In the Caucasus, Moscow Manages a Simmering Dispute

Forecast

• The entire former Soviet periphery is in flux, and one place that could see significant changes this year is the breakaway territory of Nagorno-Karabakh.
• Change could take place in the form of movement in diplomatic negotiations or military escalation - or both - between Armenia and Azerbaijan, but in large part it will be driven by the key external player in the conflict: Russia.
• Russia's position on Nagorno-Karabakh will be fluid and subject to fluctuation as it relates to its longer-term interest of maintaining influence in the Caucasus.

Analysis

The Nagorno-Karabakh region has been a hotbed of contention between Azerbaijan and Armenia since they were Soviet states, and today, their differences over the breakaway territory are as intractable as ever. As the pre-eminent power in the Caucasus, Russia holds the key to unlocking the dispute, although its motives are driven as much by its desire to retain its dominant regional status as to resolve the issue. No progress has been made in Russian-mediated talks between the two adversaries since a flare-up of combat rocked the territory in April 2016, and as this year progresses, chances of a resumption of hostilities between Armenia and Azerbaijan will remain high.

The lack of progress in resolving the security situation in Nagorno-Karabakh has made the dispute even more volatile. In 2016, Nagorno-Karabakh experienced its largest escalation of violence since a 1994 cease-fire ended Azerbaijan and Armenia's six-year war for control over it. In a span of four days, more than 100 troops from both sides were killed before Russia stepped in to stop the fighting. Azerbaijani forces captured a small amount of territory from Armenian positions (Azerbaijan claims 2,000 hectares, about 4,900 acres, were taken, while Armenia's leaders claim to have lost only 200 hectares). Fears that the battle would escalate into another major war did not materialize. Lower-level skirmishes have continued, however, and a political deadlock between the countries raises the chances that further military escalations may be in store. To determine where the conflict may be headed, it is important to understand its origins and the entities involved.

The Roots of the Conflict

The origins of the Nagorno-Karabakh conflict lie in the collapse of the Soviet Union. During the Soviet era, although most inhabitants of Nagorno-Karabakh were ethnically Armenian, the region was officially part of the Azerbaijani Soviet Socialist Republic. After Mikhail Gorbachev embarked on a period of reform in the twilight of the USSR, the status of the territory became a key issue of contention. Large-scale demonstrations were held in Armenia demanding that Nagorno-Karabakh be incorporated into the Armenian Soviet Socialist Republic, and a local referendum was held in the territory that supported this cause. Baku protested, and when Moscow was slow to respond to its concerns, in 1988, violence erupted within both Armenia and Azerbaijan along ethnic lines.

It quickly escalated into a full-scale military confrontation in which all Azerbaijanis were expelled from Nagorno-Karabakh, and today the territory's residents are almost totally ethnic Armenian. Armenian forces decisively defeated the Azerbaijanis, leading to the de facto independence of Nagorno-Karabakh and Armenian control of seven provinces abutting Nagorno-Karabakh as a corridor into the region. After mediation led by Russia, a cease-fire was reached in 1994.

But it did not completely stop hostilities. Crossfire along the line of contact, the militarized area that separates Armenian/Karabakh troops from Azerbaijani troops, in and near Nagorno-Karabakh has continued since the cease-fire was reached, and troops suffer casualties on a regular basis. In the meantime, despite numerous meetings devoted to defining the status of Nagorno-Karabakh, Armenia has not budged on Azerbaijani demands for the reintegration of the breakaway territory and the surrounding regions that it captured.

From Azerbaijan's perspective, the goal is fairly straightforward: to reclaim Nagorno-Karabakh and the surrounding territories that were captured by Armenia. This has been a difficult prospect for Azerbaijan, given that Armenia is strategically aligned with Russia and hosts a 5,000-strong Russian military presence on its territory. But although an outright invasion of Nagorno-Karabakh is unrealistic, Azerbaijan must at the very least challenge the political and security status quo of the breakaway territory. This imperative drove the spasm of violence in 2016. By inflicting casualties on Karabakh forces and regaining some territory, Baku could show its population it is doing something to address the long-standing issue.

Armenia's goal for the territory is the inverse: to maintain the current situation. Armenia is the principal political, economic and security backer of Nagorno-Karabakh, and Yerevan wants the breakaway territory to remain a de facto part of Armenia. As in Azerbaijan, the status of Nagorno-Karabakh is a sensitive political issue in Armenia, leading to its intransigence. The last Armenian official to seriously consider compromising with Azerbaijan over the territory was the country's first president, Levon Ter-Petrosyan. He was forced to resign in 1998 in the middle of talks over Nagorno-Karabakh because of his stance. (His successors, Robert Kocharyan and current leader Serzh Sarkisian, were both born in Karabakh.)

Russia's Role in the Dispute

The unbending positions of Armenia and Azerbaijan have created deadlock in negotiations, but there is a crucial third player to take into account: Russia. As the dominant external power in the Caucasus region, Moscow has played a primary role in mediating the Nagorno-Karabakh conflict since it began. Though the positions of Armenia and Azerbaijan are clear, the motivation for Russia in the conflict is much more complex.

In a broader sense, Russia's primary interest in Armenia and Azerbaijan - and along the entire former Soviet periphery - is to keep foreign influence out and entrench its own. By and large, it has accomplished this in Armenia. Besides their military affiliation, Russia controls much of Armenia's economic and strategic assets. But Azerbaijan pursues a more independent and diversified foreign policy. Given that Azerbaijan has close ties with Turkey and is a major energy producer and exporter with the potential to challenge Russia's own energy position in Europe, Moscow would like to move Baku closer into its sphere of influence, especially while Turkey is consumed with its priorities in the Middle East.

Russia's close ties with Armenia - and its de facto support for Yerevan's position on Nagorno-Karabakh - had served as a barrier to closer ties with Azerbaijan. But during the 2016 violence, Russia adopted a neutral stance rather than supporting its Armenian ally militarily or politically, shifting the dynamic. Realistically, the escalation by Azerbaijan could not have proceeded without at least a quiet understanding with Russia. Although Moscow stepped in to prevent the fighting from turning into a full-scale conflict, the message was sent that Baku had more leeway in the region and that Yerevan couldn't fully rely on Moscow to guarantee its security.

The Future of the Conflict

This raises the question of where the conflict over Nagorno-Karabakh is heading. There have been rumors and indications that Russia would like to push for a negotiated settlement, known as the Lavrov plan. Under it, Armenia would cede five of its seven regions surrounding Nagorno-Karabakh to Azerbaijan in exchange for a peacekeeping force led by Russia (or perhaps the Collective Security Treaty Organization) in those territories. Undoubtedly, Azerbaijan would welcome this solution, which ostensibly would bring Baku closer to Moscow. But the Armenian government would be strongly opposed.

If Russia indeed is pushing the plan, it could explore options to overcome Yerevan's opposition. It could allow another military escalation by Azerbaijan to pressure Armenia to make concessions. Or Moscow could use its substantial political links in the Armenian government to influence a shift in Yerevan's thinking. Although Sarkisian has strongly opposed compromise in the Nagorno-Karabakh negotiations, Armenia is in the middle of a political transition from a presidential to a parliamentary republic, and parliamentary elections are slated at the beginning of April. Russia has developed close ties to several government figures (including in the foreign and defense ministries) and leaders in the political opposition who could be more amenable to seeing things Russia's way when it comes to the Karabakh issue.

Both options, however, come with significant risks. Even if Russia were able to persuade the Armenian political elite to compromise on the status of Nagorno-Karabakh or its surrounding territories, the Armenian public might not tolerate such a deal. Over the past year, several protests have taken place in Armenia over this very issue, including a protracted standoff in July after Karabakh war veterans seized a police building and held hostages. Therefore, any major concessions put the Armenian government at risk of collapse, no matter who is leading it, thus placing Moscow's influence over Yerevan in question.

In the meantime, orchestrating or allowing another military escalation by Azerbaijan could be a more effective option for Russia, but it comes with the risk of spiraling out of control. Yerevan seemed to highlight those risks when Armenian Defense Minister Vigen Sarkisian said Feb. 22 that Armenia's Iskander missile system could be used as "a guaranteed strike weapon if the necessity arises" in a thinly veiled warning to Azerbaijan. Though Moscow would have a significant amount of influence over Armenia's use of Russian-supplied weapons systems, it nevertheless could not be certain of maintaining control of violence in Nagorno-Karabakh.

It may even be the case that Russia wants to give Azerbaijan the impression that it is pushing Armenia for political concessions even if it is not. In that case, the Lavrov plan would represent an avenue for Moscow, which is already pursuing closer military cooperation and weapons deals with Azerbaijan, to develop closer ties with Baku without undermining the position of the Armenian government. This, too, has its risks: Maintaining the political status quo indefinitely is an untenable position for Azerbaijan, so Russia cannot continue to prolong the issue without concrete results. This is especially true since other regional powers such as Turkey and Iran - though currently distracted in the Middle East - may become more active in the Caucasus and be in a position to challenge Russia's dominance in the area down the line.

Russia's position on Nagorno-Karabakh is subject to fluctuations as it relates to its longer-term interest of maintaining influence in the Caucasus. Moscow's ultimate objective is to be the dominant influence over both Armenia and Azerbaijan, and it can use the conflict in Nagorno-Karabakh as a means to shape its position in both countries. This will be a key factor in driving the political and security evolution of the conflict there, which is likely to become more volatile in the coming months.