Geopolitical Report ISSN 2785-2598 Volume 33 Issue 11
Author: Vlad Kondratiev
The Astrakhan region has historically served as a significant centre of Russian presence in the Caspian region for centuries. Since the late 20th century, following the geopolitical shifts caused by the collapse of the Soviet Union, Astrakhan’s role in Russia’s Caspian policy has acquired considerable prominence.
Historical Significance of Astrakhan in Caspian Geopolitics
Modern Astrakhan was established in 1558 as a wooden and earthen fortress on the elevated Hare or Long Hill in the upper reaches of the Volga delta. In 1580, construction began on the Kremlin (a citadel within a Russian town) with towers on the site of the wooden walls. Subsequently, a caravanserai emerged, attracting people from various regions. Russian, Armenian, and Tatar settlements developed around the city.
From the 16th to the 18th centuries, Astrakhan served as a gateway to Asia for both Russia and Europe. Much of this was attributed to the efforts of Russian Emperor Peter the Great, who, through the Persian campaign of 1722-1723, laid the groundwork for Russia’s expansion towards the southern Caspian region.
The region established its own Cossack army, navy, admiralty, shipyard, and port. By the 19th century, with the growth of the Baku oil fields, Astrakhan transformed into a significant oil market. The port of Astrakhan also evolved into one of Russia’s largest.
During World War II, Astrakhan played a pivotal role as a transit hub for transporting Baku oil products to the military. Post the 1960s, Astrakhan witnessed the creation of a globally impactful industrial foundation for Caspian shelf development within the USSR.
Russian Foreign Minister Sergei Lavrov, in recent speeches, highlighted Astrakhan’s consistent importance in the realisation of Russia’s Caspian regional goals. In recent years, the region has maintained its leadership status in international relations, primarily with its Caspian Sea neighbours. Consequently, Astrakhan was selected as the venue for the Fourth Caspian Summit in 2014. This summit proved productive, establishing the basis for the Convention on the Legal Status of the Caspian Sea.
The Russian Foreign Ministry plans to establish the Caspian Council in Astrakhan as a platform for regular meetings to foster ongoing Caspian cooperation. This initiative extends beyond mere preparation for future Caspian state summits.
Economic Significance of the Astrakhan Region
Beyond its political significance, Astrakhan is emerging as a vital economic centre in southern Russia. This transformation is driven by significant investments, logistical improvements, and oil and gas infrastructure development within the region.
Astrakhan has actively contributed to forming the transport and logistics infrastructure of the International North-South Transport Corridor (INSTC), positioning itself as a critical transit hub for goods exchange.
The Caspian cluster is under development, encompassing the “Lotos” Special Economic Zone (SEZ) and a port SEZ in the village of “Olya.” These initiatives are poised to fuel the Astrakhan region and Russia’s economic growth. This cluster is being established as a cargo-handling base for the INSTC. Its aim is to enhance the competitiveness of Russian Caspian Sea ports, attracting additional cargo flow from the Middle East and South Asia.
Logistics centres are planned for construction in the Limansky district of the Astrakhan region according to the Russian Government’s November 7, 2020 Decree No. 1792. SEZ residents will enjoy benefits, enabling port operations, as well as infrastructure facility construction, reconstruction, and operation. An anchor investor, PLC Kaspiy LLC, is committed to building a modern container terminal. This project involves equipping two unused berths of the Olya port with the necessary loading and unloading equipment.
Subsequent phases involve terminal construction in the Ilmen Zaburunny area. The cumulative outcome of these measures is the creation of a modern competitive port next to the Caspian Sea, boasting an 8-million-ton capacity by 2031. Private investment is projected to exceed 16 billion roubles, and further growth is expected as the project evolves. This initiative will boost cargo turnover through the Astrakhan port SEZ over the next decade, reaching 8 million tons.
Regarding the Lotos Special Economic Zone, which was established years ago, the region currently hosts 19 companies with a combined declared investment of over 40 billion roubles. Notably, these residents include firms from Iran, China, and other countries. These companies are engaged in projects ranging from geosynthetics and fish feed production to ship construction. With several operational plants and others under construction, including Iran’s first detergent plant in Russia, this zone is diversifying the region’s economic landscape.
In the oil and gas sector, the beginning of 2022 saw 11 hydrocarbon deposits listed on the state balance sheet, with another 11 deposits in the Russian sector of the Caspian Sea’s seabed. The region boasts explored reserves exceeding 4.7 trillion cubic meters of gas and over 1 billion tons of condensate and oil. Furthermore, offshore fields hold recoverable reserves exceeding 570 billion cubic meters of gas and 320 million tons of condensate and oil. Astrakhan’s reserves account for roughly 20% of Russia’s total condensate reserves and 5% of its natural gas reserves.
The Russian company Lukoil is significantly involved in Astrakhan’s oil and gas sector. Currently, Lukoil operates two Caspian fields, Korchagin and Filanovsky. Over 47.5 million tons of oil have been produced since the onset of their development. Infrastructure installations, including an ice-resistant fixed platform and a residential module platform, have been completed in the Greifer field’s offshore area.
The region also witnesses expansion in gas production and processing through the efforts of the company Gazprom Dobycha Astrakhan. As part of PJSC Gazprom’s decision to increase annual production in the Astrakhan Arch fields, Gazprom Dobycha Astrakhan is actively involved in designing an additional gas pre-treatment unit. This unit includes technological facilities, communications, and an additional production well fund. The Astrakhan Gas Processing Plant (GPP) under LLC Gazprom Pererabotka is concurrently engaged in design and survey work to enhance the efficiency of the Astrakhan GPP.
The shipbuilding industry remains a cornerstone of the Astrakhan region’s economy and the broader South Russia area. Astrakhan’s shipbuilders help to construct ice-resistant fixed platforms for Filanovsky, Korchagin, and other fields. Furthermore, the construction of the cruise liner “Peter the Great” is nearing completion.
The region’s shipyards also engage in building tankers, bulk carriers, special-purpose vessels, and dredgers. With over 4,000 workers employed, the sector is well-equipped to fulfil various orders. The regional government actively seeks to attract contracts to local shipyards. Notably, an agreement has recently been reached for the construction of a series of container ships for the INSTC.
Astrakhan’s International Relations with Caspian Countries
The Astrakhan region is proactive in fostering cooperation with its counterparts in Caspian countries. Traditionally, the Republic of Azerbaijan stands as a key partner for the Astrakhan region in the Caspian. Over the years, the region has nurtured trade, economic, and cultural ties with Baku. This partnership operates under an agreement between the governments of the Astrakhan region and the Republic of Azerbaijan, encompassing trade, economics, science, technology, and culture.
Since 2010, the Heydar Aliyev Foundation has undertaken several noteworthy cultural projects in Astrakhan. A symbol of friendship between Baku and Astrakhan, a monument gifted by the Astrakhan region, now graces the Azerbaijani capital. In 2018, the Azerbaijan Business Centre commenced operations in Astrakhan, followed by the opening of the Astrakhan Business Centre in Baku in 2021. This centre currently stands as the sole Russian regional representative office in Azerbaijan of its kind.
Progress has also been made with Turkmenistan in establishing a logistics centre in Astrakhan, with discussions ongoing about launching a regular shipping line between Olya and Turkmenbashi. Notable opportunities exist for collaboration with the Balkan plant in Turkmenbashi’s Turkmen port concerning shipbuilding. In 2022, a cooperation agreement was signed between the region and the khyakimlik (local executive authority) of Turkmenistan’s Balkan velayat.
Cooperative ties extend to Kazakhstan’s border regions as well. The parties explored the possibility of establishing a border trade centre to boost mutual trade. Astrakhan has developed twinning relationships with the Kazakh cities of Aktau and Atyrau. In 2022, a memorandum of cooperation was signed between the Duma of the Astrakhan Region and the Mangistau Regional Maslikhat of the Republic of Kazakhstan.
Engagement with Iran’s Mostazafan Fund, the second-largest business association in Iran after the National Iranian Oil Company, is another facet of Astrakhan’s international relations. On June 1st, 2022, a delegation led by Parviz Fattah, head of the Mostazafan Foundation, visited Astrakhan. The delegation included top fund managers and holding leaders. This visit reciprocated a meeting between Astrakhan Region Governor Igor Babushkin and Parviz Fattah in Tehran in July 2021.
Over three days, the Mostazafan delegation explored the Astrakhan region’s socio-economic potential, visiting industrial and agricultural enterprises. They engaged with Iranian entrepreneurs operating in the region and toured the Astrakhan branch of the Iranian Mir Business Bank.
Parviz Fattah conveyed that the Mostazafan Foundation aims to establish a permanent office in Astrakhan. A program for cooperation between the Astrakhan region’s government and the Mostazafan Foundation for 2022-2026 was signed at the visit’s conclusion. This comprehensive document outlines joint activities across multiple sectors, including cargo transportation development between Iran and Russia using Astrakhan’s transit capabilities, shipbuilding, ship repair cooperation, and more.
Efforts to strengthen ties with Tehran were also clear during the visit of the Iranian delegation, headed by Ambassador Extraordinary and Plenipotentiary Kazem Jalali, to the Astrakhan region in September 2021. During this visit, discussions encompassed economic, educational, and cultural potential. Notably, the Iranian ambassador explored potential cooperation in transport, logistics, and trade, emphasising Astrakhan’s pivotal role in Caspian Sea communications. Plans included the restoration of the Persian courtyard and the Persian mosque in the regional centre, architectural heritage sites in need of restoration.
Kazem Jalali highlighted the prospects of collaboration in transportation, logistics, and trade. He aptly described Astrakhan as the “heart of communications on the Caspian Sea.” These exchanges fostered cooperation between the region and Iran’s provinces.
An additional momentous event involving the Astrakhan region’s international relations was the “Caspian – Sea of Friendship” motor rally, conducted from April 1 to 11, 2023. Supported by federal authorities, the rally was led by Astrakhan Region Governor Igor Babushkin. This event enabled negotiations between the Astrakhan delegation and Caspian Sea neighbouring countries. Over 11 days, the rally covered 4,915 kilometres, spanning Kazakhstan, Turkmenistan, Iran, and Azerbaijan. The outcome included preliminary agreements among Caspian states to establish an association of special economic zones for Caspian Sea countries and those traversed by the North-South ITC.
Astrakhan’s International Humanitarian Initiatives
Astrakhan maintains its historical tradition of fostering international relations in education and culture.
In 2022, approximately 5,334 foreign citizens studied within the region’s educational institutions. Notably, the number of students from Azerbaijan, Iran, India, and other countries witnessed an upswing. In the same year, nearly 11,000 foreign citizens sought medical treatment in regional healthcare facilities.
The tradition of hosting international events in Astrakhan persists, featuring the Caspian Media Forum, the Scientific Caspian Forum, the Caspian Medical Forum, and the SELIAS Forum. These platforms continue to shape a positive international agenda in the Caspian region, positioning Astrakhan as a strategically significant entity within Russia’s Caspian pursuits.
Astrakhan’s Relations with India
The Astrakhan region’s international relations extend beyond Caspian countries. On April 27th, 2023, Pawan Kapoor, Ambassador Extraordinary and Plenipotentiary of the Republic of India to the Russian Federation embarked on a landmark visit to Astrakhan. This visit holds special significance, given the historical presence of Indian merchants in Astrakhan, who maintained a trading compound in the city.
The Ambassador’s visit, alongside an accompanying business mission from Indian circles, aimed to familiarise them with Astrakhan’s economic potential and explore opportunities for mutually beneficial collaboration.
During the visit, an international conference titled “Astrakhan Region – Republic of India: New Horizons of Business Partnership” convened. This conference delved into potential collaborations between Astrakhan and the Indian business sectors in trade and logistics. Participants included representatives from Russian and Indian authorities, as well as trade, logistics, and transport companies.
Pawan Kapoor highlighted that the India-Russia trade turnover reached a historical peak of $45 billion by the end of 2022. He underscored India’s readiness to provide Russian consumers with diverse goods, such as food products, medicines, and chemicals. The possibility of Indian companies establishing production facilities in the Lotus Special Economic Zone within Astrakhan intrigued the Indian side.
Roundtable discussions delved into various facets of cooperation between Astrakhan and Indian entities, particularly in logistics and trade. Enhancing cargo turnover along the North-South corridor, with a focus on delivering agricultural products, emerged as a priority for both countries. Creating a logistics hub in Astrakhan with dedicated food storage warehouses and centralised regulatory authorities garnered interest from the Indian side.
A pivotal meeting between Astrakhan Region Governor Igor Babushkin and Pawan Kapoor marked the Ambassador’s visit. The Governor highlighted the development of the INSTC as a key avenue for collaboration with India. He invited Indian firms to invest in the port SEZ infrastructure and to become residents of the Lotus SEZ. Discussions also encompassed the prospects of partnership in shipbuilding.
Pawan Kapoor acknowledged India’s historical ties with the Astrakhan region, recalling Indian Prime Minister Narendra Modi’s visit to Astrakhan during his tenure as Chief Minister of the state of Gujarat in 2006. The Ambassador noted ongoing discussions at the governmental level regarding an intergovernmental agreement on shipbuilding and ship repair, emphasising Astrakhan’s potential role in the agreement’s implementation.
The Military and Political Significance of Astrakhan
Astrakhan continues to hold military and political importance, with several military centres and training grounds operating within its boundaries. These facilities test Russia’s latest weaponry and military equipment.
The Kapustin Yar State Flight Test Centre near Astrakhan is engaged in testing advanced military systems, such as the S-500 anti-aircraft missile system, designed to neutralise a wide spectrum of existing and future aerospace threats.
The Akhtubinsky district houses the State Flight Test Centre named after V.P. Chkalov, where various aircraft like the Su-30, Su-34, MiG-35, Yak-130, Il-76MD-90A, Mi-28, Ka-50, and Ka-52, among others, undergo testing. The Su-35S multifunctional fighter’s state tests were conducted here, and testing of the prospective Su-57 aviation complex was also conducted.
The Ashuluk military training ground, situated in the Kharabalinsky district, hosts exercises for Russia’s and CIS countries’ anti-aircraft missile forces.
The region’s significance is also manifested in discussions about regional security. In 2022, representatives from Azerbaijan, Iran, Kazakhstan, Russia, and Turkmenistan convened in Astrakhan to address offenses committed in the Caspian Sea waters, including environmental crimes. This event was conducted under the declaration signed by the Prosecutors General of Caspian states in St. Petersburg in 2021, outlining cooperative efforts toward environmental protection and Caspian Sea resource utilisation.
A meeting held in Astrakhan on April 27th, 2022, addressed national security issues in Russia’s southern region. It was chaired by Nikolai Patrushev, Secretary of the Security Council of the Russian Federation, and attended by Vladimir Ustinov, Plenipotentiary Representative of the President of the Russian Federation in the Southern Federal District, regional heads, and federal ministry and department representatives.
Recognition of Astrakhan as a Priority Geostrategic Territory
The federal government recognises and supports the Astrakhan region’s development initiatives. Amendments to the Strategy for Spatial Development of the Russian Federation for the period up to 2025 are under consideration, designating the Astrakhan region as a priority geostrategic territory. This designation aligns with the region’s sustainable socio-economic development, territorial integrity, and national security goals.
The Federation Council’s Committee on Economic Policy, headed by Chairman A. Kutepov, convened on May 18th, 2021, to discuss the Astrakhan region’s development as a priority geostrategic territory. Representatives from federal and regional authorities took part in the discussions.
In summary, the Astrakhan region’s geopolitical significance remains paramount within Russia’s strategies for the Caspian region and beyond. The region’s historical, economic, military, and cultural ties continue to shape its role as a key player in Russia’s engagement with neighbouring countries and its broader global aspirations.
Report in media partnership with Kaspiskij Vestnik. This report was originally published by Kaspijskij institut strategicheskih issledovanij (KISI). Disclaimer: The views and opinions expressed in this article are solely those of the author and do not necessarily reflect the official stance or endorsement of SpecialEurasia. SpecialEurasia does not assume any responsibility or liability for the accuracy, completeness, or validity of the information presented in this article. Readers are advised to exercise their own discretion and judgment when interpreting and applying the content provided herein.
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