South Caucasus: Between Old Conflicts and Uncertain Future

April 2024

The South Caucasus, a small region between the Black and the Caspian Seas, between Europe, Russia, Central Asia, and the Middle East, continues to be haunted by conflicts that date back to the Soviet era but also stands in front of new perspectives to orientate itself more towards Europe.

The Russian full-scale invasion of Ukraine in February 2022 as well as prior and later regional developments have significantly changed the situation in the South Caucasus, which encompasses Armenia, Azerbaijan, Georgia and South Ossetia and Abkhazia, two regions that de facto broke away from Georgia. While these countries are trying to adapt to the new geopolitical realities, they also still struggle with historic conflicts about borders and territorial claims.

Armenia is in a difficult situation. In autumn 2020, the country lost the Second Nagorno-Karabakh War against Azerbaijan, in which Azerbaijan conquered Armenian-occupied areas of Azerbaijan as well as parts of Nagorno-Karabakh. All these areas were, since the First Nagorno-Karabakh War that lasted from 1988 to 1994, heavily contested, whereas the main reason for this was the question of the status of Nagorno-Karabakh, a region that belonged to the Soviet Republic of Azerbaijan but that was mainly inhabited by ethnic Armenians, who, after the dissolution of the Soviet Union, proclaimed Nagorno-Karabakh as the non-recognised Republic of Artsakh.

Armenian-Azerbaijani talks to normalise relations after the Second Nagorno-Karabakh War as well as Armenia’s willingness, to forgo claims regarding Nagorno-Karabakh under certain circumstances, remained without results and were overtaken by events when Azerbaijan, on 19th and 20th of September 2023, launched a lightning military offensive capturing all of Nagorno-Karabakh. The latter caused the exodus of practically all of the over 100,000 Armenian inhabitants of Nagorno-Karabakh with most of them settling in Armenia.

Efforts for a peace agreement between Armenia and Azerbaijan are, since late 2023, dragging on. Reasons for this include differences over how the still contested Armenian-Azerbaijani border should be demarcated, which remains, despite a recent partial agreement, highly controversial, and Armenian worries that Azerbaijan could make further claims on Armenian territory. This namely concerns parts of the southern Armenian province of Syunik, an area that Azerbaijanis call Western Zangezur and through which Azerbaijan wants to connect its mainland with its exclave of Nakhchivan.

The Nagorno-Karabakh conflict is, however, also echoing beyond the region. Armenia, which, in the past, has relied on its alliance with Russia, has more and more turned away from Russia. This was triggered by the fact that Russia did not support Armenia in its latest armed confrontations even though Armenia is part of a Russian-dominated security alliance, the Collective Security Treaty Organisation (Russian acronym ODKB), and as Russian peacekeepers that had been stationed in Nagorno-Karabakh did not intervene when Azerbaijan launched its lightning takeover of the area in September 2023. From a Russian perspective, this was because Nagorno-Karabakh is, according to international law, part of Azerbaijan, which also Armenia recognised in principle, which meant that the events in question did not trigger ODKB guarantees (which would have required an attack on Armenia) and that also peacekeepers did not have a mandate to intervene against Azerbaijani troops in September 2023. Be that as it may, in February 2024, Armenian prime minister Nikol Pashinyan declared that Armenia had «frozen» its participation in the ODKB and in March 2024 Armenia formally requested Russia to withdraw its border guard units from the airport of the Armenian capital Yerevan until 1st of August 2024. These security forces are, just like Russian soldiers in other bases in Armenia, stationed in Armenia due to an agreement that Armenia signed with Russia after the dissolution of the Soviet Union and which stipulates that Russia supports Armenia with border security.

Armenia’s attempts to replace Russia as security guarantor are not easy though. Latest statements of Armenian politicians indicating that Armenia wants to integrate into the European Union are uncertain and any such move would, even in the best case, take several years. In the meantime, Armenia is hoping that a small civilian EU monitoring mission that, since the beginning of 2023, operates at the Armenian-Azerbaijani border will provide at least some security, but also readies itself with weapons acquisitions from France and India for an uncertain future.

Such armament plans are seen with suspicion by Azerbaijan, amongst others as Azerbaijan did not forget the First Nagorno-Karabakh War, in which Armenia prevailed and there were atrocities against and expulsions of Azerbaijanis. The cited weapons acquisitions by Armenia will, however, at least in the medium term not change anything about Azerbaijan’s military superiority that is, inter alia, based on weapons and military equipment that Azerbaijan bought from Turkey and Israel.

Turkey has, due to language and culture connexions, always been a traditional partner for Azerbaijan and Azerbaijan has since years fostered relations with Israel. While the fact that both, Azerbaijan and Israel, are critical of Iran is playing a role in this, other aspects like sales of Azerbaijani oil and gas to Israel are at least as important.

In the South Caucasus, Iran traditionally stands on the side of Christian Armenia and has, despite the fact that Iranians as well as Azerbaijanis are mostly Shiite Muslims, strained relations with Azerbaijan. This is mainly caused by Iran seeing some statements of Azerbaijani officials regarding ethnic Azeri Iranians and the Iranian areas they inhabit as potentially stoking separatism and that the government of Azerbaijan is concerned that the Islamic Iranian regime is, via Shiite clerics, unduly influencing matters in Azerbaijan. This relationship is, however and amongst others due to the start of construction work for a transport corridor between Azerbaijan’s main land and Nakhchivan through Iranian territory in late 2023, thawing.

Whether Armenia turning away from Russia could lead to an Azerbaijani-Russian rapprochement is difficult to assess. In mid-April 2024, Russia withdrew its peacekeepers from Nagorno-Karabakh, as the reason for their presence had, with the Azerbaijani conquest of Nagorno-Karabakh in September 2023 and the subsequent exodus of the Armenian population of Nagorno-Karabakh, practically ceased to exist. This is of relevance as an Azerbaijani observer had, already before this withdrawal became clear, stated that Azerbaijan does not want any Russian troops or influence in its country, reminding that Azerbaijan had been one of the first countries of the former Soviet Union that had, after the dissolution of the Soviet Union, asked Russian troops to return to Russia. Some Azerbaijani-Russian rapprochement can, nevertheless, not be ruled out. This is all the more the case as a definitive departure of Azerbaijan’s nemesis Armenia from the ODKB could again lead to reports about Azerbaijan potentially joining the ODKB.

As the port in Azerbaijan’s capital Baku is a key point in the so-called Middle Corridor, a transport corridor that is meant to connect China under circumvention of Russia via Central Asia and the Caspian Sea with the South Caucasus and Europe, this also opens perspectives for Azerbaijan to strengthen ties to Europe. This is all the more the case as European countries are, since February 2022, increasingly interested in Azerbaijani gas in order to replace fuel that was previously sourced from Russia.

Whether the authoritarian nature of Azerbaijan’s government will become a stumbling stone for stronger relations between Azerbaijan and Europe remains to be seen. An array of recent arrests of journalists and opposition figures in Azerbaijan has caused some outrage, but there have been similar arrests in the past that did not turn international relations upside down.

In view of this and as the Azerbaijani government did not suffer any substantial negative consequences for the unilateral forceful takeover of Nagorno-Karabakh, the Azerbaijani government is seeing itself in a position of strength and is, thus, unlikely to change its current course.

That the EU, on 14th of December 2023, granted Georgia candidacy status for EU membership was a mile stone for the country whose main goal is since years an integration into the EU and NATO. That Georgia has become an EU candidate had, in the new geopolitical situation since Russia’s full-scale invasion of Ukraine, however seemingly more to do with European worries that Georgia could again slide into the sphere of influence of Russia than with Georgian progress. Out of 12 conditions that the EU had, in June 2022, given to Georgia to attain candidate status, Georgia has so far only completely fulfilled three. Accordingly, it remains unclear when Georgia might become an EU member or whether it could, like Turkey or Serbia, remain an «eternal» candidate.

This is all the more the case as this spring the Georgian government launched several controversial law proposals, whereas the most contentious is a draft law on «Transparency of Foreign Influence», which envisions that organisations and media in Georgia that obtain 20% or more of their income from abroad would be compelled to register and disclose all details of such funds. The government had already launched a practically identical proposal in spring 2023 but then withdrew it due to demonstrations against it. Then as now, critics see this proposal as a copy of a Russian law, which led to the repression of independent organisations in Russia, and at times even as a deliberate sabotage of Georgia’s aspired EU-integration by the allegedly pro-Russian Georgian government. The ruling party in Georgia, which is in power since 2012, rejects this and insists that the law in question is necessary to protect Georgia’s sovereignty, further assuring that it is modelled after an old U.S. law and a new proposed EU directive. Regarding the latter, it has to be mentioned that various European officials have declared that the current Georgian law proposal differs from European approaches,  is not in line with European values, and compromises Georgia’s path towards the EU. At the time of writing, it was unclear how this situation will develop, which had, given ongoing demonstrations in Georgia against this proposed law that had begun on 15th of April 2024, the potential to further escalate.

In contrast, economic projects such as the already mentioned Middle Corridor as well as a submarine cable through the Black Sea to transfer electricity from the Caucasus to Eastern Europe, promise less controversial chances of further ties to Europe. Given that experience with such grand projects shows that their implementations are regularly dragging on and/or that they are not completed to the extent to which they are touted, such plans should be viewed with some sobriety though.

That said, indirectly, there are also certain contentious issues in the economic sphere. This concerns in particular the Georgian government’s decision to refrain from imposing bilateral economic sanctions against Russia and to only limit itself to ensure that Georgian territory is not used to circumvent Western sanctions against Russia. The Georgian government also in this case rejects accusations of acting pro-Russian, insisting that this decision was taken as imposing bilateral sanctions would hurt the Georgian economy more than the Russian one.

Regarding security, the Georgian government’s stated aim is to prevent a new outbreak of the conflicts concerning South Ossetia and Abkhazia, two regions that Georgia sees as its own territory, but that have, after the dissolution of the Soviet Union, de facto split away from Georgia. Since then, there have been numerous hostilities in and around these regions with the last major escalation having been a 5-day war in August 2008 that was fought between the two regions and Russia on one and Georgia on the other side.

The Republics of South Ossetia and Abkhazia, which are only recognised by five other countries, are mostly depicted as areas that are completely occupied and controlled by Russia. While these territories are, economically and for security, indeed dependent on Russia (regarding the latter it should be noted that Russian troops are still stationed in bases in both regions) and also through various treaties strongly tied to Russia, the aforementioned view is not accurate.

This is, amongst others, shown by the fact that, in South Ossetia as well as in Abkhazia, various political parties and other groups are active and that there are at times internal disputes as well as differences with Russia. Recent examples are a customs dispute between South Ossetia and Russia that broke out in autumn 2023 or that the Abkhaz government, in February 2024, backtracked on the signing of a cooperation agreement with the Russian national guard after reports about this agreement caused negative reactions amongst the Abkhaz population.

Some Abkhaz and South Ossetians even fear that recent geopolitical changes, the alleged rapprochement between the current Georgian government and Russia, as well as Russia’s acquiescence of Azerbaijan’s takeover of Nagorno-Karabakh could lead to Russia at some point selling out the two regions to Georgia in return for Georgian concessions.

Although such a scenario currently remains highly unlikely, a South Ossetian observer explained that, for South Ossetia it is indeed of utmost importance «to not fall in political traps» caused by Russian-Georgian relations. He elaborated that South Ossetia «has to remain pragmatic in order to preserve its people and territory», whereas the current «policy and ignorance of the West» regarding South Ossetia and the alleged aggressive approach of Georgia would not give much room other than cooperation with Russia. Abkhaz nationalists see this in a similar fashion.

Accordingly, these frozen conflicts are unlikely to be resolved in the foreseeable future — which means that the South Caucasus will remain trapped between the echoes of a difficult past and an uncertain future.

Franz J. Marty