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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

Georgia Returns to the Old New Silk Road

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Georgia has historically been at the edge of empires. This has been both an asset and a hindrance to the development of the country. Hindrance because Georgia’s geography requires major investments to override its mountains, gorges and rivers. An asset because Georgia’s location allowed the country from time to time to position itself as a major transit territory between Europe and the Central Asia, and China further away.

This geographic paradigm has been well in play in shaping Georgia’s geopolitical position even since the breakup of the Soviet Union in 1991 and the rise of modern technologies. Thereafter, Georgia has been playing a rebalancing game by turning to other regional powers to counter the resurgent Russia. Turkey, Azerbaijan, Iran (partly) and bigger players such as the EU and the US are those which have their own interest in the South Caucasus. However, over the past several years yet another power, China, with its still evolving Belt and Road Initiative (BRI), has been slowly emerging in the South Caucasus.

This how a new Silk Road concept gradually emerged at the borders of Georgia. In fact, a closer look at historical sources from the ancient, medieval or even 15th-19th cc. history of Georgia shows an unchanged pattern of major trade routes running to the south, west, east and north of Georgia. Those routes were usually connected to outer Middle East, Central Asia, and the Russian hinterland.

Only rarely did the routes include parts of the Georgian land and, when it happened, it lasted for merely a short period of time as geography precluded transit through Georgia: the Caucasus Mountains and seas constrained movement, while general geographic knowledge for centuries remained limited.

It was only in the 11th-12th cc. that Georgian kings, David IV, Giorgi III and Queen Tamar, spent decades of their rule trying to gain control over neighboring territories with the goal to control the famous Silk Roads. Since, foreign invasions (Mongols, Ottomans, Persians, Russians) have largely prevented Georgia from playing a major transit role for transcontinental trade.

This lasted until the break-up of the Soviet Union. After 1991, Georgia has returned to its positioning between the Black and Caspian seas, between Central Asia and Eastern Europe. Major roads, pipelines and railway lines go through Georgian territory. Moreover, major works are being done to expand and build existing and new Georgian ports on the Black Sea with the potential to transform Georgia into a sea trade hub.

A good representation of Georgia’s rising position on the Silk Road was a major event held in Tbilisi on October 22-23 when up to 2000 politicians, potential investors from all over the world, visited the Georgian capital. The event was held for the third time since 2015 and attracted due attention. In total, 300 different meetings were held during the event.

The hosting of the event underscores how Georgia has recently upped its historical role as a regional hub connecting Europe and Asia. On the map, it is in fact the shortest route between China and Europe. There is a revitalization of the ancient Silk Road taking place in Georgia. This could in turn make the country an increasingly attractive destination for foreign investment. Indeed, the regional context also helps Tbilisi to position itself, as Georgia has Free Trade Agreements with Turkey, the CIS countries, the EFTA and China and a DCFTA with the European Union, comprising a 2.3 billion consumer market.

Thus, from a historical perspective, the modern Silk Road concept emanating from China arguably represents the biggest opportunity Georgia has had since the dissolution of the unified Georgian monarchy in 1490 when major roads criss-crossed the Georgian territory. In the future, when/if successive Georgian governments continue to carry out large infrastructural projects (roads, railways, sea ports), Tbilisi will be able to use those modern ‘Silk Roads’ to its geopolitical benefit, namely, gain bigger security guarantees from various global and regional powers to uphold its territorial integrity.

Author’s note: First published in Georgia Today

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Eastern Europe

Strategic Black Sea falls by the wayside in impeachment controversy

Dr. James M. Dorsey

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Presidents Donald J. Trump and Recep Tayyip Erdogan had a plateful of thorny issues on their agenda when they met in the White House this week.

None of the issues, including Turkey’s recent invasion of northern Syria, its acquisition of a Russian anti-missile system and its close ties to Russia and Iran, appear to have been resolved during the meeting between the two men in which five Republican senators critical of Turkey participated.

The failure to narrow differences didn’t stop Mr. Trump from declaring that “we’ve been friends for a long time, almost from day-one. We understand each other’s country. We understand where we are coming from.”

Mr. Trump’s display of empathy for an illiberal leader was however not the only tell-tale sign of the president’s instincts. So was what was not on the two men’s agenda: security in the Black Sea that lies at the crossroads of Russia, Eastern Europe, the Caucasus and NATO member Turkey.

The Black Sea is a flashpoint in multiple disputes involving Russia and its civilizationalist definition of a Russian world that stretches far beyond the country’s internationally recognized borders and justifies its interventions in Black Sea littoral states like Ukraine and Georgia.

The significance of the absence of the Black Sea on the White House agenda is magnified by the disclosure days earlier that Mr. Trump had initially cancelled a US freedom of navigation naval mission in the Black Sea after CNN had portrayed it as American pushback in the region.

The disclosure came in a transcript of closed-door testimony in the US House of Representatives’ impeachment inquiry of Mr. Trump’s policy towards Ukraine by Christopher Anderson, a former advisor to Kurt Volker, the US special representative to Ukraine until he resigned in September.

Mr. Anderson testified that Mr. Trump phoned his then national security advisor, John Bolton, at home to complain about the CNN story. He said the story prompted the president to cancel the routine operation of which Turkey had already been notified.

The cancellation occurred at a moment that reports were circulating in the State Department about an effort to review US assistance to Ukraine.

“We met with Ambassador Bolton and discussed this, and he made it clear that the president had called him to complain about that news report… I can’t speculate as to why…but that…operation was cancelled, but then we were able to get a second one for later in February. And we had an Arleigh-class destroyer arrive in Odessa on the fifth anniversary of the Crimea invasion,” Mr. Anderson said.

The operation was cancelled weeks after the Russian coast guard fired on Ukrainian vessels transiting the Strait of Kerch that connects the Black Sea to the Sea of Azov and separates Russian-annexed Crimea from Russian mainland. ‘This was a dramatic escalation,” Mr. Anderson said.

Mr. Trump at the time put a temporary hold on a condemnatory statement similar to ones that had been issued by America’s European allies. Ultimately, statements were issued by US Secretary of State Mike Pompeo and the United Nations ambassador Nikki Haley but not by the White House.

The Black Sea’s absence in Mr. Trump’s talks with the Turkish leader coupled with the initial cancellation of the freedom of navigation operation, the initially meek US response to the Strait of Kerch incident, and the fallout of the impeachment inquiry do little to inspire confidence in US policy in key Black Sea countries that include not only Turkey, Ukraine and Georgia, a strategic gateway to Central Asia, but also NATO members Bulgaria and Romania.

In Georgia, protesters gathered this week outside of parliament after lawmakers failed to pass a constitutional amendment that would have introduced a proportional election system in advance of elections scheduled for next year.

The amendment was one demand of protesters that have taken to the streets in Georgia since June in demonstrations that at times included anti-Russian slogans.

Russia and Georgia fought a brief war in 2008 and Russia has since recognized the self-declared independence of two Georgian regions, Abkhazia and South Ossetia.

Some 1500 US troops participated in June in annual joint exercises with the Georgian military that were originally initiated to prepare Georgian units for service in Afghanistan and Iraq.

The absence of the Black Sea in Mr. Trump’s talks with Mr. Erdogan raises the spectre that the region could become a victim of the partisan divide in Washington and/or Mr. Trump’s political priorities.

The Republican-dominated US Senate has yet to consider a bipartisan Georgia Support Act that was last month passed by the House of Representatives. The act would significantly strengthen US defense, economic, and cyber security ties with Georgia.

A Chinese delegation that included representatives of several Chinese-led business associations as well as mobile operator China Unicom visited the breakaway republic of Abkhazia this week to discuss the creation of a special trade zone to manufacture cell phones as well as electric cars.

The Black Sea is one region where the United States cannot afford to sow doubt. The damage, however, may already have been done.

Warned Black Sea security scholar Iulia-Sabina Joja in a recent study: “The region is (already) inhospitable for Western countries as they struggle to provide security… The primary cause of this insecurity is the Russian Federation… Today, Russia uses its enhanced Black Sea capabilities not only to destabilize the region militarily, politically, and economically, but also to move borders, acquire territory, and project power into the Mediterranean.”

Ms. Joja went on to suggest that “a common threat assessment of NATO members and partners is the key to a stable Black Sea. Only by exploring common ground and working towards shared deterrence can they enhance regional security.”

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Eastern Europe

The Black Sea of Economic Cooperation

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Since the Ukraine crisis of 2014 the security situation in the Black Sea region has significantly deteriorated. The annexation of Crimea by Russia as well as the latter’s military moves around the Kerch Strait and in the Azov Sea destabilized the shaky status quo which had been in place since the end of the Cold War.

To back up the current state of affairs in the Black Sea, many an analysis as well as entire books dedicated to the Ukraine crisis mention various Russian-Turkish wars of 18th-19th centuries, underlying the notion that the Black Sea has always been a space of competition and intermittent confrontation among several powers.

Wars indeed were waged and at least two powers were always competing with each other for influence across the sea. This narrative, however, portrays the Black Sea as a sea of insecurity. In reality, though, seen from a centuries-wide perspective, wars between Russia and Turkey in the Black Sea lasted for a small fraction of time in comparison with the periods of peace in the 18th-19th centuries.

Moreover, the Black Sea, though always surrounded by rival powers, was nevertheless a space of economic exchange. Trade flourished, which contributed to close contacts between coastal states. Take, for example, the period of Greek colonization in the 8th c. BC. Colonies in what is nowadays western Georgia and in the Crimean Peninsula enabled the exchange of goods in the region. During the Roman and Byzantine periods (up to the 7th-8th cc. AD, the coastline of modern western Georgia was closely integrated with great cities in Asia Minor and Crimea.

Under the unified Georgian monarchy (late 10th-15th cc.), despite patchy information in historical sources, there was a wide range of economic activity which connected western Georgia to Byzantium, Crimea and later to the Ottoman Empire. Moreover, this period saw such a large economic interconnection that Georgian traders even visited Constantinople, Thessaloniki and from the late 13th c. onwards, were in close contact with Italian merchants who operated ships and had colonies in Crimea and in Georgian cities – Sokhumi, Poti and Batumi.

Even the period of great empires from the early 18th c. around the Black Sea cannot be considered solely as a time of continuous confrontation. In fact, the Black Sea served as a good merging point for connecting different economic systems represented by Russia and the Muslim world (namely the Ottoman Empire). By the early 20th century, just before the outbreak of World War I, there was much economic activity seeing Russia sending most of its coal and grain through the Bosporus and Dardanelles to different parts of the world. Georgia, too, was connected to the rest of the world by the early 20th century when Batumi operated as a main conduit.

Surprisingly the Soviet period too can be characterized as a period of economic cooperation. Ukraine, Georgia and Russia’s ports transported oil, coal and other natural resources through the straits to the Mediterranean.

Thus, despite the wars we know in history, there have been even longer periods of much deeper economic cooperation which the countries (or empires) around the Black Sea have enjoyed over several centuries.

Back to the current deterioration of the security situation in the Black Sea, it could potentially diminish overall economic activity as the flow of foreign investment may be curbed or diverted elsewhere. In a way, the geopolitical situation in the Black Sea today is more chaotic and unpredictable than it was in the 19th century. A certain order was still in place when the Russian and Ottoman Empires fought each other, whereas in 2019 there is much unpredictability in Russian and NATO behavior. Nevertheless, it is still possible to say that economic cooperation among the countries living around the Black Sea will continue. The sea will again play a role not of a divisive, but rather a unifying character.

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