Russia’s Karabakh Policy: New Momentum in Regional Perspective

Vadim Romashov & Helena Rytövuori-Apunen. Caucasus Survey. Volume 5, Issue 2. 2017.

Introduction

Russia has never been on the side of Armenia in the Karabakh conflict. Similarly, it has never been on the side of Azerbaijan in this conflict. In the Karabakh conflict, Russia has been on the side of Russia. (Aleksandr Dugin 2013)

Western discourses rarely acknowledge the complexities which Russian policies encounter in the conflict over Nagorny Karabakh (NK; these rare examples include, e.g. Broers 2016; ICG 2016; de Waal 2016). The common interpretation is that Russia has little real interest in the final settlement of the conflict and utilizes the situation in order to expand its domination in the South Caucasus region. According to this view, which also is present among “pro-Western” experts and observers within the region, Russian diplomatic activity is ultimately focused only on the preservation of the status quo between the conflict parties (see, e.g. Babayan 2015, 449; Blank 2014, 170; DW 2014; Gadirli 2015). The reasoning is that because of the equal importance of Baku and Yerevan for the Kremlin’s strategy to increase its influence in the region, Moscow is not willing to exert any real pressure on either one of the states and press for a compromise. The parallel supply of Russia’s modern weaponry to both parties is often presented as evidence for the absence of any genuine interest in Moscow in resolving the conflict.

The conclusion that Moscow either has, or does not have, an interest in a final settlement is too simple when we try to make sense of Russia’s policies and actions in the NK conflict. The two perspectives rather indicate a dilemma which Russian diplomacy faces in formulating an effective Karabakh policy. That policy must reconcile, on the one hand, its desire to dominate a conflict settlement process when that resolution may polarize its relationship with one of the parties, and on the other hand, its desire to retain both parties’ loyalty by not resolving the conflict—and thereby risking a major new war that could force Moscow to choose sides. This dilemma is the point of departure of this article, which aims to analyse the possibility of a compromise between the perspectives of the “Armenian sides” (Yerevan and Stepanakert) and Azerbaijan on grounds that also take into account the interests of Russia, which has adopted the role of principal intermediary in the conflict. We examine the positions of Armenia and Azerbaijan in the conflict and ask what opportunities are available to start untying the persistent deadlock in the conflict when we also take into account the fact that Russia’s strategic interests define its position on the negotiation process and promote certain background conditions for its resolution. These conditions are “drivers” in the process of settlement from Russia’s point of view and against the background of its policies, unlike the basic elements that are on the negotiation table in the frame of the Minsk Group (MG).

We identify such conditions by examining Russia’s immediate and strategic goals in the conflict. Our analytical idea is that the goals, which are not only “immediate” goals in their specific contexts (under specific circumstances, such as eruptions of violence) but also appear in the policy argumentation as the means to attain other goals, provide “clues” for unfolding strategic perspectives. A goal becomes a means to attain other goals when its context (circumstantial and discursive) changes. Our analytical starting point is the notion that because Russia’s interests in NK are not limited to the resolution of this specific conflict but relates to the wider region, the process of settlement also has a wider frame of action, which in Russia’s policy-making is connected with the Minsk Process. For Moscow, it is ideal if the international settlement process converges with its interests in the region, but on the ground there is always uncertainty, contradiction and conflict that requires accommodating attitudes from diplomacy. For this reason we can expect policies and action to be shaped by the reasons that policy-makers have for choosing the solutions which, in their evaluation, are most suitable to bring together positive outcomes from a range of goals. We seek to find out how the different goals are mutually related in the Russian policy argumentation. In addition to examining documents from official sources, we also use expert opinion and media accounts of events in Russia, Armenia and Azerbaijan.

Our empirical focus is on two major incidents of the ceasefire violations in July-August 2014 and April 2016, both of which have been occurrences unprecedented in terms of violence and the scale of military operations since May 1994, when the war in NK was halted. The backdrop of our discussion is the tightened security environment generated in the entire Eurasian region by the confrontation between the Western countries and Russia. The Ukrainian conflict formed the background for the occurrence of armed clashes in the summer of 2014 on the Line of Contact (LoC) and on the state border between Armenia and Azerbaijan. In 2015, the violent trend continued and was accompanied by the rapidly deteriorating relationship between Russia and Turkey over the Syrian crisis. These events were followed by the dramatic escalation in violence on 2-5 April 2016 when large-scale warfare broke out for the first time since the end of the Karabakh War; new types of more advanced arms were employed which had previously not been available, and Azerbaijan was able to move the frontline in its favour. Together with the accumulation of weaponry on both sides of the LoC in recent years, the tension makes the risks involved in any radical changes to the status quo in this conflict more evident than ever before. In this situation, the questions of how escalation can be prevented and how a move towards resolution of the conflict can be facilitated are equally relevant to the conflict parties and the mediator-states, who co-chair the OSCE MG—Russia, the US and France. We cannot present conditions which would be acceptable to all the parties, but we are able to look for the possibility of opening a path leading to compromise in the frame of the basic elements of settlement which have been identified by the MG and elaborated in the “Basic Principles”. This thought experiment, we hope, can facilitate seeing the wider terrain of negotiating a resolution to the NK conflict.

Bridging the Gap between War and Peace: The Madrid Principles

The NK conflict is often mistakenly called “frozen” because the status quo of “no war, no peace” has remained unchanged since May 1994, when the conflict sides signed a ceasefire agreement. However, judging by the actual implementation of this agreement, the conflict is in fact one of the “hottest” conflicts on the territory of the former Soviet Union: shootings and diversions regularly occur in the LoC and on the Armenian-Azerbaijani state border, which result in military and civilian casualties. Status and identity-related issues are important elements that constitute this conflict at societal (national) level, and thus make the settlement a challenging process. Thomas de Waal (2005) argues that, based on their incompatible national versions of Karabakh history, the conflict parties believe “that to be without Nagorny Karabakh is to have an incomplete national identity, that Armenian or Azerbaijani nationhood is a stunted and wounded thing without it”. Laurence Broers (2005) points out that the identities of the conflict parties are grounded in “competing understandings of historical justice tightly interwoven with national ideologies”.

The OSCE MG has become the main platform for international mediation that strives to find a formula of peaceful resolution acceptable for every side in the NK conflict. However, because self-censorship and efforts of the Armenian and Azerbaijani governments to control the information space contribute to building cognitive walls, the negotiation agenda crafted in connection with the MG remains detached from the social and political processes taking place in both countries. In the efforts to curb this distance, one important task is to take advantage of civil society expertise and to study inter-communal relations from the point of view of building trust and confidence (Freizer 2014). Equally important is the task that has motivated this paper—to look for the possibility of agreement in the elements that have been identified in the negotiation process while taking into consideration a wider regional and strategic context.

The MG proposals known as the Madrid Principles were presented to the Armenian and Azerbaijani foreign ministers by the MG co-chairs at the OSCE ministerial meeting in Madrid on 29 November 2007. They laid the basis for the Basic Principles for the renewed negotiations geared towards the conclusion of a comprehensive peace agreement. These principles were outlined in six main points: return of the territories surrounding NK to Azerbaijan’s control, an interim status for NK providing guarantees for security and self-governance, a corridor linking Armenia to NK, future determination of the final legal status of NK through a legally binding expression of will, the right of all internally displaced persons and refugees to return to their former places of residence, and international security guarantees that would include a peacekeeping operation.

Despite the formal acceptance of the agenda of the principles by Yerevan and Baku, progress was hampered by the “devils in the details”, which pivot around two key issues: status and territory. While the Armenian side in the conflict refrains from disputing the demand to vacate the territories surrounding NK made by the international mediators and Azerbaijan, they also link this process to granting the status of independence to NK. Baku, on the other hand, does not accept providing NK with more than autonomy at most whilst retaining the area strictly under Azerbaijani jurisdiction. In order to untie this knot mediators have elaborated a settlement design in which an interim status would be provided to NK to guarantee its security and self-governance. This design is meant to move the negotiation process forward and begin a gradual transformation of the status quo. In this scenario, the territorial integrity of Azerbaijan de jure is not violated but NK remains de facto beyond its control. However, Stepanakert does not support this option and sees the status of the territory as nothing less than “a question of survival”.

Another disputed issue in the frame of the Madrid Principles is the way the expression of popular will should be organized so as to be legally binding and thereby lay the basis for the international recognition of the final status of NK. In its negotiations the Azerbaijani party has argued for two alternatives, both of which are rejected by Armenians. The first is a referendum, which would have to include the entire population of Azerbaijan. Another alternative acceptable to Azerbaijan would be organizing a plebiscite in the territory of NK after the return of Azerbaijani displaced persons and refugees to their former places of residence. In this alternative, the status can be determined only if the will expressed by both the Armenian and the Azerbaijani communities match; if not, the search for a mutually acceptable solution would continue (Musabekov 2008, 86). A third acute problem concerns the width and operation of a land corridor linking Armenia to NK through the Lachin district. Yerevan would like to keep this corridor as wide as possible, while Baku would restrict it to a road for joint Azerbaijani and Armenian use, preferably to continue to Nakhichevan in the south to connect Azerbaijan with its exclave district on the Iranian border.

While these bundles of issues remain open and its future undetermined, Stepanakert too is not ready to agree to discuss any interim status that might set some frame for the future. Whereas Stepanakert argues for itself to be included in the official negotiations in the Minsk frame, Baku has consistently objected to restoring the three-party structure of negotiations which existed for a short time after the ceasefire, arguing that the military achievements of NK were possible only because of Armenia’s direct involvement.

Moscow’s Karabakh Policy: Balancing Between a Strategic Ally and a Strategic Partner

Russia’s role as the main intermediary in the peace negotiations has been facilitated by the fact that NK itself remained outside of direct Russian military involvement—although equipment and manpower from the Soviet-era bases in the region were used to support both parties—and that Russian diplomacy brokered a ceasefire agreement in 1994. For reasons related both to the deadlock in the conflict and the wish to increase the international normative weight of its mediation efforts, Moscow agreed to the OSCE MG as the frame of the negotiation process. However, Russia’s mediation efforts in Karabakh were not very active before the war with Georgia in 2008. After this escalation, President Dmitry Medvedev held several trilateral meetings with his Armenian and Azerbaijani counterparts, Serzh Sargsyan and Ilham Aliyev. Simultaneously, the work of Russian diplomats intensified in the OSCE MG. It was important for Russia to signal to the West that NK was a different case than Georgia’s separatist regions, and anxieties had arisen in Moscow about the possibility of another explosion developing in proximity of Russia’s Caucasus border. The support given by the US and France to Medvedev’s efforts was indicative of the wish for some breakthrough based on the Madrid Principles (IISS 2011). However, Medvedev’s active mediation failed, and in 2011 the conflict settlement resumed its previous standoff.

Russian officials continue to call for the territorial integrity of Azerbaijan, and they do not draw parallels between NK and the breakaway regions in Georgia and Ukraine. Unlike in these other conflicts, Russia does not provide direct support to the NKR. The main reason for Moscow’s restrained relations with Stepanakert is Baku. Azerbaijan is a very important strategic partner for Russia in the South Caucasus. In 2013, Baku refused to sign the Association Agreement with the EU, which Moscow considers as a rival project to its own integration initiatives in former Soviet areas. Nor do Azerbaijani officials currently indicate any further willingness to deepen cooperation with NATO. Thus, there are no apparent reasons for Russia to play the card of the status of NK. Any moves towards the recognition of the NKR would be an unwise step to take at a time of challenging geopolitical conjunctures when Moscow is searching for support from its partners and trying to intensify cooperation with them.

Moreover, there is a widely shared understanding in Moscow that a radical change of NK’s status could result in the resumption of warfare that would easily spread from Karabakh into the territory of Armenia, which would trigger Article 4 of the Collective Security Treaty on mutual defence (on this understanding, see Romashov 2015). In this situation, Russia would face a dilemma over sending its troops into a war between its two strategic partners in a geopolitically important region. Direct participation of the Russian military on the side of the Armenian forces would result in a rupture of relations with Azerbaijan. However, were Moscow to refrain from supporting Yerevan, its reputation as a reliable ally—not only for Armenia but also for other members of the CSTO—would suffer a serious blow. Should Russia show such reluctance, pressures would emerge in Armenia to demand closing down the Russian military base, and Moscow would risk losing its only ally in the South Caucasus (Deriglazova and Minasyan 2011).

Due to the weaponry accumulated in the arms race between Azerbaijan and Armenia, a war today would have a destructive potential far greater than the war of 1992-1994. On the Armenian side, the increase of armaments is aimed at maintaining the deterrent potential of the Armenian military. Although Russia’s assistance to Armenia includes a discounted or free supply of weapons, its image in Armenia as an ally is tarnished by the criticism, voiced especially by the political opposition, of Russia’s simultaneous military sales to Azerbaijan. From Moscow’s point of view (see, e.g. Kremlin 2016e; Medvedev 2016b), the parallel cooperation is a way to keep the arms race under control. If Baku were to purchase armaments from other countries, Moscow would possess less influence on Azerbaijan’s military potential. An additional reason for the export of arms to Azerbaijan is that these sales are commercial, and to some extent compensate for the financial loss of supplying weapons to Armenia on preferential terms. Moreover, the arms race helps to legitimize the on-going modernization of the Russian military base at Gyumri, which considerably raises its combat capability. The growing destructive potential of a possible war with Azerbaijan and the permanent threat of resumed warfare justify Russia’s military presence in the eyes of Armenian citizens. Finally, in spite of all the criticism that the parallel military cooperation raises, it would be far more difficult for Moscow to support its image of being a mediator if it cooperated only with Armenia.

Russia’s Immediate Goals of Conflict Settlement in a Strategic Perspective

Ever since the war in Karabakh ended in 1994, Russian diplomats have tried to assure the Armenian and Azerbaijani populations about Moscow’s determination to stimulate the resolution of the conflict by creating the conditions for the peace negotiations. Whilst Russia has consistently emphasized the need to maintain the dialogue between the conflict parties, the aim to maintain the balance of military potentials has also played a crucial role in its efforts to fulfil the immediate goal of keeping Azerbaijanis and Armenians from resorting to open warfare. Simultaneously it is a means to attain a strategic goal: to keep both Armenia and Azerbaijan in military and political cooperation with Russia. Although the military dimension of policy deserves more systematic research, our interest in this article focuses on another area that has received less attention in its connections with the Karabakh conflict: Eurasian economic integration and the construction of the strategic infrastructure that is meant to lay a basis for this process.

In 2013, Russian diplomatic efforts were reinforced on the basis of the so-called May Decrees, which Vladimir Putin signed on 7 May 2012, as he commenced his third presidential term, and the Foreign Policy Concept, which was approved in February 2013. The Concept emphasized Russia’s “active role in the political and diplomatic conflict settlement in the CIS space”, including Moscow’s contribution to the settlement of the conflict in NK “in collaboration with other OSCE Minsk Group Co-Chairs, building on the principles contained in the joint statements made by the Presidents of Russia, the US and France in 2009-2011”. Henceforth Russian diplomats have consistently underlined that the settlement of this conflict is among Moscow’s top foreign policy priorities. In May 2013, Foreign Minister Sergey Lavrov denounced in clear terms the idea that the maintenance of the status quo in NK could be in harmony with Russia’s foreign policy goals:

Status quo is certainly unacceptable for everybody. Primarily for Azerbaijan, Armenia and those living in Nagorny Karabakh—I am deeply convinced in this. Status quo means not only that the issue of return of territories of Azerbaijan is unsolved, but also economic blockage of Armenia, therefore, there is no need to convince anybody that this status is unacceptable. Co-chairs are committed to the task of unblocking the situation. Status quo is unacceptable for the Russian Federation, because our neighbours, friends have a long and complex conflict, while stability and peace in the Caucasus is one of our foreign policy priorities as reflected in the Foreign Policy Concept of the Russian Federation […]. (Sergey Lavrov 2013)

Lavrov’s statement shows that the high priority given by the Russian government to the NK conflict entails a comprehensive regional perspective. More recently, in April 2016, Prime Minister Dmitry Medvedev emphasized in connection with the talks with his Azerbaijani peer that the aim of the Russian Federation is “to bring about peace and stable agreements that will ensure the normal development of the two states, i.e. Azerbaijan and Armenia, and at the same time provide prerequisites for the region’s development as a whole”. Medvedev added that the region includes other people and other countries, among them Russia, for which the region is of “paramount importance” (Medvedev 2016a). In diplomatic speech such a comprehensive perspective is frequently glossed over by speaking about “stability and peace”. Medvedev adds the phrase “normal development” to this rhetoric and, thus, emphasizes that the barriers which exist because of the conflict are abnormal and harmful. This perspective shows that the conflict in and over NK has its own dynamics that can both undermine and contribute to Moscow’s interests in the wider region. Consequently, Russian policies must pursue certain immediate goals in the limited context of NK yet they must also evaluate how these policies affect its other goals and policy preferences in the region.

The immediate goal of maintaining the dialogue between Baku and Yerevan has prevailed in official rhetoric since the end of war in Karabakh in May 1994, even while the situation in the conflict zone is characterized by “routine” violence with minor escalations. In acute situations Moscow not only makes diplomatic statements calling on the parties involved in the conflict to take “measures aimed at stabilizing the situation”, but also actively uses its multilevel channels of communication with Baku and Yerevan. Thus, in August 2014 and June 2016, in the aftermath of the two most violent military encounters of the last two decades, President Putin held bilateral meetings with Presidents Serzh Sargsyan and Ilham Aliyev, and these meetings were followed by trilateral talks. The escalations of the conflict in August 2014 induced the Russian government to make further, active diplomatic efforts to “find mutually acceptable solutions within the shortest possible time” (Lavrov 2015a). Since the trilateral talks at the presidential level in 2014 Russian diplomats have repeatedly attributed the facilitation of a settlement to the foreign policy priorities directly supervised by Vladimir Putin. In April 2015, foreign minister Sergey Lavrov mentioned:

In 2014, President Putin made some special efforts, following which we have continued consultations on possible practical steps that would allow us to start overcoming this, in my opinion, wholly unnecessary conflict and to make the Trans-Caucasus region an area of cooperation that is free from any blockades, sanctions or restrictions. Everyone stands to benefit [from such development]. (Sergey Lavrov 2015a)

The reference to the wider regional context when expressing the hope to “make Trans-Caucasus region an area of cooperation that is free from any blockades, sanctions or restrictions” shows Russia’s intentions to generate cooperation that also could sustain a process of Eurasian integration in the South Caucasus.

On the eve of the trilateral talks in Saint Petersburg in June 2016, the Russian president’s spokesperson Dmitry Peskov, as cited by Panorama.am on 20 June, plainly formulated Moscow’s immediate goal in the negotiation process following the acute phase of the conflict in April 2016: “The key task now is to secure that combat operations are not resumed, not to let the progress reached by the moment of violence outbreak around NK be lost.” Thus, the main rationale behind the trilateral meetings in 2014 and 2016 was to support Russia’s immediate goal—the maintenance of dialogue between the conflict parties—which also serves its strategic interests in the South Caucasus and beyond.

Promoting a Win-Win Approach: The Dividends of Regional Cooperation

The concomitant result of the activation of Moscow’s policies in the region is the emphasis given to strategic cooperation with Turkey. This momentum in the Russian-Turkish relations, which has been developing since 2013, has raised speculations over the emergence of a strategic alliance between the two states, both of which arguably oppose the ambitions of Western states to enlarge their presence in the Black Sea and the South Caucasus regions (see, e.g. Alaranta 2015). Due to Azerbaijan’s close relations with both Turkey and Russia, Russian-Turkish relations are affected by the dynamics in NK. Ankara gives firm support to Baku in the negotiation process by participating in the isolation of Armenia from regional projects. Because of this mutual dynamic any further escalation of the conflict would be detrimental to Russian-Turkish relations and would also hinder Russia’s integration initiatives, which have envisioned Turkey as playing an important role in the region. During 2014-2015, discussions between Ankara and Moscow on the formation of a free-trade zone between the EAEU and Turkey gave positive signs for a breakthrough in regional cooperation. However, these discussions were halted after a Russian warplane was downed by Turkish air forces in November 2015. The success of such integration plans could give Armenia a chance to resume direct trade contacts with its neighbours and therefore serve Moscow’s economic plans for the region. At a meeting with his Armenian colleague Edward Nalbandian in June 2014, Foreign Minister Lavrov described Russia’s vision of Armenian-Turkish reconciliation during 2008-2009:

In the period before the [signing] of Armenian-Turkish protocols and after that we expressed our willingness to make our contribution in the forms, most appropriate for Armenia and Turkey. There were ideas to implement infrastructure projects, including railway projects, which could connect people, countries and the adjacent regions. All this remains in force, but, of course, the first role belongs to the two countries, signatories of those protocols. We are ready to contribute to their implementation in any possible way. (Sergey Lavrov 2014b)

On 22 April 2015, when a free-trade zone between the EAEU and Turkey was still on the negotiation table, Lavrov made another statement that similarly demonstrated Moscow’s strong interest in the normalization of Armenian-Turkish relations and the connection of this issue with the need to settle the Karabakh conflict:

We certainly would like Armenian-Turkish relations to be normalised. We want resolution of the Nagorno-Karabakh conflict, which will help normalise relations between Armenia and Azerbaijan. Russia is doing a lot to this end. A few years ago, we supported a process initiated by Ankara and Yerevan, which wanted to draft documents on the opening of borders, mutual recognition, development of cooperation, etc. The documents were signed but, regrettably, they never came into force because at that stage Turkey failed to have them ratified. Russia will do all it can to make this happen. (Sergey Lavrov 2015b)

The initiative to bolster the presence of the EAEU in the region by taking a big leap in developing cooperation with Turkey and simultaneously relaxing the strained situation around NK may yet return to the agenda. Since late June 2016 relations between Turkey and Russia appear to be normalizing following a seven-month hiatus that arose from the gap between the divergent policies pursued in Moscow and Ankara in the Syrian conflict, which grew wider after Russia’s military intervention in Syria in autumn 2015. On 9 August 2016, Vladimir Putin warmly welcomed his Turkish counterpart, Recep Tayyip Erdogan, in Saint Petersburg, and stated that the restoration of relations between both countries was a “demand of the supreme interests of the two nations in the name of the long-term neighbourly ties and friendship between the peoples of Turkey and the Russian Federation”. Both presidents expressed their confidence that the normalization of relations would bring stability to the region (Kremlin 2016c). Speaking to Daily Sabah on 21 August, Turkish Economy Minister Nihat Zeybekci said that Ankara and Moscow had restarted free-trade agreement negotiations. The change of the Russian-Turkish relationship, at least for the time being, reawakens the possibility to alter the status quo in the NK conflict through cooperation between the two states. Since advancing cooperation with Turkey is an important goal for Russia in order to develop cooperation in strategic fields between both countries as well as a means to promote cooperation in the frame of the EAEU in the Caucasus and release the political deadlock around Karabakh, this process is likely to retain a high priority as a condition in the settlement of the Karabakh conflict.

At the same time, the importance of Iran is increasing in Moscow’s political and economic agenda for the South Caucasus. Since July 2015 the moment for this has become favourable because the possibility that this country could recover from the burdens of international sanctions has prompted Tehran’s diplomatic and economic activity in the region. Simultaneously Armenia’s accession to the Eurasian Economic Union opens new prospects for trade and economic cooperation between the EAEU and Iran. Unlike any other member-state of the Union, Armenia has a direct land border with Iran; therefore it is the only country in the region that links Iran to Eurasian economic integration processes. The development of this cooperation has much significance for Yerevan when we consider that its closed borders with Turkey and Azerbaijan leave it with only one other transit route (through Georgia) to external markets. Not surprisingly, PanArmenian.net reported on 11 September 2015 that in summer 2015 Armenia addressed the Eurasian Economic Commission (EEC) and invited all member-states to begin the process for the establishment of a preferential trade regime between the EAEU and Iran. On 23 December 2015, the Minister in charge of Trade of the EEC Andrey Slepnev announced that the member states together with Iran had launched joint research on the prospects of concluding a free-trade agreement. He added:

Iran is a strategic partner for us. The anticipated lifting of international sanctions will create the preconditions for the formation of the country’s new regional economic growth, while the reintegration of the Islamic Republic into the global economy will allow increasing cooperation within the framework of the “Big Eurasia”. In particular, there will be additional prerequisites for the creation of transport corridors in the directions of India, Pakistan, Iraq, as well as the formation of the “North-South” Eurasian transport space. (EEC 2015)

The North-South transport corridor has been amongst the top Russian strategic infrastructure projects since the early 2000s (see Mintrans Russia 2003). In July 2016, Russian Railways signed an agreement with Tehran and Baku to open a north-south rail line from Russia to India through the territories of Iran and Azerbaijan. The new rail line, which will complement the already functioning motorway through Azerbaijan, is a clear sign of the great importance that the transport corridor from Russia through Azerbaijan to Iran has in Moscow for increasing the transit capacity of Russian trade with Iran and India.

As an alternative, Armenia promotes the project of constructing the Iran-Armenia railway, which has been a subject of discussion between the two countries for many years already. The implementation of this ambitious project has stalled due to the lack of definite economic interest by potential investors. During his visit to Armenia in December 2013, President Putin answered a question about how advances made in the international negotiations on Iran’s nuclear programme would affect the development of the transport and communications infrastructure that holds such vital importance for the Armenian economy:

As regards transport infrastructure, then of course, bearing in mind that it is possible to build a transport link-up through Iran, we have some plans to develop rail transport. There are some difficulties regarding financial support for projects, but in general they are wholly feasible. Along with this, it seems to me that we should all work properly together, including in the South Caucasus, to restore something that worked effectively during the Soviet Union and has now been lost. I am referring to the possibility of organizing such a transport communication within the CIS. There are some problems, but I think that it is quite possible to agree on their resolutions. (Kremlin 2013)

One of the problems which Russia and Iran encounter in their efforts to enhance mutual cooperation through the South Caucasus route is, without a doubt, NK. An earlier rail connection between Tehran and Moscow had run through the territory of Azerbaijan in the Nakhichevan Autonomous Republic and on through Armenia and Georgia. The conflict over NK and the subsequent blockade of Nakhichevan by Armenia and the blockade of Armenia by Azerbaijan prevented the operation of this line after the dissolution of the Soviet Union. In an interview with Regnum on 24 June 2014, Vladimir Yakunin, at that time Head of the Russian Railways and an influential figure in Russian politics, argued that this railway should be resumed instead of constructing a new Iran-Armenia railroad, which in his opinion made little economic sense. Yakunin emphasized that “external circumstances—the conflict between Armenia and Azerbaijan, as well as the problematic relations between Georgia and Abkhazia—have the most negative impact on the economic development of the region”. Thus, in Russian policy argumentation the strategic infrastructure projects and economic cooperation in Eurasia are linked to stability in the South Caucasus, and this connection is supported by diplomatic efforts to generate a positive impetus in the settlement of the NK conflict.

This understanding influenced the trilateral meeting between the Azerbaijani, Iranian and Russian Presidents in Baku, on 8 August 2016. The three delegations agreed to move ahead with new infrastructure projects designed to make the North-South corridor much more of a reality. Importantly, the presidents adopted a declaration affirming their intent to develop solid trilateral cooperation, which in addition to economic matters will also address issues related to regional security. Among various aspects of the agenda of this trilateral cooperation the declaration mentions:

[T]he sides recognize that unresolved conflicts in the region are a major obstacle to regional cooperation, and in this regard emphasize the importance for their earliest peaceful settlement through negotiations on the basis of principles and norms of international law and adopted in accordance with them decisions and documents. (Kremlin 2016b)

Apparently, this reference—meaning primarily the NK conflict—is not merely a diplomatic phrase to express the responsibility of influential states in the region. It indicates Russia’s efforts to connect Armenia, its only military and political ally in the region, to the emerging cooperation initiatives, because leaving Yerevan out could allow it to drift towards the West. Putin’s meeting with Sargsyan on 10 August 2016 (the day after the meeting with Erdogan and two days after the Russia-Azerbaijan-Iran summit) attests to this policy consideration. The Russian president informed his Armenian colleague of the results of his recent diplomatic activity in the region as well as his discussions with Aliyev concerning the NK settlement. Sargsyan was satisfied with the information provided, and he expressed his confidence “that Armenia will only gain from Russia’s invigorated role in the region” (Kremlin 2016d, 2016e). The fact that Putin on 8 August and 11 August—immediately prior to and after his meetings with leaders of Azerbaijan, Iran, Turkey and Armenia—held sessions of the Security Council that discussed regional policy and its achievements (Kremlin 2016a, 2016f) confirms that these diplomatic moves enjoy a very high priority in Russia’s political agenda.

Iran and Turkey are also advancing their bilateral cooperation. On a visit to Turkey on 12 August, as Hurriyet Daily News reported that day, Iran’s Foreign Minister emphasized the importance of the renewal of Russian-Turkish cooperation for solving security problems in the region. On 18 August, the Russian government-funded media agency Sputnik concluded that a trilateral “alliance” between Moscow, Tehran and Ankara had started to form. Even though this trilateral dialogue concerns the Syrian crisis, it could eventually be expanded to include issues related to the South Caucasus. The two trilateral formats of cooperation—one between Russia, Azerbaijan and Turkey, and another between Russia, Azerbaijan and Iran—may develop convergent interests, especially in view of Azerbaijan’s “linking” role in both of them. However, the question remains about the place envisioned for Armenia in this process, and the answer largely depends on developments in the NK settlement.

The refusal by Baku and Yerevan to sign the Association Agreement with the EU, Armenia’s accession to the EAEU, and the simultaneous intensification of the EAEU’s cooperation with Azerbaijan, Turkey and Iran are all developments that coincide with Moscow’s aim to bring the interests of Baku and Yerevan closer to each other. Although Baku is cautious about Russia’s predominance in integration initiatives within the post-Soviet space, Azerbaijan’s participation in selected areas of cooperation in the frame of the EAEU remains possible (Markedonov 2014). During his visit to Baku in June 2014, Foreign Minister Lavrov revealed that Azerbaijan had informally been invited to join the cooperation for Eurasian integration:

There was no formal invitation to Azerbaijan to join the Customs Union or the created Eurasian Economic Union. However, in the contacts between our leaders, when they touched upon the topic of economic cooperation, we always noted that we will be pleased to have any partner who shows interest in becoming closer to the Customs Union and later the Eurasian Economic Union. (Sergey Lavrov 2014a)

There is a range of potential projects that may interest not only Armenia, Azerbaijan, Iran, Turkey and Russia but also Kazakhstan and Georgia in the fields of trade, transportation, communications and, above all, energy; however, these projects cannot be fully realized unless the Armenian borders with Turkey and Azerbaijan are opened and Russian-Georgian economic relations are completely re-established. Opening Armenia’s borders serves not only the immediate goal of easing Armenia’s economic position but also as a means to attain Russia’s strategic goals relating to economic cooperation in the wider region. Access to transit routes through Georgia serves a variety of economic goals and, moreover, is a way to make advances towards the strategic goal of drawing Georgia closer to Russia’s Eurasian integration. Advances in these processes require that some positive dynamism in the transformation of the status quo must be triggered to boost regional cooperation. At minimum, the return of some of the territories surrounding NK, combined with concrete security guarantees for the NKR, can be a step to facilitate the abolishment of the economic blockade of Armenia.

With its experience of the acute conflict that arose in the final years of the Soviet Union, and faced with the increased potential of a negative scenario for its development that undermines Eurasian integration, Russian diplomacy now seems to have settled on the line of action which implies transforming the Armenian-Azerbaijani relationship from a zero-sum conflict into a relationship of at least some compatibility of interests. Developments in recent years have sharpened the idea that the task of diplomacy in the South Caucasus is to construct an environment of common interests in line with Russia’s strategic interests and the promotion of Eurasian integration. Because there is little chance that political momentum can be developed to bring together the interests of Armenians and Azerbaijanis, the path available is to promise economic dividends from cooperation. A new opening with an emphasis on economic matters may stand some chance in the contemporary situation, which would require proactive action from governments in both Armenia and Azerbaijan.

In the difficult economic situation—in Armenia due to Russia’s worsening economy and in Azerbaijan because of the depreciation in the price of oil—the leadership of both Armenia and Azerbaijan may be willing to consider the opportunities of regional cooperation promoted by Moscow more actively than it has done at any time since the collapse of the integrated Soviet economy. Even though the functionalist strategy of using economic incentives to secure the sides’ support for conflict transformation has failed in the past, Russia continues to advocate this approach to achieve a win-win situation. In the course of Russia’s recent diplomatic activity in the region as outlined above, Putin stated on the meeting with Sargsyan:

I believe that both Armenia and Azerbaijan really want to find a way out of this situation in order to live in peace and harmony, to cooperate, and to grow their respective economies. Armenia is also interested in removing all infrastructural and economic restrictions in order to develop its economy, improve life for its people, and consolidate the Armenian state. This is our goal, the goal of a settlement. And the goal is to achieve these results. Azerbaijan has similar goals. My recent contacts with President Aliyev in Baku bear this out. However, it is necessary to find approaches and arrangements where […] no one feels like a winner or a loser. There must be a solution developed by the leaders of Armenia and Azerbaijan that is accepted by the societies of both countries. That is the most important thing. (Kremlin 2016e)

Russia’s challenge in relation to both Azerbaijan and Armenia is to demonstrate for their societies not only the economic but also political benefits of cooperation and, hence, it needs to remain sensitive about Karabakh. As long as a flaring of violent conflict can be avoided, the NK issue itself remains a relatively stable element in the game which, in Moscow, is expected to transform the conflict. Like this Russia’s policy-making can focus on promoting wider regional cooperation that includes Turkey and Iran and provides both the economic and political dividends through which Armenia and Azerbaijan can be brought to work together.

Conclusion: Implications for the MG

Russia cannot achieve results in the settlement of the NK conflict by acting alone. In order to facilitate dialogue between Baku and Yerevan, it relies on the working platforms provided by the MG. In addition to its practical significance as the main platform for the negotiations and elaboration and implementation of the Basic Principles for conflict resolution, the MG has great symbolic political value for Russia, and discontinuing it would signal the burial of any hope of inclusive security cooperation in Europe. It is more than a frame for discussions: it is the symbolic and practical “bottleneck” for solutions that have a chance of being effective because of basic agreement between the major powers who have the UN mandate to mediate the peace process. At the same time, the trilateral platform with meetings between high-level officials from Russia, Armenia and Azerbaijan has been used to quickly stabilize the situation in the case of events that could escalate the conflict. Such a platform also serves Russia’s strategic goals by allowing the discussion of Russia’s policy preferences in a confidential environment without the presence of representatives from the US and France. This setting of negotiations seems to be comfortable also for Baku and Yerevan. On 20 June 2016, in Saint Petersburg, the three presidents agreed on a trilateral statement which emphasized “the importance of their regular contacts on the NK issue” and their agreement “to continue them in this format in addition to the work of the OSCE Minsk Group co-chairs”. The suspicions that Russia’s own interests would start to dominate its role in the international mediation efforts have on occasion generated criticism amongst Western observers. However, although there is no publicly available, reliable information on the concrete proposals which Russian diplomats have put on the table, it is difficult to imagine that Moscow could have reason to deviate from the Madrid Principles, which it has helped to craft and which are the only basic elements agreed on for discussion.

Of the six Madrid Principles two touch mainly upon Russia’s strategic interests. These are the questions of an interim status for NK and international security guarantees, including a peacekeeping operation. The remaining principles appear to be rather secondary for Russia’s strategic considerations, although they have significance as parts of the comprehensive process. From the perspective of Russian diplomacy, their “secondary character” means that Moscow is ready to agree to any compromise which Baku, Yerevan and Stepanakert are able to achieve on the issues. By contrast, the questions about the interim status and the international security guarantees for NK relate to the strategic goal of Russia’s policies in the South Caucasus to limit the influence of Western countries in the region and to consolidate its own presence. The uncertain future of NK, which the agreement that there will be an interim status renders possible (although this does not follow from the concept and its definition in the process), is basically in line with Russia’s interests because it allows Moscow to continue using the NK issue to influence decision-making in Baku and Yerevan. For as long as uncertainty prevails over the interim status designed to avoid disputes over the final status, Armenia needs Russian security guarantees, and Azerbaijan seeks approaches which would win Moscow to its side in the conflict.

However, because for Russia the support of both Baku and Yerevan is equally important due to its strategic aspirations in the region, it becomes necessary to create some positive dynamism in the settlement process and to keep it associated with specific benefits for both parties in the conflict. Due to this arguably paradoxical situation, the goal is not to preserve the status quo but to keep the situation open and flexible as well as firmly on track to finding only peaceful solutions, while at the same time preserving the balance between Armenian and Azerbaijani interests. Consequently, an important part of the dialogue through which Russia seeks to realize its immediate and strategic goals is to uphold an openness in the discussions on the future status of NK. Although such openness in the frame of the Madrid Principles may seem to leave “a hole in the whole”, from the point of view of Russia’s strategic goals it offers a means for creating the flexibility needed to hold together the policies and arrangements for wider regional cooperation.

In regard to the question of international security guarantees, Moscow has clearly signalled that a peacekeeping contingent from NATO or the EU is not acceptable; and at the same time a Russian-dominated composition of forces is unacceptable to the West and Azerbaijan. Therefore, it is most likely that the OSCE, which has conducted a monitoring mission in the conflict zone since 1995, will lead a peacekeeping-like operation in NK. On 16 May 2016, the co-chairing countries of the OSCE MG held a meeting with the presidents of Armenia and Azerbaijan, the first such meeting after the remarkable escalation of the conflict in early April 2016. According to the Joint Statement of the MG co-chairs, the presidents agreed “to finalize in the shortest possible time an OSCE investigative mechanism” and “to the expansion of the existing Office of the Personal Representative of the OSCE Chairperson in Office”. Even though such an agreement is not the same as agreeing on a full-fledged military peacekeeping operation, the expanding role of the OSCE mission (should it come about) would mark considerable progress in the conflict settlement process and help to restore the hopes previously vested in the Minsk Process. This is in harmony with Russia’s interests, not least because the Minsk Process promises stability. However, unless the concession on returning of at least some of the territories is achieved, this progress would play only into the hands of the Armenian sides because it could help them further cement the status quo. Because Russia’s policy is still taking shape and its development, moreover, depends on changes in Eurasian and global politics, any conclusions about its success and impacts would be purely speculative. More research is required, and what we have hoped to do is to recall that simplification, with regard to the complexities Russia faces in this conflict, is not conducive to effective interventions in the direction of its ultimate resolution.