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What advantages will the Bahrain Hub give Turkmenistan?

24.02.2023 | 12:09 |
 What advantages will the Bahrain Hub give Turkmenistan?

After the talks between the heads of Turkmenistan and Bahrain, the sides published a joint communique outlining the basic principles of further cooperation and plans for the near future.

As it became known, Manama and Ashgabat welcomed the recognition of Turkmenistan as a partner in the Global Logistics Hub "sea-air", which provides continuous communication between the markets of Asia and Europe. In this article, ORIENT will tell you about the strengths of this international hub and help you understand what advantages it will give to Turkmenistan.

A little bit about Bahrain

Bahrain is a small island state: its area is 760 km2, which is less than the territory of the Turkmen capital by almost 200 km2. However, despite its small size, this Arab kingdom plays an important role in the Persian Gulf basin. The thing is that almost a hundred islands on which the state is located occupy significant water areas that have the status of a special economic zone.

In addition, Bahrain is one of the largest regional players in the oil market. If earlier it was believed that the reserves of the "pearl country" were at the limit, then after the discovery in 2015 of a new giant shale oil field with a volume of 80 billion barrels, Bahrain regained leverage over world oil quotes. However, the leadership itself opposes limiting economic development only to the realization of oil potential. As a result, the non-carbon sector of the economy is increasing, the share in total export revenues of which has already exceeded 25%.

Thanks to its currency, the second strongest in the world, and a simplified tax system, Bahrain has become one of the largest centers of banking operations and free currency circulation zones, as a result of which the largest Arab companies in the world are registered here. The exceptional location in the Persian Gulf, which is of particular value from the point of view of global logistics, led to the formation of the so-called "Bahrain Global Sea-Air Logistics Hub" in 2021.

Какие преимущества даст Туркменистану «Бахрейнский узел»?

Logistics hub "sea-air": what do we know about it?

The Bahrain Hub, as this route is called in another way, is the fastest multimodal logistics center in the region, which allows you to service containers in just 2 hours.

This point does not connect any particular established route, but is a place where the main traffic flows converge. This location is based on a strategic location halfway between the Asian and European markets. It has a global reach, thanks to a combination of sea and air transshipment infrastructure.

In practice, the hub relies on optimized clearance procedures and full digitalization, which ensure high-speed delivery of goods from the Bahraini air port to the sea port and vice versa. As Arab sources note, this is exactly the main "trick" of the node: the need for costs for this very transshipment is covered by the mobility and speed of delivery of goods. Thus, the node helps to deliver goods 50% faster compared to purely sea transportation, and at the same time 40% cheaper compared to air.

This combination of transport is very important for Turkmenistan, since most likely the export of goods will be carried out by aircraft, and only then by sea. For this purpose, an appropriate legal platform was prepared – an agreement on air communication between Turkmenistan and Bahrain.

Bahrain's transport minister once said: "Thanks to our unique location, the proximity of our ports, as well as the close cooperation of our regulators, operators and port administrations and our modern solutions, we can create a hub for global logistics companies."

What can the Bahrain Hub offer Turkmenistan?

Turkmenistan's partnership within the framework of the hub project will provide Turkmen companies with the opportunity to become authorized and trusted shippers in Bahrain's Sea-Air Global Logistics Center. In addition to this, not only companies can become full participants, but also users of all this infrastructure – exporters.

All the necessary conditions have been created for this. For example, in the adjacent free economic zones, 100% foreign ownership is allowed for enterprises, no duties on export-import operations, free use of land in state industrial zones for 3 years, discounts on electricity for the first 5 years of operation, and others.

At the moment, Turkmenistan is building stable ties with the countries of the Persian Gulf: recall at least the recent meetings of high-ranking officials of Ashgabat and Abu Dhabi. This suggests that Turkmenistan intends to become the main logistics center by integrating the Eurasian routes "North–South" and "West–East", as well as providing high-speed access of goods from the Central Asian republics and Russia to the Middle East market.

And under such optimal conditions that Manama can provide, Turkmen aircraft will easily "break through the window" to the markets of the GCC countries (Saudi Arabia, Kuwait, UAE, Qatar, Bahrain and Oman).


Turkmenistan is joining the partnership in the Sea-air Global Logistics Hub in order to gain a strategic advantage in trans–Eurasian transportation from the countries of the region to the Persian Gulf states, and further by sea to Africa, Europe, South, Southeast and East Asia.



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