Geopolitics and Foreign Policy

Armenia’s European Aspirations: Navigating Geopolitical Challenges and Economic Dependencies

Geopolitics and Foreign Policy / Anahide Pilibossian

The article was originally published as part of the Italian Institute for International Political Studies (ISPI) The recent statement of the Armenian Foreign Minister in the margins of the Antalya Diplomatic Forum denotes Armenia’s desire to join the European Union. This aspiration raises important questions on Armenia’s current position and options, which this article seeks to shed light on. At the same time, today’s complicated geopolitical environment highlights the need for the EU to formulate a strategic vision for the region. Between Pax Europa and Pax Russica, Armenia first went with the latter. However, following Yerevan’s defeat in the second Nagorno-Karabakh War and the military takeover of the region by Azerbaijan, despite the presence of the Russian peacekeepers, Armenia has now opted for the former. It stated its desire, backed by the EU, to join the Black Sea energy cable project (from which it has been excluded, reportedly as a result of pressures from Azerbaijan) and promote a regional infrastructure and connectivity project called the Crossroad of Peace, embracing, as European leaders did after World War II, the peace-building effects of economic regional integration projects. A staircase approach for effective delivery The question of European integration includes two further issues, one on “Rusxit” and another on policy approximation. Today, Armenia has frozen its Collective Security Treaty Organisation membership and appears to be going in this direction with regards to the Commonwealth of Independent States, but it firmly remains a member of the Eurasian Economic Union (EAEU). If on the one hand, Armenia is detaching itself from Moscow militarily and diplomatically, on the other, it remains economically engaged with Russia and the EAEU, a point Armenian Prime Minister Pashinyan reaffirmed after meeting Russian President Putin in May 2024. In fact, Moscow is Yerevan’s largest trading partner and main energy supplier. Economic diplomacy, including trade, is arguably the greatest divide between the EU and Armenia, however it is also an area with great potential for improvement Back in 2013, when Armenia and the EU were negotiating an association agreement – at the same time as Ukraine, Georgia, and Moldova – Armenia withdrew from the negotiations, announcing that it would be joining the EAEU. In 2017, the EU and Armenia signed the Comprehensive and Enhanced Partnership Agreement (CEPA). Although covering many aspects, CEPA excludes free trade given Armenia’s membership in the EAEU. In the current context, a staircase approach to bringing Armenia closer to EU market standards and gradually decreasing its dependence on Russian trade is necessary. Greater support from and cooperation with the EU in building stronger sanitary and market standards for Armenian products would be a great (and achievable) first step. The second element preconditioning Armenia’s European aspiration is policy approximation. Here, the baseline would be to fully implement the CEPA, as even three years after the agreement entered into force, Armenia still lags behind. A great deal of work is needed to implement its civic reforms section in particular. This entails upgrading institutional capacity-building in public administration. The EU and Member States can better tailor and institutionalise their support, building on their expertise in evidence-based policy analysis and intergovernmental communications and processes. This would not only reinforce diplomatic dialogue, but also help strengthen policymaking for Armenian citizens. A diversified foreign policy Some argue that Armenia is strategically adopting an ambiguous position, paving the way for an alternative pursuit of diversification. In truth, the Armenian approach has been to gradually detach itself from Russian dependency and intensify its diplomatic engagements – not just with the EU but also with the Global South, including India, the United Arab Emirates, and Saudi Arabia. Armenia is also working on what it can offer. This includes the Crossroad of Peace, as well as its potential as a tech powerhouse. Armenia is closely watching the ongoing events in Georgia, as its own European trajectory also depends on Tbilisi. Many powers from inside and outside the region are following how the EU engages the South Caucasus, particularly after 2021, when European Council President Michel became the facilitator of the now-defunct Brussels platform of peace negotiations between Armenia and Azerbaijan. The EU’s contradictions The EU has shown several times its political investment in making the region peaceful and more prosperous. It established an energy agreement with Azerbaijan. It agreed to establish a civilian mission to observe the Armenia–Azerbaijan border, following Azerbaijan’s aggression and land-grab of Armenian territories in September 2022 — all this while Azerbaijan continues to refuse and denigrate the EU Mission to Armenia; it affirmed its desire to strengthen and deepen EU–Armenia relations following the military assault of Azerbaijan on the Armenians of Nagorno-Karabakh, forcing them to leave the enclave in September 2023; lastly, it granted Georgia candidate status in December 2023. Significantly, Azerbaijan’s repeated assaults triggered the EU to actively pursue greater closeness with Armenia. This has put the EU in an awkward position, given Azerbaijan’s refusal to continue to engage in the Brussels format despite the otherwise celebrated strategic energy partnership with the two and Georgia’s decision and persistence in adopting the Foreign Influence Law despite holding EU candidate status. The EU’s contradictions and reaction to regional events, which are misaligned with its policy priorities, signal its lack of strategic vision and the limited effectiveness of its foreign policy in the region. Using the EU’s ambiguities, we observe a rapprochement between Russia and Azerbaijan, reinforced by their drive to obstruct the West’s increased presence while keeping the safe distance of an economic partnership that only renders the bloc dependent on them. As the EU elections pave the way for a new legislative cycle, an important question looms on Brussels: how will its lack of strategic vision and action uphold its long-term interests and foundational priorities?

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Is Azerbaijan Interested in Peace?

Geopolitics and Foreign Policy / Benyamin Poghosyan

The article was originally published on Iipvienna.com The immediate aftermath of the military takeover of Nagorno-Karabakh by Azerbaijan After the military takeover of Nagorno-Karabakh by Azerbaijan in September 2023 and the forced displacement of the Armenians who lived there, there were hopes in Armenia and abroad that an Armenia-Azerbaijan peace agreement was within reach. These hopes were based on the assumption that Azerbaijan had achieved its primary objective for the past 30 years: the full absorption of Nagorno-Karabakh into Azerbaijan without any Armenian claims over the region. Since September 2023, Azerbaijan has controlled all of Nagorno-Karabakh, with only a handful of Armenians remaining there. The Armenian government has accepted this reality and has no intention of challenging it. Meanwhile, Azerbaijan has faced no repercussions from the US, the EU, or Russia for imposing a blockade on Nagorno-Karabakh in December 2022, ignoring the orders of the International Court of Justice, launching a military attack in September 2023, or forcing all Armenians to leave the region. It seemed that the time for peace had thus arrived – a peace that would formalize Azerbaijani control over Nagorno-Karabakh, settle relations with Armenia, and open the way for the normalization of relations between Armenia and Turkey. Normalized relations with both Azerbaijan and Turkey would also allow Armenia to take tangible steps to reduce its dependence on Russia. Thus, with the much-anticipated peace agreement, Azerbaijan would have paved the way to a more stable region and a reduced Russian presence in the South Caucasus, while Georgia would embark on its path as an EU candidate country. The EU and the US may have had these hopes in late September 2023. They looked forward to the triumph of Western mediation efforts – signing an Armenia-Azerbaijan peace agreement by the end of 2023 – and the imminent decline of Russia’s presence in the South Caucasus. The December 7th, 2023 Armenia-Azerbaijan joint statement on the release of prisoners of war and Armenia’s support for the Azerbaijani bid to host COP29 in Baku in 2024 gave more impetus to these hopes. Azerbaijan’s ever-changing demands Five months later, however, the peace agreement has still not been signed, and there are growing doubts that it might be signed anytime soon. The cause for this lies not in Armenia’s demands to secure the right of return for Armenians from Nagorno-Karabakh, to provide an autonomous status to Nagorno-Karabakh, or to withdraw Azerbaijani troops from the occupied territories of Armenia prior to any agreement. Instead, the primary reasons lie in Azerbaijan. These include Baku’s refusal to continue negotiations in Western platforms; its ever-changing demands for an extraterritorial corridor via Armenia from Azerbaijan to its exclave Nakhchivan; its refusal to agree on concrete maps for the border delimitation and demarcation process; its unwillingness to withdraw its troops from the Armenian territories that it occupied in 2021-2022, which de facto means a refusal to recognize Armenian territorial integrity in accordance with 1991 Alma-Ata declaration (which Azerbaijan accepted in multiple statements during negotiations in Prague and Brussels in 2022-2023); and its demands to amend the Armenian constitution and other legal acts. By putting forward these demands and constantly threatening to “use the iron fist” again if Armenia refuses to accept them, Azerbaijan has effectively killed the possibility of signing any real agreement. Instead, Azerbaijan argues that both sides should sign a “framework agreement” that will only include general terms and omit any outstanding issues. Indeed, according to Baku, the thornier issues should be discussed in future negotiations, while the “framework agreement” would cover general statements on the recognition of territorial integrity, noninterference, and a commitment to not using one another’s territory for any harmful activities. Importantly, this document would not clarify the principles of border delimitation and demarcation – one of the key areas of the negotiations – or which maps the process should be based on. The document would also not include any accepted principles on the restoration of communications – another critical issue – especially on the question of passport and border controls between Armenia and Azerbaijan. According to Azerbaijani logic, the signature of such a “framework agreement” will significantly decrease tensions and pave the way for more constructive negotiations to find solutions for the thornier issues. It also argues that a contrario the absence of any peace agreement will increase the likelihood of military flare-ups and will keep the situation volatile – thus hinting that if Armenia refuse to sign the “framework agreement,” Azerbaijan is justified in using military means, as it has done before to successfully achieve its political aims. Simultaneously, however, Azerbaijan continues to demand a de facto extraterritorial corridor via Armenia to connect Azerbaijan with its Nakhchivan Autonomous Republic. This position was once again emphasized by Azerbaijani President Ilham Aliyev during his January 10th, 2024 interview with local media. Aliyev stated that no border, passport, or customs controls should exist for goods that pass via Armenia from Azerbaijan to Nakhchivan; otherwise, Azerbaijan will not open any communications with Armenia and “Armenia will continue to be a dead end.” In the same interview, Aliyev said that Azerbaijan will not agree to any guarantors for the future peace agreement. Interestingly, while Azerbaijan argues that there should be no controls to connect one part of Azerbaijan with another, Baku has never demanded a lifting of passport, border, and customs controls via Iran to reach Nakhchivan from Azerbaijan proper. Azerbaijan has used Iranian territory for the last 30 years to connect with Nakhchivan – recently coming to an agreement with Iran to establish new routes – but there was no talk of Iran granting a passport-, border-, and customs-free regime for Azerbaijani persons and cargo traveling via Iranian territory to reach Nakhchivan. Azerbaijan sent its latest version of suggestions for a peace agreement to Armenia in late December 2023, and Yerevan shared its version with Baku on January 4th, 2024. Armenia’s Foreign Minister and Secretary of the Security Council recently mentioned that Armenia saw some regression in the latest Azerbaijani proposal shared with Armenia. There are

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Armenia’s Foreign Policy Diversification Amid New Geopolitical Realities

Geopolitics and Foreign Policy / Davit Antonyan

The article was originally published on the Oxford Diplomatic Society. The end of the post-Cold War order brought back the phenomenon of great power competition and fostered a realignment of both global and regional actors. With interests at stake from regions as far apart as Russia, the United States, the European Union, India, China, and the Middle East, the South Caucasus is a microcosm of the new dynamics shaped by the shifting global power order. For international relations enthusiasts, the geopolitical dynamics in the South Caucasus provide an interesting study of how the emerging multipolar world is affecting smaller states. For the Republic of Armenia, the past four years of military and political defeats by its hostile neighbor, Azerbaijan, have sparked a rethinking of its security and foreign policy architecture. These realities included a full-scale war launched by Azerbaijan in 2020 over the self proclaimed, Armenian-populated Nagorno Karabakh Republic, incursions into its sovereign territory by Azerbaijan in 2021 and 2022, and a military takeover and ethnic cleansing of Nagorno-Karabakh, an ethnically Armenian region, by Azerbaijan in 2023. Since independence from the Soviet Union in 1991, Armenia has traditionally pursued a Russia-first foreign policy while maintaining friendly ties with the US, EU, Iran, and NATO. This relationship was historically aimed at balancing Turkey’s influence over the South Caucasus; however, as Turkey’s foreign policy grew independent of the West, and Azerbaijan and Turkey assumed a more important role for both Russia and the West given their strategic resources (i.e., oil and gas) and infrastructure, the balance of power in the region started to shift against Armenia. This made it necessary to reassess Armenian’s security reliances to shield the country from further aggression by Azerbaijan amid the regional and global turmoil. Meanwhile, Azerbaijan made efforts to diversify its foreign policy beyond its traditional reliance on Turkey in order to attract the international community’s support. This included stronger military cooperation with Israel and Pakistan, connectivity partnerships with Russia and Iran, and economic and energy initiatives with the US, EU, and UK. Azerbaijan’s strategic diversification of its security, foreign policy, and economy might help explain the international community’s muted response to its repeated violations of international law and normalization of the threat of and actual use of force to settle geopolitical problems against Armenians. After four difficult years and amid the shifting balance of power, the time has come for Armenia to intensify the comprehensive diversification of its security and foreign policy. The motivation behind this diversification is to strengthen the interest of diplomatic partners in Armenia’s development and success while enhancing its own internal resilience—thus deterring any attempts at its erosion. The current diversification strategy pursued by Armenia is multifold and provides a strong starting point for making up for the less active diversification of the past three decades. For one, it is intensively fostering rapprochement with preexisting diplomatic partners such as the EU, US, UK, and Georgia— engaging them in economic and political sectors key to Armenia’s resilience. Moreover, Armenia is expanding its diplomatic relations with the EU and France, and forming a strong partnership with India, to include new prospects for security and defense. It has signed contracts worth hundreds of millions of US dollars with Indian defense contractors, invited a European Union Monitoring Mission to its border with Azerbaijan to contribute to human security, and purchased military equipment from France. Armenia will also reportedly receive 10 million euros in non-lethal military support from the European Peace Facility. Finally, it has expanded the dynamics of its relations with nontraditional partners such as the United Arab Emirates while opening new diplomatic relations with Saudi Arabia. This wave of diversification follows growing dissatisfaction with Russia, its traditional partner. There is dissatisfaction, both in government and among citizens, that Russia does not fulfill its security obligations to Armenia under their alliance framework, especially during the 2021 and 2022 Azerbaijani incursions. At the same time, however, Russia’s influence on Armenia’s economy is strong: 40% of exports from Armenia, 70% of remittances to Armenia, and gas and electricity distribution infrastructure are all under Russian control, in addition to the import of significant materials such as grain, gas, nuclear fuel, and petroleum products. Given these dependencies and its primary goal of survival, Armenia’s diversification strategy is multilayered. As a small, landlocked country, it relies on partners such as Iran and Georgia for access to global markets (as borders with Turkey and Azerbaijan are closed), while also still being in the immediate neighborhood of Russia. In its diversification strategy, straying too far in any one direction is likely to earn at best, the ire, and at worst, the retaliation, of far larger regional powers. And with any significant geopolitical shock, Armenia’s dependencies can become its vulnerabilities—especially in key strategic areas such as defense, trade, food, or energy. Given this delicate situation, this author believes the next phase of the diversification agenda should be tailored around a strategy of “addition, not subtraction.” This includes expanded relations with the Global South and initiatives with foreign partners in key sectors where Armenia currently displays a weakness or overreliance on just one partner. All the while, this will avoid the complete rupture of relations with Russia that might come as a result of becoming embroiled in the Russia/West divide. In trade, Armenia should foster a diversification of export partners for local producers. The advances made in gaining access to the Chabahar port in Iran and further development of trade relations with India can serve this purpose. The new EU–Armenia Partnership agenda, announced in February 2024, sets out the areas where the bilateral relation can further strengthen, including in improving Armenia’s market standards for locally-produced goods. In energy, as Gabriella Kchozyan wrote in Issue No.10 of the Diplomatic Dispatch, Armenia should open up to more diverse partners to revamp its nuclear power capabilities while also diversifying its own energy production to add more renewable capacities. In tourism and culture, Armenia can target the growing middle and upper-middle classes of India, East Asia, and the Arab world. By engaging them in strategic sectors of development, Armenia can build a multilayered patchwork of international partners who add complementary value to its national development. In parallel, this will strengthen its security architecture by bringing in diverse defense partners. These partners can provide

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Outlining Russia’s Future in the South Caucasus – An Armenian Perspective

Geopolitics and Foreign Policy / Sergei Melkonian

This article was originally published in the Stockholm Centre for Easter European Studies Guest Report No. 2, 2024. Executive Summary Following the break-up of the Soviet Union, Russia positioned itself to control the balance of power in the South Caucasus. It took a leading role in local economies and was the main security provider, maintaining the key to conflict resolution. These factors ensured it a dominant position in the region. Today, however, Russia is not the only power determining the regional balance and mediating conflicts. The famous Russian mantra on the post-Soviet states, “they are not going anywhere”, has never been less relevant. Changes in Russia’s approach to the South Caucasus For many years, Russia viewed the South Caucasus as part of its post-Soviet space. It adopted a uniform approach to the region, using economic, military, and other tools of domination. Today’s uncertain environment has led to a revision of its regional priorities. Armenia and the Nagorno-Karabakh conflict have become secondary, and Russia now views its South Caucasus agenda through the prism of its confrontation with the West. Moscow no longer has a clear strategy in the region. The Kremlin’s 2016 Foreign Policy Concept references the Nagorno-Karabakh settlement but the current version, published in 2023, makes no mention of Russia’s approach to Nagorno-Karabakh. A lack of a strategic vision, together with limited resources due to the war in Ukraine, has led Moscow to take a reactive approach in the region, as illustrated by its failure to fulfil its security guarantees to Armenia during the Azerbaijani attacks of May 2021 and September 2022, and the absence of any reaction either during or following Baku’s military assault on Nagorno-Karabakh in September 2023. This led to ethnic cleansing and the death of some Russian peacekeepers in the process. Growing dependence on Türkiye and Azerbaijan has created a situation in which the above events are at least partially beyond Russia’s control. Russia’s main condition for accepting these changes is the exclusion of any Western presence. Keeping Brussels and Washington away from engaging in the South Caucasus will not only ensure that Russia’s local interests are met but also guarantee it a dominant position, alone or with non-Western actors, in the post-Ukraine war order. How Will Russia Protect Its Position in the Region? The signing of a peace agreement between Armenia and Azerbaijan through European or US facilitation will signal the loss of Russia’s position as the main peace broker and mediator in the post-conflict phase, in favour of the West. For Russia, this must be avoided. Politically, Russia has tried to maintain its leadership position by involving Iran and Türkiye in the region. During the 2022 Nagorno-Karabakh war, Moscow resisted attempts by Tehran and Ankara to engage in the negotiation process. Turkey’s direct involvement in the conflict on the side of Azerbaijan led it subsequently to formalise its presence on the ground through the joint Russian-Turkish Monitoring Centre. Iran had remained outside of the process, but this all changed in 2023. Russia now supports the “3+3” format – the conflict negotiation platform involving the three Caucasian countries (Armenia, Georgia, and Azerbaijan) and the three regional powers (Russia, Iran, and Turkey), thereby setting the stage for the direct participation of Tehran and Ankara in determining the future of the region. Russia sees maintaining the trilateral negotiating platform (Armenia-Azerbaijan-Russia) as an added tool for preserving its position. Some agreements were reached in the European and US formats but since September 2023, Azerbaijan appears to have rejected the EU’s, and possibly the US’s, invitations to negotiate, stated its preference for holding the negotiations on a bilateral basis or with regional powers. Azerbaijan refused to participate in the meeting on the margins of the European Policy Community meeting in Granada in October 2023. It had agreed to a gathering of foreign affairs ministers in Washington, DC, in January 2024, but then refused to invite US State Department Senior Advisor Louis Bono to Baku, making the prospects for reactivating the US platform none too promising. Russia’s second instrument for maintaining its pre-eminence in the region is its long-term involvement in connectivity, one area being Armenian-Azerbaijani communications. The Trilateral Statement of 10 November 2020 states that “control over transport communications between Azerbaijan and its exclave [Nakhijevan/Nakhchivan] through the territory of Armenia shall be exercised by the Border Guard Service bodies of the FSS/FSB [Federal Security Service] of Russia”. Similarly, control of the Lachin corridor connecting Nagorno-Karabakh and Armenia was maintained by Russian peacekeepers. Yerevan’s proposed Crossroads for Peace announced in October 2023, advocates unblocking communications based on the principle of sovereignty, which excludes Russian control. This is because the 2020 Statement is now irrelevant in the wake of Azerbaijan’s takeover of all of Nagorno-Karabakh, making the Lachin corridor void, and Russia’s inaction during the military assault on the Armenians of Nagorno-Karabagh. If the negotiation process between Armenia and Azerbaijan continues on the Russian platform, as Russia and Azerbaijan prefer, Russia is more likely to secure control over the communications routes between Armenia and Azerbaijan. On Azerbaijan’s position on the route between its main territory and enclave – the so-called Zangezur Corridor, Russia does not officially support the demands of control-free passage between Azerbaijan and its enclave. This was stated by Special Envoy Alexey Overchuk in September 2022, repeated by Ambassador Sergey Kopyrkin in February 2023, and reiterated by Minister for Foreign Affairs Sergey Lavrov in January 2024. However, Moscow looks positively at the opening of this route, based on the 2020 Trilateral Statement, and given that it will bring stability to the region. Russia has tried to put the issue of railway communications with Armenia through Georgia on the agenda to counter the West’s plans to isolate it through sanctions. However, this was immediately disavowed by Tbilisi. Given Russia’s interest in open communications with Georgia, Armenia’s approach to unblocking all communications in the region through the Crossroads of Peace project might be supported by Russia. There are currently no substantive negotiations on this issue. The third instrument – and the most attractive to Russia – is economic. Georgia serves as an example for Moscow of how – despite the political crisis between the two governments –

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Strengthening EU-Armenia Relations

Geopolitics and Foreign Policy / An APRI Armenia Analysis

APRI Armenia, in cooperation with the Heinrich Böll Stiftung Yerevan Office—South Caucasus Region, conducted a short research project in late 2023 to look at current and evolving factors in the relationship between the European Union and Armenia. Following a comprehensive desk research, APRI Armenia interviewed Armenian officials, EU diplomats in Armenia, and civil society representatives from both Yerevan and Brussels. Coincidentally, this project was made in parallel with the EU fact finding mission in charge of exploring opportunities to enhance and strengthen EU-Armenia relations across all dimensions. In addition to outlining mutual expectations of Armenia and the European Union and examining the potential for the relationship’s future development, the report offers policy-oriented recommendations on how to strengthen EU–Armenia relations. The key findings are as follows: The European Union and Armenia must articulate a coherent foreign policy vision. The EU’s ambition to uphold the principles of good governance, democracy, and human rights while ensuring stability, conflict resolution, and economic prosperity faces the challenge of reconciling fundamental principles with short-term needs. At the same time, Armenia needs to take more agency in the engagement with the EU and identify the areas that would benefit most from EU engagement.

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What Next in Armenia – Azerbaijan Negotiations

Geopolitics and Foreign Policy / Benyamin Poghosyan

The article was published in The Armenian Weekly. n the late months of 2022 and 2023 there were intensive discussions about the possible signature of the Armenia – Azerbaijan peace agreement. Both international mediators and facilitators, as well as representatives of Armenia and Azerbaijan were making statements that a peace agreement signature is within reach. As we enter 2024, discussions are underway about the potential signature of the Armenia – Azerbaijan agreement in 2024. The December 7, 2023, bilateral statement on the release of Prisoners of War and Armenia’s support of the Azerbaijani bid to host the COP29 in Baku gave more impetus to these hopes. Some believe that the military takeover of Nagorno Karabakh by Azerbaijan in September 2023 made this perspective more realistic, especially as the Armenian government agreed not to include anything on Nagorno Karabakh in the peace agreement. However, as with any agreement, the content is more important than the title, and here, Armenia and Azerbaijan have different approaches. Azerbaijan argues that sides should sign a framework document that will include only general terms and will omit any issues upon which sides cannot reach a consensus. Thus, the peace agreement should not have any clarity about the principles of delimitation and demarcation, one of the key areas of the negotiations, and any agreement on what map should be used as a base for the process. The document should not also include any agreed principles on the restoration of communications, another key issue, especially on the issues of passport and border control. According to Azerbaijan’s point of view, these issues should be discussed in future negotiations, while the agreement itself will include some general statements on the recognition of territorial integrity, noninterference, and not using each other’s territory for any harmful activities against the sides. Azerbaijan argues that the signature of the framework agreement will significantly decrease the tensions, diminish the likelihood of the resumption of hostilities, and will pave the way for more constructive negotiations to find solutions over the thorniest issues. It also argues that a contrario the absence of any peace agreement will increase the likelihood of military flare-ups and will keep the situation volatile, thus hinting that if Armenia rejects the signature of the framework agreement, then Azerbaijan “is justified in using military mean as it did in May and November 2021 and September 2022 to achieve its political aims. Simultaneously, Azerbaijan continues to demand a de facto extraterritorial corridor via Armenia to connect Azerbaijan with the Nakhijevan Autonomous Republic. This position was once more emphasized by President Aliyev during his January 10, 2024, interview with local media. President Aliyev mentioned that no border, passport, or customs control should take place for goods that will pass via Armenia from Azerbaijan to Nakhijevan; otherwise, Azerbaijan will not open any communication with Armenia, and “Armenia will continue to be a dead end.” In the same interview, President Aliyev told that Azerbaijan will not agree to have any guarantors for the future peace agreement. Interestingly, while Azerbaijan argues that there should be no controls to connect one part of Azerbaijan with another, Baku has never claimed to have passport, border, and customs control-free transit via Iran to reach Nakhijevan from Azerbaijan proper. Azerbaijan has used Iranian territory for the last 30 years to connect with Nakhijevan and recently came to agreement with Iran to establish new routes via Iran to reach Nakhijevan, but there was no talk about Iran granting passport, border, and customs-free regime for Azerbaijani persons and cargo traveling via Iranian territory to reach Nakhijevan. Armenia, on the other hand, categorically rejects the possibility of allowing the passage of goods via its territory without any passport, border, or customs control and insists on the necessity of establishing guarantors, as well as an international dispute-solving mechanism to prevent and manage any future breach of the agreement. Armenia believes that any peace agreement should at least include the principles of the future border delimitation and demarcation process with agreed maps, as well as clarity over the process of restoration of communications. Armenia argues that a peace agreement should not leave any space for misinterpretations, which is likely to trigger future tensions and escalations. Thus, from the Armenian perspective, if all problematic issues are simply taken out from the text of the agreement, the document itself will become an empty shell which will not solve any problems and will not decrease the possibility of new military escalations. Azerbaijan sent its latest version of suggestions on a peace agreement to Armenia in late December 2023, and Armenia shared its version with Baku on January 4, 2024. The Armenian Foreign Minister and Secretary of the Security Council recently mentioned that Armenia saw some regression in the latest Azerbaijani suggestions shared with Armenia. They did not disclose any details, but it is probably related to Azerbaijani’s demands for control-free movement via Armenia from Azerbaijan to Nakhijevan and the rejection of the institute of guarantors. How should Armenia and Azerbaijan move forward towards the signature of the peace agreement? If they agree on the Azerbaijani vision, then the peace agreement will simply fix the new post-September 2023 status quo, where there is no self-proclaimed Nagorno Karabakh Republic, no Armenians living there, with Armenia accepting this reality with no vision and no wish to change it, and with at least 200 square km of Armenian territory remaining under Azerbaijani control. Simultaneously, essential disagreements between Armenia and Azerbaijan on all other issues will remain in place; there will be no restoration of communication, no start of border delimitation and demarcation process, and threats will always be there for new Azerbaijani attacks. Thus, the “framework agreement” will only serve Azerbaijani interests to close the Nagorno Karabakh chapter while providing no benefits and real assurance of future security to Armenia. Some may argue that any framework agreement is better than no agreement at all, mentioning that the lack of agreement paves the way for new attacks against Armenia by Azerbaijan. However, as we mentioned, the “framework agreement” will not reduce, but only delay, the threat of new

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How Russian Migration Fuels Armenia’s IT Sector Growth

Geopolitics and Foreign Policy / Benyamin Poghosyan

The article was published in the Italian Institute for International Political Studies (ISPI). The Russian invasion of Ukraine has led to a significant influx of Russian IT specialists into Armenia, boosting the sector and contributing to the country’s economic recovery. The growth of IT has become a synonym for Armenia’s development in the last decades. Given that the country has had a rather strong position in the IT sector since the collapse of the Soviet Union, it appears to be natural to observe the industry flourishing. In the 2000s, the primary agents of change were the branches of multinational companies, such as Synopsys Armenia and others. In recent years, the focus has shifted towards establishing a vibrant and thriving start-up ecosystem. Not even the economic slowdown in 2014-2016, the political upheavals of 2018, the Covid-19 Pandemic, and the 2020 war in Nagorno Karabakh did stop the growth of the IT sector in Armenia. The growing number of IT companies in Armenia has created an opportunity for the younger generation to have a more significant influence and earn higher salaries, considering that the current average net monthly salary in Armenia is around $400. Today, a coder with basic knowledge earns between $1200 and $2000 per month, while salaries for senior developers in the sector have started to reach $5000 a month. It is also essential to note that Armenia’s IT sector does not employ just coders. Designers, content writers, project managers, graphic designers, lawyers, marketers, and accountants work in IT companies. While their salaries are often lower than those of coders, they are still relatively high compared to other sectors. However, not everything shines in the Armenian IT sector. The number one problem is the shortage of qualified professionals. At the same time, Armenia still faces brain drain, and the most successful start-ups usually leave the country and register themselves in the US to access Western Venture Capital. The latest example is Picsart, the first unicorn with Armenian roots. Some other famous IT companies are being named Armenian only because their founders are Armenians, although they were established outside the country and only have branches in Armenia, like ServiceTitan. The Russian invasion of Ukraine has triggered a significant exodus of Russians; some left Russia for political reasons, as they were against the war, and many did not want to compromise their lives. Armenia became one of the primary destinations for Russian migrants due to several reasons. Armenia and Russia enjoy a visa-free regime, and there are many daily flights to Yerevan from multiple Russian cities. Armenia and Russia are members of the Eurasian Economic Union, allowing tariff-free export and import. Perhaps, most importantly, many Armenians have favorable views on Russians. Despite the growing criticism of Russia in Armenia due to its actions or inaction during the 2020 Nagorno-Karabakh war, Azerbaijani incursions into Armenia in 2021 and 2022, and the military takeover of Nagorno-Karabakh by Azerbaijan in September 2023, this has not turned into resentment against Russians, as it has focused on the Russian state. According to different estimates, up to 100,000 Russians have entered Armenia since February 2022, with two big waves, one in March-April and one in late September-October 2022, immediately after mobilization was declared in Russia. As of October 2023, up to 60,000 Russians remain in Armenia, primarily located in the capital, Yerevan, though a few Russians also live in Gyumri, the second biggest city of Armenia. Most Russians who migrated to Armenia are specialists in the IT sphere. The robust growth of the IT sector in Armenia played a role in influencing their choice, as Armenia can offer them developed infrastructure, including IT business centers and IT parks. In early March, when the first large wave of Russians arrived, the local tech community quickly organized events and online groups to integrate the newly arrived tech professionals moving to the country. One telegram group, set up to help those relocating, quickly reached tens of thousands of members. Several Russian companies have also opened offices or expanded their current presence in the country. One notable example is Miro, an online whiteboard tool valued at $17.5 billion after closing its $400 million Series C round. Yandex, the Russian tech giant, also opened a new office in Armenia earlier this year. It can be assumed that most of the workforce of these offices are relocated Russians. However, their presence will create future employment opportunities for Armenian tech sector workers as well. Meanwhile, it should be noted that not all newcomers started to work in Armenian companies. Some Russian specialists later found opportunities to immigrate to other countries in Europe and North America. Some are still in Armenia working remotely for global companies, and others are working for the Armenia branch of their employers. In general, the influx of Russian IT specialists has played a positive role in the further development of the already booming IT sector in Armenia, and, in the long term, it will contribute to the overall economic recovery of Armenia.

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Perpetuating the cycle of violence

Geopolitics and Foreign Policy / Benyamin Poghosyan

The article was published in IPS Journal. After Azerbaijan’s latest offensive in Nagorno-Karabakh, the South Caucasus will likely see further escalations and suffering for decades to come On 19 September 2023, Azerbaijan launched a large-scale offensive along the line of contact with the self-declared Nagorno-Karabakh Republic. The military operation followed approximately nine months of blockade, which brought the population of Nagorno-Karabakh to the brink of mass starvation. After 24 hours of intensive hostilities, the Nagorno-Karabakh authorities accepted the demands of Azerbaijan, including the disarmament and dissolution of the Nagorno-Karabakh defence army and the start of discussions with Azerbaijan on an ‘integration’ within the framework of the Azerbaijani constitution. The humanitarian implications of the latest military offensive are immense. Thousands of civilians are missing, many were probably killed, as villages are cut off from the outside world while surrounded by Azerbaijani troops. Up to 5,000 civilian Armenians found asylum at the headquarters of the Russian peacekeeping mission around the Stepanakert airport. There is a lack of internet and mobile connection in the area, as Azerbaijani troops destroyed mobile towers and other telecommunication equipment during the first hours of the operation. The future of Armenians in Nagorno-Karabakh is unclear. The absolute majority would like to leave the region, as there are no guarantees for the protection of their fundamental rights under Azerbaijani rule. But even the evacuation of Armenians from their homeland, which equals ethnic cleansing, is not guaranteed, as thousands of Armenian men are under investigation in Azerbaijan and can be arrested while passing through the Lachin checkpoint. The representatives of the Nagorno-Karabakh Armenians met with the Azerbaijani side in the Azerbaijani town of Yevlakh on the morning of 21 September. However, while the meeting was still underway, Azerbaijan resumed the shelling of Stepanakert (the capital of Nagorno-Karabakh), and Azerbaijani troops entered the city, putting the 60,000 residents in direct danger. Further implications of Azerbaijan’s offensive Besides the tragic humanitarian implications, Azerbaijan’s renewed attack against Nagorno-Karabakh will have significant consequences for regional security, appearing like a signal to all regional actors that hard power is the only currency worth anything. Just five days before this new offensive, Acting Assistant Secretary for European and Eurasian Affairs Yuri Kim stated during the Senate Foreign Affairs Committee hearing that the United States would not countenance any action or effort – short- or long-term – to ethnically cleanse or commit other atrocities against the Armenian population of Nagorno-Karabakh. And the EU leadership, including President of the European Council Charles Michel, made several calls to end the Lachin corridor blockade and emphasised the necessity to ensure the rights of Nagorno-Karabakh Armenians. Azerbaijan’s apparent contempt towards these calls and demonstrative use of force makes it clear that the West has no real leverage to influence the developments in the region. Meanwhile, the Azerbaijani offensive also humiliated Russia, whose peacekeepers were deployed in Nagorno-Karabakh after the 2020 war to protect the civilian Armenian population. If Azerbaijan can violate previous agreements and defy both the US and Russia, what are the guarantees that any new agreement will not be thrown into the dustbin of history within a few weeks or months? In recent weeks, the Armenian leadership itself took several steps to irritate Russia and send messages to the West – such as the visit of the first lady to Kyiv, the decision to ratify the Rome Statute of the International Criminal Court – probably hoping that the US and the EU would stop the upcoming Azerbaijani offensive. Reality proved them otherwise. The Azerbaijani offensive and its dissolution of Nagorno-Karabakh both revoke the statement of 10 November 2020, including the agreement to restore communications and establish a connection between Azerbaijan and its exclave Nakhijevan via Armenia. Azerbaijan’s actions will make it extremely difficult to successfully finish the Armenia-Azerbaijan peace negotiations. If Azerbaijan can violate previous agreements and defy both the US and Russia, what are the guarantees that any new agreement will not be thrown into the dustbin of history within a few weeks or months? The upcoming years, if not decades, in the South Caucasus will be marked by additional escalations, wars and human suffering. The second humiliation of Armenia in three years will also destabilise the Armenian domestic political situation. Prime Minister Nikol Pashinyan has already lost a significant part of his support. In the 17 September Yerevan municipal elections (Yerevan is the capital of Armenia, with some 40-45 per cent of the entire population living there), Pashinyan’s party received 33 per cent of the votes — in September 2018, it still got around 80 per cent. The voter turnout was extremely low at less than 30 per cent. The de facto dissolution of Nagorno-Karabakh, huge losses among the civilian population and the potential influx of some 70-80,000 refugees to Armenia will further weaken Pashinyan’s position. The opposition, on the other hand, had already formed a committee to achieve his resignation, and clashes took place between protestors and police in downtown Yerevan during the rallies on 19 and 20 September. In the long term, Azerbaijan’s decision to ‘end’ the Nagorno-Karabakh conflict with brutal force will perpetuate the cycle of violence between Armenians and Azerbaijanis. Many people in Armenia and the diaspora will focus on strengthening Armenia and on taking revenge. Given Azerbaijan’s actions to cultivate the concept of ‘Western Azerbaijan’, which declares most of Armenia as Azerbaijani historic lands, and Azerbaijani and Turkish demands to open the so-called ‘Zangezur corridor’ to connect Azerbaijan with Nakhijevan and Turkey, the upcoming years, if not decades, in the South Caucasus will be marked by additional escalations, wars and human suffering.

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Assessing the Fallout from Azerbaijan’s Military Offensive Against Nagorno-Karabakh

Geopolitics and Foreign Policy / An APRI Armenia Analysis

For the first time since the end of the 2020 War, Azerbaijan has launched a full-scale military offensive in Nagorno-Karabakh. At 1:15 pm Yerevan/Baku time on Tuesday, September 19, the government of Azerbaijan began intensive shelling of the Armenian-held areas of Nagorno-Karabakh. Within twenty-four hours local Armenian authorities signed a de facto capitulation agreement, accepting the long-held demands of the Azerbaijani government – issues that had previously been expected to be the subject of negotiations through ongoing peace talks. By achieving its aims through a military assault, Azerbaijan has missed an opportunity to defuse the Nagorno-Karabakh issue through peaceful reconciliation with local Armenians. Moreover, it has added significant animus to the interstate peace process between Armenia and Azerbaijan. It has also clearly signaled a willingness to depopulate the region, suggesting at one point the evacuation of residents through the Lachin corridor; a mass exodus of refugees through that route may still occur. While Azerbaijan claimed to be targeting military infrastructure held by the Nagorno-Karabakh Defense Army, by Wednesday there were multiple accounts of civilian casualties and damage to civilian infrastructure, including a lack of access to food and electricity. The operation comes after what appeared to be substantial planning and preparation, with a heavy build-up of Azeri military hardware since the start of September. It also comes after more than nine months of a blockade by Azerbaijan that cut off the normal supply of food, medicine, and basic supplies to the Armenian population of Nagorno-Karabakh, diminishing local capacity for emergency response. On Monday, September 18, the day before the attacks started, the International Committee of the Red Cross was allowed to deliver food to the region for the first time since June, but the free movement of people, vehicles, and cargo through the Lachin corridor had not been restored. Below are some of the major implications of Azerbaijan’s military operation, based on the collective assessment of APRI Armenia’s research team: Where Do We Go From Here? The coming days will show the extent to which Azerbaijan’s military offensive has succeeded in achieving its full political agenda—namely, the full reintegration of Nagorno-Karabakh without international security guarantees for the Armenian population. It will also become clear how dramatically the combination of the Lachin corridor blockade and the September 19 offensive have resulted in an exodus of the Armenian population. Those outcomes, as well as the degree of diplomatic pushback against Azerbaijan for resolving its issues by force, will determine the future course of the region and its approach to handling coming disputes. If Azerbaijan is able to use its military and resources advantage to gain substantially from this week’s operation, at little diplomatic or economic cost, then it will be incentivized to launch similar initiatives in the future. As the region manages the fallout of the military takeover of Nagorno-Karabakh, international partners should immediately secure the safe evacuation of Armenians who do not want to remain in Azerbaijan under the current conditions. They should guarantee secure passage for evacuees and ensure that no Armenians are harmed, detained, or incarcerated while passing through the Azerbaijani checkpoint on the Lachin corridor. The United Nations and other relevant organizations should provide support for the emergency needs of Armenian evacuees, who could number up to 100,000. Alongside other measures, international partners should invest in a more substantial presence in Armenia, extending the EU Civilian Monitoring Mission beyond February 2025 as well as expanding its mandate and capacities. Investments in infrastructure and defensive military capacity in Armenia will also be crucial to deterring future escalations. The path forward for Armenia, Azerbaijan, and the Armenians of Nagorno-Karabakh will depend on the commitment and substantive engagement of the international community. The region is at a critical turning point; the degree and scope of stabilization efforts will determine whether the conflict expands across borders or produces other forms of ongoing turmoil between neighboring states.

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Kennan Cable No. 81: What’s at Stake in Nagorno-Karabakh: U.S. Interests and the Risk of Ethnic Cleansing

Geopolitics and Foreign Policy / Lara Setrakian

In a corner of the former Soviet Union, overshadowed by the catastrophe in Ukraine, a blockade backed by the government of Azerbaijan has cut off an estimated 120,000 Armenians in Nagorno-Karabakh from the rest of the world. Since December 12, a group of activists, with support from Azerbaijani government officials and military forces, have blocked the free movement of traffic along the only road connecting Nagorno-Karabakh to Armenia, known as the Lachin Corridor.[1] The Armenians of Nagorno-Karabakh have endured a relentless winter, with just a trickle of humanitarian supplies allowed in, along with intermittent gas and electricity cuts.[2] The United States and its partners have warned of a humanitarian catastrophe,[3] with U.S. Secretary of State Antony Blinken repeatedly calling on Azerbaijan to open the Lachin Corridor.[4] Last month, the International Court of Justice (ICJ) ordered the Azerbaijani government to do the same.[5] But the blockade continues into its fourth month, threatening to derail Western-led peace efforts and to spark a new round of conflict, with the risk of ethnic cleansing in Nagorno-Karabakh. With or without violent confrontation, the Azerbaijani government can coerce the Armenian population to leave the land by making their lives and livelihoods increasingly difficult to sustain. The issue is more than a regional territorial squabble; it has become part of a larger contest, with notable U.S. interests at stake. For the past three decades, Russia’s hard power presence in the South Caucasus and its influence over former Soviet republics provided Moscow with enough leverage to maintain peace between Armenia and Azerbaijan. Now Russia’s influence is receding, and its weakened capacity has been laid bare. The U.S. has its first opportunity since the fall of the Soviet Union to gain significant standing in the South Caucasus, by rewriting the security architecture of the region. At the 2023 Munich Security Conference in February, Blinken addressed the Nagorno-Karabakh issue. Sitting at a table with Armenian and Azerbaijani leaders on each side, he stated America’s commitment to the peace process, along with European partners. The surge of Western diplomatic engagement began after the Ukraine conflict and saw a major uptick after Azerbaijani attacks on Armenia proper in September 2022. Azerbaijan’s blockade of the Lachin Corridor is a pivotal moment in the conflict between Armenians and Azerbaijanis over the future of Nagorno-Karabakh. The two have been in tension since the late years of the Soviet Union, though the seeds of the conflict were planted long before that. In the 1920s, Josef Stalin, then the Commissar of Nationalities for the USSR, placed the Armenian-majority region of Nagorno-Karabakh within the boundaries of Soviet Azerbaijan,[6] but granted Armenians of the region a high degree of cultural autonomy and self-rule. The resulting creation of the Nagorno-Karabakh Autonomous Oblast in 1923 was a move designed to create conflict, keeping Armenians and Azerbaijanis in a state of perceived vulnerability that would require Moscow to regularly intervene.[7] That strategy succeeded. Beginning in the 1960s, after complaints of cultural repression and demographic policies designed to dilute their presence, the Armenians of Nagorno-Karabakh began to petition Soviet authorities for reassignment to the Armenian SSR. Emboldened by the reforms of glasnost and perestroika, Armenians held a referendum in 1991, with a vast majority of the population voting for Nagorno-Karabakh’s independence.[8] But the poll was rejected by Baku as illegal and the disagreement sparked pogroms against the Armenians of Azerbaijan and interethnic violence, culminating in the First Nagorno-Karabakh War. The conflict killed roughly 30,000 people between 1991–94 and pushed hundreds of thousands of people from their homes. Azerbaijanis were forced to leave lands captured by Armenians and Armenians fled from Baku and other parts of Azerbaijan.[9] In Nagorno-Karabakh, local Armenians prevailed over Azerbaijani forces. For nearly 30 years, they built a self-proclaimed independent republic with democratic elections, a free press, and a range of public institutions. Officially, it remained within the territorial boundaries of Azerbaijan, unrecognized by any foreign country, though international mediators made reference to the right of self-determination for local Armenians as part of ongoing peace talks. The government of Azerbaijan has long wanted to bring Nagorno-Karabakh under the federal control of Baku; the land controlled by Armenians before the 2020 war constituted 20 percent of Azerbaijan’s officially recognized territory. In September 2020, leveraging its superior military resources and direct support from Turkey, Azerbaijan launched an offensive to retake Nagorno-Karabakh and made significant territorial gains. After 44 days of war, a cease-fire brokered by Moscow, known as the trilateral agreement, was signed by Armenia, Azerbaijan, and Russia in November 2020.[10] The agreement guaranteed free passage of people and goods through the Lachin Corridor. Baku’s stated goal is the full reintegration of Nagorno-Karabakh into Azerbaijan, by force if necessary. Under its proposal, Armenian residents would be treated as Azerbaijani citizens, with no special cultural or administrative status and rights. Armenians want to continue the internationally led negotiations that have long included notions of special status and civilian protection. The history of violence against Armenians in Azerbaijan, including the recent execution of Armenian prisoners of war and the sexual mutilation of female soldiers, give Armenians in Nagorno-Karabakh little confidence in their safety. Internationally led confidence-building measures would need significant time to generate the conditions for interethnic peace. Also at issue is Baku’s treatment of ethnic and religious minorities already living under its control; while Azerbaijan runs showpiece initiatives on interfaith relations for an international audience, it has received the lowest possible rating from Freedom House for the treatment of women and ethnic minorities at home.[11] According to Freedom House, Azerbaijan’s government “has worked to stifle public expressions of Talysh and Lezgin identity, among other targeted groups.”[12] The Armenians of Nagorno-Karabakh are not interested in following the same fate. For most of the past 30 years the U.S., France, and Russia worked as partners to help solve the Nagorno-Karabakh conflict, serving as co-chairs of the Organization for Security and Co-operation in Europe (OSCE) Minsk Group.[13] It was a project that captured the geopolitical zeitgeist of the 1990s: the new Russia working with leading countries of the West to solve problems in the former

Kennan Cable No. 81: What’s at Stake in Nagorno-Karabakh: U.S. Interests and the Risk of Ethnic Cleansing Read More »

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