3. Security Issues and Regional Integration
In the coming years, relations with Russia will be determined by the positions of Azerbaijan’s ruling elite on issues from security to economic policy. In particular, this elite’s members have diverse calculations on two fundamental issues of critical importance to relations with Russia: Nagorny Karabakh and regional integration.
The Nagorny Karabakh conflict
Negotiations to resolve the conflict in Nagorny Karabakh since the 1994 truce between Azerbaijan and Armenia are ongoing under the mediation of the Minsk Group co-chairs (Russia, the US and France). Since 1997, with the inclusion of US and French co-chairmanship, Russia’s domination of this mediation body has decreased. However, due to Armenia’s economic and military dependence on Russia, a privileged role continues to be afforded to Russia in the negotiations, as reflected in two agreements: the 1994 truce and the 2008 ‘Moscow declaration’. These are the only agreements that have been signed between the parties to the conflict, and both were achieved through Russian mediation.
The Azerbaijani ruling elite still believes that Russia is the only actor that can truly lead the negotiations or block any peace process. That said, attitudes have changed over the past decade. Until 2008, Azerbaijan wanted to weaken Russia’s role in the Minsk Group while strengthening the involvement of the US and France in bilateral talks with Armenia. That changed after 2008, however, when Russia saw conflict resolution as a better option than the status quo – a position consistent with its effort to mitigate reputational damage from the war with Georgia. A breakthrough on conflict resolution was seen as being of ultimate importance following that war, in light of Armenia’s deepening isolation in the region and geographical connection to Russia via Georgian territory. The shift in Russia’s tactical position aided the establishment of a constructive dialogue between Azerbaijan and Armenia, though this was not as fruitful as Baku had hoped. In the absence of a clear geopolitical goal, such as enticing Azerbaijan to join a Russian-led integration project, Russia’s role was perceived positively among the Azerbaijani elite.
However, a trilateral, presidential-level format for dialogue between Azerbaijan, Armenia and Russia, which had been created by Russia’s President Dmitry Medvedev in 2008, collapsed in 2011. At this point, Russia decided that it had little hope of finding a formula that would satisfy both Azerbaijan and Armenia; and that continuing with the trilateral format risked endangering relations with both countries. Russia’s involvement in the conflict resolution process therefore weakened. Azerbaijan expected this to change with the return of Vladimir Putin to the Russian presidency in 2012. Instead, Russian engagement was downgraded from presidential level to foreign minister level. This offered an alternative to the increasingly inactive Minsk Group negotiations.
Given the fall-out from the conflicts in Ukraine and Syria, the Minsk Group nonetheless provided a rare forum for cooperation between Russia and the West. This led the majority of the Azerbaijani elite to believe that Moscow might make a greater diplomatic effort in respect of Nagorny Karabakh as a means of improving Russia’s image, showing cooperation with the West and getting sanctions lifted.
From 2013 to 2016, Azerbaijan expected Russia to take a constructive and supportive position in the Nagorny Karabakh negotiations, on the grounds that Baku had invested in strengthening relations with Moscow for years (including via multi-million-dollar purchases of weapons and military equipment from Russia, and increased economic cooperation). The majority of the Azerbaijani elite believed that Russia could force Armenia to the negotiating table, or that Russia would not intervene if there were a brief flare-up in the conflict zone with Armenia. (This is precisely what happened during the April 2016 escalation between Azerbaijan and Armenia; Russia did not use aggressive rhetoric towards Baku, nor did it immediately interfere diplomatically.) However, the dynamics in the Armenian–Russian relationship were either misunderstood or ignored. For example, Armenia saw joining the EAEU in 2013 as strengthening its hand on Nagorny Karabakh, as this potentially limited Russia’s leverage in the negotiations. Azerbaijan, for its part, highlighted the fact that it was not pursuing closer integration with the West and was ready to join the EAEU once the conflict was resolved – a position intended to push Russia into helping settle the conflict in line with Azerbaijani interests.
At a minimum, this meant a rejection of the ‘land for status’ formula, on which Armenia seemed (and still seems) intransigent. Armenia wanted a formula whereby immediately following the signing of a peace agreement, all occupied territories surrounding Nagorny Karabakh would be returned to Azerbaijan in exchange for agreement that the status of the region would be decided by referendum. The rationale on the Armenian side was that the majority Armenian population of the de facto Nagorno-Karabakh Republic would vote in favour of independence. Azerbaijan, in turn, wanted (and still wants) the return of occupied territories to Azerbaijan and the deferral of a final-status agreement.
However, Azerbaijan overestimated the extent of Russia’s mediating role, which it wrongly perceived as offering a means of exerting pressure on Armenia. Russia was then, and still is, in a position in which not supporting Armenia is untenable; even the suggestion of a pro-Azerbaijan shift would damage Russia’s reputation as a reliable ally of Armenia. After the war of April 2016, in order to compensate for having given that impression, Russia had had to send huge supplies of weaponry to Armenia. Being seen as a less-than-reliable ally would also have wider implications for Russia in terms of its relations with other members of the EAEU and the Collective Security Treaty Organization (CSTO).
Overall, Azerbaijan’s Russia-centric view of options for resolving the Nagorny Karabakh conflict has been tempered by uncertainty about the extent to which compromise with Moscow can ever lead the latter to engage genuinely in seeking a solution. There are two possible directions for Azerbaijan: joining Russia’s regional integration projects, or agreeing to a significant role for Russia in a peacekeeping operation. The majority of the Azerbaijani elite now believes that Russia will inevitably be part of the conflict resolution process, and that it will therefore not be possible to avoid the presence of Russian peacekeepers. This departure from the elite’s previous opposition to the idea is pragmatic; its members understand that Russia could impose greater demands on Azerbaijan, such as the establishment of a permanent military base in Nagorny Karabakh after resolution of the conflict, in return for pushing Armenia to change its stance on resolution. In this sort of scenario, a small Russian force initially branded as peacekeepers would essentially evolve into a permanent military presence.
There is also a view in Azerbaijan that the war of April 2016 was a reality check for Russia, whose image was damaged in both Azerbaijan and Armenia. Armenia was unhappy with Russia’s neutrality over the conflict, and Azerbaijan with Russia’s failure to push Armenia to reach a settlement. Azerbaijan was disappointed, in particular, by Russia taking the position that the belligerents would ‘be able to reach a compromise settlement of the existing conflict – without winners or losers’. The experience of the April 2016 war showed that Russia is not immune from negative publicity in either country, if perceived to be acting against the interests of the belligerents. The Azerbaijani elite thinks that sooner or later this new reality will lead Russia to change its policy. Its hope is for Moscow to provide a security guarantee to Armenia in exchange for the return to Azerbaijan of the five territories surrounding Nagorny Karabakh. This would include granting long-term interim status to the de facto authorities in Nagorny Karabakh, which would be nominally under Azerbaijani jurisdiction but functionally independent. In the long term, this would make both countries more dependent on Russia than is the case today. Armenia would need Russian security guarantees to preserve its interests in Nagorny Karabakh. Azerbaijan would have to pursue policies that would keep Russia on its side in order to see the conflict’s full resolution. This could give Russia leverage to compel Azerbaijan to join the EAEU and the CSTO.
For the time being, and in the absence of progress negotiating a resolution to the conflict, the only alternative for Azerbaijan is to apply military pressure to Armenia. The degree to which it is able to do so is dependent on Russia. Russia’s slow and lightweight response to the Azerbaijani offensive during the April 2016 war has been attributed by some observers to the close relations that have developed between Baku and Moscow, especially in terms of military-industrial cooperation. This has deepened since the signing in 2010–11 of major arms purchases. Azerbaijan has also been able to establish relations with influential military-industrial figures in Russia who have sought to counterbalance the more ideologically driven elements of their country’s foreign policy establishment. These more moderate figures include Russian bureaucrats whose policies hitherto have not always been supportive of Azerbaijan, and who are likely to remain sceptical of any professed loyalty on Azerbaijan’s part until it joins Russia-led military alliances and integration projects. To apply military pressure on Armenia, Baku needs at least to be able to secure Moscow’s neutrality. Meanwhile all-out war remains out of the question, given Russia’s opposition to such a scenario. Ultimately, therefore, Russia has the final say on the conflict, whether that means war or peace.
Russia’s regional integration projects
Until Russia’s annexation of Crimea in early 2014 and support for separatist entities in eastern Ukraine, its integration projects in the post-Soviet space had not been seen as threatening Azerbaijan’s sovereignty. In the immediate post-independence period, Azerbaijan had avoided a path towards full integration with either Western or Russian-led regional cooperation models, on the grounds that this would limit the sovereignty of government decision-making in sectoral areas (economy, security) or expose it to undue diplomatic influence from external power centres (whether Moscow, Brussels or Washington). For example, when Azerbaijan became a member of the CIS in 1993, there was an understanding that it would not join any CIS project that entailed cooperation on economic or security issues with Armenia.
The events in Ukraine since 2014 have changed this political calculus. They have made it clear that the economic benefits of Russia’s integration models – in particular the EAEU – are far outweighed by the clear hegemonic impulses behind them. Purely economic integration would be attractive to Azerbaijan. It needs a long-term visa-free regime for its citizens in Russia, better conditions for the more than 1 million Azerbaijani labour migrants there, and secure access to the Russian market for its agricultural exports. However, Russia’s aggression in Ukraine has demonstrated that the EAEU is in reality a purely geopolitical project.
Despite this, Azerbaijan’s threat perception has continued to focus more on Armenia’s mobilization of the EAEU against it than on potential Russian pressure and demands. For Armenia, such mobilization includes the idea of creating favourable economic conditions for Nagorny Karabakh, for example by eliminating customs barriers and requesting similar measures from other member states (though it has become clear that this is not going to happen). Azerbaijan’s perception is that the de facto authorities in Nagorny Karabakh will indirectly reap economic benefits from Armenia’s EAEU membership.
Another challenge surrounds the CSTO, as Armenia has tried to stop other member states from selling arms to Azerbaijan. The latter’s response has been to strengthen relations with Belarus and Kazakhstan, both of which on many occasions have defended its positions, especially on Nagorny Karabakh. By doing so, Azerbaijan has succeeded in protecting its national interest without joining the CSTO.
Despite Russia’s hegemonic agenda and a lack of immediate economic incentives, Azerbaijan’s hitherto implacable opposition to EAEU membership has softened recently (it remains, nonetheless, fully opposed to joining the CSTO). But this does not mean that there have not been forces or groups among the ruling elite who wish to see Azerbaijan join the CSTO. Since 2017, these voices have started to become bolder, unambiguously advocating membership. In 2018, their media activities reached a new level, when a member of parliament openly called on Azerbaijan to join the CSTO, thus triggering a public debate which would have been unimaginable several years ago. Baku is trying to use the prospect of EAEU accession as a tactic to encourage more active Russian engagement in the Nagorny Karabakh negotiations. The Russian response has been to ask Azerbaijan to join the EAEU if it wants this.
Since 2016 Azerbaijan has been part of another economic integration project, in the shape of the trilateral format with Russia and Iran. The core initial agenda of this project was the construction of a railway connection between the three countries, as a part of an international transport route from Asia to Russia and Europe. For Azerbaijan, this would obviate the potential opening of a Georgia–Abkhazia railway linking Iran and Russia via Armenia. Russia’s political aim with the trilateral format is the formation of an axis to limit the West’s influence in the region, and to exclude it from regional development initiatives. The format has been characterized by Aleksandr Dugin, leader of the Eurasian Movement and a staunchly pro-Kremlin political commentator, as a triangle designed to eliminate ‘the West’s freedom of manoeuvre and [the West’s] ability to generate provocations […] in the South Caucasus region’. At the second trilateral meeting in 2017, new customs procedures were introduced to eliminate barriers to the movement of goods and services between the three countries.
The trilateral format serves Azerbaijan’s economic interests in a number of ways, especially in the absence of strong ties with the West. It gives the country access to an exclusive platform involving two major regional powers. It is also the first purely regional format that excludes Azerbaijan’s strategic ally, Turkey. Ankara has been involved in the development of most regional integration models, including energy and transport projects with Baku and Tbilisi, since independence weakened Russia’s domination of railway, energy and transport in both Azerbaijan and Georgia. This included an institutional trilateral Azerbaijan–Georgia–Turkey format, initiated by Turkey. There is also a trilateral regional integration model involving Iran, Azerbaijan and Turkey. However, this format indirectly increases Russia’s influence over regional affairs, as development of the North–South transport corridor requires Azerbaijan to establish a better customs relationship with Russia. This could perhaps increase Russia’s leverage in seeking to convince Azerbaijan to join the EAEU, even without the offer of political concessions on Nagorny Karabakh.
Azerbaijan’s elite does not entirely reject the possibility of EAEU accession, but making a rational case for membership is difficult without corresponding political gains. EAEU membership would only be acceptable to Azerbaijan under two scenarios: first, if the EAEU were expanded to include countries from outside the post-Soviet space, which would change the perception of it being a Russia-controlled bloc or reincarnation of the Soviet Union; second, if a free-trade zone were created between Azerbaijan and the EAEU, as this would benefit Azerbaijan in the eventuality of further development of transportation links across Eurasia. If Turkey were to form a customs union with the EAEU, for example, this would be a game-changer for both the Azerbaijani ruling elite and the public, as Ankara’s participation would be seen as a guarantee of Azerbaijani interests. It would make it much easier for the Azerbaijani government to address potential public anger about joining a Russian-led integration model. In recent years, the elite’s position has changed from outright rejection of EAEU membership to seeking options for something less than full membership. In contrast, the elite seems to remain staunch in its belief that membership of a military organization such as the CSTO would be much riskier, even if Russia offered progress on conflict resolution in exchange for this.
An alternative option would be closer cooperation with Russia and other EAEU members through an organization that involved global economic powers. For instance, Azerbaijan might consider full membership of the Shanghai Cooperation Organisation (SCO), of which it has been a dialogue partner since 2016 (with Russia’s support). This would have the additional benefit of strengthening relations with China, whose financial support in the event of future economic problems could be a key factor for political stability and harmony within the ruling elite. Moreover, China’s ‘Belt and Road Initiative’ – a sprawling planned network of trade infrastructure investments spanning Central Asia and beyond – requires improved transport connections with Azerbaijan. Access to China’s market would require compliance with the trade regulations of EAEU members such as Kazakhstan or Kyrgyzstan, and/or with other Central Asian states (Turkmenistan, Uzbekistan and Tajikistan) that stand between Azerbaijan and the Chinese border. Given the coordination with EAEU members (as well as, potentially, with non-EAEU members) that this would involve, it is possible that Azerbaijan might consider some kind of partial agreement with the EAEU, such as observer status or a special customs arrangement. As one observer has noted, ‘Russia has declared a free trade zone between EEU [EAEU] and Iran and has mentioned facilitating closer ties between Tehran and SCO, relations that might draw Azerbaijan closer to both Moscow and SCO.’