The final stages of the Soviet Union’s life cycle set the chain of events in motion, leading to territorial disputes in various areas of the Union. Azerbaijan and Armenia have, unfortunately, shared the fate of being locked in a six-year-long deadly war that claimed the lives of thousands on both sides. As the parties continued their fight for Karabakh, internationally recognized as a territory of Azerbaijan, both Baku and Yerevan could not conclude the war either by the military or by diplomatic means.

After the disintegration of the Soviet Union, conflicting sides found themselves in a challenging economic and humanitarian situation. Consequently, several mediation attempts have been launched to bring the conflict to its conclusion. One of the most promising mechanisms was the OSCE Minsk Group. The Minsk Group was initially formed as an international mediation effort to find a political solution to the Karabakh conflict. It was formed in 1992 by the Conference on Security and Cooperation in Europe (CSCE), now known as the Organization for Security and Cooperation in Europe (OSCE). The efforts of the Minsk group were spearheaded by three co-chair nations: France, the United States of America, and Russia. Several other countries, including Germany, Belarus, Turkey, Italy, Finland, Sweden, Azerbaijan, and Armenia, enjoyed the rights of permanent membership. However, in reality, these states’ roles have been extremely limited to the point of being almost non-existent.

On paper, establishing a team of international mediators was essential to achieving sustainable peace between Azerbaijan and Armenia. It is expected that after prolonged fighting, conflicting sides cannot find a comprehensive settlement, and indeed, Azerbaijan and Armenia have not been in a position to negotiate on their own. Hence, the birth of the OSCE Minsk Group was a step in the right direction. In retrospect, it is possible to say that the moment for the mediation became ripe as both sides engaged in hostilities for a significant amount of time, including after the disintegration of the Soviet Union. Additionally, the ongoing fighting took its toll on both nations. The fact that the Minsk Group operated under the auspices of the OSCE gave it a high level of credibility necessary to deal with the challenge of unraveling the puzzle.

The best way to analyze the diplomatic efforts of the OSCE Minsk Group is to divide its lifetime into three stages: early stage (pre-2000), mid-stage (2000-2010), and later stage (2010-2020).

Early attempts of the Group revolved around curbing the potential for another escalation in the region and finding a political settlement to the conflict. Three separate deals were put forward in the late 90s. The first deal was introduced in July 1997. It was labeled a “comprehensive agreement” and aimed to achieve two key objectives: end the armed hostilities and find a political solution for settling the region’s status. Armenia rejected this proposal due to a lack of consensus between President Ter-Petrosyan and other members of the political establishment. In September 1997, OSCE Minsk Group came up with another deal known as the “step-by-step deal”, which was once again rejected by Armenia. This deal entailed gradually removing forces and the sequence of other steps, with an eventual deployment of multinational OSCE peacekeeping forces.

The final proposal arrived in November 1998, widely known as “the common state deal.” Implementing this approach would have given Karabakh some aspects of sovereignty, including influencing Azerbaijan’s foreign policy, own borders, police and security forces, national anthem, constitution, and other symbols. Such an agreement could not have been implemented in practice because it would mean that Azerbaijan would have had to relinquish its sovereignty over the region and endanger its security permanently. It was consequently rejected.

The mid-stage of the Minsk Group mediation efforts coincided with the introduction of the Madrid Principles at the 2007 OSCE ministerial conference in Madrid. In 2009, during the G8 summit in L’Aquila, the US President Obama, Russian President Medvedev, and French President Sarkozy released a joint statement on the Karabakh Conflict by outlining the Basic Principles (also known as modified Madrid Principles) for conflict resolution:

• Return of the territories surrounding Karabakh to Azerbaijani control;
• An interim status for Karabakh providing guarantees for security and self-governance;
• A corridor linking Armenia to Karabakh;
• Future determination of the final legal status of Karabakh through a legally binding _expression_ of will;
• The right of all internally displaced persons and refugees to return to their former places of residence;
• International security guarantees that would include a peacekeeping operation.

This set of criteria paved the way for a systemic approach to dealing with the conflict. These guidelines imply the willingness of the sides to move in the direction of compromise. This view was somewhat reinforced by the introduction of the “Kazan formula” in 2011, according to which Armenia would have to return five occupied regions around Karabakh to Azerbaijan, followed by the remaining two. In turn, Azerbaijan would lift the economic blockade against Armenia and sign the economic, humanitarian cooperation, and non-violence agreements. Additionally, peacekeepers would be deployed in the area. In this context, it is essential to note that the “Kazan Formula,” in contrast to the Basic Principles, would have infringed upon the interests of Azerbaijan because now Baku would receive only five regions immediately. From this perspective, the “Kazan Formula” was a significant step back in mediation from the perspective of Baku.

After 2011, the Group failed to achieve any objectives. Furthermore, the Minsk Group’s apparent inability to deliver results tarnished its reputation and credibility. The best description of the Group’s mediation efforts came from the retired US Ambassador Richard E. Hoagland: “We stayed in fivestar hotels where we were usually assigned suites on the executive floor that gave us access to a private dining room and full bar at no additional expense. We always sought out the best restaurants in the cities where we found ourselves. We lived well while we showed the OSCE flag and reminded Baku and Yerevan that the Minsk Group exists. But to be blunt, very, very little ever got accomplished.”

Things went from bad to worse before the start of the Second Karabakh war. The two statements by top officials in Armenia illustrated that the peace talks have approached the end of their life cycle. First, the former Defense Minister of Armenia, David Tonoyan, publicly announced a strategic approach of “New war for new territories,” aimed to “rid Armenia of this trench condition, the constant defensive state, and will add the units which may shift the military actions to the territory of the enemy.” The statement made in 2019 is considered as one of the causes of the Second Karabakh War in September 2020 between Azerbaijan and Armenia.

Another statement that further damaged the likelihood of reaching an agreement was made by Prime Minister Nikol Pashinyan, who claimed that Karabakh is the territory of Armenia.

If we look at the situation through the lens of Mr. Tonoyan’s statements and plans, it becomes understandable why Baku had reasons to doubt the security of its other territories and people. A principle of anarchy in international relations, i.e., the fact that there is no higher authority capable of refereeing contentious issues among the states, contributed to the perception of a security threat, which diminished the chances of finding a solution to a protracted conflict. Adding Mr. Pashinyan’s comment to a discussion will show that by 2020, peace talks were doomed. Consequently, Azerbaijan exercised the right for self-defense outlined in the Article 51 of the UN Charter.

After the conclusion of the 2020 war, several rounds of talks were held in the US, the EU, and Russia. These talks have not led to any tangible results. The failure of the post-war peace-building initiatives can be attributed to the unresolved fate of the separatists at that time. Armenia tried to secure special privileges for the region, a demand Azerbaijan was unwilling to accommodate.

The analysis of earlier mediation attempts between Baku and Yerevan, both before and after the Second war, indicates that the presence of a separatist entity and the irreconcilable views on its future were the key issues preventing the sides from ending a long-lasting conflict. It is essential to realize that from Yerevan’s point of view, the presence of a separatist regime on Azerbaijani territory was a way to gain a competitive advantage over Baku. Meanwhile, Baku saw the presence of such a regime as a legitimate security threat. Hence, Azerbaijan opposed the presence of separatist forces on its territory, while Armenia benefitted from directly controlling separatists. This dynamic led to a zero-sum game between the two South Caucasus states, making it challenging to conclude the hostilities between the sides. Therefore, while the separatist regime continued to exist, Baku and Yerevan had a very slim chance of reaching a comprehensive agreement on normalizing relations. This is particularly evident from the analysis of mediation efforts spearheaded by the OSCE Minsk Group. Despite its fall into obscurity, the Group retained a monopoly over the Karabakh conflict mediation for a significant amount of time. Every proposal failed because Baku and Yerevan could not synchronize their views on Karabakh’s future.

However, now there is a glimmer of hope for Azerbaijan and Armenia. Following the September 2023 events, the separatist regime operating in the internationally recognized territory of Azerbaijan ceased to exist. Thus, the root causes preventing Baku and Yerevan from reaching an agreement on normalizing relations are now history.

Eliminating a separatist entity on the territory of Azerbaijan enables the sides to search for a mutually beneficial solution and sign a peace document. From the mediation perspective, this development is the single most significant transformation that has taken place in the conflict. As things stand today, the risk-reward ratio shifted toward finding a solution because continuing hostilities carries more risks than potential rewards.

Peace treaty is the best way to guarantee security

After all, Armenia is more worried about its security. Looking at the balance of power dynamic between Baku and Yerevan paints a grim picture for Armenia. The population of Armenia stands roughly at 3 million people, while the Azerbaijani population exceeds 10 million inhabitants. The gross domestic product of Azerbaijan surpasses that of Armenia by more than threefold. Finally, Baku enjoys more substantial relations with other states.

Meanwhile, up until recently, Armenia was heavily reliant on Russia for security, and Moscow was the sole diplomatic partner of Yerevan. Considering the radical policy shift of Armenia and its subsequent attempts to foster ties with other states, it is unclear whether Yerevan will be able to achieve its foreign policy objectives in short order. Furthermore, at this point, there are serious reasons to consider that Armenia may become a metaphorical battlefield for dominance between the West and Russia or Iran. Therefore, an unresolved conflict with Azerbaijan will further challenge Armenia’s position, and contribute to the security concerns of Yerevan.

Finally, in the context of a possible peace agreement with Azerbaijan, Yerevan will find rapprochement with Baku economically beneficial. A peace deal between Baku and Yerevan will open opportunities for Armenia to join several international projects, including the Middle Corridor, which will further strengthen Armenian security via the mechanism of interdependence.

Signing a peace deal is the solution to the security competition that plagues the South Caucasus. Otherwise, the conflict dynamic between Baku and Yerevan may emerge once again. In principle, there is no alternative to the formal peace agreement between Baku and Yerevan. After all, this is how every conflict is supposed to end.