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Why Nikol Pashinyan Returned From Vienna Empty- Handed?

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On 29 March 2019, the first official meeting was held between Azerbaijan’s President Ilham Aliyev and Armenian Prime Minister Nikol Pashinyan in Vienna on the settlement of the Nagorno-Karabakh conflict. The OSCE Minsk Group Co-chairs assessed the meeting positive and constructive. According their statement, “two leaders underlined the importance of building up an environment conducive to peace and taking further concrete and tangible steps in the negotiation process to find a peaceful solution to the conflict. The leaders recommitted to strengthening the ceasefire and improving the mechanism for direct communication.  They also agreed to develop a number of measures in the humanitarian field.” After the meeting, UN Secretary General in his statement welcomed creating an environment conducive to peace and called on taking further steps towards successful negotiations.

Both President Ilham Aliyev and Prime Minister Nikol Pashinyan described the meeting as a new beginning. President Ilham Aliyev also evaluated this meeting as an indicator that the format of the negotiations remains unchanged. Because after Pashinyan became a Prime Minister, he started to draw zigzag regarding the format, principles and future of peace talks around the Nagorno-Karabakh conflict. This meeting was very important for international community to clarify the stance of Armenia’s new government in terms of the future of the peace talks.

Pashinyan, who based his policy on the Nagorno-Karabakh negotiation process on the thesis that the previous administrations had weakened the Armenia’s position, offered two suggestions to the Armenian community for this deadlock. The first is to ensure that the Nagorno-Karabakh Armenians are included in the negotiation process by abandoning the Madrid Principles, which are the backbone of the diplomatic negotiations proposed by the OSCE Minsk Group’s Co-chairs. The second is to get rid of the political and economic embargo, which is one of the most important tools against Armenia in the hands of Azerbaijan in the process of diplomatic negotiations.

In order to achieve these goals, before the Vienna meeting, Armenian new Prime Minister tried to benefit from three important visits. He first visited Iran, and later Brussels. After that, new President of Georgia visited Armenia. All three countries play an important role for new Armenian government`s foreign and Nagorno-Karabakh policy. Because he couldn`t attract the interest from Washington and the general observations that his relations with Moscow is complicated.

During these visits, Pashinyan sought to achieve three important goals. Firstly, is to gain support for Armenian position in Nagorno-Karabakh resolution process. Secondly, to attract new investments and to develop new government’s foreign economic relations in order to soften the impacts of economic isolation in the region. Thirdly, to get political support for his new government.

Before Vienna meeting, he made his first visit to Iran on 27-28 February2019.Iran is the second alternative for Armenia to soften here conomic isolation. Armenia, tries to become a bridge for Iranian transportation and energy project between Iran and the Black Sea as well as Iran and the Eurasian Economic Union. In Tehran, Pashinyan proposed the gas transit to Georgia, when Saloma Zourabichvili was in Baku making supporting statements for the East-West energy and transportation projects that meant a kind rejection of Yerevan’s proposal.

On the other hand, Iran was subjected to the Western political and economic sanctions. Iran has its own problems, as they need 3.4 billion dollars for Iranian Armenian railway project. That is why during Pashinyan’s visit to Iran some sectorial agreements signed between both sides, which can unlikely change geopolitical situation in the region.

He made his second visit to Brussels on 4 March 2019. During his visit to the EU, Pashinyan tried to exert pressure on Azerbaijan through the EU official authorities. Here, the main concern of Armenia is the EU’s support for the territorial integrity and sovereignty of Azerbaijan in the new agreement to be signed between two. Pashinyan also expected economic support from the EU in the wake of his rise to power. But, the EU officials did not promise Armenia a new batch of investment in the current conditions, as well as for the Nagorno-Karabakh negotiation process.

Then important visit made by Georgian new president Salome Zourabichvili to Armenia on 13-14 March in 2019. Before Armenia, Zourabichvili had visited Azerbaijan and supported the territorial integrity and sovereignty of Azerbaijan. Armenian officials were expecting an explanation from the authorities of Georgia for that reason. Whereas, Zourabichvili accused Armenia for ostensible support of the territorial integrity of Georgia while taking steps that tend to harm the latter’s sovereignty. During the meeting with President of the National Assembly of Armenia President, Zourabichvili stated that, “recognition of Georgia’s sovereignty and territorial integrity not only verbally, but also factually is our one and only key interest.” Zourabichvili also mentioned that parties should work together and, based on international norms, move to a new stage of solving these conflicts. Otherwise, economic progress, stability, enhanced cooperation, and strengthening of the transportation and logistics ties with the EU and other countries are only verbal statements.” That statement meant that without settlement of Nagorno-Karabakh conflict, Georgia could not support Armenian`s participation in the regional projects.

To sum up, prior to his visit to Vienna, Pashinyan new precondition to change the format for the solution of the Nagorno-Karabakh conflict didn`t get support from the international community. Meanwhile, before Vienna meeting, Pashinyan couldn`t change the geopolitical conditions for Armenia. As he left Vienna with an empty hand, he couldn`t impose Armenian new precondition on Azerbaijan and returned with empty-hand.

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Eastern Europe

Quality of Life in Latvia is not a priority

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Four presidents, 14 governments and eight Seimas have changed in Latvia over the past 20 years. The country joined the European Union and NATO, and then switched to the euro. But have Latvians become better off? Has their quality of life improved? Statistics shows that the general well-being of population remains very low. Political turbulence only worsens the situation.

Thus, according to Numbeo.com portal, one of the largest databases on the cost of living and quality of life worldwide, Lithuania and Latvia are the worst Nordic countries for quality of life.

Quality of Life Index by Country 2019

The leaders of the rating are Denmark, Finland and Iceland. Latvia showed the lowest result, the quality of life index here is 149.15 points. In Lithuania, the result is slightly higher – 156.36 points.
Numbeo experts took into account the purchasing power of the population, safety, health care, the cost of living and some other factors.

It is noted that the world ranking of countries for the quality of life is led by Denmark, Switzerland and Finland. Estonia took 11th place, Lithuania – 29th, and Latvia – 34th.

The more so, experts said that the proportion of shadow economy in Latvia rose by 2.2 percentage point last year to 24.2 percent.

The shadow economy proportion in Latvia has risen for the past two years in a row.

EU-SILC survey gives another frightening indicator. According to eurostat.ec.europa.eu, Latvia, as well as Estonia and Lithuania are top three EU countries in terms of poverty risk among pensioners.

Political and economic short-sightedness has lead to the state when the Baltic States have become the first battlefield in case of war between NATO and Russia.

The United States is preparing for the use of nuclear weapons in Europe along with non-nuclear countries, said Vladimir Ermakov, director of the Department for Non-Proliferation and Arms Control of the Russian Foreign Ministry. Experts point out that military airfields in the Baltic States and Poland have already been prepared to receive NATO aircraft that can carry tactical nuclear weapons. If take his words seriously, this means the end of the Baltic States’ existence.

The behavior of the authorities guaranteed Latvia, Lithuania and Estonia the status of the first battlefield, despite the fact that in the event of war, economy would be completely destroyed and population would disappear.

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Eastern Europe

How the Caspian Sea joins the Black Sea

Asim Suleymanov

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In the development of international cooperation and the deepening of industrial cooperation, the leading role belongs to the formation of a network of international transport corridors. It has a special place in solving transport problems associated with the expansion of interstate transportation, economic, cultural and other ties, with the creation of an international transport infrastructure that has common technical parameters and ensures the use of a single transportation technology as the basis for the integration of national transport systems into the global transport system.

Developing corridors are to play a system-forming role in the economic and social development of the territories along which they pass. Their creation is directly related to projects for the development of sectors of the economy and social sphere.

If a modern transport corridor connects the Caspian Sea and Black Sea, it will lead to uninterrupted cargo transportation between Asia and Europe. New opportunities for the regional states will be opened up. This was confirmed by the first meeting of the foreign ministers of Azerbaijan, Romania, Georgia and Turkmenistan, held in mid-March 2019 in Bucharest.

According to its results, a political declaration was signed. The document reflects the determination of the four states to implement the project of an international freight route between two seas by joint forces.

As expected, the corridor between the two seas will have a real impact on the standard of living in the participating countries and cause a sharp surge in business activity in neighboring regions.

The idea of the project is to make full use of the geographical proximity of Romania, Georgia, Azerbaijan and Turkmenistan, as well as the capabilities of the ports of Constanta in Romania, Poti in Georgia, Baku in Azerbaijan and Turkmenbashi in Turkmenistan.

New transport route will allow establishing a direct connection between the port of Constanta and the Danube River, and then the rivers and canals on the European continent, that will open access to Central and Northern Europe.

In general, the Caspian-Black Sea region is becoming links of a single Eurasian transport network.

The main question is how to direct the necessary volumes of cargo along this route, which would make its work profitable and profitable. To meet these challenges, in the near future four countries have planned to create an expert working group, optimize working procedures, harmonize tariffs, identify remaining infrastructure and legal constraints, and jointly promote the project at the international level, including in the course of interaction with the European Union. But it will not be easy for them to achieve all these ambitious goals.

The closest allies of Azerbaijan, Turkey and Russia, support all the projects aimed at strengthening economic cooperation between Baku and other countries of the Caspian-Black Sea region. Moscow and Ankara are lobbying for the creation of a transport corridor between the two seas.

Azerbaijan once again demonstrates that it is becoming one of the most important transport hubs of Eurasia – a transit hub in which the East and the West are tightly tied.

This country is interested in East and West, not conflicting with each other, but driven forward by the single energy of partnership.

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Eastern Europe

China’s changing interests in South Caucasus

Orkhan Baghirov

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President Ilham Aliyev and Chinese leader Xi Jinping in Beijing Photo: Azertac

On April25-28,“Second Belt and Road Forum for International Cooperation” took place in the capital city of China. From South Caucasus region only Azerbaijan leader Aliyev was in the list of 36 top-Level attendees (Diplomat, April 27).As the Azerbaijan was participating first forum in 2017 on ministerial level, visit of President in second forum demonstrates intention of both sides for close cooperation within the framework BRI.

Despite fact that China’s strong ambition to enter European market through BRI makes Georgia one of the most important players in the region (it has FTA both with China and EU) its high-level officials did not attend the forum (Emerging-Europe, January 3, 2018).

Generally, South Caucasus region was not in the Chinese focus when the BRI project was unveiled in 2013.Its attitude to the region has changed afterwards. Being part of the Central Asia-West Asia Economic Corridor, South Caucasus has strategic importance for China. At the same time, transportation projects such as Baku-Tbilisi-Kars railway and Anaklia Deep-Sea Port has increased significance of the region.

From geopolitical point of view stability in Azerbaijan and Georgia’s political problems with Russia creates ground for Chinese presence in Caucasus. It is clear that having political problems with West Russia is not willing to confront China. Therefore, using these opportunities and establishing good relations both with Georgia and Azerbaijan China is able to avoid its biggest rival in Eurasia and use shortest way to European markets (Trend.az, April 10).

Importance of South Caucasus countries within the BRI framework is not same. Armenia has less potential for BRI. It does not have enough transportation infrastructure and its borders with Azerbaijan and Turkey closed. Armenia has a potential to become a corridor to markets of Eurasian Economic Union (EEU) and Iran. However, it does not have borders with the members of EEU and  railway project between Armenia and Iran is not viable due its high costs ($3.2 billion) and less importance in commercial means (Vestnikkavkaza, August 25, 2018).Also, China has borders with two biggest members of EEU and could easily reach EEU markets through them. 

In the case of Georgia, China is the biggest foreign investor. China’s Hualing Group controls Kutaisi free industrial zone (FIZ), owns Basis Bank, hotels, wine export enterprise. It also constructs “Tbilisi Sea New City” near Tbilisi Sea in which company has already invested around 150 million dollars (hualing.ge).Another Chinese company CEFC Energy owns 75% of Poti FIZ (Cbw.ge, March 20).

Unlike the Georgia, mostly state-owned Chinese companies have invested in Azerbaijan. One of these companies CTIEC Group constructed biggest cement factory in Azerbaijan in 2014.China also has a great interest on Baku International Sea Trade Port as it is one of the main ports within BRI. Based on intergovernmental grant agreement China transferred $2 million worth equipment to the port (Azernews, April 4, 2018).

Despite fact that Azerbaijan is China’s key trade partner in the South Caucasus (it accounts 43 percent of China’s trade turnover in the region) it has massive investments in Georgia (Azernews, April 25). It mostly related to political orientation of these countries. Georgia follows more western orientation that made it more attractive for China while Azerbaijan implements balanced strategy and it does not want to feel China’s pressure. Besides, Azerbaijan is not in need of financial assistance like Armenia and Georgia as it has enough financial reserves.

However, recent developments of Sino-Azeri economic relations within the framework of the Second Belt and Road Forum creates new perspectives for China’s presence in South Caucasus. During the forum 10 agreements worth of 821 million USD has been signed  (Azvision.az, April 24). These contracts cover different economic spheres of non-oil sector including the construction of a tire factory in the Sumgayit chemical-industrial park, the creation of a 300-hectare greenhouse complex in the Kurdamir region of Azerbaijan, and the construction of agrological industrial parks in the Guba, Goychay and Khachmaz regions (Turan.az April 24).If we take in account that Chinese investors have invested800 million USD in the economy of Azerbaijan since independence, obtained agreements in the forum worth of same amount shows China’s growing interest in Azerbaijan.

Nevertheless, it does not mean that China’s preference of Georgia has changed. Within the BRI project both Azerbaijan and Georgia are of geopolitical importance for China. It is in China’s interest to boost bilateral relations with both of countries. It is apparent that China already has considerable investments in Georgia and now it is time to deepen cooperation with Azerbaijan. At the same time Azerbaijan is not going to cross limits of its balanced policy. Chinese companies that signed agreements in second forum are government affiliated companies as well. It again shows that Azerbaijan is willing to deepen cooperation without creating room for pressure in its domestic economy.

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