Shifting Sands in the South Caucasus: Peace Efforts, New Threats, and Evolving Alliances

Armenian Prime Minister Nikol Pashinyan

The South Caucasus is currently experiencing a period of significant geopolitical transformation, marked by ongoing peace negotiations between Armenia and Azerbaijan, a re-evaluation of regional security alliances, and a recalibration of national priorities. Recent developments highlight a complex interplay of internal and external pressures shaping the future of the region.

Armenia and Azerbaijan: Steps Towards a Peace Agreement

Significant progress has been made towards a peace agreement between Armenia and Azerbaijan. On 8 August, Armenian and Azerbaijani foreign ministers signed a joint statement in Washington, which was welcomed by the OSCE. This meeting, also attended by US President Donald Trump and leaders Ilham Aliyev and Nikol Pashinyan, saw the initialling of a 17-part peace deal and the signing of a seven-point declaration affirming progress towards peace. Although the peace agreement is not yet officially signed, as Azerbaijan has requested changes to Armenia’s constitution as a precondition, these steps are seen as unprecedented.

A tangible outcome of the Washington meeting was the announcement of the Trump Route for International Peace and Prosperity (TRIPP). This plan aims to connect Azerbaijan to its exclave of Nakhchivan through Armenian territory, with the route expected to be managed by an unnamed US company. Crucially, this route is intended to preserve Armenia's sovereignty, territorial integrity, and jurisdiction. This aligns with Turkish President Recep Tayyip Erdoğan's view that the Zangezur corridor, which passes through Armenia's Syunik province to connect Azerbaijan with Nakhchivan, is a "peace project" for the entire region. He believes its full implementation will elevate economic cooperation between Turkey, Azerbaijan, and Armenia to a new level. Turkey is also constructing a 224-kilometre Kars-Igdir-Aralik-Dilucu railway line, which Erdoğan described as the "backbone" of the "Zangezur corridor".

In a further sign of normalisation, a decision to disband the OSCE Minsk Group and its associated structures is anticipated on 1 September. A draft resolution for the closure of the Minsk Group, which had actively mediated the Armenia-Azerbaijan conflict since its establishment in 1992, has been circulated among OSCE participating states. Both Baku and Yerevan have sent a joint statement and a proposed draft resolution to OSCE member states regarding its dissolution.

Azerbaijan's Shifting "External Enemy" Rhetoric

Despite the progress in peace talks with Armenia, Azerbaijani President Ilham Aliyev has maintained a rhetoric of being "ready for war at any moment," a stance he articulated during a visit to Kalbajar. While for years his "enemy" and "war" rhetoric was directed at Armenia, political analysts now suggest that the specific target is less important than the creation of an "enemy image".

President Aliyev has also discussed an extensive military build-up since the Second Karabakh War, including:

• Increasing the number of special forces by thousands.

• Creating new commando forces.

• Acquiring modern unmanned aerial vehicles (UAVs) and new artillery systems.

Political researcher Fuad Shahbazov believes that Aliyev's emphasis on the Caspian Sea suggests Russia as the implied source of threat. Shahbazov highlights deteriorating relations between Russia and Azerbaijan since late last year, referencing incidents such as an AZAL plane's emergency landing and operations against ethnic Azerbaijanis in Yekaterinburg. Although direct military confrontation seems unlikely, Shahbazov notes that Russian government-affiliated figures have openly threatened Azerbaijan, citing former general and Duma member Gurulyov's remark that military operations in Ukraine could extend to the Caucasus. Shahbazov views Aliyev's security warning as rational given these threats, anticipating continued open threats against Azerbaijan and its diaspora in Russia, with Caspian Sea security emerging as a primary concern. The Caspian Basin is vital for energy and as an integral part of the main trade corridor for Azerbaijan, the Caucasus, and Central Asia.

Arastun Oruclu, head of the "East-West" Research Centre, concurs that the "foreign enemy image is very important for Ilham Aliyev". He argues that Aliyev's policy has long been built on enmity with Armenia, and now, with the peace process advancing, threats from Iran and Russia provide a new rationale. Oruclu believes that maintaining an external enemy factor is crucial for Aliyev to divert attention from pressing domestic issues, including socio-economic problems, a governance crisis, and the general socio-political situation in Azerbaijan.

Paradoxically, Russia and Azerbaijan have also identified economic cooperation priorities, including transport development, strengthening independent financial systems for mutual settlements, energy cooperation, industrial cooperation, and collaboration in the Caspian Sea. Iran has also expressed readiness to begin supplying Russian gas via Azerbaijan, with discussions underway to finalise pricing.

Armenia's Ideological Shift and the Russian Military Presence

Armenian Prime Minister Nikol Pashinyan has introduced the "Real Armenia" ideology, which advocates for Armenians to accept modern Armenia within its current borders. On the 35th anniversary of Armenia's declaration of independence, Pashinyan criticised the "key ideological provisions" of the document as "conflict-oriented" and a product of "collective patriotism instilled by the Soviet Union". He argued that this ideology, which led to the Karabakh Movement, ultimately aimed at the "strategic impossibility of the existence of an independent Armenian state". Pashinyan firmly believes that continuing the Karabakh Movement would mean "abolishing the independence of the Republic of Armenia". He asserted that offering concessions earlier was the "only theoretical opportunity to avoid the 44-day war," and that the "Real Armenia" ideology has made peace with Azerbaijan and dialogue with Turkey possible, deepening relations with Georgia and Iran, and positioning Armenia as a global partner.

The issue of Russia's military presence in Armenia remains a contentious topic, particularly in Gyumri, where the Russian 102nd Military Base is located. The base, established in 1995 with an agreement extended until 2044, houses an estimated 3,000 to 5,000 Russian military personnel.

Pro-Western protesters in Gyumri have called for the withdrawal of the base, arguing it threatens Armenia's sovereignty and citing past incidents involving servicemen. Arman Babajanyan, leader of the For the Republic Party, believes the base is "a threat that must be neutralised" and that Armenia should be defended only by Armenian soldiers. Artur Sakunts of the Helsinki Citizens' Assembly also questions why Armenian taxpayers should support those who have "occupied its territory".

Pro-Russian groups, such as the Mother Armenia initiative and the Communist Party, have staged counter-rallies in support of the base, claiming it provides security guarantees. Andranik Tevanyan, leader of the Mother Armenia movement, views the withdrawal of Russian troops as an "invitation for Turkish forces into Armenia" and a blow to Armenia's security. The Communists declared the base's presence an "irreplaceable guarantee of Armenia's security".

While Armenian officials like Deputy Foreign Minister Paruyr Hovhannisyan have expressed the ideal of countries controlling their own borders, Foreign Minister Ararat Mirzoyan stated that the removal of the Russian military base is "not on the agenda, at least for now". However, Russia's military presence in Armenia is already shrinking. Russian border guards have been progressively withdrawn from Yerevan's Zvartnots airport, as well as segments of Armenia's borders with Turkey and Iran, with Armenian border troops now taking full control. This move is seen by some analysts as strengthening Armenia's sovereignty.

The South Caucasus is navigating a complex path towards peace and stability, marked by the potential for historic agreements alongside persistent geopolitical tensions and evolving national identities.