After years of fighting, frozen conflicts and diplomatic impasses, events are starting to change quickly in the South Caucasus — and in a positive way.

Azerbaijani President Ilham Aliyev and Armenian Prime Minister Nikol Pashinyan met in Moscow last week as part of a process toward peace and normalization.

This followed meetings on May 1 in Washington and May 14 in Brussels. After the Brussels meeting, European Council President Charles Michael said the “momentum should be maintained to take decisive steps toward the signing of a comprehensive peace agreement.”

The next step will be on June 1, with five-party talks (Aliyev, Pashinyan and Michel will be joined by French President Emmanuel Macron and German Chancellor Olaf Scholz) in Moldova at the European Political Community summit. If things continue to progress at tihs rate, then a lasting peace deal could be on the horizon.

The region of Karabakh has been the source of tension and conflict between Armenia and Azerbaijan since the dying days of the Soviet Union. It is predominately populated with ethnic Armenians but is internationally recognized as part of Azerbaijan.

Pashinyan said last week that “the 86,600 sq km of Azerbaijan's territory includes Nagorno-Karabakh,” a significant breakthrough in the peace talks. No Armenian leader has acknowledged Karabakh being a part of Azerbaijan. Pashinyan’s political situation in Armenia is already precarious and his recognition of Karabakh as part of Azerbaijan has not been welcome at home. So it was politically brave of him to recognize Azerbaijani control over Karabakh, as this will probably unlock the next phase of peace talks.

Since the early 1990s Armenia and Azerbaijan have been in conflict. Sometimes this conflict has been “frozen,” while at others it has been “hot” — for example, during the Second Nagorno-Karabakh War in 2020 when 44 days of intense fighting left thousands dead on both sides.

After intense fighting in the region in the early 1990s, Armenia ended up occupying a sizable area of Azerbaijan, including the Karabakh region, for almost three decades. However, after the Second Nagorno-Karabakh War ended, Azerbaijan regained most of its territory. The resulting ceasefire agreement left a small section of Karabakh out of the hands of Baku and under the supervision of a Russian peacekeeping force.

There have been many times in the past that Armenia and Azerbaijan have been close to a peace deal, only for it to fall through at the last minute.

Luke Coffey

Since the war ended, the situation has remained tense. While there have been no major battles, small skirmishes along the state border have left many soldiers dead and wounded on both sides. This localized fighting occurs in parallel to the diplomatic track that has been taking place on and off since November 2020. Both sides have also been arming. Azerbaijan has increased its military spending and has continued to import weapons from Turkey and Israel. Armenia has been procuring drones and other weapons from Iran and India.

Even with the progress in negotiations, there are still problems between the two sides in addition to the frequent skirmishes. For example, there has been a lack of progress to implement the terms of the November 2020 ceasefire agreement that brought the 2nd Nagorno-Karabakh War to an end. Specifically, in Article 9 of the ceasefire agreement, Armenia pledged to “guarantee the security of transport connections” between Azerbaijan proper and its autonomous Nakhchivan exclave via Armenia’s Syunik province. This has yet to happen. Understandably, the lack of progress has frustrated Baku.

Another issue of contention is the so-called Lachin Corridor, a road that connects Armenia to the ethnic Armenians communities in Karabakh. As part of the same ceasefire agreement, Azerbaijan pledged to allow its use by Armenia. While it has done so, in recent months Azerbaijan has limited the flow of traffic due to concerns that Armenia was smuggling weapons into the region.

There is also a mutual concern about the Kremlin’s role in the region, albeit for different reasons. The geopolitical reality on the ground means that Moscow will have a role in brokering any peace deal. While peace building efforts are not formally coordinated between Washington and Brussels on one side and Moscow on the other, all these efforts indirectly build off each other. However, Azerbaijan is becoming increasingly dissatisfied with the actions of Russian peacekeepers on its territory. Baku even accuses Russian peacekeepers of helping Armenians smuggle illicit goods and weapons into Karabakh. Meanwhile, Yerevan is frustrated by that it perceives to be a lack of Kremlin support in the conflict with Azerbaijan, even though Armenia and Russia are in the same security alliance. These tensions with Moscow come at a time when Russian influence in the region is declining because of its problems in Ukraine.

There have been many times in the past that Armenia and Azerbaijan have been close to a peace deal, only for it to fall through at the last minute. However, with Pashinyan’s recognition of Azerbaijani control of Karabakh, and with the flurry of diplomatic activity with Washington DC and Brussels, the prospects of a lasting deal have never been so high.

The South Caucasus has missed out on billions of dollars in foreign investment because of frozen conflicts. Armenia, a poor and landlocked country, has been left out of important and lucrative regional energy and infrastructure projects too.

The region needs peace in order to find prosperity. The forthcoming meeting in Moldova could make history. For the sake of peace and security in the South Caucasus let’s hope for the best.

• Luke Coffey is a senior fellow at the Hudson Institute. Twitter: @LukeDCoffey