The Geopolitics of the Nagorno-Karabakh Conflict

Fariz Ismailzade is a political analyst based in Baku, Azerbaijan, who specialises in the politics and economics of the Caucasus region.

The Nagorno-Karabakh conflict, one of the bloodiest disputes in the Caucasus, is considered by many to mark the beginning of the ethnic tensions in the Soviet empire that eventually led to its collapse. Having started in 1988, the conflict became a devastating factor not only for the Soviet Union itself, but also for the two main warring parties, Azerbaijan and Armenia, which became independent in 1991. Subsequently, more than one million Azerbaijanis and three hundred thousand Armenians were deported or ethnically cleansed from their homes. Full-scale military hostilities ended with a shaky ceasefire in 1994, leaving the whole of Nagorno-Karabakh as well as seven surrounding provinces of Azerbaijan occupied by Armenian forces.

A key reason for the deadlock over Nagorno-Karabakh and the absence of any tangible prospect of a solution is the geographical location of the conflict and its resulting geopolitical complications. As Caucasian countries, Azerbaijan and Armenia are part of a region that serves as a bridge between East and West, and between the territories of the former Soviet Union and the Islamic world. This causes many regional powers to be interested in the area, creating an unhealthy competition, often turning into a bitter rivalry, between them. As a result, the Nagorno-Karabakh conflict remains frozen and unresolved.

As if this strategic geographic location were not enough, Azerbaijan also possesses vast oil and gas reserves. This has caused external powers such as the United States, China and the European Union, hungry for energy resources, to become involved in the region as well.

There are at least seven major players in the geopolitical game over Nagorno-Karabakh: Russia, the United States, the European Union, Iran, Turkey, the Islamic world, and China. A closer look at the interests and actions of each of these players illustrates their role in the conflict and reveals the difficulties associated with finding a solution to it.

Geopolitical Players

Russia

Many local analysts believe that Russia has been not only a geopolitical player in the Nagorno-Karabakh conflict, but also a direct participant in it. Although Russia denies this, there is plenty of evidence to support the claim. The conflict began when the Soviet Union was in its last years of existence, and thus the crumbling Soviet army and its military bases in the South Caucasus were drawn into the fighting.

Russia initially supplied weapons to both sides. This was done both at the level of corrupt local commanders, who were simply selling the weapons for private profit, as well as at state level owing to Moscow’s desire to keep both sides dependent on itself. Many analysts in both Baku and Yerevan believe that Russia intentionally fuelled the conflict in order to keep it alive and weaken newly independent Armenia and Azerbaijan, thus keeping them within its own orbit of influence.

Yet this early equal supply of weapons to Armenia and Azerbaijan did not translate into Russian neutrality on Nagorno-Karabakh. Many Azerbaijanis feel that Russia has disproportionately favoured fellow-Christian Armenia in the dispute and that more generally it has often pursued pro-Armenian policies at the expense of Azerbaijan.

Historically, Russia and Armenia have had close ties. During the reign of the Russian tsars in the nineteenth century, thousands of Armenian families were resettled from the territory of the Ottoman Empire to the Caucasus to increase Russia’s security along the border with Turkey. It was clear that Russia trusted in the loyalty of its fellow Christians. Thus, Armenia became a loyal bastion of Russia in the South Caucasus, something that Moscow was not willing to give up.

Azerbaijan, on the other hand, is a Muslim, although secular, nation with strong cultural and linguistic connections to NATO member Turkey, and has never placed much trust in Russia. Thus, even from the beginning of the Nagorno-Karabakh conflict, and more so towards the mid-1990s, it was clear that Russia supported the position of Armenia and was doing its best to empower its small South Caucasian ally as much as possible. In 1992, Russian military forces from the 366th Motorised Infantry Brigade stationed in Nagorno-Karabakh helped Armenians capture the strategic point of Khojali and massacre more than four hundred civilians in one night. Russian troops have participated in military actions throughout the conflict, as shown for example in the case of six captured Russian soldiers who were pardoned by Azerbaijan’s then-president Heydar Aliev in 1994. In 1997, Lev Rokhlin, chairman of the Russian Duma’s Committee on Defence, discovered that $1 billion worth of Russian military hardware had been illegally transferred to Armenia. Rokhlin was subsequently killed in mysterious circumstances and the incident was never investigated properly. Moreover, Russia and Armenia have developed a significant system of common defence within the framework of the Collective Security Treaty of the Commonwealth of Independent States (CIS), the successor entity to the Soviet Union. Russia maintains two military bases in Armenia and owns 90 per cent of its energy-producing facilities and plants, purchased following a 2003 deal to clear Armenia’s substantial debt to Russia. Consequently, Russia now controls most of Armenia’s energy generation and distribution systems.

Strong Armenian–Russian military co-operation is mirrored by significant Russian support for Armenia on the diplomatic front. Not interested in settling the conflict in favour of Azerbaijan, or indeed in settling it at all, Russia hinders any breakthrough on Nagorno-Karabakh by international bodies such as the United Nations, the Organisation for Security and Co-operation in Europe (OSCE), and the Council of Europe. As co-chair (with the United States and France) of the Minsk Group of the OSCE, which is charged with brokering an end to the Nagorno-Karabakh conflict, Russia is well placed to play an obstructive role. Many analysts believe that Russia was behind the terror attack in the Armenian parliament in October 1999 which killed Prime Minister Vazgen Sargsian and the speaker of parliament, Karen Demirchian. The attack occurred on the eve of the OSCE’s Istanbul summit, at which a peace deal on Nagorno-Karabakh was supposed to be finalised and cemented. But the tragic events in the Armenian parliament ruined that hope.

At the moment, Russia is pursuing a somewhat more balanced policy on Nagorno-Karabakh compared to the mid-1990s, thanks to the improvement in relations between Baku and Moscow that occurred after Vladimir Putin succeeded Boris Yeltsin as president. Putin visited Azerbaijan in January 2001, and since then bilateral relations between Azerbaijan and Russia have become more pragmatic. Moscow has since declared that it would recognise any peace deal agreed between two sides. This, unfortunately, has little bearing on a practical solution to the conflict.

The United States

Washington has been tied to the Caucasus because of the vast energy reserves of the Caspian Sea and the region’s geostrategic importance in the war against terror. In addition, the strong, wealthy and active Armenian diaspora in the United States has kept Washington’s attention focused on the area since the collapse of the Soviet Union. It was precisely because of the power of the Armenian lobby that the US Congress passed Section 907 of the Freedom Support Act in 1992, prohibiting any US governmental assistance to Azerbaijan. Azerbaijanis regarded this legislative bill as discriminatory and as a measure that punished the victim.

With the signing in 1994 of the “contract of the century” between Baku and Western (including US) energy companies to exploit Azeri oil fields, the US presence in the Caucasus has become part of the geopolitical reality and rivalry between Washington and Moscow. The construction of the Baku–Tbilisi–Ceyhan (BTC) oil pipeline, which opened in May 2005, is another major victory for the White House. This pipeline, actively supported by both the Clinton and Bush administrations, strategically connects Azerbaijan, Georgia and Turkey, and ensures the Westward integration of Azerbaijan and Georgia.

But it was the 11 September 2024 terrorist attacks on New York and Washington and the subsequent US war on terror that cemented co-operation between the United States and the countries of the Caucasus, particularly Georgia and Azerbaijan, which have sent peacekeeping forces to Iraq and Afghanistan and provided air bases and air space for US planes. They have also co-operated with the United States in exchanging intelligence and in the fight against money-laundering.

The United States has thus become an active player in the region and specifically in the Nagorno-Karabakh peace process. Washington has supported the territorial integrity of Azerbaijan, yet has also insisted that the conflict be resolved by diplomatic negotiations, not military means. The United States has sponsored a series of meetings between the leaders of Armenia and Azerbaijan since 1999, the most important being that between presidents Heydar Aliev and Robert Kocharian in Key West, Florida, in March 2002, at which a deal was nearly agreed. However, the negotiations ultimately proved fruitless as neither side was willing to compromise on the chief issue, the status of Nagorno-Karabakh.

At the moment, the Minsk Group of the OSCE is widely regarded as ineffective, unable to achieve any progress towards a Nagorno-Karabakh solution because of the competing interests and goals of its co-chairs—the United States, Russia and France. In particular, Azerbaijan has harshly criticised the mediators for a lack of action and results, and has stressed the mounting frustration, disappointment and calls for war among the Azeri public. The Minsk Group co-chairs, in their turn, blame everything on the Azeri and Armenian presidents, and consider themselves to be facilitators only, not negotiators.

Turkey

From the outset of the conflict, Turkey has condemned Armenia as the aggressor and supported its brotherly nation Azerbaijan by closing its border with Armenia and refusing to establish diplomatic relations with Yerevan. The Armenian claims about the so-called genocide of 1915, demands for territorial and financial compensation, attempts to force the parliaments of other countries to recognise—without proper historic study—the alleged genocide, and terrorist attacks by Armenian groups on Turkish diplomats in the 1970s and 1980s (more than seventy Turkish diplomats were killed) have further impaired relations between the two nations.

Yerevan has been pushing for the opening of the Turkish–Armenian border, a call supported by the United States and European Union. Ankara, however, ties such an opening to the liberation of the occupied Azerbaijani territories and to recognition by Yerevan of Turkey’s territorial integrity.

While Armenian–Turkish relations remain cold, Azeri–Turkish relations have developed fast and are close and strong. Ankara has provided military and economic assistance to Azerbaijan and has also given it political support at major international summits. The BTC pipeline project has further strengthened ties between the two countries.

Turkey is a key power in the Caucasus and can be a major player in resolving the Nagorno-Karabakh conflict. Its opening of trade and communication links with Yerevan could be an important part of any peace package. Yet Turkey also figures as a major obstacle in the peace process, owing to its difficult relations with Yerevan.

Iran

Iran has taken a somewhat more balanced stance on Nagorno-Karabakh than Turkey: despite its Islamic identity, it has at times supported Christian Armenia over Muslim Azerbaijan. Although Iran has provided humanitarian aid to Azeri refugees and has fostered trade and economic relations with Azerbaijan, it has been angered by Baku and Washington’s close co-operation on energy and has not welcomed the arrival of US companies in the Caspian Sea region. Neither does Iran appreciate Azerbaijan’s friendly ties with Israel. A further complication in Iranian–Azeri relations is the fact that more than thirty million of Iran’s population are ethnic Azeris: Iran fears that Azerbaijan might plant secessionist ideas among this group.

For its part, Baku was unhappy that Iran was funding many Islamic schools and mosques in Azerbaijan, and feared that Iran might sponsor an Islamic revolution in Azerbaijan. In 1996, the Azeri authorities arrested officials of the Islamic Party of Azerbaijan, which was suspected of being funded by Iran. Disagreements over territorial waters and the allocation of resources in the Caspian Sea aggravated tensions between the two countries. In the summer of 2001, Iranian gunboats pursued Azeri survey vessels which were exploring the possibility of oil-field development in Caspian waters off southern Azerbaijan (the Alov field, developed in partnership with the UK oil and gas giant, BP). Iranian jet fighters subsequently violated Azeri air space, and only the diplomatic intervention of Ankara and Washington prevented a full-scale war.

Azeri–Iranian relations have improved in the past year owing to Tehran’s fears that the United States will use Azerbaijan as a launch pad for a possible war against Iran. Thus, since 2004, senior Iranian officials, including Iran’s previous president, Mohammad Khatami, have visited Baku to seek better relations. Iran has also abandoned any hope it may once have had of organising an Islamic revolution in Azerbaijan, and has agreed to open an Azerbaijani consulate in Tebriz, the largest ethnic-Azeri city in Iran.

Armenian–Iranian relations, by contrast, have been warm ever since Armenia gained independence in 1991, with Iran providing Yerevan with trade and economic opportunities and, most recently, building a gas pipeline to Armenia.

While Iran has been somewhat excluded from the Nagorno-Karabakh peace process (even though at the beginning of the conflict it played a mediating role between the warring parties), it is a major power in the region and any possible future peace deal will have to include Iran in the framework. In 2000–1, a “land-swap plan” envisaging an exchange of territory between Azerbaijan and Armenia circulated in the media of the two countries and allegedly featured in negotiations between their two presidents. Any such plan would necessarily also concern Iran, as it borders the lands of the conflicting parties. Nevertheless, Iran remains suspicions of peace proposals forwarded by the United States, because it fears they will increase US influence in the region.

The European Union

EU activity in the Caucasus has so far been mostly economic in nature, with BP and other European energy giants (Elf, TotalFina, Eni) participating in energy projects in Azerbaijan. The European Union has also been developing the East–West transport and communication corridor and providing technical assistance to the three Caucasian nations (Georgia, Armenia, and Azerbaijan) that fall within the framework of its Tacis Programme to supply such aid to thirteen east European and Central Asian countries. Leading EU members Britain, Germany, France, and Italy have supported the territorial integrity of these three Caucasian nations and affirmed their intention to back peace negotiations on the various ethnic and secessionist conflicts that afflict them. As regards Nagorno-Karabakh, France has directly participated in the peace talks as one of the co-chairs of the Minsk Group.

The comparative trust between the European Union and Russia is more likely to advance a Nagorno-Karabakh solution than is the bitter rivalry between Russia and the United States. Russia currently enjoys warm ties with Germany and France, and this could assist the international negotiators in seeking to resolve the conflict.

The Islamic World

Saudi Arabia, Kuwait, and other Persian Gulf nations have supplied humanitarian assistance to Azeri refugees and internally displaced persons, yet this assistance has been accompanied by an increase of religious propaganda, alarming Azerbaijan’s political leaders, who are keen to build a secular state in their country. Azerbaijan pays special attention to relations with the Islamic world. The Organisation of the Islamic Conference was the first, and is so far the only, international body openly to condemn Armenia for aggression over Nagorno-Karabakh. It has called for the immediate and unconditional liberation of the occupied Azeri territories. Islamic countries also partner Azerbaijan in energy, trade and investment, thus helping it to build a strong economy. Some Muslim countries, such as Syria and Lebanon, have also developed strong ties with Armenia.

Islamic countries have not directly participated in the Nagorno-Karabakh peace process, yet they are an important factor in the ethnic conflicts in the Caucasus because they are capable of providing large sums of money, weapons and humanitarian aid to the various Islamic warlords in the region.

China

Although little active in the Caucasus in the 1990s, China has been increasing its role lately with greater participation in regional energy projects and enhanced trade and communication ties with Caucasian countries. In March 2005, President Ilham Aliev of Azerbaijan travelled to China to develop bilateral ties.

China, with its growing economic power and military might, could soon be a major player in the region. In 1999, Azerbaijan was shocked by the transfer of eight Chinese Typhoon multiple rocket systems to Armenia, an act for which Beijing swiftly expressed official regret, blaming the deal on private companies. Although not a direct player in the Nagorno-Karabakh conflict, China has the capacity to become one.

The Great Game

Although the Cold War is over and relations between Moscow and Washington have improved significantly, the bitter rivalry between these two power centres has not ended. Russia and the United States have co-operated economically and politically, and on security issues and the war against international terrorism; yet the traditional Realpolitik competition between them endures and the Caucasus is one of the hotspots in this geopolitical rivalry.

The entry of the United States into the Caucasus and the active participation of US oil and gas companies in the production-sharing agreements in the Caspian Sea have drawn bitter opposition from Moscow. Russia regards the former Soviet space as its own backyard and had no plans to share it with the West. That is why it long failed to agree with Azerbaijan on the legal status of the Caspian Sea, and why it has also opposed the construction of the BTC pipeline, which bypasses Russia completely. Moscow argued that the BTC pipeline is not economically viable and proposed instead a northern route for the export of Azeri oil, through the territory of Russia.

Moreover, the expansion of NATO into eastern Europe has roused Russian fears of hostile encirclement. Moscow believes that NATO and the United States have not abandoned hopes of weakening Russia and limiting its global influence; one way of accomplishing that would be to expand NATO by incorporating the former East Bloc countries, leaving Russia isolated.

After the 11 September attacks, the United States launched military assistance programmes in Georgia (the “Train and Equip” programme) and Azerbaijan (the “Caspian Guard” programme) and even raised the possibility of establishing US military bases in the Caucasus. US Secretary of Defence Donald Rumsfeld has repeatedly visited Baku to discuss this issue. Meanwhile, Georgia has once again been pushing for the removal of Russian military bases from its territory. All of this damaged the level of trust between Moscow and Washington.

Finally, the velvet revolutions in Georgia and Ukraine in 2003–4 and the accession to power in these countries of pro-Western political forces further aggravated the rivalry between Moscow and Washington, the former accusing the latter of masterminding these revolutions to increase US influence in the region in a zero-sum game vis-à-vis Russia. Moscow is also angered by signs that Washington hopes to foment similar “people power” upheavals in Belarus and even in Russia itself. The repeated calls in 2005 of President George W. Bush and his senior officials for more democratic governance in Russia are taken as a clear indication of such a policy.

Although the rivalry between Moscow and Washington is a major feature of the geopolitical game being played in the Caucasus, it is only one part of it. Other bitter rivalries exist between the United States and Iran; between Turkey and Iran; between the United States and China; and between the Islamic world and the West. The United States is trying to prevent Iran from developing nuclear weapons, and the Caucasus figures in this goal as Washington is helping Azerbaijan to strengthen its border security and Caspian Sea presence to ensure no illicit transfers of nuclear material or technology are made to the Islamic Republic. The United States also objects to Russia’s assistance with Iran’s nuclear power programme. At the same time, the United States is trying to limit the growth of China’s economic presence in the Caucasus. Similarly, Muslim countries actively fund pro-Islamic forces to contain the Westernisation of the region. This is especially clearly seen in Chechnya.

This bitter rivalry of regional and world powers in the Caucasus significantly hinders its development and the resolution of its deadlocked conflicts.

Implications for Karabakh

The Minsk Group of the OSCE has proven ineffective in resolving the Nagorno-Karabakh conflict because of the competing interests of the co-chairs, specifically Russia and the United States. The frozen status quo suits Moscow because it believes that a resolution would reduce Armenia’s dependence on Russia and cause this South Caucasus ally to tilt towards the West. The United States and Europe have been attempting to wean Armenia from Russia, but largely unsuccessfully. Russia also believes that a Nagorno-Karabakh solution would strengthen Azerbaijan and increase its regional influence, something Moscow opposes as Azerbaijan has close ties with Ankara.

Some experts believe that if Azerbaijan renounced its pro-Western stance in favour of Russia, Moscow would help to resolve the conflict. Although popular, this belief lacks empirical evidence, because since the early 1990s Azerbaijan has twice taken steps towards Moscow without a Karabakh reward: in 1993, when Azerbaijan’s nationalist pro-Turkish president, Abulfaz Elchibey, was ousted and replaced by the more pragmatic politician, former Politburo member Heydar Aliev, who subsequently brought Azerbaijan into the CIS; and in 2002, when Aliev and Putin opened a new stage in bilateral relations by agreeing on the legal division of the Caspian Sea and the leasing to Russia of the Gabala radio location station in Azerbaijan. (The Gabala station is of major strategic importance to Russia, allowing it to monitor the air space of all of Africa and the Middle East.) Yet despite these moves, Russia did not change its position on the Nagorno-Karabakh conflict.

Contrariwise, other analysts argue that a Nagorno-Karabakh solution will be possible only once the United States fully inserts itself into the Caucasus and can thus exert greater pressure on both sides. At the moment, however, the insecurity and fears of Armenia vis-à-vis Turkey and its subsequent dependence on Russia prevent this from occurring.

Local analysts note that when relations between Moscow and Washington improve, there is progress in the Nagorno-Karabakh negotiations, with some signs of hope for a lasting solution. When US–Russian relations deteriorate, the peace process runs into complete deadlock.

Presidents Bush and Putin have met several times in recent years and discussed a wide range of issues, including the ethnic conflicts in the South Caucasus. Yet the meetings failed to produce any results. This tendency is likely to continue in the near future.

Conclusion

The Nagorno-Karabakh conflict is a hostage to geopolitical rivalry. Although international organisations put much of the blame on the political leaderships of Armenia and Azerbaijan for their inability to make concessions and persuade their nations that peace requires painful compromises, it is clear that the conflict has more players than just Yerevan and Baku. It is no coincidence that Azerbaijanis believe the keys to a solution are to be found in Moscow and Washington. At the moment, the status quo is likely to continue. Only a major improvement in Russian–American relations will change the situation.