The post-Soviet region is known for turbulent internal and external political processes. The hotspots inherited by states after the collapse of the Soviet Union remain to this day, and are hindering stability in this region. One of these hotspots is Nagorno-Karabakh, an independent unrecognized state with an Armenian population between Armenia and Azerbaijan, formed as a result of a military conflict (1991-94) between the two countries. Despite the fact that the international community recognizes Azerbaijan as the owner of these territories, until recently Armenia insisted on recognizing these lands as Armenian.
The Armenian Revolution
After the end of the war, power passed into the hands of military officials in both Armenia and Azerbaijan. In Armenia, despite the periodic change of power, people from the highest military level, who came to Yerevan from Karabakh, became presidents. This caused dissatisfaction among the people, especially against the backdrop of an unstable economic situation. In 2015, the former president of Armenia, Serzh Sargsyan, initiated amendments to the constitution, changing the country from a presidential to a parliamentary republic. Despite Sargsyan’s promises that he would not put forward his candidacy for the post of prime minister in 2018, he did, and was elected. In the spring of 2018, mass protests began in Armenia, which led to Sargsyan’s resignation, and Nikol Pashinyan, leader of the revolutionary movement, oppositionist and former MP, became the prime minister. Two years later, in 2020, Azerbaijan launched a large-scale offensive operation against Nagorno-Karabakh, and most of the territories came under its control. In the history of the post-Soviet region, this military conflict was called the 44-Day War, in which about 5,000 people died on each side.
Economic relations
The war ended with the signing of a ceasefire agreement between Armenia, Azerbaijan and Russia as an intermediary, which sent peacekeeping forces to Nagorno-Karabakh to ensure military stability. However, this ceasefire document also included clauses on establishing economic relations in the region without any further clarification. Now, the discussion on these economic relations has opened.
After the collapse of the Soviet Union, Azerbaijan was left with an enclave in the south of Armenia, Nakhichevan, bordering Armenia, Iran and Turkey. For 30 years, before the 2020 war, Azerbaijan had no land access to this territory. Therefore, it was expected that the discussion on the establishment of economic relations would include the opening of a land road through southern Armenia to Nagorno-Karabakh, and hence Azerbaijan. The opening of this road spurred border skirmishes between Azerbaijan and Armenia and the issue of delimitation and demarcation of the borders between the two countries arose. Without clarifying the borders first, and despite the fact that the bilateral military-political situation was still not “prosperous” enough, Pashinyan proceeded with the process of opening routes. Azerbaijan, taking good advantage of this opportunity, increased pressure by delaying the start of the delimitation and demarcation of borders, moving forward along the sovereign territory of Armenia, and demanding that the routes’ opening process be accelerated. What is even more surprising is that the prime minister of Armenia seems willing to initiate this process not only with Azerbaijan, but also with Turkey, with which there is the question of recognizing the 1915 genocide and the issue of the territorial demands of Western Armenia.
What does Pashinyan want?
‘The hostility between Azerbaijan and Armenia will not disappear with economic relations and the opening of routes. This step carries risks for Armenian national interests’
It is known that Turkish ambitions to translate the plan of Pan-Turkism into reality are growing increasingly stronger. Establishing economic relations without preconditions (at least on the recognition of the genocide) gives the green light not only to Turkey but also to its closest ally, Azerbaijan. The Armenian government is conducting a large information campaign about the benefits of economic relations with Turkey and Azerbaijan in a manner that makes people wonder whether national interests have been put aside. It’s perfectly understandable that, for 30 years, Armenia was in a state of semi-isolation in the region. The country has borders with Azerbaijan, Georgia, Iran and Turkey, and the bulk of its foreign economic activity is with Georgia and Iran. However, the hostility between Azerbaijan and Armenia will not disappear with economic relations and the opening of routes. This step carries risks for Armenian national interests in the mid- to long term.
In economic terms, according to expert calculations, the opening of the railway from Nakhichevan to Azerbaijan through Armenia will give Armenia $1.2 million in profit per year – the payback period for the project, taking into account the planned investments, is 100 years. In addition, the economies of both Turkey and Azerbaijan are several times that of Armenia’s. When opening access to investments in the country, the economy could be captured by large Turkish and Azeri companies, which in future could be used also for political purposes.
Geopolitical situation
On this large regional football field, Azerbaijan, Turkey and Russia remain in the game, Armenia has become the ball, and Georgia and Iran have been left on the sidelines. With the opening of economic routes in the South Caucasus, Russia could diversify the ways of foreign trade in goods with Iran, Turkey and even India, whose path to Russia lies through Iran. On the other hand, Tehran is dissatisfied with the latest regional developments: firstly, because previously Azerbaijan could only trade with the southern part of Turkey through Iran, but now there will be an alternative; and secondly, because Turkey and Azerbaijan will strengthen their positions in the region, at the expense of Iran, which is already fighting for its position in the Persian Gulf.
The development of economic relations in the region at the moment seems to work against the national interests of Armenia. Is Pashinyan betraying his state or is he being subjected to political pressure from outside? It is possible that Pashinyan is afraid of a new war, therefore making friends with the enemies looks like a solution. However, in the case of Azerbaijan, Pashinyan could insist on clarifying the borders first, and in the case of Turkey, an emphasis could be given to recognizing the 1915 genocide. Also, Pashinyan could rely more on the Armenian diaspora for economic support rather than hoping for benefits from economic relations with Turkey and Azerbaijan. The Armenian diaspora, even in the recent past, has often raised funds to support the state.
Elias Hadjikoumis is a foreign, security and defense policy expert and a member of the International Institute for Strategic Studies.