Nagorno-Karabakh Conflict Geopolitical Assesment Historical Background The conflict dates back to 1988 when Nagorno-Karabakh’s ethnic Armenians attempted to secede from Azerbaijan (at that time, both Armenia and Azerbaijan were Republics of the Soviet Union). As the USSR collapsed in 1991, the conflict rapidly escalated into a full-scale war that left about 30,000 dead and 1 million people internally displaced. By 1994, ethnic Armenians gained control of the region. The same year, a Russian-brokered ceasefire was signed, leaving Nagorno-Karabakh in Armenian de facto control. As a result, about 1/7 of Azerbaijan territory passed under Armenian occupation and around 700,000 Azeri refugees (about 10% of Azerbaijan’s population) became internally displaced in the region. Since the truce, a simmering stalemate has prevailed with sporadic shootings between the parties.
Current Issues On April 2nd, Azeri frustration spilled over and the conflict resumed. Despite both sides accused each other of starting the fighting it is highly likely that Azerbaijani forces resumed the conflict by seizing settlements and strategic targets along the front. The OSCE's Minsk Group (a multilateral body, co-chaired by the US, France, and Russia), has proved to be ineffective in mitigating the conflict. In fact, the OSCE's Minsk Group lacks the capability to pressure the involved parties and it acts as a mere observer.
Interestingly, the conflict began when both Armenian and Azeri presidents were in Washington for a security meeting. This circumstance suggests that the resume of the fighting was not an incident. Indeed, dissatisfaction with the stagnating diplomatic situation could have moved Azeris to change the status quo.
Arguably, the conflict will benefit Azeri Government to relieve domestic tensions arising from falling oil prices. As a matter of fact, Azerbaijan is highly dependent on oil and gas prices that account for above 90% of its exports. Indeed, since 2014 the Azeri Central Bank has burned more than 2/3 of its reserves supporting the currency.
The Economist suggests that both the conflict and the perspective of a quick victory are creating euphoria among the Azeri population. Azerbaijan now possess a military superiority over Armenia, which is the result of the massive expansion of defense spending (from $177m in 2013 to $3billion in 2015). Arguably, the Azeri Army aims to take advantage of its temporary competitive advantage under the philosophy “use it or lose it”.
On April 6th, the OSCE's Minsk Group brought the belligerent parties to agree to a cease fire. However, hostilities are still continuing across the entire region. As Nagorno-Karabakh is inhabited by a majority of ethnic Armenian, it is unlikely that the Azeri army will ever be able to exercise an effective control over the region, because fighting will result in ethnic cleansing, which will never be allowed by the international community.
Risk Assessment To forecast the possibility that schemisches will further develop in a full-scale war it is important to analyse both the behaviour and interest of key geopolitical stakeholders such as Turkey, NATO and Russia.
Turkey, a long-time ally of Azerbaijan and a foe of Russia, publicly endorsed the Azerbaijani offensive. For instance, last week, Turkey Prime Minister Erdogan declared that Turkey would stand by Azerbaijan “to the end” of the conflict. Interestingly, the political analyst Papadopoulos sustained that Turkey is now lobbying in the American Government the thesis that Russia through Armenia poses a direct threat to Turkey. Nevertheless, neither the US nor NATO seems interested in a military intervention in the region. In fact, as long as Armenia will not escalate the conflict to the detriment of Azerbaijan, they would lack both the mandate and the legal legitimacy for intervening in the Nagorno-Karabakh region.
Also, the conflict will pose further struggle in EU plans to diversify gas supplies from Russia rising concern over transit security issue. Indeed, the Nagorno-Karabakh is set less than 30 miles from the main oil pipeline connecting Azerbaijan to Turkey. Despite the risk of collateral damage to this infrastructure are low, this could raise concerns for future pipelines project in the area.
The violence has forced Russia, a key mediator in the conflict, to step up diplomatic efforts to quench it. Today, Russia has closer ties with Armenia than with Azerbaijan. In fact, Moscow has military bases in Armenia and treaty obligation to defend the country against an attack on its sovereign territory (excluding Nagorno-Karabakh). Yet, Russia is also one of the major suppliers of weapons to Azerbaijan. So far, Russia has looked to strengthen economic and political ties with both countries in the wake of the flare-up. For instance, last week, Gazprom extended a gas supply contract with Armenia reducing the already low gas prices. In the meantime, Russian Foreign Minister discussed in Baku a proposed railway line from Russia to Iran via Azerbaijan. Therefore, is likely Russia will adopt a real politic approach and briefly put aside its dispute with Turkey to push for de-escalation of the conflict.
In conclusion, Azerbaijan, due to the oil prices crisis, now has not the economic capabilities for a full-scale offensive that could include an ethnic resettlement in the region. Also, Armenia does not possess the military capability to effectively oppose Azerbaijan, and it substantially relies on Russian assistance. Yet, if neither Russia nor NATO will take an active role backing one of the two countries, it is likely that the region will experience just sporadic clashes in the region that should not affect the geopolitical stability of the region.