Two fundamental factors determining the developments in the Transcaucasia at the given stage make re-examining the protracted Nagorno-Karabakh conflict. The question is sliding oil price and Iran’s emerging from long years of international economic isolation.
As oil price slides, Azerbaijan faces serious problems. The national currency – manat – has depreciated dramatically. Price hikes, including for essential goods, growing unemployment rate has generally affected the social and economic situation, sparking large-scale protests in the country. The situation was slightly stabilized after police and security services resorted to tough measures. The government launched budget cuts and search for foreign borrowings to correct the situation.
Thomas de Waal, a well-known British analyst for the Caucasus, does not rule out that “an Azerbaijani regime that is in desperate straits might choose to "play the Karabakh card"- the one grievance (the Karabakh issue - EADaily) that can rally all Azerbaijanis around the flag - and start a military operation, large or small, to recover lost territory.” Perhaps, the British analyst would like to see such scenario, but something different is happening now.
Regular reports of the defense departments of Armenia and proclaimed Nagorno-Karabakh Republic (NKR) show that yet not so long ago the extremely tense situation on the state border of the two countries and in Nagorno-Karabakh has improved certainly. Intensity of the sporadic fire and penetration attempts by Azerbaijan’s raiders have decreased too.
The problem is not only the shrinking flow of oil-dollars that makes Baku reconsider its military budget and reduce the import of advanced weapons from foreign countries. (During the last years, Azerbaijan had spent at least $6 billion on its military budget and, it is obvious that it will not be able to break that “record” for a long time.) There is something that seems even bigger grievance to Baku – the lifting of the sanctions against Iran and its emergence from the financial and economic isolation. This process will be inevitably associated with the developing trade and economic relations with Armenia. On January 24, the presidents of Armenia and Iran, Serzh Sargsyan and Hassan Rouhani had a phone call. Reportedly, the two leaders discussed issues on the bilateral agenda, in particular, enhancement of versatile cooperation. Potentially, Armenia may become a transit country for export of the Iranian gas and other goods to the Black Sea ports of Georgia.
Besides, the positive effects of Yerevan’s decision to align with the Eurasian Economic Union started emerging now. Tehran seeks close cooperation with this integration union, speaking of possible Free Trade Area between Iran and the EEU in future. Meantime, the only country in the Eurasian Union bordering with Iran is Armenia, which gives the country even bigger role in the processes that would help soften the negative influence of the global crisis on the countries of the region.
Today even Georgia began thinking of cooperation with the EEU and Russia. In this light, the Turkish-Azeri policy of Armenia’s economic isolation has become a complete anachronism (it became clear yet long ago) and may even affect its initiators.
Undoubtedly, the crisis has affected Armenia too: incomes from export of copper and molybdenum – the key export products – has decreased tangibly, private transfer from abroad, mostly from Russia, have decreased by one-third. Meantime, the oil price decreased fourfold. Yerevan expects that Moscow will provide the promised loans to re-equip the Armenian army and extend the service life of the Armenian NPP. Actually, Armenia is in a better situation now than Azerbaijan. It is noteworthy that yet six years ago, in its strategic forecast the Armenian Defense Ministry mentioned the probability of such developments in Azerbaijan, though nothing pointed at such changes then.
Baku cannot but see these evident things. Resumption of war in Karabakh and large-scale hostilities that seemed adventurism before are simply impossible in the near future. The idea that “war could rally the Azerbaijani people around the flag and save the incumbent regime” seems rather provocative, indeed.
Hence, it is hardly possible to change the status quo in Karabakh so far. Furthermore, the current developments may intensify the settlement process, as the only alternative to war is peace that has become extremely necessary not only to the peoples in the region but also to the regimes that comprehend that peace is the only condition for them to retain power. In this light, the Karabakh peace process within the OSCE Minsk Group may gradually intensify and get more nuances.
In particular, there are reasons to think that the OSCE MG co-chairs (Russia, U.S. and France) may insist on Nagorno-Karabakh rejoining the negotiations. After all, the Karabakh conflict is, perhaps, the only conflict in the world where one of the key conflicting parties – NKR – is not let to the peace talks. Meantime, at his latest annual press conference, Foreign Minister of Russia Sergey Lavrov said that any negotiations must be inclusive and involve all the parties concerned. Lavrov believes such approach universal saying it cannot but apply the discussions on the Karabakh issue too. In fact, this coincides with the stands of Washington and Paris. It has become evident that the negotiations cannot result in any agreements unless the Karabakh side joins them. The status quo can be changed only if the configuration of the negotiation process is changed.
In addition, Baku may have to reconsider its foreign policy and foreign economic priorities, as its key strategic partner – Turkey - has plunged into domestic policy problems, amid large-scale war against Kurds and wrong foreign policy of President Erdogan’s government. In addition, Azerbaijan may face the need to cooperate with Iran and even the EEU. The Azerbaijani government has not rule out that at some moment such cooperation may become favorable. In such case, the Karabakh peace process will get new features and aspects, as it will be happening within a single integration union.
Anyway, the idea that war may help overcome crisis, like it happened many times in history, will hardly work for the given particular situation. Quite the contrary, war in Karabakh seems less and less probable with every passing day, while the prospects of a peaceful resolution and mutually acceptable decisions based on the mediators’ proposals seem quite real in the mid-term outlook.
Anush Levonyan, political analyst at EADaily
