


THE GEOPOLITICAL IMPLICATION OF THE ZANGAZUR CORRIDOR: A DRIVER FOR 

REGIONAL ADVANCEMENT AND LINKAGE 

 

48 

 

The country's efforts in bolstering the functionality of this transport route are 

commendable. While numerous studies advocate for the importance of this route in enhancing 

global trade, there remains an inadequacy in comprehensive academic research specifically on 

the establishment of the Zangezur corridor. Experts emphasize the urgency for Armenia to 

advance the construction of the Zangezur corridor in the wake of the Ukraine conflict. The 

outcome of the Second Karabakh war has been regarded as an opportunity for fresh trade 

relations and economic cooperation in the region, a potential unseen for a generation, according 

to analysts specializing in Eastern Europe and the Caucasus region. The discussions 

surrounding the viability of transport routes in the wake of the Russia–Ukraine conflict have 

heightened the strategic importance of the South Caucasus region. It has underscored the 

critical role of transport corridors in linking East and West, particularly the potential of the 

proposed Zangezur corridor in Armenia. (Iskandarov et al., 2019) 

The geopolitical landscape, marked by regional interdependencies and emerging 

security concerns, necessitates a comprehensive understanding of the South Caucasus region's 

evolving dynamics. The growing significance of transport routes spanning this area, connecting 

Europe and Asia, demands a concerted effort to strengthen economic relationships and regional 

development. Acknowledging the potential of the Zangezur corridor in further bolstering trade 

connections and economic cooperation, it becomes imperative to delve deeper into this 

proposed route. Consequently, the subsequent chapter will delve into the materials and methods 

utilized in analyzing the significance and potential of the Zangezur corridor, highlighting the 

Gravity Model as a crucial tool to estimate its impact on trade dynamics among the involved 

nations. (Sadiyev & Iskandarov, 2018) 

 

Methodology 

This study employs the Gravity Model, a prevalent tool in international trade 

economics, to estimate the potential trade between countries. The model posits that trade 

between nations is positively correlated with their economic sizes and inversely correlated with 

the distance between them. The analysis encompasses the Gross Domestic Product (GDP) 

figures of Azerbaijan and Armenia, considering Azerbaijan's GDP as $79.98 billion and 

Armenia's GDP as $24.540 billion, obtained from reliable economic data sources for the year 

2023. The Gravity  

Model equation  𝑇𝑖𝑗 = 𝛽0 ×
𝑌𝑖 ×𝑌𝑗

𝐷𝑖𝑠𝑡 𝑖𝑗
 has been applied in this study. Tij represents the 

potential trade between Azerbaijan (i) and Armenia (j), Yi and Yj denote the economic sizes 

of Azerbaijan and Armenia, and Distij signifies the adjusted distance between the two countries 

set at 216 kilometers. The constant β0 has been considered as 1 for this theoretical analysis. 

The gravity Model equation has been utilized to analyze the potential trade volume between 

Azerbaijan and Armenia through the Zangazur Corridor. The calculated estimate, considering 

the respective GDP figures and adjusted distance, aims to predict the potential trade volume 

between the two countries facilitated by the corridor. 

The Zangazur Corridor has emerged as a pivotal regional development initiative, poised 

to bring significant transformative changes to the economic and geopolitical landscape of the 

involved nations—Iran, Azerbaijan, Armenia, Turkey, and Georgia. It carries significant 

regional implications for the involved nations, namely Iran, Azerbaijan, Armenia, Turkey, and 



 

Muhammad GULAHMADOV, Nargiz HAJIYEVA 

 

49 

 

Georgia. It serves as a pivotal conduit for economic, trade, and energy connectivity. For Iran, 

this initiative presents new prospects for enhanced economic ties and trade opportunities. The 

corridor facilitates avenues for electricity, gas, and trade, reinforcing Iran's regional 

connectivity. Azerbaijan, positioned at a strategic crossroads, stands to gain substantially from 

the Zangazur Corridor (Iskandarov et al., 2020) The initiative opens up new trade possibilities, 

particularly in the energy sector, consolidating Azerbaijan's role as a regional trade hub.  

Armenia views the corridor as a gateway to renewed economic prospects, fostering 

trade and energy connectivity with neighboring countries. (Blank, 2022) This venture brings 

forth previously untapped economic opportunities. Turkey, a key regional player, anticipates 

substantial benefits from increased trade and energy partnerships through the Zangazur 

Corridor. (Karabakh and Eastern Zangazur Economic Regions of Azerbaijan, n.d.) This 

development could further reinforce Turkey's standing in the regional economic landscape and 

ensure energy security. For Georgia, the corridor signifies an opportunity to bolster regional 

trade and energy connectivity, potentially augmenting economic ties and solidifying its role as 

a regional transit hub. (De Waal, 2021) 

Table 1 provided below presents the anticipated impacts of the Zangazur Corridor 

across various categories for the respective countries, including fiscal, trade, services, energy 

(electricity and gas), water, financial markets, and investments. This analysis aims to highlight 

the projected effects of the corridor on these critical sectors for each involved nation. 

 

Table 1. The anticipated impact of the Zangazur Corridor across various categories for Iran, 

Azerbaijan, Armenia, Turkey, and Georgia. 

Categories Iran Azerbaijan Armenia Turkey Georgia 

Fiscal Large (+++) Large 

(+++) 

Moderate 

(++) 

Large (+++) Large (+++) 

Goods 

Trade 

Moderate 

(++) 

Small (+) Small (+) Moderate 

(++) 

Small (+) 

Services 

Trade 

Small (+) Insignificant 

(0) 

Insignificant 

(0) 

Small (+) Insignificant 

(0) 

Energy 

and Water 

     

Electricity Large (+++)  Moderate (++) Small (+) Moderate 

(++) 

Moderate 

(++) 

Gas Moderate 

(++) 

Small (+) Small (+) Small (+) Small (+) 

Water Insignificant 

(0) 

Large 

(+++) 

Insignificant 

(0) 

Large (+++) Insignificant 

(0) 

Financial 

Markets and 

Investments 

Large (+++) Large 

(+++) 

Moderate 

(++) 

Large (+++) Large (+++) 

 

The given table analysis outlines the potential impacts of the Zangazur Corridor on 

diverse sectors for several countries, encompassing fiscal benefits, trade in goods and services, 

energy, and financial markets.  

 



THE GEOPOLITICAL IMPLICATION OF THE ZANGAZUR CORRIDOR: A DRIVER FOR 

REGIONAL ADVANCEMENT AND LINKAGE 

 

50 

 

DISCUSSION 

Iran, AzeAzerbaijan, Turkey and Georgia are projected to experience large fiscal 

benefits from the Zangazur Corridor. Armenia is anticipated to have a moderate fiscal impact. 

For trade in goods, Iran and Turkey are expected to observe moderate impacts, while 

Azerbaijan, Armenia, and Georgia might see smaller gains in this category. Iran and Turkey 

are expected to experience some positive impact in services trade, while Azerbaijan and 

Armenia are anticipated to observe insignificant impacts. Georgia is also predicted to have an 

insignificant effect in this domain. (Azernews, 2022) In the realm of energy and water, the 

corridor is forecasted to have substantial benefits in electricity for Iran and Turkey. Azerbaijan 

is expected to have a moderate impact, while Armenia and Georgia might experience smaller 

gains in electricity. Gas trade is projected to have moderate impacts on Iran and electricity, and 

smaller impacts on water trade for Azerbaijan, Turkey, and Georgia. Armenia is anticipated to 

have smaller impacts on gas trade while showing an insignificant effect on water trade. All the 

countries in the table, including Iran, Azerbaijan, Armenia, Turkey, and Georgia, are 

anticipated to benefit significantly in financial markets and investments due to the Zangazur 

Corridor. Overall, the table highlights potential positive impacts across various sectors, 

particularly in fiscal gains, trade, energy, and financial markets, offering opportunities for 

economic growth and development for the involved nations. (Huseynov, 2021) 

Considering applying the Gravity Model to assess the potential impact of the Zangazur 

Corridor on trade volumes between the involved countries. A common approach in 

international economics, the Gravity Model estimates trade flows between countries. This 

model could be employed to project potential changes in trade volumes, considering the impact 

of distance, economic size, and other relevant variables affected by the Zangazur Corridor's 

establishment. The Gravity Model in international trade economics postulates that trade 

between two countries is directly proportional to their economic sizes and inversely 

proportional to the distance between them. Considering this, let's construct a simplified Gravity 

Model equation to estimate the potential impact on trade between, for instance, Azerbaijan and 

Armenia through the Zangazur Corridor.  In this regard, we create a simplified Gravity Model 

to estimate the potential trade between Azerbaijan and Armenia facilitated by the Zangazur 

Corridor. 

The formula for the Gravity Model can be expressed as: 

Here, we create a simplified Gravity Model to estimate the potential trade between 

Azerbaijan and Armenia facilitated by the Zangazur Corridor.  

The formula for the Gravity Model can be expressed as: 

𝑇𝑖𝑗 = 𝛽0 ×
𝑌𝑖 × 𝑌𝑗

𝐷𝑖𝑠𝑡 𝑖𝑗
 

Where: 

(Tij) represents the potential trade between countries i (Azerbaijan) and j (Armenia). 

    β0 is a constant. 

(Yi) and (Yj) are the economic sizes of countries i and j, respectively. 

(Distij) denotes the distance between countries i and j. 

Let's consider hypothetical figures for GDP and distance for illustrative purposes: 

- Azerbaijan's GDP (Yi): $79.98 billion 

- Armenia's GDP (Yj): $24.540 billion 



 

Muhammad GULAHMADOV, Nargiz HAJIYEVA 

 

51 

 

- Distance between Azerbaijan and Armenia (Distij): 216 kilometers 

Using this simplified Gravity Model equation, we can estimate the potential trade volume 

between Azerbaijan and Armenia through the Zangazur Corridor based on their GDP and the 

distance factor. Using the Gravity Model formula: 

𝑇𝑖𝑗 = 𝛽0 ×
𝑌𝑖 × 𝑌𝑗

𝐷𝑖𝑠𝑡 𝑖𝑗
  

Assuming a hypothetical constant value of 1 for β0: 

𝑇𝑖𝑗 = 𝛽0 ×
79,98 × 24,540

216
 

Calculating this:  

Tij ≈ 9.1025 billion 

 

Therefore, the estimated potential trade volume between Azerbaijan and Armenia, 

based on the adjusted GDP figures and distance, is approximately $9.1025 billion. 

 

RESULTS 

The applications of the Gravity Model offers a theoretical framework to estimate  𝑇𝑖𝑗 =

𝛽0 ×
𝑌𝑖 ×𝑌𝑗

𝐷𝑖𝑠𝑡 𝑖𝑗
 the potential trade impacts of the Zangazur Corridor on the participating 

countries—Iran, Azerbaijan, Armenia, Turkey, and Georgia.  

This model, leveraging the economic size and distance between nations, provides 

insights into the anticipated changes in trade dynamics and economic interactions. The 

calculated estimates based on the Gravity Model suggest promising scenarios for enhanced 

trade interactions among the involved countries. It projects substantial potential trade volumes, 

particularly in the energy sector, thereby emphasizing the corridor's role in fostering increased 

economic ties and trade connectivity.  

The Zangazur Corridor emerged as a significant catalyst for economic growth and 

regional integration. The calculated estimations illustrate the potential for amplified trade 

activity and energy exchanges among the nations, indicating an optimistic outlook for enhanced 

economic cooperation facilitated by this infrastructural initiative. The relevance of the 

Zangazur Corridor becomes apparent through these estimations, showcasing the potentially 

transformative effects on trade dynamics among the involved nations (Lmhamad, 2022).  

The corridor stands as a promising avenue for bolstering economic cooperation and 

connectivity, particularly in the energy sector, which aligns with the regional aspirations for 

enhanced trade relationships and economic development. The Gravity Model analysis 

underscores the crucial role of the Zangazur Corridor in reshaping trade dynamics, providing 

an optimistic outlook for increased trade activity, energy exchange, and strengthened economic 

ties among the participating countries. (Gawliczek, 2023) This analysis offers valuable insights 

into the anticipated trade effects of the Zangazur Corridor, reinforcing its significance as a 

catalyst for regional economic development and fostering increased economic cooperation 

among the involved nations. 

 

 

 



THE GEOPOLITICAL IMPLICATION OF THE ZANGAZUR CORRIDOR: A DRIVER FOR 

REGIONAL ADVANCEMENT AND LINKAGE 

 

52 

 

CONCLUSIONS 

In the wake of the Russia–Ukraine conflict and the subsequent reevaluation of 

transportation routes, the Zangazur Corridor emerged as a pivotal element in the regional 

landscape. This passage, strategically positioned in the liberated territories of Azerbaijan, 

stands as a beacon for fostering regional progress and heightened connectivity in the South 

Caucasus region. The discussions surrounding this corridor underscore its potential 

significance in enhancing economic ties, fortifying trade relations, and reshaping geopolitical 

dynamics among the neighboring nations. The proposed Zangazur Corridor provides an 

unprecedented opportunity to revolutionize trade networks, bridge regional divides, and drive 

comprehensive economic development. Moreover, the strategic positioning of this corridor 

serves not only as a physical connector but also as a symbol of potential collaboration and 

mutual prosperity among the nations involved. As these territories transform, the Zangazur 

Corridor stands as a testament to the region's resilience, offering prospects for increased 

economic cooperation and regional integration. The impending realization of this corridor 

bears the promise of an era of economic rejuvenation, peace, and stability in the South 

Caucasus. Its potential impact on trade, infrastructure development, and regional cooperation 

envisions a path towards a more prosperous and connected future for the involved nations. 

 

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3. Iskandarov, I., et al. (2020). "Geopolitical Shifts in the South Caucasus." Eurasian Studies 

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4. Blank, R. (2022). "The Zangezur Corridor: Implications for East-West Trade." Global 

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5. De Waal, T. (2021). "The Second Karabakh War: Economic Prospects and Trade 

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Muhammad GULAHMADOV, Nargiz HAJIYEVA 

 

53 

 

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