Armenia, Azerbaijan and Georgia already operate within a fractured region, with large migrant populations abroad, and assume varying degrees of responsibility for the region’s separatist entities - Abkhazia, South Ossetia and Nagorny Karabakh - whose long-term isolation makes them highly vulnerable to the pandemic.
All three South Caucasus states reported their first cases early - between February 26 and March 1 - and started responding shortly after. And the form and success of their response has been defined by the work each had put into developing their political, healthcare and economic institutions over the long term, and has put their ability to protect their citizens into stark relief.
With the fewest financial and institutional resources among the three South Caucasus states, the response of Nikol Pashinyan’s government relied on its strongest asset – public support. But this proved insufficient for quelling the spread.
Restrictions on free movement as well as advice to wear protective clothing were largely approved of but not observed by the public, nor enforced. The restrictions were then partially lifted in early May despite a continuing rise in infections, leaving Armenia suffering the most severe outbreak of the three countries, at a scale similar to that of Italy.
This has in turn put pressure on an underfunded and long-mismanaged healthcare system that Pashinyan inherited from his predecessors. Although new steps announced in late May, such as making protective masks in public spaces compulsory, had more teeth, the damage has already been done.
The government’s inability to contain the pandemic promptly also delays efforts to address the economic impact, and the country can scarcely afford this with GDP set to drop by 3.5% in 2020. The hit on Russia’s economy will also result in a drop in remittances and the economic downturn beyond the region impact funding, including tourism, from Armenian diaspora.
Meanwhile, Yerevan has to continue to shoulder around 55% of Nagorny Karabakh’s budget too, and the pandemic diverts attention from political and economic reforms - the promise of which brought Pashinyan to power in 2018.
With a healthcare system as unprepared for major crises as Armenia’s, Baku’s response relied on its security apparatus. Lockdown was the most draconian in the region with over 65s banned from leaving their homes for several weeks and everyone else having to request permission via text message.
The measures do seem to have flattened the infection curve - according to official statistics - but provided an opportunity for the state to crack down further on opposition with a wave of arrests. With physical meetings impossible, opposition figures are even more vulnerable to hacking and mysterious internet outages.
The authorities tried to appear unperturbed by the pandemic, even going ahead with military exercises as scheduled in May. But Baku is worried about the impact of the pandemic on the energy market - Azerbaijan’s GDP is already projected to drop by 3% in 2020.
The country’s economy is cushioned by its sovereign wealth fund for now, but social support measures left out many of the most disadvantaged – rural communities and people at the low end of the shadow economy. With hydrocarbons forming 90% of exports, Azerbaijan’s economy cannot sustain low oil prices in the long term. But in the short to medium term, the pandemic will not alter the country’s course.
So far, Georgia has been hit the least by COVID-19 thanks to a relatively swift response and efficient management of the health crisis - with the significant exception of the government’s refusal to ban religious services. A country of 3.7 million people, it has managed to limit the number of infections to hundreds rather than thousands.
But Tbilisi cannot relax. Across South Caucasus, Georgia’s economy is the most exposed to the impact of the virus with GDP forecast to fall by 5.5% in 2020. Tourism makes up approximately 20% of the economy and – along with exports and remittances – will be hit hardest thanks to a dependence on Russia which amounts to approximately 9% of Georgia’s GDP. Although the government is trying to attract new visitors and markets elsewhere, this is unlikely to have an immediate effect.
This is worrying for the government with parliamentary elections due in October and facing voters’ already negative perception of the country’s economic performance even before COVID-19. The government has started preparing for the elections by issuing populist promises such as a mortgage subsidy, while also securing loans from the IMF, the Asian Development Bank and the Asian Infrastructure Investment Bank.
On the positive side, the EU’s offer of a EUR 500 million aid package - conditional on Georgia’s electoral reform - shows the pandemic is creating opportunities for the international community to combine aid with a push for reforms.
The three countries have set themselves different policy agendas in response to the pandemic, and this means their paths will diverge even further.
Azerbaijan’s regime seems set to continue on an authoritarian path for as long as its finances allow, but will find itself in a fragile position when the money runs out. For Armenia, the pandemic highlights the importance of institutional reform, but this will be delayed as the government focuses on handling the crisis. And Georgia must build a stronger economy to consolidate its achievements in governance.
However, despite these divergent paths, all three countries would do well to note that even within their fractured region, your neighbours’ problems can easily become your own.