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Karabakh conflict: How the status-quo changed after a quarter of a century

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Karabakh

This piece mainly argues that the fact that with respect to the Karabakh conflict, the economic, military, and geopolitical balance of power has changed in a quarter of a century or so in favor of Azerbaijan and Turkey but at the expense of Armenia produced a victory for Azerbaijan in the war over Karabakh in September-November 2020. Thanks to its hydrocarbon resources, over the years, Azerbaijan has invested in the armed forces massively. In the meantime, both Azerbaijan and Turkey have cultivated closer ties with Russia. Armenia’s over-reliance on Russia along with its weak economic and military capabilities, on the other hand, has put it in a disadvantaged position against Azerbaijan and in the region. The color revolution, which swept pro-European Union Nikol Pashinyan into power as prime minister in Armenia in 2018 helped distance Moscow from Yerevan. Unlike in the past, the United States was disengaged from the region, mainly because of its partial withdrawal from the international stage. The European Union has been traditionally relatively uninvolved in the conflict and France preferred to remain neutral in the dispute not to jeopardize its impartiality towards the warring parties. Squeezed between the geopolitical interests in the region and its ethnic Azeris’ sympathy with Azerbaijan, Iran was unable to play a key role in the conflict. The confluence of these factors changed the hitherto prevailing balance of power and produced a victory for Azerbaijan, overturning the 26-year old status-quo in the region.

The Origins of the Karabakh Conflict

Inhabited to a large extent by the Armenians, Karabakh was granted to Soviet Azerbaijan by the Soviet Union in 1921. Towards the end of the Cold War, Karabakh wanted to split from Azerbaijan, leading to the first clashes between the parties. The first Karabakh War started in 1992 and ended in 1994, leaving 25,000 dead and 724,000 Azeris and 300,000 – 500,000 Armenians displaced. At the end of the war, Armenians seized Karabakh and all of five as well as a large part of two other districts (rayons) of Azerbaijan, surrounding Karabakh, representing thirteen percent of Azerbaijan’s territory. Following the May 1994 ceasefire brokered by Russia, the Minsk Group under OSCE led the peace negotiations, albeit with no success. Given that Armenia’s and Azerbaijan’s demands were highly irreconcilable – respect for territorial integrity (Azerbaijan) and the right of self-determination (Armenia), it proved difficult to find a common ground despite years of negotiations.  Ending this protracted conflict through a peace agreement was not possible also due to the fact that both sides believed that time would enhance their respective positions. Armenians in Karabakh thought that over time their self-declared de-facto independent republic will gradually gain international recognition while Azerbaijan believed that their military build-up would strengthen its leverage over the Armenians. 

The Flare-up of the Conflict and the Peace Deal

Violence flared up in Karabakh on 27 September 2020 after a tense year between Armenia and Azerbaijan. Following the 44-day fighting, with the loss of the strategically important town of Shusha in Karabakh to Azerbaijan, Armenia decided to lay down its arms. The conflict left 2,425 Armenians and 2,783 Azeris dead. After the fighting ended with a Russia-brokered ceasefire, 1,960 Russian peacekeepers were deployed in the region to monitor the ceasefire. The peace deal signed on 9 November 2020 ensured the transfer of all the seven Armenia-occupied districts, adjacent to Karabakh to Azerbaijan, division of Karabakh into two parts, controlled by Armenia and Azerbaijan respectively, the right of return of internally displaced people and refugees in the 1990s to the region, opening of a corridor from Azerbaijan to its autonomous republic of Nakhchivan, bordering Turkey, connection of Karabakh to Armenia through Lachin corridor. The deal did not determine the core issue of the final status of Karabakh, which will be decided through negotiations between Armenia and Azerbaijan later.

Cultivation of Close Ties between Azerbaijan and Russia

An important factor that contributed to Azerbaijan’s victory over Armenia in the 44-day long war was Azerbaijan’s cultivation of close ties with Russia. Striving for the expansion of its influence in its “near abroad” after Vladimir Putin came to power in 2000, Russia did not want to push Azerbaijan, a geostrategically important and energy exporting country to the embrace of the West. As for Azerbaijan, even if it did not join the Russia-dominated Collective Security Treaty Organization (CSTO) and Eurasian Economic Union (EAEU), it did not turn Russia into an enemy unlike Georgia or Ukraine did. Unlike Georgia, Azerbaijan has never vocally expressed its desire to join NATO. So, even though Armenia was not an official ally of Russia, there was no reason for Moscow to punish Baku.

Aware of the role that Russia could play in the resolution of the frozen Karabakh conflict, Azerbaijan courted with Moscow although it, at the same time, viewed Russia as a threat. Azerbaijan cooperated with Russia at the expense of its relations with the West, which was another factor gaining the sympathy of Russia for Azerbaijan. A watershed event in Azerbaijan’s growing cooperation with Russia was the August 2008 Russian-Georgian war that demonstrated that Russia is the dominant actor in the region and the West was not willing to counter Russia. This led Azerbaijan to increase economic cooperation with the border region North Caucasus in the Russian Federation and led to expansion of Russian soft power, including an increase in education provided in Russian language, and proliferation pro-Russia media outlets and politically engaged initiatives in Azerbaijan. Azerbaijan expected that these steps as well as its multi-billion dollar acquisition of arms and military equipment from Russia would neutralize Moscow in case of flare-up of a war with Armenia as was the case in the April 2016 conflict, which Moscow did not interfere promptly.

Growing Military Disparity between Azerbaijan and Armenia

Azerbaijan has used hydrocarbon-revenues for the expansion of its weapons and military equipment massively, creating a major disparity between the Armenian and Azerbaijani armed forces over the years. Azerbaijani military budget has started to grow dramatically in 2006 when Baku Tbilisi Ceyhan (BTC) oil pipeline became operational. By 2010, Azerbaijan’s defense expenditure alone surpassed Armenia state’s whole budget. After the first Karabakh conflict ended, Azerbaijan’s military expenditure totalled $70 million in 1995. Over the years, however, there was a dramatic jump in its military expenditure, rising to $1.7 billion in 2018. Armenia’s military spending was, on the other hand, $50 million in 1995 while it totalled $610 million in 2018. That is, Azerbaijan’s military spending was three times higher than that of Armenia. As a result of this wide imbalance in military spending, Armenia acquired only Russian weapons at subsidized prices or second-hand arms free of charge, Azerbaijan purchased high-tech arms not only from Russia but also from other suppliers such as Israel and Turkey. Apparently, Azerbaijan military’s intensive use of unmanned drones also played a decisive role in its victory.

Shifting Armenian Position

Armenia’s shifting position was another determinant in the fate of the Karabakh war. Armenia’s asymmetrical relationship with its ally Russia has deteriorated at Erivan’s expense in that it became heavily dependent on Russia in terms of economy, security and energy supply. Its closed borders, a weak manufacturing sector, its inability to attract foreign direct investment (FDI), and its channelling of limited economic resources to military expenditure put the brakes on the economic growth of Armenia. The country did not benefit economically either from joining the EAEU since its rationale is geopolitical. By implication, Armenia did not possess sufficient military arsenal at par with that of Azerbaijan. Nor did it turn into an economic success story that could attract the attention of major powers.

Change of hands at the helm of the Armenian state after the Velvet Revolution in 2018 was another development that changed the balance of power at the expense of Armenia. Considering the new Armenian leader Pashinyan, who overthrew the old guard close to the Kremlin, as “the man of Soros”, Russia wanted to replace him with a more loyal politician.  Besides, realizing that the balance in the conflict has shifted in favour of Azerbaijan in 26 years, Russia expected Armenia to be more flexible at the peace negotiations before the flare-up of the conflict in September 2020. Since Armenia did not agree to change its position, Russia did not want to assume the geopolitical cost of Armenia’s intransigence by interfering in the conflict that broke out in September 2020 in an untimely manner. That is why, Russia dragged its feet to involve in the conflict.

Turkey’s Rapprochement with Russia and Alliance with Azerbaijan

Turkish-Russian rapprochement was another factor that tilted the balance of power in the region in favour of Azerbaijan. Strained relations with the West pushed Moscow and Ankara to forge a close partnership with each other. Having competed with Russia in the first half of the 1990s in Eurasia, Turkey opted to cooperate with it after the second half of the 1990s, developing a multi-dimensional relationship with this country. The volume of bilateral trade reached $26.3 billion in 2019. Although they have some differences in geostrategic issues like in Syria, Libya and the Eastern Mediterranean, they both benefit from this partnership that encompasses trade, energy, investment, pipeline politics, tourism, arms supply and regional issues. In short, when the conflict broke out in September, Turkey was a partner for Russia more than a rival. That is why Russia remained silent to Turkey’s vocal support to Azerbaijan in the conflict in September unlike in the first Karabakh war at the beginning of the 1990s.

Moreover, Turkey’s unconditional support to Azerbaijan, above all its military support, including its supply of unmanned drones was instrumental in determining the fate of the conflict. They concluded a Strategic Partnership and Mutual Assistance Agreement in 2010 that foresaw mutual aid in case of an attack by a third party. Turkey’s growing support to Azerbaijan stems above all not only from its growing integration with Azerbaijan, especially, in the field of energy, including the launch of Trans Anatolian Pipeline (TANAP) in 2019, shipping more Azeri gas to Turkey and the massive investment of the Azerbaijani state energy giant SOCAR in Turkey but also from its increasing assertiveness in its neighbourhood. That is, its fierce backing to Baku in the conflict is, at the same time, a corollary of its assertive foreign policy in Syria, Libya and the Eastern Mediterranean. Thanks to a dramatic growth in its economy after 2000 as a result of economic policies turning it into a “trading state” and a concomitant rise in its military capabilities, Turkey transformed into a major actor in its region.

Actors that Played a Lesser Role in the Conflict

As for the Western role in the conflict, although Armenians associate themselves with the Western civilization, Armenia does not have much strategic importance for the West. It is the smallest post-Soviet republic, does not have energy resources nor does it have energy transit routes. Given the authoritarian regime that dominated in the country in the post-Cold War period, the West has lost its interest in Armenia. Overall, the EU has been traditionally relatively disengaged from the Karabakh conflict mainly because of the dominating role of Russia in the issue as well as the risk of impartiality of the EU for Azerbaijan after most of the EU countries recognized the independence of Kosovo after 2008. Drawing a similarity between their status, Azerbaijan was concerned that EU countries could also recognize the self-proclaimed Karabakh Republic like Kosovo.

As for France, despite the pressure applied by 600,000 Armenian diaspora in the country to intervene in the conflict on behalf of Armenia, it remained impartial in the conflict, justifying this attitude with its role as co-chairman in the OSCE Minsk Group. Another reason for the inactive posture of France in the issue is that the South Caucasus is not a traditional area of influence for France unlike Africa.

Likewise, the USA remained aloof from the conflict with the exception of a few statements from the Secretary of State Mike Pompeo calling for a peaceful resolution of the conflict and hosting talks with Azeri and Armenian ministers of foreign affairs. The lack of US interest in the conflict largely stems from the partial US disengagement from international politics as a result of “America First” approach under Donald Trump Administration. Washington’s preoccupation with the presidential elections as well as the fight against COVID-19 pandemic also distracted Washington’s attention from the region.

Like the EU and the USA, another actor that played a little role in the conflict, if any, is Iran. Iran is divided between geopolitical interests in the South Caucasus and the sociological realities inside the country.On the one hand, Iran strives to counterbalance the sway of the Azerbaijan-Turkish alliance in the region, supporting the Armenia-Russia axis. Besides, Azerbaijan’s close relationship with Israel disturbs Iran. On the other hand, it is home to about seventeen million ethnic Azeris, who called for the Iranian state to support Azerbaijan against Armenia in the conflict. As a result, Iran remained largely impartial in the conflict apart from proposing a not-so effective peace plan.

In Lieu of Conclusion

The 44-day war overturned the 26-year status-quo in Karabakh. Now that the final status of Karabakh is to be determined following the negotiations to be held in the next weeks between Azerbaijan and Armenia, the next step should be to establish a permanent peace in the region. Now, it will be much easier for Turkey and Azerbaijan to open their closed borders with Armenia. To be sure, this will boost economic integration of Armenia with Azerbaijan and Turkey, bolstering its economic development. Involvement of regional powers like Russia and Iran in this kind of initiatives is also a sine qua non for the achievement of a sustainable peace in the region.

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Eastern Europe

Latvia developed new tasks for NATO soldiers

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Member of the Latvian Saemas’ national association “Everything for Latvia!” and Freedom”/LNNK Jānis Dombrava stated the need to attract NATO troops to resolve the migration crisis. This is reported by la.lv.  In his opinion, illegal migration from the Middle East to Europe may acquire the feature of an invasion. He believes that under the guise of refugees, foreign military and intelligence officers can enter the country. To his mind, in this case, the involvement of the alliance forces is more reasonable and effective than the actions of the European border agencies. Dombrava also noted that in the face of an increase in the flow of refugees, the government may even neglect the observance of human rights.

The Canadian-led battlegroup in Latvia at Camp Ādaži consists of approximately 1512 soldiers, as well as military equipment, including tanks and armoured fighting vehicles.

Though the main task of the battlegroup in Latvia is country’s defence in case of military aggression, Latvian officials unilaterally invented new tasks for NATO soldiers So, it is absolutely clear, that Latvian politicians are ready to allow NATO troops to resolve any problem even without legal basis. Such deification and complete trust could lead to the full substitution of NATO’s real tasks in Latvia.

It should be noted that NATO troops are very far from being ideal soldiers. Their inappropriate behaviour is very often in a centre of scandals. The recent incidents prove the existing problems within NATO contingents in the Baltic States.

They are not always ready to fulfill their tasks during military exercises and training. And in this situation Latvian politicians call to use them as border guards! It is nonsense! It seems as if it is time to narrow their tasks rather than to widen them. They are just guests for some time in the territory of the Baltic States. It could happen that they would decide who will enter Latvia and who will be forbidden to cross the border!

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Changes are Possible: Which Reforms does Ukraine Need Now?

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Photo: Robert Anasch/Unsplash

The past 16 months have tested our resilience to sudden, unexpected, and prolonged shocks. As for an individual, resilience for a country or economy is reflected in how well it has prepared for an uncertain future.

A look around the globe reveals how resilient countries have been to the COVID-19 pandemic. Some have done well, others less so. The costs of having done less well are almost always borne by the poor. It is for this reason the World Bank and the international community more broadly urge—and provide support to—countries to undertake economic and structural reforms, not just for today’s challenges but tomorrow’s.

One country where the dialogue on reform has been longstanding and intense is Ukraine. This is particularly true since the economic crisis of 2014-2015 in the wake of the Maidan Revolution, when the economy collapsed, and poverty skyrocketed. Many feared the COVID pandemic would have similar effects on the country.

The good news is that thanks to a sustained, even if often difficult, movement on reforms, Ukraine is better positioned to emerge from the pandemic than many expected. Our initial projection in the World Bank, for example, was that the economy would contract by nearly 8 percent in 2020; the actual decline was half that. Gross international reserves at end-2020 were US$10 billion higher than projected. Most important, there are far fewer poor than anticipated.

Let’s consider three reform areas which have contributed to these outcomes.

First, no area of the economy contributed more to the economic crisis of 2014-2015 than the banking sector. Powerful interests captured the largest banks, distorted the flow of capital, and strangled economic activity. Fortunately, Ukraine developed a framework to resolve and recapitalize banks and strengthen supervision. Privatbank was nationalized and is now earning profits. It is now being prepared for privatization.

Second, COVID halted and threatened to reverse a five-year trend in poverty reduction. Thanks to reforms of the social safety net, Ukraine is avoiding this reversal. A few years back, the government was spending some 4.7 percent of GDP on social programs with limited poverty impact. Nearly half these resources went to an energy subsidy that expanded to cover one-in-two of the country’s households.

Since 2018, the Government has been restructuring the system by reducing broad subsidies and targeting resources to the poor. This is working. Transfers going to the poorest one-fifth of the population are rising significantly—from just 37 percent in 2019 to 50 percent this year and are projected to reach 55 percent in 2023.

Third, the health system itself. Ukrainians live a decade less than their EU neighbors. Basic epidemiological vulnerabilities are exacerbated by a health delivery system centered around outdated hospitals and an excessive reliance on out-of-pocket spending. In 2017, Ukraine passed a landmark health financing law defining a package of primary care for all Ukrainians, free-of-charge. The law is transforming Ukraine’s constitutional commitment to free health care from an aspiration into specific critical services that are actually being delivered.

The performance of these sectors, which were on the “front line” during COVID, demonstrate the payoff of reforms. The job now is to tackle the outstanding challenges.

The first is to reduce the reach of the public sector in the economy. Ukraine has some 3,500 companies owned by the state—most of them loss-making—in sectors from machine building to hotels. Ukraine needs far fewer SOEs. Those that remain must be better managed.

Ukraine has demonstrated that progress can be made in this area. The first round of corporate governance reforms has been successfully implemented at state-owned banks. Naftogaz was unbundled in 2020. The electricity sector too is being gradually liberalized. Tariffs have increased and reforms are expected to support investment in aging electricity-producing and transmitting infrastructure. Investments in renewable energy are also surging.

But there are developments of concern, including a recent removal of the CEO of an SOE which raised concerns among Ukraine’s friends eager to see management independence of these enterprises. Management functions of SOE supervisory boards and their members need to remain free of interference.

The second challenge is to strengthen the rule of law. Over recent years, the country has established—and has committed to protect—new institutions to combat corruption. These need to be allowed to function professionally and independently. And they need to be supported by a judicial system defined by integrity and transparency. The move to re-establish an independent High Qualification Council is a welcome step in this direction.

Finally, we know change is possible because after nearly twenty years, Ukraine on July first opened its agricultural land market. Farmers are now free to sell their land which will help unleash the country’s greatest potential source of economic growth and employment.

Ukraine has demonstrated its ability to undertake tough reforms and, thanks to the COVID-19 pandemic, has seen the real-life benefits of these reforms. The World Bank looks forward to providing continued assistance as the country takes on new challenges on the way to closer European integration.

This article was first published in European Pravda via World Bank

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Liberal Development at Stake as LGBT+ Flags Burn in Georgia

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Photo: Protesters hold a banner depicting U.S. Ambassador to Georgia Kelly Degnan during a rally against Pride Week in Tbilisi, Georgia July 1, 2021. Credit: REUTERS/Irakli Gedenidze

Protests against Georgia’s LGBT+ Pride parade turned ugly in Tbilisi on July 5 when members of the community were hunted down and attacked, around 50 journalists beaten up and the offices of various organizations vandalized. Tensions continued the following day, despite a heavy police presence.

On the face of it, the Georgian state condemned the violence. President Salome Zourabichvili was among the first with a clear statement supporting freedom of expression, members of parliament did likewise and the Ministry of Internal Affairs condemned any form of violence.

But behind the scenes, another less tolerant message had been spread before the attacks. Anxiety about this year’s events had been rising as a result of statements by the government and clergy. Prime Minister Irakli Garibashvili suggested the march “poses a threat of civil strife.” The Georgian Orthodox Church meanwhile condemned the event, saying it, “contains signs of provocation, conflicts with socially recognized moral norms and aims to legalize grave sin.”

For many, these statements signified tacit approval for the abuse of peaceful demonstrators. Meanwhile, the near-complete absence of security at the outset of the five-day event was all too obvious in Tbilisi’s streets and caused a public outcry. Many alleged the government was less focused on public safety than on upcoming elections where will need support from socially conservative voters and the powerful clergy, in a country where more than 80% of the population is tied to the Georgian Orthodox Church.

The violence brought a joint statement of condemnation from Western embassies. “Violence is simply unacceptable and cannot be excused,” it said. The Pride event was not the first and had previously been used by anti-gay groups. Violence was widespread in 2013 — and the reality of attacks against sexual minorities in Georgia remains ever-present.

In a socially conservative country such as Georgia, antagonism to all things liberal can run deep. Resistance to non-traditional sexual and religious mores divides society. This in turn causes political tension and polarization and can drown out discussion of other problems the country is marred in. It very obviously damages the country’s reputation abroad, where the treatment of minorities is considered a key marker of democratic progress and readiness for further involvement in European institutions.

That is why this violence should also be seen from a broader perspective. It is a challenge to liberal ideas and ultimately to the liberal world order.

A country can be democratic, have a multiplicity of parties, active election campaigns, and other features characteristic of rule by popular consent. But democracies can also be ruled by illiberal methods, used for the preservation of political power, the denigration of opposing political forces, and most of all the use of religious and nationalist sentiments to raise or lower tensions.

It happens across Eurasia, and Georgia is no exception. These are hybrid democracies with nominally democratic rule. Armenia, Georgia, Kyrgyzstan, and others have increasingly more in common, despite geographic distance and cultural differences.

Hungary too has been treading this path. Its recent law banning the supposed propagation of LGBT+ materials in schools must be repealed, European Commission President Ursula von der Leyen said on July 7. “This legislation uses the protection of children . . . to discriminate against people because of their sexual orientation . . . It is a disgrace,” she said.

One of the defining features of illiberalism is agility in appropriating ideas on state governance and molding them to the illiberal agenda.

It is true that a mere 30 years since the collapse of the Soviet Union is not enough to have built a truly liberal democratic state. Generations born and raised in the Soviet period or in the troubled 1990s still dominate the political landscape. This means that a different worldview still prevails. It favors democratic development but is also violently nationalistic in opposing liberal state-building.

Georgia’s growing illiberalism has to be understood in the context of the Russian gravitational pull. Blaming all the internal problems of Russia’s neighbors has become mainstream thinking among opposition politicians, NGOs, and sometimes even government figures. Exaggeration is commonplace, but when looking at the illiberal challenge from a long-term perspective, it becomes clear where Russia has succeeded in its illiberal goals. It is determined to stop Georgia from joining NATO and the EU. Partly as a result, the process drags on and this causes friction across society. Belief in the ultimate success of the liberal agenda is meanwhile undermined and alternatives are sought. Hybrid illiberal governments are the most plausible development. The next stage could well be a total abandonment of Euro-Atlantic aspirations.

Indeed what seemed irrevocable now seems probable, if not real. Pushback against Georgia’s Euro-Atlantic choice is growing stronger. Protesters in front of the parliament in central Tbilisi violently brought tore the EU flag. Twice.

The message of anti-liberal groups has also been evolving. There has been significant growth in their messaging. The anti-pride sentiment is evolving into a wider resistance to the Western way of life and Georgia’s Western foreign policy path, perhaps because it is easily attacked and misrepresented.

To deal with this, Western support is important, but much depends on Georgian governments and the population at large. A pushback against radicalism and anti-liberalism should come in the guise of time and resources for the development of stronger and currently faltering institutions. Urgency in addressing these problems has never been higher — internal and foreign challenges converge and present a fundamental challenge to what Georgia has been pursuing since the days of Eduard Shevardnadze – the Western path to development.

Author’s note: first published at cepa

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