Analysis: South Caucasus after the two wars

Secure South Caucasus is vital for Eurasian relations, trade flow, energy security and efficient transportation. Peace between Azerbaijan and Armenia and completing projects with Türkiye and Central Asia are crucial for a prosperous region

Two significant developments have recently profoundly impacted security formation in the South Caucasus: Azerbaijan’s Karabakh Victory, and ramifications of the Russia-Ukraine war on the region.

After the Karabakh Victory and before the Russia-Ukraine War, the most important step in the field of security was the Shusha declaration signed between Azerbaijan and Türkiye. The parliaments of both countries approved this declaration, and thus it became an international agreement. The agreement envisages military cooperation between the two countries and cooperation in economy, transportation and trade. For example, a preferential trade agreement was signed between Azerbaijan and Türkiye within this framework.

Before the Russia-Ukraine war, Azerbaijan signed a declaration of alliance with Russia. However, this declaration was not brought onto the agenda of the respective parliaments and did not prevent Azerbaijan from remaining neutral in the conflict. Azerbaijan has supported Ukraine’s territorial integrity and sovereignty in this war and even sent humanitarian aid to Ukraine.

The Russia-Ukraine war has increased the strategic value of Azerbaijan in terms of global energy and transportation opportunities. First, through the Tripartite Declaration signed after the Karabakh War, the possibility of the Zangezur Corridor emerged. It is a project that was supported by both Russia and Western states. Moreover, the Middle Corridor project, which is an initiative of the Organization of Turkish States and passes through Azerbaijan, has increased Azerbaijan’s importance in terms of global transportation and food security. There has been increasing traffic in negotiations between the region’s states to realize this corridor. Bilateral and multiple meetings were held to accelerate the transition towards the Middle Corridor to reduce customs tariffs.

Energy supply

The second most important development in this regard has been in the field of energy supply. European countries signed a new energy memorandum of understanding (MoU) with Azerbaijan on July 18, 2022, within the framework of the policy of diversifying their energy resources. With this MoU, it was decided to increase the capacity of the Southern Gas Corridor, which carries Azerbaijani gas from the Azerbaijan Shah Deniz-2 project to the European market, by up to 32 billion cubic meters by 2027.

Azerbaijan has also signed new agreements to export Kazakh oil to the energy market via the Baku-Tbilisi-Ceyhan and Baku-Supsa pipelines through Azerbaijan. This will increase Kazakhstan’s energy export security and Azerbaijan’s future as an energy transit country.

In contrast, demand for renewable energy sources has increased in the energy sector. Various agreements have been signed between Azerbaijan and European countries on this issue. Electricity produced from renewable energy sources in Azerbaijan will be exported to Europe via Georgia and Türkiye. Azerbaijan has declared that it is ready to cooperate with Kazakhstan.

The Azerbaijan-Armenia normalization process, closely related to the region’s security, has not yet achieved any serious success and a threat to regional security remains. Instead of signing a peace agreement with Azerbaijan, Armenia is delaying the process by putting forward various preconditions while Armenian officials complain about Azerbaijan in international meetings.

As widely reported, Azerbaijan has presented a five-item package of proposals that include mutual recognition of the territorial integrity of the parties. Ultimately, the Prime Minister of Armenia recognized the territorial integrity of Azerbaijan, including Karabakh. However, the demand for an international mechanism for the rights and security of Armenians residing within the territorial domain of Azerbaijan is still being put forward, which negatively affects the negotiations.

Meanwhile, Armenian Prime Minister Nikol Pashinyan ignored the demand for the right of return of more than 200,000 Azerbaijanis expelled from Armenia between 1987-1990. The Azerbaijanis who were expelled from Armenia have organized and have started working to return to their lands in Armenia. At the present stage, some representatives of international organizations are seriously interested in this issue. During the period of occupation, Armenia destroyed the houses of Azerbaijanis and looted their cultural assets. The Armenian government will therefore have to compensate monetarily.

Armenia still refrains from fulfilling the conditions of the tripartite declaration that ended the war on Nov. 10, 2020. There are still some 10,000 Armenian military personnel on the territory of Azerbaijan. Additionally, contrary to the declaration, regional communication and transportation lines remain unopened.

Georgia has a goal of membership in NATO and the EU. However, in the post-Russia-Ukraine war period, Tbilisi has been unable to attract sufficient attention from the West. After the second Karabakh War, as before, Georgia supports regional transport and energy projects and cooperation mechanisms. After the war, Azerbaijan’s President Ilham Aliyev proposed the construction of the Azerbaijan-Georgia-Armenia tripartite platform. While Georgia supported this platform, Armenia did not.

Türkiye as a stabilizing actor

Türkiye became a stabilizing actor in the region with the victory of its ally Azerbaijan in the second Karabakh War and through the Shusha Declaration. Through agreements signed between Azerbaijan and Türkiye, the Azerbaijani army is switching to the Turkish military model. For this reason, commando units are being established in the liberated Azerbaijani territories. Moreover, cooperation between the two countries in the field of the defense industry is increasing exponentially.

Türkiye and Azerbaijan also work in the spirit of allies on energy, transport, and trade projects and want to include other regional actors in this cooperation. In 2020, the heads of state of Azerbaijan and Türkiye proposed a platform consisting of all six regional states, including Russia, Türkiye, and Iran, for regional cooperation.

Another critical issue concerning the region’s security is the Türkiye-Armenia normalization process. After victory in the Second Karabakh War, opportunities emerged for normalizing relations between these two countries, and both appointed special representatives for this purpose. However, the fact that Armenia has not signed a peace agreement with Azerbaijan negatively affects this process.

After Azerbaijan’s victory in Karabakh, Iran had difficulty adapting its own policies to the geopolitical reality in the region. Tehran delayed the realization of the Zangezur Corridor and tried to exert pressure by conducting military exercises on the border with Azerbaijan. However, after a while, the country had to take a step back. The important factors in this were the Shusha Declaration between Azerbaijan and Türkiye, the fact that Tehran’s aggressive policy could not find support from Russia and Iran being aware that pressure on Azerbaijan would not yield the desired result. Although the most recent visit of the Iranian foreign minister to Azerbaijan was positive, it is too early to assume stability has been achieved in Azerbaijani-Iranian relations.

Russia has to share its influence in the region with Türkiye in the post-Karabakh War period and is gradually losing its role as a stabilizing power following the Ukraine war. In the Russia-Ukraine War period, it lost its monopoly on the normalization process between Azerbaijan and Armenia to the West. This is also because proposals put forward by Russia were not accepted by either country. The presence of Russian peacekeeping troops in Karabakh does not satisfy either Azerbaijan or Armenia. Moreover, Ruben Vardanyan, sent to the region from Russia, is seen as an obstacle to integrating Karabakh Armenians with Azerbaijan. The support provided by Russian peacekeepers to separatists in the region continues to be harshly criticized by the Azerbaijani press and society.

After Azerbaijan’s Karabakh Victory, the West became more active in the region. Since the onset of the Russia-Ukraine war, the importance of the region has increased in terms of energy and transportation projects, as well as security for the EU. Priorities of the West are ensuring the normalization process of Azerbaijan and Armenia under Western management, strengthening regional transport and energy connections, and isolating Russia from the region’s politics integrating the South Caucasus with the West.

However, we cannot say that the West has acted unilaterally in this regard. There are different approaches to this issue, and the French government, in particular, plays a spoiling role in regional politics.

In conclusion, the South Caucasus region is an important part of Eurasia in terms of its relations with Central Asia, Middle East and the West. A safe South Caucasus will ensure trade flow between East and West and foster global energy supply security along with the healthy functioning of north-south transportation routes. To ensure this, a peace agreement should be signed between Azerbaijan and Armenia, and all states of the region should cooperate within the framework of respect for mutual sovereignty and territorial integrity. The unfinished energy and transportation projects between the Türkiye-South Caucasus-Central Asia should be completed, and a South Caucasus-Central Asia platform can be established.