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The Limits of China’s Involvement in South Caucasus

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As the Second Karabakh War ended, all regional players’ interests were scrutinized in detail. One power however, China, was largely absent from the analysis. Official rhetoric from Beijing indicates the continuation of China’s non-intervention policy in the region. However, its position also indicates the limits of China’s involvement in the South Caucasus.

Great expectations

There is a good deal of ambivalence in the Chinese position on the South Caucasus. The country’s ambassadors to the region’s three states – Armenia, Azerbaijan, and Georgia – often announce how important the Caucasus is, but Beijing’s investment policies and political moves reflect little of the vocalized grand geopolitical thinking.

As late as 2017 the prospects seemed rosier, with each South Caucasian state hoping for a larger Chinese presence. In 2017, China and Georgia signed a free trade agreement. Georgian government hoped the country’s location on the Black Sea. With several ports such as Batumi, Poti and the then-planned Anaklia deep sea port, Baku-Tbilisi-Kars (BTK) railway and East-West Highway, would allow it to operate as a logistics and transit hub for the expanding Belt and Road Initiative – a near-trillion US dollar Chinese initiative aimed at linking the Indo-Pacific region with the European market.

Moreover, there was  a geopolitical aspect to the Georgian-Chinese cooperation. Deeper economic penetration into Georgia could spell a  greater stake in Georgia’s stability and security for Beijing. For Tbilisi, relations with China were in a way a means to mitigate Russian geopolitical pressure following the invasion of Georgia in 2008. 

A similar understanding was behind Armenia’s and Azerbaijan’s calculations. Chinese investment, especially in infrastructure, was to be the main driver of the nascent cooperation in both cases. After all, most of the infrastructure hails from the Soviet era, making financing for new construction badly needed.  

Baku in particular was enthusiastic about infrastructure development in Central Asia as well as a steady growth of shipments from China, as it could provide a boost for the South Caucasus transport and energy corridor. Over the past years the ports of Baku and a small city of Alat have invested into improving their infrastructure. Alat is especially promising as an estimated transshipment of the new port complex potentially reaches 25 million tons of cargo and 1 million twenty-foot equivalent unit (TEU) per year.

As was the case with Georgia, Armenia and Azerbaijan too looked at China as a source for diversification of their foreign policy orientation. Baku and Yerevan enjoy deep economic and military cooperation with Moscow, but uneasiness in both capitals about Russian geopolitical pressure persists. As such, China could have played a pivotal role in mitigating their fears of dependence on Moscow.

Last, but not least, Armenia also pinned its hopes on the economic involvement of China in the country. Though sandwiched between the rival Turkey and Azerbaijan and having only two borders open – in the north with Georgia and in the south with Iran – the country has been positioning itself as a potential transit corridor for Chinese goods from Iran to the Black Sea.

Reality check

None of the hopes of the South Caucasus countries regarding China have materialized. Perhaps the hope for more active Trans-Caspian transshipment could still be realized in one form or another, but overall, the South Caucasus has seen little Chinese investment or general geopolitical attention from Beijing. Trade with the three states has grown, but it has not so far been a game changer. Moreover, official BRI documents published in China over the past years too do not mention the region as a potential corridor to the European Union.

For China, the South Caucasus plays a modest role. In terms of BRI, the Russian corridor is a logical option for China-Europe links. Rather than transporting goods via the Caspian and Black Seas a direct Russian route may be longer in terms of distance, but is more feasible in practice. Other aspects of geography put limits on Chinese engagement in the South Caucasus as well. Unlike Central Asia, the region does not border on China. It also does not represent a primary security concern for Beijing, which would have necessitated larger engagement similar to Chinese actions in Tajikistan.

In a way, this physical distance does provide a certain advantage. Beijing can approach the region unencumbered by the problems its faces in Central Asia. Mistrust towards and fear of Chinese expansionism pervade the moods of political elites and the general public of Central Asian states, but this is not the case in the South Caucasus. Further, China has not so far gotten embroiled in internal affairs of the region’s three states and  has not awarded special preference to governments on ideological grounds. Ideally this would pave the way for a more active Chinese involvement. However, we have not seen Beijing tapping into this opportunity so far.

The rationale for China’s reluctance to engage the South Caucasus could be Russia, which regards the region as its sphere of influence. Considering the budding partnership between Moscow and Beijing, the latter might be unwilling to challenge Russia’s geopolitical preeminence. However, the Russia factor is not sufficient to explain Chinese abstention. After all, China does challenge Russia’s position in Central Asia and Moscow has been very careful not to voice its concerns openly. 

In many ways China’s relative inconspicuousness in the South Caucasus is dictated by its position on the Black Sea, a strategic location providing connection to Eastern, Central, Southern Europe, and Russia. It also allows access to the Mediterranean through the Bosphorus and Dardanelles Straits. Being involved in this sea would offer serious geopolitical opportunities to China, but much depends on energy availability. As the demand for oil and gas resources in China increases, so does Beijing’s quest to find new energy sources and safe avenues for import. 

However,  trends indicate that the Black Sea does not stand out in this regard. Black Sea adjacent states, with the significant exception of Russia (though even the latter exports gas and oil to China from its deposits in Siberia), have little to no direct energy trade with China. Overall, the resource potential of the Black Sea is too uncertain to invite deeper Chinese involvement. Even with Turkey which recently made gas discoveries in the Black Sea, the Chinese stance is unlikely to change as the potential gas deposits would mostly be consumed by Turkey’s growing internal demands.

Instead, the region seems to be much more important for other actors, mainly the EU and Russia .China does not seem motivated to compete with these other players when the potential benefits remain uncertain. The South Caucasus is of critical importance to the EU’s energy security as a transport corridor through which as much as 10 percent of Europe’s oil and oil import transit. The EU is also heavily involved in the region through its Eastern Partnership and the Transport Corridor Europe-Caucasus-Asia (TRACECA) projects. Besides, Russia’s growing military involvement in the Black Sea also limits Chinese potential involvement in the region. A geopolitically overcrowded Black Sea region provides little incentive for Chinese companies.

No breakthrough in sight

Looking ahead, the picture is not promising for the realization of the South Caucasus states expectations. It appears instead that both global and regional trends will limit China’s involvement in the region. 

Though China has performed much better than others economically following the negative effects of the COVID-19 pandemic, its growth remains unstable and government debt is soaring. This will put pressure on China’s willingness to lend money abroad, which does not portend well for the South Caucasus. Most likely, the region will remain overshadowed by other regions of primary importance for BRI – Southeast Asia, Central Asia and the Middle East.

A changing balance of power in the Black Sea and the Russo-Turkish geopolitical pre-eminence in the South Caucasus following the second Karabakh War will further limit Chinese companies’ willingness to invest or participate in region-wide projects. The South Caucasus will remain a major fault line between Russia and the West, and increasingly between Turkey and Russia as of late. Engaging this geopolitically fraught region will be risky for Chinese companies and therefore likely undesirable.

Finally, one must account for US pressure on the South Caucasus states. As the region will be subject to the great power competition between China and the US, Georgia and, to a certain extent Azerbaijan, will face a dilemma of damaging bilateral relations with Washington should they invite large Chinese investments into the countries’ critical infrastructure.

Author’s note: first published in chinaobservers

Emil Avdaliani specializes on former Soviet space and wider Eurasia with particular focus on Russia's internal and foreign policy, relations with Iran, China, the EU and the US. He teaches history and international relations at Tbilisi State University and Ilia State University (Georgia).

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Eastern Europe

Thorny path towards peace and reconciliation in Karabakh

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On January 11 the leaders of Russia, Azerbaijan and Armenia signed a deal to develop cross-border transportation routes and boost economic growth to benefit the South Caucasus and the Wider Region. This meeting took place two months after the Moscow-brokered armistice between Armenia and Azerbaijan ended a 44-day war over Nagorno-Karabakh.

This ethno-territorial conflict over Nagorno-Karabakh has drawn dividing lines between Armenia and Azerbaijan for almost 30 years. Some estimates put the number of deaths on both sides at 30,000 after the First Karabakh war before a ceasefire was reached in May 1994. As a result of this war, one fifth of the internationally recognized territory of Azerbaijan was occupied and the entire Azerbaijani population of the former Nagorno-Karabakh Autonomous Oblast (NKAO) and seven adjacent districts (Lachin, Kalbajar, Agdam, Fizuly, Jabrail, Gubatli and Zangilan) was forcibly expelled by the Armenian armed forces. Incidentally, due to sporadic frontline skirmishes and clashes, both military personnel and civilians have been killed along the Line of Contact, devoid of any peacekeeping force, since 1994.

Over the years, Armenia and the separatist regime that emerged in the occupied Azerbaijani territories refused any final status short of independence for Nagorno-Karabakh and tried to preserve this status quo and achieve international security guarantees on the non-resumption of hostilities while avoiding the withdrawal of its armed forces from the occupied territories and preventing the safe return of expelled Azerbaijani inhabitants to their permanent places of residence. However, such a policy, in its turn, polarized the region and reduced to naught any meaningful regional cooperation between the three South Caucasus states.

The Second Karabakh war, which took place from September 27 to November 9, 2020, and the subsequent Russia-brokered peace deal on November 10, significantly changed the facts on the ground and created a new political reality that replaced the “no war, no peace” situation that had been hanging over the region for almost 30 years. As a result of this war, more than 6,000 soldiers died on both sides in fighting.

This war came to an end because of a clear victory for Azerbaijan, which has restored its territorial integrity and sovereignty. Owing to the humiliating defeat of Armenia,the myth of the invincibility of the Armenian armed forces has been shattered and the Prime Minister of this country has been under continuous pressure from the opposition to step down.

Thus, after the Second Karabakh war, the pendulum has swung from devastating war towards actual peace. The question, is, however, whether the conflicting parties will be able to achieve lasting peace in the coming years: How can a relationship that has been completely destroyed owing to this protracted armed conflict and previous wars be restored?

The fate of all inhabitants of both the highlands and lowlands of Karabakh, irrespective of their ethnic origin, is crucial in this context. Security arrangements for the Armenian minority residing in this area are currently organized through the deployment of 1,960 Russian peacekeepers for at least five years to monitor the implementation of the trilateral statement signed by the heads of state of Azerbaijan, Armenia, and the Russian Federation on November 10 (hereafter, the trilateral statement). At the same time, the return of the former Azerbaijani inhabitants to their permanent places of residence previously occupied by the Armenian armed forces is envisaged by the trilateral statement and the UNHCR has been assigned to oversee this task.

It is paramount that Azerbaijan has to demonstrate a policy of “strategic patience” in the coming years to entice the Armenians of Karabakh region into closer incorporation through attractive political, economic, social, and other development.

On the other hand, Armenia has to concentrate on its own internationally recognized sovereign territory. Today, it is important that this country changes its external minority policy and withdraws its territorial claims against Azerbaijan. As a next step, both Armenia and Azerbaijan can recognize the territorial integrity of one other.

Such rapprochement can lead to the opening of the borders between Armenia and Turkey and Armenia and Azerbaijan, which would increase economic opportunities for landlocked Armenia. It can thereby contribute to regional stability, development, and trans-regional cooperation among the three South Caucasian states. At the same time, it would create an enabling environment that could be more conducive for future dialogue and interactions between Armenians and Azerbaijanis.

We must face the fact that a stable equilibrium between these two nations has never previously been achieved. However, despite ups and downs, there was peaceful coexistence between the Armenian and Azerbaijani communities in Karabakh as well as Armenia and Azerbaijan’s respective minorities in Azerbaijan and Armenia. This protracted conflict has, however, led Armenians and Azerbaijanis to live in parallel realities for almost 30 years.

In light of the recent past, we cannot soon reconcile our different narratives. It is a long process; however, reconciliation is not only an outcome, it is also a process. Although the gestation period might be long, the process of reconciliation itself can be extremely rewarding.

In fact, the Armenian and Azerbaijani inhabitants of Karabakh have lived together in this region in the past. However, for almost 30 years this was impossible. Will and determination should be put to good use in order to arrive at such a peaceful coexistence once again.

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Eastern Europe

Dawn of great power competition in South Caucasus

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The pace of geopolitical change in the South Caucasus is staggering, with the recent Karabakh war only underlining several major geopolitical trends in the region.

The first noticeable trend being the undercutting of democratic ideals and achievements of the region’s states. Take Armenia, its young democracy had high hopes following the 2018 revolution, but now it will be more even more dependent on Russia.

It is not a matter of whether a democratic model is better or not, the matter lies in the incompatibility of an aspiring democracy with a powerful nondemocracy such as Russia.

The Armenian leadership will now have to make extensive concessions to Moscow to shore up its military, backtracking on its democratic values. Building a fair political system cannot go hand in hand with the Russian political model.

The war also put an end to any hopes of Armenia implementing a multivector foreign policy, an already highly scrutinized issue. Mistakes were made continuously along the way, the biggest being an overreliance on Russia.

In the buildup to 2020, Armenia’s multiaxial foreign policy efforts gradually deteriorated, with the 2016 fighting showing the limits. Armenian politicians attempted to develop ties with other regional powers in the aftermath, but Russian influence had already begun to incrementally increase.

Tipping the scales in a no longer balanced alliance culminated in the 2020 war with Azerbaijan thanks to Yerevan’s maneuvering. More crucially, the war has obliterated Yerevan’s multiaxial policy efforts for years to come.

Now, Armenia’s dependence on Russia would be even more pronounced with no viable geopolitical alternatives.

With no more foreign policy diversification, the three South Caucasus states are divided by larger regional powers, further fracturing the region.

The return of Turkey and the growth of the Russian military could resurrect the great power competition, in which a nation’s military power, infrastructure projects and economic might are directly translated into their geopolitical influence over the region, ultimately deterring long-term conflict resolution.

The Western stance

The Karabakh war highlighted a regression in Western peacekeeping standards. The Western approach to conflict resolution based on equality rather than geopolitical interests has been trumped by the Russian alternative.

Moscow is not looking to resolve the conflict (it never does in territorial conflicts); instead, it is seeking to prolong it under its close watch in a bid to increase its influence.

Looking at the situation from the Russian perspective, it is clear the country will continue to influence Armenia and Azerbaijan, only now to a far greater extent than before.

The West’s inability to accommodate fluid geopolitical realities in the South Caucasus also raises questions about its commitment to resolving the issues at hand. The second Karabakh war was in a way a by-product of the West’s declining engagement in the region over the past several years.

The West can no longer treat the South Caucasus as a monolithic entity, and a diversified foreign policy should be applied in line with realities on the ground.

Policies should reflect each individual state, and the West should, perhaps, be more geopolitical in its approach.

Turkey’s recent suggestion to create a six-nation pact bringing together the South Caucasus states, Russia, Turkey and Iran, shows the regression of Western influence in the region. But the geopolitical vacuum is never empty for long, and Turkey and Russia approach.

Georgia’s position

Georgia could act as the last bastion of dominant Western influence, but even there, the West should be cautious. The country is on the cusp of Europe, making it susceptible to foreign influence.

Bordered by Russia and Turkey, two powers often discerning of Europe, Georgia also feels the pressure to adapt to the changing circumstances on the ground.

The lack of Western resolve in the region and the Black Sea could propel Tbilisi if not toward a total reconsideration of its foreign policy, toward diversifying its foreign ties – one could call a “rebalancing.”

The war also solidified that the Caspian basin and South Caucasus are inextricably linked to the greater Middle East.

Russia and Turkey are basing their strategies in the region on developments in the Middle East and the Black Sea region. Not since the end of the Soviet Union has the South Caucasus been such a critical point for the West, especially the incoming Biden administration.

But time is critical and any further delay in active U.S. policy could spell disaster for Georgia, which serves as a door to the Caspian and on to Central Asia.

The West has been in regression in the region for quite some time now; the Karabakh war only brought it to the light, and it must be proactive if things are to change.

Much will depend on the U.S. and its new administration, but the West will have to come to an understanding with Turkey, even if it be limited, to salvage its deteriorating position in the region.

After all, the South Caucasus has always been the only theater where Turkish and Western interests have always coincided. Considering its limited presence in the region, the West could consider backing Turkey.

Not only would it serve as a reconciliatory gesture pleasing Ankara, but it would also limit Russia’s movement in the region. With the ink about to dry on who will influence the region, the West must immediately adapt its approach if it wishes to have any input in the rapidly changing geopolitics of the South Caucasus.

Author’s note: first published in dailysabah

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Eastern Europe

An Impending Revolution

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Large crowds have demonstrated their anger at the results of the presidential election in Belarus. Photo: Kseniya Halubovich

Even on the end note, the year contains surprises enough to deem it as a year of instability and chaos given every nook and cranny around the globe is riddled with a new crisis every day. Latest down in the tally is the country of Belarus that has hardly streamlined over at least half a decade but now is hosting up as a venue to rippling protests in almost all the districts of its capital, Minsk. The outrage has resulted from the massive rigging imputed on the communist party in ruling for almost three decades since the split of Soviet Union in 1994. With Europe and Russia divided on the front as the protests and violence continue to rage: a revolution is emerging as a possibility.

The historical map of Belarus is nearly as complex as the geographical landscape which might only stand next to Afghanistan in terms of the intricacies faced by a landlocked country as such. Belarus is located in the Eastern European region bordered by Russia to the north-eastern perimeter. Poland borderlines the country to the West while Ukraine shares a border in the South. The NATO members, Lithuania and Latvia, outskirt the borders of Belarus in the Northwest, making the region as a prime buffer between the Russian regime and the western world. As Belarus stands as a junction between the European Union (EU) and Russia, the proximal nature brings about interests of either parties in the internal affairs of Minsk. However, the nature of the bond shared between the trio is by no means a triangle unlike other former soviet nations since Belarus has casted its absolute loyalty to Russia since the split of Soviet Union and ultimate accession to power of president, Alexander Lukashenko, the leader of the Communist Party of Belarus. Along with the alliance, however, came the unwanted dependency since over the 26-year rule of Lukashenko, he crippled the economy and the political writ of Belarus, using every last ounce of authority to subdue the opposition and the democratic mechanism of the country, earning him the nefarious title ‘Europe’s last dictator’.

The outburst of protests today stems from this very problem that is more deep-rooted than what comes across as apparent. The excessive and draconian use of power and autonomy has invalidated the independence of Belarusians and turned them haplessly at the mercy of Russian aid and support while blocking out any western support in the name of guarding national sovereignty. The ongoing surge of dissent was triggered earlier in August when the elections turned about to be absurdly rigged in favour of Alexander Lukashenko, granting him an indelible majority of 80% of the total vote count along with a lifetime of rule over the country despite his blatant unpopularity across the country. The accusations were further solidified when one of the popular opposing candidates, Svetlana Tikhanovskaya, casted a complaint with the authorities regarding the falsification of election results. Instead of being appeased, she was detained for 7 straight hours and was even forced to exile to the neighbouring country of Lithuania. This resulted in major tide of riots and protests erupting all across Minsk, preceding over 3000 arrests over the election night.

On the official front, however, an aggressive stance was upheld along with a constant refusal of Lukashenko from stepping down from the long-held office or even considering a review of the polls counted despite exorbitant reports of unfair results. Heavy use of rubber bullets and tear gas was an eccentric protocol adopted by the local police force which instead of placating the rioters, further ignited the protests in more districts of the capital city. The anti-government relies also entitled ‘March of Neighbours’ transitioned into a high scale protest with many of the state employees resigning from their positions to stand upright against the long overdue corrupt regime. With the protests raging over months and the Lukashenko government getting more and more aggressive with their policies, the fear that once sparkled in the eyes of the natives is dwindling exceedingly and is turning into a cry for an outright revolution, which would be a ground-breaking one ever since the revolution of Iran back in 1979.

European counties have taken their conventional passive position in the crisis sinceEU is well aware of the Russian influence in Belarus and does not want to interfere with a probability of a direct conflict with Russia. However, they did call out their protest over the rigged elections, slapping sanctions over Belarus yet have not accused Lukashenko directly but instead have proposed a thorough international dialogue. Russia, on the other hand, faces a complex position since the dependence of Belarus bought Moscow a base against the West along with other regional rogues like Ukraine. However, high scale protests and rising chances of a full-blown revolution is hardly the choice Russian intends to opt. As the situation continues to unfold, economic reforms, as promised by Lukashenko, appears to be the only option that both EU and Russia could encourage as a bipartisan plan. Despite that, with six months of protests erupting as an outrage over a tyranny of 26 years, the reform-offering might be a bit late an offer since its no more about the country anymore, it’s about a struggle between a liberal or a communist Belarus.

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