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The Nagorno-Karabakh conflict and an estimate of war damages for Azerbaijan

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[yt_dropcap type=”square” font=”” size=”14″ color=”#000″ background=”#fff” ] T [/yt_dropcap]he conflict between Armenia and Azerbaijan over the Nagorno-Karabakh became as one of the most tragic and complicated conflicts contributing to instability in the entire region. The conflict has claimed thousands of lives and over one million people became refugees and internally displaced persons (IDPs).

Twenty percent of Azerbaijani territory has been occupied and material damages worth billions of dollars as the whole infrastructure devastated or destroyed in the occupied regions. A ceasefire agreement has been signed on May 1994 to halt the bloody conflict. However, four-day April 2016 war showed once again that peace agreement between the warring parties is extremely fragile.

If we look at the war damage in Azerbaijan, it is worth noting that the socio-economic damage caused by Armenian aggression negatively affected all spheres of the Azerbaijani economy. According to the calculations, 890 cities, villages and settlements, 102 thousand dwelling houses, 7000 public buildings, 695 healthcare facilities, 693 secondary schools, 927 libraries, 310 industrial and building enterprises, 464 historical monuments and museums, 6 state theaters and concert studios have been devastated or destroyed in the occupied territories.

TABLE 1: Infrastructural and telecommunication damages

1.

Railroad

240,4 km

2.

Motor road

800 km

3.

Bridges

160

4.

Water Reservoirs

3 (main Sarsang)

5.

Water-line

2,300 km

6.

Air

4 airports ( main Khojali airport)

7.

Gas distribution stations

35

8.

Gas-pipe

Baku-Khankendi (Stepanakert)-Nakhichevan

9.

Transformer stations

2,500

10.

Electric lines

15,000 km

11.

Telecommunications

for more than 35 000 subscribers

Source: http://karabakh.org and own construction

It is worth also noting that the occupied territories of Nagorno-Karabakh represented a large agricultural region within Azerbaijan, as about 70% of summer pastures of the country remain in the occupied areas. In general, grain-growing, fodder production, vine-growing, tobacco-growing, potato-growing, cotton-growing, dairy farming and meat farming, particularly sheep-breeding dominated in the agriculture. Agricultural sector played always important role in national economy, thus after aggression during years 1990-1994 GDP of the country decreased about 63% in total due to agriculture output falling about 43%. Percentage of population dependent on agriculture in the country used to be always high (36.8% –2014), therefore, loss of fertile agricultural lands resulted in high unemployment. The occupied regions had quite strong progress in agricultural production and productivity growth. However, all those production facilities destroyed and remained in the occupied territories. Preliminary calculations show that the total damage to Azerbaijan caused by Armenian aggression estimated around $60 billion.

It should be also highlighted that the illegal economic and other activities carried out by Armenia and the third states in the occupied territories of the Republic of Azerbaijan are contrary to the core principles of the OSCE and the UN. As the Armenia is the occupant of Azerbaijan’s territories and its armed forces are illegally situated in the occupied territories, it grossly violates the core principles of international law. Armenia encourages and facilitates resettlement of Syrian Armenians in the occupied territories. Government agencies of Armenia, including its Ministry of Diaspora, as well as other organizations of Armenia, in particular the Armenian Revolutionary Federation (ARF), which designed special Yerevan-headquartered “Help your Brother” program for this purpose. Armenians from Syria (many from Qamishli and Aleppo in Syria) are settled mainly but not exclusively in the occupied Zangilan, Gubadly and Lachyn districts (“Illegal Economic and other activities in the occupied territories of Azerbaijan”: Report by the MFA of the Republic of Azerbaijan, 2016, pdf, pp. 11).

Armenian diaspora organizations, including the Lebanon-based Artsakh Roots Investment (“ARI”) company, play a major role in enabling and facilitating the occupation. A large amount of funding for settlements and other activities is provided by foreign private investors, mostly of Armenian origin, and from charity non-profit organizations such as the US-based Tufenkian Foundation, Armenian General Benevolent Union (AGBU), Cherchian Family Foundation are channeling large amounts into the illegal activities and settlements throughout the occupied territories. Hayatsan All-Armenian Fund designed and implemented a special “Re-population of villages of Artsakh” project. Building new infrastructure and communication facilities as well as illegal activities in the field of ICT and banking sectors are well-known facts. For example, the Armenian banks such as “Artsakhbank”, Converse Bank, Ardshininvestbank, Armbusinessbank, Armeconombank, Araratbank, Unibank and Ameriabank are operating in the occupied territories. Armenia’s mobile operators such as Armentel (a subsidiary of the Russian Vimpelcom under the “Beeline” brand), Viva Cell MTS and Orange Armenia, a subsidiary of Orange Group France, provide roaming services with reduced rates to “Karabakh Telecom CJSC” (ibid, pp. 10- 24).

Armenia is also a transit route to export goods illegally produced in the occupied territories to international markets. The goods produced in the Nagorno-Karabakh and other occupied areas are being exported to the European, Russian, Ukrainian, the U.S. markets etc. under a fake label ‘made in Armenia’ or by companies operating in the Nagorno-Karabakh but registered in Armenia. It pursued illegal policy on development and operation gold deposit located in the occupied Kalbajar region of Azerbaijan by Base Metals CJSC, which is a wholly owned subsidiary of Armenia’s Vallex Group CJSC, registered in Liechtenstein. Another company Gold Star CJSC reportedly started exploitation of the gold mine in Zangilan district (ibid, pp. 14). All these facts are a clear violation of international law.

The occupation of Azerbaijani territories is significant obstacle to regional cooperation, and its policy leads Armenia to isolation. Consequently, the country will have no opportunity to participate in regional projects. On the contrary, due to a rapid economic growth, Azerbaijan has been realizing important energy and transport projects of regional and global importance. Important projects, such as the Baku–Tbilisi–Ceyhan pipeline (BTC), the Baku-Tbilisi-Erzurum gas pipeline (BTE), Trans-Anatolian Natural Gas Pipeline (TANAP) and the Baku-Tbilisi-Kars railway (BTK) which bypassed Armenia, realized due to cooperation between Azerbaijan, Georgia and Turkey. Occupation of Azerbaijani territories caused socio-economic damage not only for Azeri but also for Armenian people too, and it is obvious that the current situation damages the Armenian economy. It is worth underlining that as long as this country continues its aggression against Azerbaijan, it will stay away from all regional projects, and inclusive regional cooperation in the South Caucasus will be impossible.

After last year’s April bloody clash between Azerbaijan and Armenia in the Nagorno-Karabakh region, the economic damage of war on Azerbaijanis became again increasingly important. As a result of only four-day clash, 6 civilians were killed, 26 people injured, 445 houses, 5 schools, 2 medical centers, 2 kindergartens and other social and administrative buildings were seriously damaged. These figures are only “a drop in the bucket”, therefore, a careful calculation of the whole war damage caused by Armenian aggression since the start of war is extremely important.

Undoubtedly, Azerbaijani government has the list of all devastated and destroyed infrastructures, production facilities and cultural heritage in the occupied zones. Also geography, history, and culture of the occupied territories have a great potential for the tourism industry, but Azerbaijan cannot benefit from this sector. To make exact calculation, it is very important to liberate all occupied territories and attract international organizations to calculate the exact amount of damages.

In addition to the foregoing, as a result of Armenian aggression, the blockade of the Nakhchivan Autonomous Republic (Azerbaijani exclave) has been continuing for almost 28 years. The blockade of the region actually prevents realization of the full economic potential of this region. Therefore, the damage to this region should be also calculated, and abolishing the blockade should be the subject of discussions and adopted documents by international organizations. Accordingly, while calculating the final amount of damages and costs, all direct and indirect costs should be calculated, and undoubtedly, the final actual costs will exceed the preliminary estimated costs by several times.

The conclusion must be that although the war caused both human suffering and economic losses for Azerbaijanis and Armenians, unfortunately, additional losses will be in the future due to the ongoing conflict. As many Armenian journalists and human rights activists underline Azerbaijanis and Armenians suffer a lot from the Nagorno-Karabakh conflict, and this conflict should be resolved so that both Armenian and Azeri people could live peacefully there. According to journalist and social activist Susan Jaghinyan –“the Armenian people had their share of grief. Only occupiers (Armenian authorities) benefited from the conflict”. All these facts once again confirm that both Azeri and Armenian people are continuing suffering from the bloody conflict. The fastest peaceful resolution of the Karabakh conflict will restore regional integration, and the people of the region will be able to benefit from regional economic development.

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Eastern Europe

Crisis in Armenia Provides Fertile Ground for Russian Meddling

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The immediate cause came on February 25, when Onik Gasparyan, Chief of General Staff of the Armenian Army, and other senior commanders released a statement calling for Prime Minister Nikol Pashinyan to step down. Pashinyan responded by firing Gasparyan.

Yet the real cause of the uproar is Armenia’s defeat in the Second Karabakh War last year, which has triggered a deeply troubled and long-drawn-out period of soul-searching and consequent instability.

Delving into the details over what are the real reasons and who is to blame may anyway be futile in the cloudy political world of all three South Caucasus states (including Georgia and its current woes). While many Armenians believe that the protests are more about internal democratic processes, there is an undeniable geopolitical context too. Perhaps what matters most is the international ramifications of the conflict, especially as the early phases of the Russian-brokered November 2020 ceasefire agreement between Armenia and Azerbaijan are now being implemented.

The political crisis in Armenia does not affect the implementation of the agreement on Nagorno-Karabakh, Kremlin spokesman Dmitry Peskov said on February 26. Other statements by the Russian leadership indicated that the Kremlin, which closely follows the internal development of its Collective Security Treaty Organization (CSTO) ally and the fellow member of the Eurasian Economic Union (EEU), is nevertheless remaining aloof for now.

Over the past year, Russia has confronted multiple crises along its border with some finesse, successfully managing near-simultaneous crises in Belarus, Kyrgyzstan, and Armenia-Azerbaijan.

In each case, the Kremlin has sought to extract geo-economic benefits. Take the current Armenian crisis. The opposition has some support, but not as much as the current leadership. Leaders from both sides have connections with senior Russian leaders, albeit the Kremlin was far more comfortable with the pre-Pashinyan Armenian political elite. They understood what Russia likes in the near-abroad – cautious leaders mindful of Russian sensitivities and unwilling to play the reformist and Western cards that Pahinyan has used since coming to power in 2018.

And yet however much illiberal Russia feels uncomfortable with the reformist Pashinyan government, it needs for now because his signature is on the November ceasefire agreement. With the early stages of the deal being implemented, Russia is keeping its eyes on the prize — most importantly, the agreement to reopen Soviet-era railways which potentially will reconnect Russia to Armenia via Azerbaijani territory. Chaos in Armenia can only jeopardize this key aim.

Russia also understands that Pashinyan is becoming increasingly dependent as time goes by and that it can exploit this vulnerability. Equally obviously, the opposition could prevail, and that would ultimately benefit Russia too.

In the long run, Russia has caught Armenia in a cycle. To stay in power, the government would need extensive Russian economic, diplomatic, and perhaps even military support. But any new government formed by the current opposition would likely demand even more weaponry from Russia to prepare for the next confrontation, however hypothetic, with Azerbaijan. In both cases, the price for more arms would likely be deeper integration of Armenia within the EEU. And whatever remained of Armenia’s policy efforts towards the West, already under grave pressure since the Karabakh defeat, would die.

Potentially, there is a yet-greater reward for Russia – persuading Azerbaijan to allow the Russian peacekeeping mission to remain on its soil beyond the end of 2025. In which case, an openly revanchist Armenian government formed by an opposition determined to build a battle-ready military capable of offensive operations would be a useful tool for the Kremlin to justify the continued presence of its units in Karabakh.

Author’s note: first published in cepa.org

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Caspian: Status, Challenges, Prospects

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An Analysis into the Legal Classification, Security and Environmental Concerns, Geopolitics and Energy Flow Impact of the Caspian Plateau

How has the world’s largest inland body of (salty) water escaped the economic and political notice for so long? And it is for a resource-rich area of a unique locality that connects Europe and Asia in more than just geography. Simply, the Caspian Basin is an underrated and underexplored topic with scarce literature on its geomorphology, mineral deposits and marine biota, its legal disputes, pipeline diplomacy,environmental concerns and overall geopolitical and geo-economic interplays.

As the former Minister of the Canadian government and Secretary General of the OECD – Honorable Donald J Johnston – states in the foreword, Caspian – Status, Challenges, Prospects“is a fitting title for a book that masterfully gives an objective, comprehensive overview of the region. The authors have compiled an analysis of Caspian’s legal classification, security and environmental concerns, geopolitical scenarios, and energy flow impacts as they affect the world’s largest continental landmass – Eurasia.”

From comprehensive but content intensive insights on Caspian littoral states Azerbaijan, Kazakhstan, Iran, Russiaand Turkmenistan, to external actors like Turkey, EU, China and the United States, readers are presented how separate actors and factors interact in this unique theater. The book elaborates on the legal classification of the Caspian plateau including the recent ‘Convention on Legal Status of the Caspian,’ to the numerous territorial and environmental security concerns.

Prof. Anis H. Bajrektarevic and his co-authors present Caspian as the most recent, fresh and novel way, in one stop-shop offering broad analysis on the Caspian region. It is a single volume book for which extensive information is exceptionally rare to find elsewhere. Following the read, authors are confident that a new expanse of scholarly conversation and actions of practitioners will unfold, not only focused on Caspian’s unique geography, but its overall socio-economic, politico-security and environmental scene.

Welcoming the book, following words of endorsements have been said:

The Caspian basin and adjacent Central Asian region (all being OSCE member states, apart from Iran) have, since the early Middle ages, acted as a crossroads between different civilizations and geopolitical spaces. In an increasingly interconnected world, growing geopolitical competition, economic interdependence and the emergence of new global challenges, particularly those related to water, energy and the climate emergency, have highlighted the relevance of this region, making it of increasing interest to researchers and academics. This book presents a thorough analytical compendium of historical factors, political dynamics, economic trends, legal frameworks and geopolitical interests which underpin, but also affect, the stability and development of this complex, diverse and strategically significant region.

Amb. Lamberto Zanier,Secretary-General, Organization for Security and Cooperation in Europe (2011-2017)  OSCE High Commissioner on National Minorities (2017-2020)

A thoughtful, comprehensive and balanced analysis of the complex interplay between geopolitics and geo-economics in Central Eurasia, and pivotal energy plateau – that of Caspian. We finally have an all-in reader that was otherwise chronically missing in international literature, which will hopefully reverse the trend of underreporting on such a prime world’s spot.   

Hence, this is a must-read book for those wondering about the future of one of the most dynamic and most promising regions of the world and what it could entail for both reginal and external players. 
Andrey Kortunov Director General, Russian International Affairs Council

Although of pivotal geopolitical and geo-economic importance, Caspian energy plateau represents one of the most underreported subjects in the western literature. Interdisciplinary research on the topic is simply missing.  

Therefore, this book of professor Bajrektarevic and his team – unbiased, multidisciplinary, accurate and timely – is a much-needed and long-awaited reader: A must read for scholars and practitioners, be it from Eurasia or beyond.

It is truly a remarkable piece of work!  

Authors were able to tackle a challenging subject with a passion, knowledge and precision, and turn it into a compelling, comprehensive yet concise read which I highly recommend.   

Former Minister of Foreign Affairs, Republic of Kazakhstan Erzhan Kazykhanov, Ambassador Embassy of Kazakhstan, Washington dc, USA 

ARTNeT secretariat is pleased to see how our initial invitation to Prof. Anis H. Bajrektarevic to present at the ARTNeT Seminar Series in 2015 evolved. The talk was initially published as a working paper for ARTNeT (AWP 149). Now Prof. Bajrektarevic, in collaboration with another two co-authors, offers a comprehensive study on a nexus of legal, security, and environmental issues all emanating from and linked to energy cooperation (or lack thereof) in the subregion. This volume’s value extends beyond the education of readers on the Caspian Basin’s legal status (e.g., is it a sea or a lake?). It is just as relevant for those who want a more in-depth understanding of an interplay of economic, security, and political interest of players in the region and outside. With the global institutions increasingly less capable of dealing with rising geopolitics and geo-economic tensions, more clarity – even if only about some aspects of those problematic issues – should be appreciated. This volume offers such clarity.   

Mia Mikic, Director UN Economic and Social Commission for Asia and the Pacific (UN ESCAP) ARTNeT coordinator

It is my honor to reflect on this work on Caspian. Comprehensive and content rich, this book of professor Anis H. Bajrektarevic and his co-authors brings up comprehensively all the useful information on Caspian, with the geographical and historical background and cultural, economic as well as security aspects related to it.

Authors’ novel and unbiased approach shall certainly help decision makers in their bettered understanding of the region that has centuries-long history of peace and cordial neighbourly relations. Long needed and timely coming, I warmly recommend this reader to those who want to know, but more importantly to all those who want to understand, this pivotal region of the world.

Ali Asghar Soltanieh Former Ambassador of Islamic Republic of Iran to United Nations and other International Organizations in Geneva & Vienna

The book by Professor Bajrektarevic and his co-authors embodies a wide-ranging overview of the intertwined interests pursued by the young democracies of the Caspian basin, battling with inherited land and water disputes, and their interplay with regional and global powers. Apparently, supporting political independence of the formers and promoting their integration into the latter’s markets requires adequate analyses, timely outreach policies and consistent engagement. In this sense the publication serves as one of the scarce handbooks to understand diverse interests of stakeholders, dynamically changing security architecture of the region and emerging opportunities of cooperation around the Caspian Sea.

Ambassador GalibIsrafilov Permanent Representative to the UN Vienna and to the OSCE Embassy of Azerbaijan to Austria

Caspian: Status, Challenges, Prospects

An Analysis into the Legal Classification, Security and Environmental Concerns, Geopolitics and Energy Flow Impact of the Caspian Plateau

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Eastern Europe

As Georgians Fight Each Other, Russia Gleefully Looks On

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Earlier today, the leader of Georgia’s major opposition party – United National Movement (UNM) – was detained at his party headquarters by government security forces, the most recent escalation in a drawn-out political crisis. This could well be the beginning of a new troubled period in the country’s internal dynamics, with repercussions for the country’s foreign policy.

The optics favor the opposition. Images of armed and armored police storming UNM’s headquarters was damaging to the ruling party, Georgian Dream (GD). Western diplomats expressed grave concern over the events and their repercussions. Protests have been called, and will likely be covered closely in Western media.

What comes next, however, is not clear.

Much will depend on what long-term vision for the country the opposition can articulate in the aftermath of the most recent events. It was not that long ago that UNM was declining as a political force in Georgian politics. There is a real opportunity here. But the burden is on the opposition to make a play for the loyalty of voters beyond its circle of already-convinced supporters.

Appealing to ordinary Georgian voters is ultimately the key to resolving the crisis. Beyond the intra-party clashes about the legitimacy of the most recent elections, there is a growing chasm between political elites and the challenges faced by people in their daily lives. And tackling these challenges successfully will not be easy.

Both the ruling party and the opposition have been facing declining support from the public at large. Long-term economic problems, which have been greatly exacerbated by the pandemic, have not been credibly addressed by either side. Instead of solutions, both sides have engaged in political theatrics. For many voters, the current crisis is more about a struggle for political power, rather than about democracy and the economic development of the country. No wonder that most people consider their social and economic human rights to have been violated for decades no matter which party is in power. These attitudes help explain high abstention rates during the most recent election. Despite remarkable successes in the early years after the Rose Revolution, Georgia has lacked a long-term policy for reimagining its fragile economy since its independence and the disastrous conflicts of the 1990s.

None of this, however, should minimize the threats to Georgian struggling democracy. Today’s arrests reinforce a longstanding trend in Georgian politics: the belief that the ruling party always stands above the law. This was the case with Eduard Shevardnadze, Mikheil Saakashvili, and is now the case with the current government. For less politically engaged citizens, plus ça change: Georgian political elites for the last 30 years have all ended up behaving the same way, they say. That kind of cynicism is especially toxic to the establishment of healthy democratic norms.

The crisis also has a broader, regional dimension. The South Caucasus features two small and extremely fragile democracies – Armenia and Georgia. The former took a major hit last year, with its dependence on Moscow growing following Yerevan’s defeat in the Second Karabakh War. Today, Russia is much better positioned to roll back any reformist agenda Armenians may want to enact. Armenia’s current Prime Minister Nikol Pashinyan has been weakened, and easily staged protests are an easy way to keep him in line.

Georgia faces similar challenges. At a time when Washington and Brussels are patching things up after four years of Trump, and the Biden administration vigorously reiterates its support for NATO, Georgia’s woes are a boon for Moscow. Chaos at the top weakens Georgia’s international standing and undermines its hopes for NATO and EU membership. And internal deadlock not only makes Georgia seem like a basket-case but also makes a breakthrough on economic matters ever more unlikely. Without a serious course correction, international attention will inevitably drift away.

At the end of the day, democracy is about a lot more than finding an intra-party consensus or even securing a modus vivendi in a deeply polarized society. It is about moving beyond the push-and-pull of everyday politics and addressing the everyday needs of the people. No party has risen to the occasion yet. Georgia’s NATO and EU aspirations remain a touchstone for Georgian voters, and both parties lay claim to fully representing those aspirations. But only through credibly addressing Georgia’s internal economic problems can these aspirations ever be fully realized. The party that manages to articulate this fact would triumph.

Author’s note: first published in cepa.org

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