Can Diplomacy and Development
Unleash Nagorno-Karabakh’s Potential?
There are
substantial opportunities that the development of the region can bring if a
renewed conflict in Nagorno Karabakh can be averted.
by Eugene Chausovsky /February 4, 2021
2020 was a decisive year for the
Nagorno Karabakh conflict between Armenia and Azerbaijan. In what had been a
simmering conflict for more than twenty-five years—with periodic yet largely
contained escalations—the map of the conflict was significantly
redrawn last year. Azerbaijan, through military action and a
subsequent diplomatic settlement brokered by Russia, reclaimed substantial
Armenian-occupied territories in and surrounding Nagorno Karabakh, gaining much
of what Baku had lost in the initial 1988-1994 conflict between the two
countries.
In addition to the territorial
map, the geopolitical map of the conflict was also redrawn. Russia,
long a mediator in the conflict, became directly involved on the ground with
the deployment of 2,000 Russian peacekeepers in and around Nagorno Karabakh
following the truce reached on Nov 9. Turkey also became more involved,
providing military assistance and assets like drones which
proved highly influential in enabling Azerbaijan to break the decades-long
stalemate of the conflict. Both Russia and Turkey are now set to jointly
monitor the conflict, while Russian forces are already on the ground engaged in
peacekeeping and mine clearance operations.
If 2020 was about Azerbaijan
redrawing the map of the Nagorno Karabakh conflict, the key question for 2021
will be about what Baku can and
can’t achieve with those gains. Already, the Azerbaijani
government, led by long-serving President Ilham Aliyev, has come up with
ambitious plans for the reintegration and development of the territories it has regained. Such
plans have been nominally supported by Russian President Vladimir Putin, and
even by Armenian Prime Minister Nikol Pashinyan, with the two leaders meeting
with Aliyev in Moscow on Jan 11 for the first time since the ceasefire was
declared in order to discuss the path forward for the region.
During their trilateral meeting, it was agreed that a working group would be established to address regional economic and transport infrastructure projects, with an official plan set to be submitted by March 1. Among the list of projects that are being planned or already currently underway are the construction of a new international airport in the Fizuli region, a new road connecting Azerbaijan to its exclave in Nakhchivan and further on to Turkey, and a railway between the Azerbaijani towns of Horadiz and Zangilan on the border with Armenia. Additionally, there are plans to develop the energy sector of Nagorno Karabakh, according to analysts from the Baku-based Center of Analysis of International Relations (AIR Center), with gasification works in the region planned by Azerigaz Production Association and an increase in the power supply of “strategic facilities” planned by Azeris.
Such projects are quite ambitious, with many of them, including the Fizuli international airport, currently scheduled to be completed by the end of this year or early 2022. However, many of these projects could take much longer to get off the ground. Indeed, there are several significant challenges and constraints that could prove to delay—or disrupt altogether—Azerbaijan’s lofty goals for the region.
The first challenge is
logistical. Just a few months into the ceasefire, there are still thorny issues
that have yet to be fully implemented, including the return of 700,000 IDPs that
fled the war zone and the movement of people from both Azerbaijan and Armenia
into the region, which could take several years to accomplish. There are also
thousands of mines and other dangerous materials from the conflict that need to
be cleared before large-scale construction works and population movements can
be conducted safely. In addition, there are economic considerations for
implementing large-scale infrastructure projects, coming amid the global
recession caused by the Covid-19 pandemic. Nevertheless, Azerbaijan has
allocated 2.2 billion AZN ($1.3 billion) from its 2021 state budget for the
reconstruction efforts, and international companies from Turkey, Italy and
other countries are set to participate in this process.
Another challenge facing the
future development of Nagorno Karabakh is political. While Azerbaijan has been
celebrating its military victory and the popularity of Aliyev is arguably at a
record high, Armenia has been thrown into political turmoil as a result of its
losses in the conflict. Large-scale
protests broke out in Yerevan and other cities following the
ceasefire agreement, with many Armenians—including officials within the
Armenian government—calling for the resignation of Pashinyan. Pashinyan has so
far been able to remain in power, though he has said that early parliamentary
elections would be held in the country sometime in 2021.
This leaves a lot of uncertainty
about the future Armenian position regarding major infrastructure projects in
and around Nagorno Karabakh, as well as to the ceasefire agreement itself. It
cannot be discounted that, in the event of a change in power in Armenia, the
country would try to reclaim some of
its losses militarily. The presence of Russian peacekeeping
forces in the region is likely to be a major check on any such ambitions by
Armenia (or, conversely, any appetite by Azerbaijan to regain more territory),
but this nevertheless remains a risk. Indeed, there have already been several
ceasefire violations even after the Nov agreement, albeit largely limited.
Yet another challenge is
geopolitical. Even if the political situation in Armenia does not significantly
destabilize and both Yerevan and Baku honor the parameters of the ceasefire
agreement, the conflicting positions of Russia and Turkey also need to
be taken into account. While the two countries have so far cooperated on the
ceasefire and have agreed to the establishment of a joint monitoring center,
some of the strategic interests of the two players remain at odds. There have
been indications that Turkey is considering the unilateral deployment of its
troops to Azerbaijan outside of the parameters of the Russian-brokered
ceasefire agreement, and broader tensions between Moscow and Ankara in theaters
like Syria and Libya have the potential to spill over into the Nagorno
Karabakh theater.
What’s more, the potential for
enhanced involvement by other external players—including the United States, EU,
and China—could make the situation even more convoluted and problematic. This
is particularly the case as countries like the United States and France have
significant and influential Armenian diasporas, which their respective governments may
feel the need to assuage. Competition for involvement in the infrastructure
projects among rising players like China could also raise tensions with more
established players like Russia and Turkey.
Despite all of these challenges,
there are substantial opportunities that the development of the region can
bring if a renewed conflict in Nagorno Karabakh can be averted. The territory
is located within the highly strategic Caucasus region and consists of the
Southern Corridor, a key transit zone for energy supplies from Azerbaijan
through Georgia to Turkey and on to Europe, as well as a key component of the
International North-South Transport Corridor, which includes Russia and Iran.
If the peace between Armenia and Azerbaijan can hold and if Yerevan and other
regional players were to be incorporated as cooperative partners within a
broader transport and logistical framework, this could unleash significant
economic potential well beyond the region. Such economic projects could offer
opportunities for both economic revival in the region and serve as a mechanism
to maintain a durable peace. Yet, due to the uncertain political atmosphere and
complex geopolitical realities in the Caucasus region, such opportunities for
economic growth and peaceful development are by no means guaranteed.
Eugene Chausovsky
is a Non-Resident Fellow with the Center for Global Policy. Chausovsky
previously served as Senior Eurasia Analyst at the geopolitical analysis firm
Stratfor for more than 10 years. His work focuses on political, economic and
security issues pertaining to Russia, Eurasia, and the Middle East.
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