As the ripples of Russia’s invasion of Ukraine pulse outward, they have left one region especially volatile: the South Caucasus. The Ukrainian conflict has paradoxically raised the likelihood of both further fighting and a negotiated peace in this area between the Caspian and Black Seas. The region was the site of a brutal war in 2020 between Armenia and Azerbaijan over the disputed territory of Nagorno-Karabakh—an Armenian-populated enclave within Azerbaijan—and adjacent regions. The 44-day war left around 7,000 people dead and saw Azerbaijan inflict a crushing defeat on Armenia, reversing territorial losses it had suffered in fighting during the 1990s. The war also left unresolved questions, lingering disputes, and simmering tensions. In March, just as Ukraine used Turkish-made Bayraktar drones to repulse Russian forces, Azerbaijan used the same type of drones to strike Armenian troops in Karabakh.

Now that Russia is bogged down by its war in Ukraine, Russia’s centrality to any settlement of this conflict—in what it sees as its own backyard—is in doubt. Peace talks are underway between Armenia and Azerbaijan under the auspices of the European Union. In May, Armenian Prime Minister Nikol Pashinyan and Azerbaijani President Ilham Aliyev met in Brussels for what European Council President Charles Michel described as “productive” talks. The parties are making progress on two major issues: the reopening of transport routes across closed borders and the demarcation of the official border between Armenia and Azerbaijan. On a third, the future status of the Armenian population of Karabakh, the core issue of the conflict since 1988, intense wrangling continues even on the terms of debate.

The shadow of the war in Ukraine hangs heavy over these negotiations. The Kremlin helped forge a cease-fire deal in November 2020 under which it deployed a peacekeeping force to Karabakh. Russia is the closest military and economic ally of Armenia and also signed a partnership agreement with Azerbaijan two days before the invasion of Ukraine, declaring friendship and promising deeper economic cooperation. Now, however, its setbacks in Ukraine have limited Russia’s capacity to project power in its neighborhood. Its military and diplomatic chiefs are distracted, and local powers can more easily ignore its instructions and threats. These limitations may help explain both why there has been an upsurge in violence in and around Karabakh and why the EU has supplanted Russia as the major mediator between the two sides. The diminished Russian role has caused instability, but it also gives Armenia and Azerbaijan an opportunity, if they wish to seize it, to work toward a definitive and historic peace settlement.

A POSITION OF STRENGTH

The pendulum has swung decidedly in Azerbaijan’s favor in this 30-year conflict. In 1994, the Armenians won a military victory in the first war with Azerbaijan, following which they not only held Karabakh but occupied partially or wholly the seven Azerbaijani districts around the enclave, having forced out more than half a million people who lived there. In 2020, the Azerbaijanis recaptured these seven regions and seized around a third of the territory of Nagorno-Karabakh, driving out at least 20,000 Armenians. It is the Armenians of Karabakh who now feel threatened, concerned that if it were not for the Russian peacekeeping force, they would be forced to quit their homes altogether.

In March, tensions and violence surged again. The gas pipeline from Armenia into Karabakh was cut off, disrupting supply and leaving Karabakh Armenians without heat in freezing temperatures. The Armenians alleged Azerbaijani foul play in the severing of the pipeline, while the Azerbaijanis mostly refused to comment. At the same time, Azerbaijani forces set up loudspeakers outside Armenian villages and played the Azerbaijani national anthem and intimidating messages in the Armenian language, telling the inhabitants to pack their bags and leave. Then, Azerbaijani soldiers defied Russian peacekeepers and marched into the Armenian village of Parukh. Local Armenian forces tried to push the Azerbaijanis from the high ground above the village, but the Azerbaijanis responded by deploying the fearsome Turkish Bayraktar drones that had helped them win the 2020 war, killing at least three Armenian soldiers.

The war in Ukraine looms over negotiations to end the conflict in Nagorno-Karabakh.

A clamor of different interpretations followed the fighting. Some concluded that Russia was colluding with Azerbaijan to deliver a warning message to Armenia; Armenia had abstained rather than support Russia at the UN General Assembly vote in March that condemned the invasion of Ukraine. Others speculated that Baku was testing the resolve of the Russian peacekeepers and Moscow’s political commitment to this mission. Azerbaijan and Russia had never agreed to a written mandate for the peacekeeping operation, and the Russian forces had no clear rules of engagement. Since the beginning of the war in Ukraine, Russian troop numbers in the Karabakh region have dipped a little from a peak of 1,960 to around 1,600. Unlike in other conflict zones where Russia has deployed troops, such as in the breakaway states of Abkhazia and Transnistria, its mission in Karabakh has an expiration date: November 2025. The mission can be renewed for another five years, but it can also be terminated if one of the three parties to the 2020 agreement—most likely Azerbaijan—withdraws its consent six months before the end date.

Azerbaijan feels confident. The war in Ukraine sent European officials rushing to Baku, desperate for Azerbaijani gas as a substitute for Russian energy supplies. Almost all Azerbaijanis reveled in the success of the 2020 war, feeling it somehow lifted a three-decades-old national curse from their country. Victory gave Aliyev, president since 2003, a fresh mandate. He has used it to press for more concessions from the Armenians, employing occasional force and political rhetoric. One Azerbaijani expert described the tactic to me as “coercive diplomacy.” The Armenians would say that they see much more coercion than diplomacy. The defeat in the brutal 2020 war still traumatizes Armenian society. Around 4,000 young Armenian men died in just six weeks.

Armenia’s prime minister seems ready to open a new chapter in relations with his neighbors. Ever since Pashinyan came to power in a peaceful revolution in 2018, his main agenda has been reform and state building in Armenia itself, distinguishing himself from his two predecessors, who hailed from Karabakh and made the cause of freeing that territory from Azerbaijani control the cornerstone of their policies. 

Despite losing the war, Pashinyan convincingly won elections in June 2021. That has given him, he evidently believes, a mandate to negotiate unpopular deals with both Azerbaijan and Turkey. In April, Pashinyan responded in cautiously positive terms to a five-point plan from Azerbaijan that called for Armenia to recognize Azerbaijan’s territorial integrity and withdraw its support for Karabakh’s secession from Azerbaijan.

On April 13, Pashinyan gave a momentous speech to parliament in which he backed away from traditional Armenian positions on Karabakh. “The Karabakh issue,” he declared, “is not a matter of territory but of rights,” saying in effect that securing guarantees from Baku for the protection of the Armenian population now superseded Yerevan’s territorial claims. This change in policy triggered large street demonstrations in Yerevan led by an alliance of former Armenian leaders and Karabakh Armenians. The public is generally behind the prime minister, in large part because his predecessors were so unpopular, but much of the political establishment is firmly against what it sees as a betrayal of the 30-year-old national cause of independence for Karabakh.

THE EU STEPS IN

Pashinyan’s willingness to ruffle feathers at home has given momentum to the talks with Azerbaijan. But a thicket of thorny issues remains to be cleared. Michel, the president of the European Council, has entered the fray as the most effective mediator. Seen by the sides as more of an honest broker than Moscow, Michel has facilitated a new bilateral channel between two special advisers from each side. The first order of business is to resolve outstanding humanitarian issues: Armenia seeks the release of around 38 detainees, considered to be prisoners of war by the Armenians, still in Azerbaijani custody; Azerbaijan accuses the other side of withholding information about the positions of minefields in the territories the Armenians lost in 2020 and the locations of the graves of around 4,000 Azerbaijani soldiers still missing from the war in the 1990s. Even on such humanitarian issues, as one EU official told me recently, “Everything is transactional.”

A bigger piece of business is to act on the final point of the 2020 cease-fire agreement, which calls for the opening of “all economic and transport connections in the region.” The agreement specifically mentions Azerbaijan’s demand for a new route reconnecting western Azerbaijan to the exclave of Nakhchivan, which is tucked between Armenia and Iran and has been isolated from the rest of Azerbaijan for 30 years.

In Brussels, the two sides apparently agreed to the principles of a deal on transport routes. But many difficult details remain, with the Armenian side insisting on seeing several routes opened rather than just one and the Azerbaijani side wanting assurances of minimal official Armenian presence along the new route. An agreement on these routes would have important consequences. It would give new international rail connections not just to Armenia and Azerbaijan but also to Iran and Turkey. In light of the war in Ukraine, a deal would boost the so-called Middle Corridor, the little-used transit route between western China and Turkey that bypasses Russia by snaking through Central Asia, the Caspian Sea, and the South Caucasus.  

WHITHER RUSSIA?

What has gone unspoken in the talks is as telling as what has been spoken. In several months of public messaging by the European Union, officials have consistently left out two words: “Russia” and “Karabakh.”

Europe’s titanic struggle with Russia over Ukraine precludes any formal cooperation with Moscow in the Caucasus—yet Moscow’s involvement is unavoidable. The Russians have bristled at what they see as a Western attempt to hijack the peace process they launched. In April, a Russian foreign ministry spokesperson condemned the EU’s “shameless attempts to appropriate the subject of the well-known Russian-Azerbaijani-Armenian agreements” reached in November 2020.

Moscow and Brussels can probably agree on most points of substance—except on the issue of Russia’s primacy as mediator. Western countries tacitly support the Russian peacekeeping force in Karabakh as a stabilizing factor—and besides, no one else is prepared to take on that role. But they undoubtedly have questions about what happens when the mission ends in 2025. Russia is supposed to be the security guarantor of the new road to Nakhchivan for an indefinite period—a provision that looks much less attractive now that its army is ravaging Ukraine.

In his May 23 statement, Michel mentioned the word “Karabakh” for the first time, saying, “I also stressed to both leaders that it was necessary that the rights and security of the ethnic Armenian population in Karabakh be addressed.” Its omission in previous statements points to the strength of Azerbaijan’s position in the current negotiations. Baku now insists that Karabakh no longer exists as a territorial entity and, since the Armenians previously never agreed to discuss the region’s autonomy within Azerbaijan, they have forfeited that right now. As one Azerbaijani official said, referring to Azerbaijan’s original proposal for self-rule made before the war, “We offered it, you rejected it.” That is why Baku insists on not mentioning the name Karabakh in international communiques—even though the November 2020 agreement signed by Aliyev mentions “the zone of the Nagorno-Karabakh conflict.” From its position of strength, Azerbaijan hopes to quash the Karabakh Armenians’ desire not only for secession but also for self-government.  

Sooner or later, however, dialogue must begin on the future status of the Karabakh Armenians, the issue that triggered this disastrous conflict in 1988, when the region was still part of the Soviet Union. Baku will have to declare what rights and provisions it is ready to extend to the Armenian inhabitants of Karabakh, and the Karabakh Armenians themselves will have to acknowledge that if only by virtue of geography and their energy and economic needs, their future lies within Azerbaijan.

MENTAL SHIFT

For more than 30 years, the Karabakh conflict has been central to the modern national identities of both the Armenians and the Azerbaijanis. It has dwarfed other—arguably much more important—considerations about their international ambitions or the challenges posed by their larger neighbors, Iran, Russia, and Turkey. Both sides still use language that excludes the other: for example, the Armenians call Karabakh by the old Armenian name Artsakh, implying a region without Azerbaijanis, and the Azerbaijanis call the Armenian-populated town of Stepanakert by an Azerbaijani name, Khankendi.

To overcome this legacy, a mental shift is needed. Armenian officials say that Pashinyan is now signaling the start of such a shift, weathering a fierce domestic backlash for doing so.   

Aliyev’s position is more ambiguous. From time to time, especially to international interlocutors, he makes conciliatory statements. Speaking to his own public, however, he is much tougher, continuing to deliver triumphal victory speeches that mock the Armenians. For example, speaking on April 22 in the town of Shusha, which was recaptured from the Armenians at the end of the war in 2020, Aliyev proclaimed: “Armenia was brought to its knees before us, bowed its head, was forced to sign an act of capitulation . . . and it is still in that situation now.”

Russian peacekeepers in Nagorno-Karabakh, November 2020
Russian peacekeepers in Nagorno-Karabakh, November 2020
Francesco Brembati / Reuters

These remarks smack of the macho stubbornness that has marked both sides for three decades. They reflect a belief that only force, not diplomacy, has achieved results in this conflict. In the 1990s, both sides employed systematic ethnic cleansing. No Azerbaijanis remained in Armenia or in Karabakh and its surrounding Azerbaijani regions, which were then completely leveled when they came under Armenian control. No Armenians remained in the city of Baku, where they once formed a large community, or in any regions under Azerbaijani control. Many in Azerbaijan evidently believe that it is still possible to solve the conflict by using those tactics again and forcing the Armenian population to leave Karabakh. They might even succeed—but this would undoubtedly lead to a new cycle of violence and deepening resentment in Armenia.

For the first time in years, the parties now have some space to pursue a peace deal, thanks to the mediation of the EU. But it could all easily unravel, especially given the unstable geopolitical environment. It will become clear in the next few months if both sides of the conflict—and especially Azerbaijan, the victor of 2020—decide they want to make the most of a chance to seek an elusive peace.

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