The austere beauty of the mountains surrounding Stepanakert does little to relieve the morose atmosphere. Long a provincial town with an ethnic Armenian majority deep in western Azerbaijan, Stepanakert now styles itself the capital of the independent Armenian Republic of Nagorno-Karabakh. But not even Armenia, which urged Nagorno-Karabakh's secession and supported it in the subsequent war with Azerbaijan, recognizes the enclave as a state. After almost seven years of violence and another two under a shaky cease-fire, the enclave's economy is deteriorating and the population is declining. This has done little to mitigate the sense of ethnic grievance and nationalism that prevails in the mountain fastness of High Karabakh.

Nagorno-Karabakh's Armenians had agitated for autonomy for decades before declaring independence in July 1988 as the Kremlin's hold over the Soviet Union slipped. (The 1989 Soviet census in the enclave showed a population about three-quarters Armenian and one-quarter Azeri.) That February, some 30 ethnic Armenians had been killed in a pogrom in Sumgait, and more would die later that year in Baku, the capital, and other towns in Azerbaijan outside Nagorno-Karabakh; the government of Azerbaijan probably encouraged the massacres, and certainly did little to prevent them. When the enclave seceded, Baku sent police commandos to suppress the Armenian militants. By 1991 Nagorno-Karabakh was at war. Three years later, Karabakhi fighters, supported by Armenian regular troops and Russian advisers, had routed Azerbaijani forces far superior in number. Not only had the Karabakhis gained control of the enclave's 1,700 square miles, but they had seized territory beyond its borders amounting to approximately ten percent of the rest of Azerbaijan.

Some 25,000 people died in the fighting, according to Human Rights WatchffiHelsinki, and indiscriminate shelling of civilians, hostage-taking, and torture of prisoners were reported on both sides. A December 1994 cease-fire has brought no peace agreement. The initial massacres led about 400,000 ethnic Armenians to flee Azerbaijan proper. The war also uprooted some 700,000 ethnic Azeris, Kurds, and others from Armenia, captured areas of Azerbaijan, and Nagorno-Karabakh; all 40,000 Azeris in the enclave, a quarter of the population, fled or were expelled. Those refugees have since been living in camps in Azerbaijan.

Even though 20,000 Karabakhi Armenians are under arms, there is little trace of fighting today in Stepanakert. Its apartment blocks and low houses are dusty and rundown and water and electricity are scarce, but such is the case in many other remote, impoverished corners of the former Soviet Union, including most of Armenia and Azerbaijan. The fa ades bearing shrapnel marks and the occasional building gutted by rocket fire look as if they were damaged long ago. Neighboring Susa, overwhelmingly Azeri before the war, is now a ghost town, the Armenian church steeple rising over the ruined mosque. But in the nearby capital, as throughout Nagorno-Karabakh, the overall impression is of dilapidation, not war.

ENEMIES EVERYWHERE

Rebuilding and refurbishing is going on in the would-be capital of Stepanakert, at least among the grim official buildings around the main square. In the Soviet era, these formed the backdrop for the annual May Day rallies and the commemorations of World War II. Karabakhis, people in Stepanakert like to boast, served in that conflict in numbers far exceeding their share of the population. "Armenians are natural fighters," a Karabakhi government official told me. "When the call came, we joined frontline units. Azeris don't like to fight. In the Great Patriotic War [World War II], in the Red Army, in Afghanistan, it was always the same-you found them in construction battalions."

In Stepanakert today, the big annual celebration marks Nagorno-Karabakh's independence and military victories over the Azeris. To judge by the video of a recent parade, which Karabakhi officials appear to enjoy playing for their infrequent visitors, the ceremony is a miniature version of the reviews vaunting Soviet military might that used to be staged in Moscow's Red Square. Generals are driven by, saluting, and the troops goose-step past, followed by tanks, armored personnel carriers, and vehicles laden with rockets, while planes and attack helicopters streak overhead.

As he watched the tape with me during my visit last summer, the deputy foreign minister of the "republic," Valery Atajanian, could barely contain his excitement. By his own admission he had seen the video countless times, but from the medal-laden veterans of 1945 to the children waving along the parade route, every detail seemed to thrill him. Finally, as one particularly fierce-looking group of fighters marched past, Atajanian could keep silent no longer. "Those are the special forces," he blurted out. "They're the best-real beasts."

As in other small, embattled societies, conversations in Nagorno-Karabakh are punctuated by assertions of military invincibility. Like the Turkish Cypriots, whose political discourse resembles that of these Armenian Christians, Karabakhis start from the premise that whatever they do will be misunderstood. They have no doubt that right is on their side-the atrocities that accompanied their victory and their negotiators' intransigence at the peace talks are the Azeris' fault-but the world is against them. Foreigners they regard with suspicion. Only the Armenian government, their friends in Moscow, and their brothers in the Armenian diaspora can be trusted-and them not always. From their mountain statelet, the Karabakhis glower down. At times they seem as unmoved by the suffering they themselves have caused and as immovable in their insistence on their right to the land as Nasi Gori ("Our Mountains"), a statue on the outskirts of Stepanakert that has become the enclave's emblem.

Nasi Gori is a squat concoction in reddish tuff fashioned for Soviet officials in the 1960s by a local sculptor, Sergei Bagdissirian. In a style reminiscent of nothing so much as a set for a 1950s Italian movie about the labors of Hercules, the monument portrays the massive heads of a pair of archetypal Karabakh grandparents. He is bearded, and she is either wearing a babushka or is simply too tightly framed by the improbable peaks of the mountains that form the top of the sculpture, representing Karabakh's terrain. "It would make a nice bunker," said an Armenian sculptor in Karabakh working on a piece celebrating Karabakhi independence. When I went for a look at the sculpture, sheep were grazing around it while their shepherd had a smoke. The base was deeply scarred by the initials of lovers, and on it rested an empty bottle of Armenian champagne and the remains of a chicken dinner being consumed by a horde of ants.

"That sculpture is strong, like Karabakh," a local politician told me. "It shows us as we are in our essence. It is the perfect representation of why the Armenian people here must be free on their own land." Asked if he went to the monument often, he hesitated, then replied in confident tones, "It's not necessary. Nasi Gori is in my soul. Of course, I would not expect a foreigner to understand."

THE ROAD TO ARMENIA

It is difficult just to get to Nagorno-Karabakh, let alone understand it. One must either come by helicopter or drive through the Lachin corridor, a formerly Azeri area southwest of Karabakh proper that was the heart of Red Kurdistan, a 1920s Soviet experiment in providing a national homeland for the region's Kurdish people. The Lachin corridor sits astride what the Karabakhis call the "road of life." This 50-mile-long route from the border of Armenia proper to Stepanakert, which an army of workers is now turning into a modern highway, is in many ways at the center of Karabakhi identity: for the Armenian separatists of Nagorno-Karabakh, life means, above all, the connection to Armenia.

And beyond Armenia are the three million members of the Armenian diaspora. The substantial communities in the United States, France, Argentina, and Lebanon are haunted by memories of the 1915-16 Ottoman Turkish genocide that left one million Armenians dead. The prospect of a Nagorno-Karabakh independent from Azeri rule (the Azeris are a Turkic people) led some diaspora Armenians to drop everything to fight for Nagorno-Karabakh. Such volunteers' efforts, though significant, were less important than the diaspora's well-funded international lobbying on Nagorno-Karabakh's behalf or its large financial contributions to the statelet. A telethon in Los Angeles last year raised $11 million for construction work on the "road of life"; diaspora Armenians were assured that $250 would underwrite a meter of roadway.

Whether one arrives in Nagorno-Karabakh by road or by air, one does so from Armenia. And, when asked, the people along the way seem deliberately vague about whether they live in Armenia, Nagorno-Karabakh, or what they call the "occupied territories." A "border post" just past the town of Lachin, like so much of the official rhetoric of Karabakhi independence, is largely a fiction. One can drive from the Armenian capital of Yerevan to Stepanakert and never show an identity document until the Karabakhi interior ministry checkpoint on the fringes of the enclave's capital. The Armenian currency, the dram, is universally accepted.

Lachin, like other places in the occupied territories, has been resettled largely by people from Armenia, particularly from areas devastated by the 1988 earthquake. For these settlers, the partially destroyed houses vacated by Azeris and Kurds are an improvement over the camps and makeshift shelters they had lived in back home since the disaster. "I had 40 square meters for myself and my family," a schoolteacher in Lachin told me matter-of-factly. "Here I have 100 meters. Of course, it needs some work."

Most Karabakhis are eager to see more Armenian settlement of the occupied areas so as to render the distinction between the enclave and Armenia even more meaningless, and the Armenian government seems eager to facilitate this movement of people. In any case, nothing happens in Nagorno-Karabakh without at least Armenia's tacit assent. The war was as much an Armenian victory as a Karabakhi one. Although the Karabakhis proved themselves fierce fighters during the three years of combat against vastly superior Azeri forces, they could never have prevailed without the troops, money, and advice from Armenia. (The Russians also provided some military aid, but, true to form, they helped the Azeris as well.) Nor would the Karabakhis have survived without Armenia, either economically or militarily, in this period of uneasy peace. Karabakh's flag is the Armenian tricolor with the crude addition of a jagged white line two-thirds of the way across symbolizing the division of the two Armenian states. Armenian President Levon Ter-Petrossian handpicked Nagorno-Karabakh's president, Robert Kocharian, who went on to win election. That the Ter-Petrossian government is running the show in Nagorno-Karabakh is a fact that officials in Stepanakert, who privately yearn for eventual union with Armenia, scarcely bother to deny.

The oppressed Armenians of Nagorno-Karabakh are in turn a potent symbol in the politics of Armenia proper. In the last years of the Soviet Union, Ter-Petrossian headed the Karabakh Committee, an Armenian organization that lobbied for autonomy for Karabakh, and he rode the issue to the presidency of independent Armenia. Polls in Armenia show that almost as overwhelming a majority favors absorption of the enclave as in Nagorno-Karabakh itself. But for the time being, the Armenian government hews to the fiction of Karabakhi independence, and, indeed, technically does not have diplomatic relations with the enclave.

THE LONG CEASE-FIRE

For Yerevan at this point to openly declare its ties with Nagorno-Karabakh would be economic suicide, as Azerbaijan would tighten its trade and energy embargo against Armenia. It would also doubtless put an end to the public negotiations on the future of the enclave, which include not only the three contending parties but the Organization for Security and Cooperation in Europe and separate representatives from the United States and Russia as well (although the consensus is that these talks have been getting nowhere). And it would almost certainly sabotage promising back-channel negotiations between Armenia and Azerbaijan.

The Azeris, for their part, are biding their time. They believe that when, in 1998 or 1999, they begin receiving substantial revenues from the oil pipelines now being built through their country, they will be able to negotiate the return of lost territory from a position of strength. There is also much talk in Baku of rebuilding the army. The Karabakhis fought brilliantly, but Baku's forces were less an army than a collection of militias that cooperated only intermittently and were not always paid by commanders whose venality was astonishing even by the standards of the Caucasus. Today Azeris point to the example of Croatia and its painstaking construction of a modern military in the years 1991-95. The more hard-line Azeris go further, promising that before the end of the century they will launch their own version of Operation Storm, the Croatian reconquest of the Krajina region. There is certainly no desire for battle today among ordinary Azeris. Whether there will be any taste for war a few years from now in Azerbaijan, a country with neither a martial tradition nor an effective government, remains to be seen. So does the question of whether Moscow would permit such an offensive to get off the ground.

From the Armenian perspective, however unsatisfactory the status quo, any change is politically risky. It will be difficult enough for Ter-Petrossian to agree to force the Karabakhis to hand back the occupied territories. For him to acquiesce to even the most generous autonomy arrangement that leaves Karabakh formally part of Azerbaijan is unthinkable. The Armenian diaspora, more radical on the Karabakh question than Armenians in the region-as diasporas usually are on such matters-would be incensed, and even a partial withdrawal of its support would be disastrous for Ter-Petrossian. Since independence, the Armenian economy has depended heavily on diaspora contributions. More crucially, diaspora Armenians' lobbying has won for Armenia levels of foreign aid and of political backing for its position in an interstate conflict greater than those enjoyed by any other country of so little economic or strategic importance.

CREATION OF A MONSTER

The relationship between Yerevan and Stepanakert is more complicated than it is sometimes made out to be. As President Slobodan Milosevic of Serbia discovered with the Bosnian Serbs in 1995, Frankensteins have a habit of losing control of their monsters. Like the Bosnian Serbs' Republika Srpska, Karabakh has become a haven for the most extreme variants of nationalism, in this case including the Armenian nationalism of the Dashnak Party, which is banned in Armenia but important in the diaspora. Both Armenian and Karabakhi officials privately acknowledge that Ter-Petrossian may not be able to impose a settlement unacceptable to Stepanakert. That makes the status quo even more attractive, since any change runs the risk of unleashing the hard-liners.

And there are plenty of them in Nagorno-Karabakh. Indeed, at times one wonders about the sanity of some of the enclave's officials. Perhaps egged on by a couple of glasses of mulberry vodka with dinner, deputy foreign minister Atajanian sketched for me scenarios for Azerbaijan's and even Turkey's dismemberment by a peculiar alliance including forces from Cyprus, Greece, Russia, and the United States. He cited the predictions of Nostradamus.

Incredibly, many of the enclave's citizens think the government is far too moderate. "President" Kocharian and his aides would at least contemplate returning most of the captured territory outside Nagorno-Karabakh for a peace treaty that recognized the enclave's independence and its sovereignty over the Lachin corridor. But opposition to a land-for-peace deal is shared by many beyond Dashnak Party members and their supporters in the Armenian diaspora. More moderate figures in Karabakh take an equally truculent line.

Garen Ogandjanian is a member of parliament and the representative in Stepanakert of the Helsinki Citizens Assembly, a human rights group. He outlined for me ambitious plans for the creation of an "open society." "We have had enough of militarized ways of thinking here in Nagorno-Karabakh," said Ogandjanian, a slight man with a gentle manner. But from Karl Popper, the conversation passed rapidly to the security situation. Asked if land should be given back to the Azeris as part of a peace deal, Ogandjanian replied, "In theory, yes, if the security guarantees for us were absolute, if we could trust them-which . . . I doubt we could. Personally, I don't see why we should give any land back. Historically, Nagorno-Karabakh was even larger than all the territory our troops now control. The Azeris have too much as it is." That the claims of the enclave's principal human rights advocate and those of the hardest of hard-line Dashnaks are all but indistinguishable suggests how much the extreme nationalist position has become the consensus in Nagorno-Karabakh, as it has in Armenia proper and Azerbaijan.

The Dashnaks, of course, are the ones who did the heavy lifting on the ground. Their men, including a substantial number of volunteers from the diaspora, did a great deal of the fighting and dying before the cease-fire. The hero of the early period of combat, when the Karabakhis seemed on the verge of losing, was an Armenian-American from California, Monte Melkonian. He was killed just before victory was secured, and busts of him are now displayed in many government offices in Stepanakert.

Dashnak loyalists and members of other extreme nationalist groups have come from Armenia-although not, it appears, from the diaspora-to settle in some of the occupied areas. In such places, talk of territorial compromise is unacceptable. "The Azeris are lucky we didn't take more," an Armenian settler in Lachin told me. "Let the Turks come back!" a settler in Lachin town, once 80 percent Kurdish and Azeri, declared. "We'll kill them all, whatever Kocharian says. This is our land. Maybe there were Turks here in 1990, but [70 years ago] this was Armenian land. And that is what it must be forever.

"We are a hospitable, courageous people," he continued. "Our only misfortune was to live among the Turks. And no Christian people can live successfully in a sea of Muslims." A friend interrupted. "There's an old saying: 'There's no family without a monster.' Well, the Turks are the monsters of the whole world."

GRIEVANCES AS A WAY OF LIFE

The insistence in Nagorno-Karabakh on referring to Azeris as Turks reminds one that the Bosnian Serbs refer to Bosnian Muslims the same way. In fact, the similarities between the Karabakhi Armenians and Bosnian Serbs loyal to political demagogue Radovan Karadzic and military commander Ratko Mladic strike anyone who has traveled in both the Caucasus and the Balkans. As in Pale, the Bosnian Serb capital, two years ago, the talk among Karabakhi Armenians in Stepanakert today is exclusively about their side's unique suffering. Only their losses and their refugees matter. For the harm they themselves have done, the Karabakhis, like the Bosnian Serbs, are unashamed. If Azeris suffered, they insist in Stepanakert, the filthy Turks brought it on themselves. "You may be sure," deputy minister Atajanian told me, "that anything bad we did, we were forced to do."

It was the Azeris, after all, Karabakhis say, who thwarted the Armenian people's legitimate aspirations to self-determination. Azerbaijan's violent 1988 crackdown on the separatists, they say, started the war. If ethnic cleansing took place in Nagorno-Karabakh and it is difficult to deny that it did-it was the inevitable consequence of Azeri massacres of Armenians. Atajanian waxed particularly indignant over criticism of Karabakhi human rights violations during the war: "Why do the Red Cross and certain foreign governments always demand that we behave better than the Azeris? Why do they continue to remind us so aggressively about international law? Let the Azeris obey international law. Baku! That's where they should direct their complaints."

As among the inhabitants of the Balkans and other places around the world, inflamed ethnic chauvinism combined with the memory of real communal suffering breeds among the peoples of the Caucasus fantasies of their original virtue and their enemies' original wickedness. Moral judgments become simple in such circumstances-we are good, they are bad; we tell the truth, they lie-and actions follow from there.

From the Armenian perspective, given the Azeri crimes against Armenians the Karabakhi leadership is generous in being willing to resolve its differences with Azerbaijan peacefully, especially after its triumph in the war. Atajanian insisted that unless the Azeris agree to Stepanakert's minimal demands of independence for Karabakh and recognition of Karabakhi sovereignty in the Lachin corridor, there would be another war. "And next time," he said, "we won't stop where we did. We'll go on to Yevlakh, and if they still won't agree to a settlement we'll march to Baku." He paused. "That's what the army wants to do right now."

Even admitting, as seems probable, that the Azeris are to blame for the outbreak of the war, neither the Karabakhi leaders nor the Armenian authorities in Yerevan can claim the moral high ground. What began as a struggle for self-determination soon degenerated into ethnic cleansing, massacre, and war fought without rules or pity, and Nagorno-Karabakh was cleansed of its non-Armenian population. As a result, 700,000 Azeri, Kurdish, and other refugees are living today in camps in Azerbaijan in conditions of unimaginable squalor. Neglected by the government, they are largely forgotten by the outside world.

Exacerbating the situation is a U.S. law passed in 1992 at the instigation of the Armenian lobby in America that prohibits international relief agencies from using U.S. government funds to aid the government of Azerbaijan. In a post-communist society like Azerbaijan, in which the medical and educational sectors are state-run, the legislation effectively rules out projects to supply hospitals, treat the tuberculosis endemic in the refugee camps, rehabilitate schools, or even use local doctors to do medical assessments. In private, Armenia's officials are unenthusiastic about the law, but diaspora leaders have been adamant. In the end the legislation plays into the hands of the Heydar Aliyev government in Baku, which uses the lack of American aid to justify its own abject failure to ameliorate conditions in the camps. And the more pathetic the refugees' situation, the easier it is for Baku to divert attention from its responsibility for provoking the crisis in Nagorno-Karabakh and paint Azerbaijan the victim.

It is enough to make one yearn, against all better judgment, for the Soviet Union and its rhetoric of interethnic solidarity. In the destroyed Azeri town of Susa, I passed a Soviet-era sign exhorting friendship among peoples. It was cant when erected, no doubt, but Suren, my elderly Armenian driver from Yerevan, did not think the harmony between ethnic groups had been a complete charade. "In the old days," he said, as we drove into Nagorno-Karabakh through the ruins of Lachin, "it didn't matter whether you were an Azeri, an Armenian, or a Karabakhi. We all got along." He did not, however, wish for a return to the past. "It will get better," he insisted, adding, "though not, of course, in my lifetime."

THE HARD WORK OF STATE-BUILDING

A foreign aid worker who has spent more than a year in Karabakh observed, "When people here tell you of their wish to lead a normal life-and I have people saying this to me all the time-they mean the life they led in Soviet times, when the ruble was worth $1.40 [the current value is about 5,000 rubles to the dollar] and most of them had cars and could afford vacations by the Caspian." But, he concluded gloomily, "those days are never coming back."

On both sides of the divide between Armenians and Azeris, when the talk moves away from the Karabakh question it often focuses on the need to replace the old Soviet state-controlled economic system with the free market. While the Azeris look to Western companies to help them tap the country's purportedly enormous oil and gas reserves, bringing in dreamed-of hard currency, the Armenian and Karabakhi authorities channel diaspora contributions into construction on the "road of life." When completed, the highway will be the most modern in the Caucasus, up to Western standards-a monument to the diaspora's power and wealth, if not strictly necessary from a practical point of view.

The hope in the diaspora and in Stepanakert is that the road-building and resettlement of the occupied territories will ensure that the battlefield victories of the Karabakh Armenians are not lost at the negotiating table. But two years after the war's end, for all the bluster of Karabakh's officials and the influence of its friends in Washington, the question is still whether it can survive as a statelet. Armenia cannot do for it, economically or militarily, what Belgrade did for the Serbs, let alone what Ankara did for the Turkish Cypriots.

Armenia's leaders may not be prepared to mortgage their country's economic future indefinitely for the sake of Nagorno-Karabakh. The Azerbaijani embargo continues to do harm, although Azerbaijan has eased its sanctions and Armenia has developed other trade ties. Unemployment in Armenia is above 50 percent, and it is clear that the price of improvement in the economic situation is flexibility on Karabakh. The diaspora, rich as it is, cannot subsidize the enclave, population 150,000, let alone Armenia, population three million.

Over the long run, neither extreme nationalists nor any other brand of ideologue can keep economic realities at bay. In spite of the sums coming in from the diaspora, conditions in Nagorno-Karabakh are deteriorating. Agriculture is the only viable sector, and most young men remain in the military. As a high official in the enclave ruefully admitted, "Many people are leaving, either for Armenia or for other countries."

Even more to the point, it is not clear that in Nagorno-Karabakh, Armenia, or many of the other post-Soviet states-or in many African countries, for that matter-the conception of the state reaches much beyond ethnic identity. The founders of Israel, with whom present-day Armenian nationalists often compare themselves, did not think that creating a Jewish state was all they had to do. They aspired to create a modern state, a new economics (among the Labor Zionists, a version of socialism), and an idea of democracy as well. They would have scoffed at the notion that the mystical virtues of ethnic solidarity would see them through.

But the Armenians of Karabakh, like many other peoples, have only that mystical idea to hold on to. It served them well while the fighting raged, but now it stands in the way of a solution. It mires Armenians and Azeris alike in their grievances, their self-love, and their mutual loathing. In such circumstances, talk of the past will always be more potent than talk of the future. But the past is steeped in blood, and if the future is to be different, compromises will have to be made.

The signs, both on the ground among the belligerents and in the wider region, are not encouraging. But without a compromise, sooner or later war will break out again. And unlike in the early 1990s, it may disturb great powers like the United States and Russia, whose interests in the area have grown substantially, or regional powers like Turkey and Iran, which would bear the brunt of refugee flows that would be the first consequence of renewed fighting. This time the conflict might not be so contained.

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  • David Rieff, a Senior Fellow at the World Policy Institute at the New School for Social Research, is the author of Slaughterhouse: Bosnia and the Failure of the West.
  • More By David Rieff