The report analyzed the primary external factors influencing regional geopolitics. It assessed possible future developments in the South Caucasus, focusing on Armenian foreign policy diversification, the prospects of Armenia–Azerbaijan negotiations, the possible future of Georgian foreign policy, and Azerbaijan’s quest for a new foreign policy vision after the military takeover of Nagorno-Karabakh and the forced displacement of its Armenian population in September 2023. 

The key findings are as follows:

The transition of the global order from a unipolar world to a more complex security architecture has profoundly impacted South Caucasus geopolitics. The region has become a microcosm of the emerging multipolar world order, with external players—global and regional, as well as newer ones—such as Russia, the United States, the European Union, France, Turkey, Iran, China, Israel, India, and Pakistan having coinciding or conflicting interests in the South Caucasus. 

The primary external factor influencing regional geopolitics has been and continues to be the Russia–Ukraine War. It has resulted in a decrease in Russian influence in the South Caucasus and simultaneously increased the region’s significance for Russia as a transit hub to the Middle East and Southeast Asia.

Another critical element shaping the unfolding regional geopolitics is the issue of opening communications. Two main projects, the International North–South Transport Corridor and the Middle Corridor, pass through the South Caucasus, tightly intertwinning geopolitics and geoeconomics. 

The future of US and EU engagement is another essential factor affecting the region, and various scenarios are possible depending on the policy of the new EU leadership and the US administration following their 2024 respective elections. 

It also became apparent from this study that the South Caucasus does not constitute a coherent region from a political and economic point of view. It lacks common institutions and structures, and regional powers often have diverging foreign policy visions.

As great power competition has taken center stage in the world order, the South Caucasus faces two possible scenarios—to continue to be a place for regional rivalry with existing and emerging fault lines further fracturing the area or to start the gradual movement toward transforming into a regional strategic convening hub.

To facilitate the second scenario, which would benefit the three countries and support the region’s trajectory toward a stable and prosperous future, APRI Armenia recommends starting academic and think tank cooperation between regional states and creating a regional think tank network. Establishing cooperation on issues related to water management and climate change can also be a step toward shaping a coherent and cohesive region.