The new ceasefire agreement negotiated between Russia, Armenia and Azerbaijan has grave geopolitical and domestic consequences for the South Caucasus states. Stefan Meister, Director of the Heinrich Böll Foundation South Caucasus, explains 10 consequences of the agreement.
The ceasefire agreement negotiated by Russia between Armenia and Azerbaijan on 10 November 2020 utterly changes the situation in the Nagorno-Karabakh conflict. Armenia hastily returned all seven of the territories around Nagorno-Karabakh it had conquered in the early 1990s to Azerbaijan. Both the areas conquered by Azerbaijan in the south of the disputed region and the strategically and historically important city of Shusha/Shushi remain under Azerbaijani control.
1960 Russian peacekeepers are securing Nagorno-Karabakh and a 5 kilometre-wide transit corridor between the disputed region and Armenia. There will be a corridor through Armenia at the border to Iran, connecting Azerbaijan with its enclave Nakhichevan. Russian FSB border guards will secure this transit route.
While the ‘hot war’, which caused an estimated up to 5000 casualties in total, has been stopped, the conflict now enters a new phase, as fundamental issues like the status of Nagorno-Karabakh have not been resolved and the agreement is causing renewed friction. Especially for Armenia, this humiliating loss has grave consequences for domestic politics, and will challenge the nation’s sovereignty.
We are seeing a shift in the balance of power in the region from the EU and United States towards Russia and Turkey. While Turkey itself did not sign the agreement, Ankara plays a significant role in the background. Israel, too, with its deliveries of arms, played no small part in Azerbaijan’s victory, and is pursuing its own interests in particular with regard to Iran’s influence in the region.
Those who have been working for 25 years towards a peaceful resolution to the conflict are being marginalised further. There is no role for trust building between the hostile nations in the truce. This article analyses 10 consequences from this war and the ceasefire agreement with far-reaching consequences for South Caucasus and the EU.
1. Why is this war happening now?
Armenia and Azerbaijan each played a part in the latest escalation. The conflict over Nagorno-Karabakh never froze completely; it always had the potential to escalate. The two sides engaged in an arms race and have become the most heavily armed states in the world. Azerbaijan in particular had an immense budget with its revenue from oil and gas exports. While Yerevan was quite happy with the status quo, the Azerbaijani leadership increasingly got the impression that Armenia – largely ignored by the international community – was establishing new precedents by building additional infrastructure and through its policy of settlement in the occupied territories. While the election of Nikol Pashinyan after the 2018 Velvet Revolution briefly raised hopes that with a Prime Minister without roots in Nagorno-Karabakh (unlike his predecessor) would come a window of opportunity to resolve the conflict, any such hopes were soon dashed.
Though Nikol Pashinyan initially took a moderate tone, appearing to recognise the need for him to lead his nation out of isolation to democratise it, he soon realised that the political costs of a compromise with Azerbaijan were too high, and therefore exposed him to political attacks from his opposition. As a result, his early reconciliatory rhetoric soon gave way to the tone of a hardliner who had to show his backing for Nagorno-Karabakh and was even considering integrating the disputed region into Armenia.
After the dispute between Azerbaijan’s President Aliyev and Prime Minister Pashinyan at the 2020 Munich Security Conference at the latest, it was clear that the leaders of both nations had grown so far apart that a resolution of the conflict seemed extremely unlikely. At the same time, Ilham Aliyev rhetorically prepared his country for this war. After a brief military escalation in July 2020, culminating in the loss of a high-ranking officer, he also noted the strong nationalist dynamic in his country, which could easily spill onto the streets as demonstrations, and challenge his legitimacy.
2. What is Turkey’s role in this war?
Turkey’s support for Azerbaijan shifted the balance in this conflict and was the key element in Baku’s military victory. For years, Azerbaijan had been arming itself with state-of-the-art drones and precision weapons for this war. Turkey not only helped improve the capabilities of the Azerbaijani army with joint exercises, it also gave Baku a military advantage by providing drones, as well as the relevant operating systems and on-site technical support to Azerbaijan.
Multiple sources have confirmed that at up to 2000 Syrian combatants were smuggled in with Turkish aid, boosting the military capacity of the Azerbaijani army. President Erdogan’s unconditional Turkish support for Azerbaijan on the international stage gave Baku the feeling of having a true ally. While it may be domestically advantageous for the Turkish president to score points with the nationalists by supporting Azerbaijan, it is far more important for him to challenge Russia in its post-Soviet sphere of influence, and thus improve his own bargaining position vis-à-vis Moscow in other conflicts, such as Syria and Libya.
Ankara and Moscow are on opposite sides in several conflicts (Syria, Libya, handling of the Kurds), and the Turkish leadership cannot like how Moscow is attempting to tip the military balance in its favour in the Black Sea especially after the Russian annexation of Crimea. Through its intervention in the Karabakh conflict, Turkey indicated its ambition to become an influential power in South Caucasus again.
For example, states such as Georgia and Ukraine increasingly perceive it as an ally to counterbalance Russia in the Black Sea region. At the same time, this victory strengthens the Baku-Ankara axis, allowing Turkey to continue to pursue its economic and energy policy interests in Caspian Sea resources.
3. Has Russia come out on top of the conflict with the ceasefire agreement?
Russia is both the winner and the loser of this war, as the truce both shows that Moscow remains the key security policy player in the region, but also clearly shows that Turkey has a firm foothold in the region as another serious player. While it initially appeared as though the Azerbaijani attack and rapid territorial gains took Russia by surprise, this allowed the Russian leadership to give itself a new role in the Nagorno-Karabakh conflict by stationing almost 2000 ‘peacekeeping forces’ there.
Russia’s actions have also definitively marginalised the OSCE Minsk Group, further reducing the influence of the USA and France/EU in the region. Moscow not only brokered the ceasefire agreement, making it even more important for Armenia as a protective power, Azerbaijan must also come to terms with the Russian presence in Nagorno-Karabakh. Moscow succeeded in keeping Turkey out of the agreement, though there is a monitoring mechanism with Turkish involvement.
While the concession of a corridor monitored by Russia through Armenia gives Turkey a direct connection to Azerbaijan and to the Caspian Sea, Russia has control over how well this transit route works. The Russian leadership’s cynical ‘wait-and-see’ approach shows that Moscow’s influence on the conflict parties is limited, and it has no problem with its ally Armenia having to surrender large swathes of the territories it conquered in the early 1990s to Azerbaijan.
4. Is Russia Armenia’s ally?
Armenia had to learn that the western community not only left it to fend for itself, but that it also cannot count on Russia as a protective power. Moscow’s ‘wait-and-see’ approach until just before an Armenian defeat, and Russia’s pronounced neutrality was a source of frustration in Armenia. Even though the alliance option under the Collective Security Treaty Organization only applies for the territory of Armenia, this response shows that the post-Soviet institution run by Russia is more a Potemkin organisation by the grace of Moscow than a functional collective defence alliance.
It would have been inconceivable for Belarus or Kazakhstan to have come to Armenia’s aid in this war. As a result, Moscow decides when to intervene under the cover of its security organisation, and when not to. Given the Russian military presence in Nagorno-Karabakh, Russia’s role in securing the transit route between Armenia and the disputed region, as well as the corridor to Nakhichevan, Armenia is even more dependent on Moscow’s benevolence. That will give Russia even greater influence on Armenia’s domestic politics.
It is conceivable that the Kremlin’s hesitation was also intended to weaken the position of Prime Minister Pashinyan, who came to power via street protests and a democratic election – a nightmare for any authoritarian regime in Moscow, especially considering its own domestic politics or other post-Soviet neighbouring states (e.g. Belarus).
5. What does the ceasefire agreement mean for Armenia?
For Armenia, this ceasefire agreement is tantamount to capitulation, not only undermining the country’s sovereignty, but also sustainably destabilising the country as a whole. The players in the Velvet Revolution, especially Nikol Pashinyan, discredited themselves in the eyes of many Armenians by signing the agreement, and are unlikely to remain in office for long.
The wave of refugees from Nagorno-Karabakh and the surrounding provinces, as well as the returning soldiers will also be a burden on Armenia, not only weakening the country financially, but also exerting a destabilising effect through all of the frustrated and homeless people. The 100,000 people who have already fled from Nagorno-Karabakh to date already threaten to overwhelm a small country like Armenia. The chaos created by the unplanned, hasty retreat, and the state’s inability to look after the fleeing people will further delegitimise the Armenian government and its institutions.
The significant impact of the Covid-19 pandemic on Armenia must not be forgotten; it is assumed that almost half of the population of Nagorno-Karabakh is affected by the virus. At the same time, there are currently not enough capable politicians who could give the country a perspective: the players in the Velvet Revolution have failed; through their corruption and by running down the army, their predecessors bear some of the blame for the resulting situation.
6. What will happen to Nagorno-Karabakh’s status?
The unresolved status of Nagorno-Karabakh is becoming a contentious issue that will continue to affect domestic policy in Armenia and cause lasting instability in South Caucasus. It is an open wound that persists between Armenians and Azerbaijanis. Every responsible Armenian politician will have no room for compromise after this defeat.
After this war, it appears rather unlikely that all Armenians will return to the region controlled by Russian forces. They cannot truly rely on Russian protection, and it is difficult to envision how Armenians and Azerbaijanis can co-exist now. It remains to be seen whether the pressure on Azerbaijani politicians to take the remaining territories will grow. It cannot be ruled out that this agreement is merely a strategic break for Azerbaijan, and it will take advantage of its military superiority to capture the capital Stepanakert, which is 15 km from Shusha/Shushi.
In any case, Baku will use its position of power to integrate Nagorno-Karabakh and the surrounding provinces. This will cause flight and displacement, also increasing hate between the neighbours. For Baku it will be very costly to rebuild the mostly destroyed infrastructure in the 7 territories it gained back and were it plans to resettle bigger parts of the 700.000 refugees (IDPs) who had to leave their homeland in the beginning of the 1990s.
7. What is Iran’s position?
The corridor through Armenia to the Azerbaijani enclave of Nakhichevan is another source of potential conflict, both with regard to its use by Turkey and Azerbaijan, and also for the future relationship with Iran. Iran is an important trade ally for Armenia, and in particular for Armenia’s supply of electricity for Iranian gas.
For Armenia, this had previously been the only way to at least partially mitigate the unilateral economic and energy policy dependency on Russia. For the Iranian leadership, it is important that Russia has a presence in the region, and that its rival Turkey cannot establish any dominance in the neighbouring country. While Iran called for the return of the seven territories around Nagorno-Karabakh to Azerbaijan, Tehran welcomes the fact that Nagorno-Karabakh was not conquered with Turkish support, and that instead Russian forces will monitor this territory for at least 5 years.
In this way the Iranian leadership hopes that the peace accord will reduce the domestic political pressure on Tehran from its own Azerbaijani minority (up to 25 percent of Iran’s population, who took to the streets in support of Azerbaijan during this war).
8. What does the ceasefire agreement mean for the EU and the United States?
For the EU and the United States, this ceasefire agreement must be seen as a failure of its policy of stabilisation, trust-building and conflict resolution. The OSCE Minsk format has now finally lost both function and legitimacy. While it was certainly problematic from an Azerbaijani perspective from the outset that the three countries with the largest Armenian minorities worldwide, France, Russia and the United States, were co-chairs of the group, France and the US in particular have begun to exhibit a certain weariness with this format in recent years, which resulted in Russia dominating all negotiations. However, Moscow used this conflict to ensure that the two countries remain dependent on it by supplying weapons to both conflict parties among other things.
The fact that Russia negotiated the ceasefire agreement outside the Minsk Group format with Turkey presents us with a new reality: the west no longer has a part to play in this conflict; Russian leadership is more likely to reach an accord with Ankara than with Washington. However, the actual tragedy involves democratic forces in Armenia: they are deeply disappointed at the disinterest from Brussels and the EU member states. After the Velvet Revolution, Armenia saw itself as blossoming democracy, and sought to ‘befriend’ other democracies, above all in Europe.
As far as Armenia is concerned, they showed no empathy or interest in helping the country. Only authoritarian Russia was willing to at least guarantee a fragile peace with its ‘peacekeeping forces’. That not only discredits democracy and the EU, it also causes the stakeholders in the government, parliament and civil society, who campaigned for a new, European and democratic Armenia, to lose credibility. This ultimately also harms the EU neighbourhood policy, in which Armenia was considered a role model, as it was both a member of the Eurasian Economic Union and had a Comprehensive and Enhanced Partnership Agreement (CEPA) with the EU.
9. What does this war and the truce mean for reconciliation?
The big losers in these developments are the Armenian civil society and peace activists in both countries. The pressure on the Armenian civil society, especially those who cooperated with western institutions and participated in reconciliation measures with Azerbaijanis, has grown enormously. Not only have they been marginalised in social debates, they have also been subjected to immense pressure through hate speech, verbal and physical attacks in recent weeks. The same also applies for Azerbaijan, where in the national frenzy of victory, anyone who campaigned for peace was considered a traitor and even persecuted by state authorities.
All those who called for reconciliation have lost, with the nationalists and hardliners dominating the current discourse in both countries. They will dominate politics in the years to come in Armenia and Azerbaijan, which will weaken civil society and makes true peace even more unlikely. The organised attacks on a Soros Foundation institution and the Radio Liberty offices in Yerevan show that even western institutions that promote democracy and pluralism can come under pressure in Armenia. In Azerbaijan, systematic repression against sections of the opposition had already started with the Covid-19 pandemic.
This military victory boosted the legitimacy of President Aliyev, giving him even more scope to put critics under pressure. The paradigm of enmity between the two states, which has been part of the nation building process in Armenia and Azerbaijan since the 1990s, will grow even stronger. For Armenia, the trauma of the genocide by Turkey in the early 20th century is deeply rooted in the collective memory. This war by Azerbaijan with Turkish support must also be seen in this context, once again evoking the trauma of a possible genocide.
10. What are the consequences for the EU’s neighbourhood?
This conflict underestimated by the EU sends multiple geopolitical messages and has an impact beyond the region’s borders. Turkey’s arrival in South Caucasus and the influence of Iran, which is expected to grow, are causing a further disintegration of the post-Soviet territory. With the ceasefire agreement and deployment of ‘peacekeeping forces’, Russia demonstrated that it remains the key security player in South Caucasus. However, it is increasingly being challenged by countries like Turkey, Iran and China. Russia’s policy of taking advantage of conflicts rather than resolving them will only work while it has sufficient resources to back it up by military force.
Turkey now has direct access to the Caspian Sea and is coming closer to its goal of becoming an energy hub for resources from the Caspian sea. Growing independence from Russian oil and gas imports, as well as the military and economic cooperation with Azerbaijan improve Turkey’s position in negotiations with Russia. Countries like Georgia and Ukraine will keep a close eye on the players that will balance Russia’s influence in their region in future. Turkey is also already discussing drone deliveries to Ukraine.
The EU is not a geopolitical player. Due to its failure to act, the stability and development of its neighbours will be increasingly influenced by other players. In a multipolar world, this leads to instability, as the withdrawal of the United States will leave a vacuum at the EU’s southern and eastern borders, in which players like Russia, Turkey, Saudi Arabia or Iran will compete for influence. Even if the EU remains a mere onlooker, it will still face direct consequences of conflicts, wars, displacement and instability of weak states.
At the same time, it is losing credibility in the societies and among democratic stakeholders. Its failure to act has substantially weakened democracy and the rule of law at its borders and, where the ‘right of the mighty’ is prevailing over the ‘might of right’. At the same time, all players must be aware that true peace can only be achieved through trust-building and compromise. Now we are more far away from that.
 According to SIPRI, Azerbaijan spent 24 billion dollars on its military between 2009 and 2018. In the same period, Armenia spent 4 billion dollars on its military, but was able to purchase weapons from Russia at preferential prices. https://www.sipri.org/sites/default/files/SIPRI-Milex-data-1949-2019.xlsx
 Between 2014 and 2018, Azerbaijan was the second largest buyer of Israeli weapons, accounting for 17 percent of Israeli exports. Trends in international arms trade, 2018, SIPRI factsheet, March 2019, https://www.sipri.org/sites/default/files/2019-03/fs_1903_at_2018.pdf