Debating Nagorno Karabakh Peace Process

Dr. Efgan Niftiyev

Since the ceasefire regime went into effect at the occupied territories of Azerbaijan by Armenia, almost
every summer season has been recorded with increased tensions. However this summer no major
skirmish took place at the line of contact of armed forces. On the other hand recently there has been
increased number of statements from co-chair countries of the Minsk Group calling for the immediate
resolution of Nagorno Karabakh conflict. After meeting Azerbaijani counterpart, Russian foreign
minister Sergei Lavrov stated that it was time to intensify peace process to reach a deal. I believe the
common approach is to move towards results. We shall be able to achieve progress of the kind in near
future Lavrov said.(1)Completing Lavrovs approach American, Russian and French co-chairs had
consultative meetings both in DC and Moscow followed by visits to Yerevan and Baku (after Vienna).
The diplomats are shuttling to facilitate a meeting between presidents of Azerbaijan and Armenia
where a progress in talks can be made. In his interview to Russian media, American co-chair of the
Minsk Group, James Warlick said that the occupied territories of Azerbaijan must be returned to
Azerbaijani control as part of a comprehensive settlement of the Nagorno-Karabakh conflict. All these
developments can be read as positive indicators of rejuvenation of stalled diplomatic efforts to bring
lasting peace. Whether the Minsk Group will be able to sustain this dynamism or not is yet to be seen.
In this context there are number of factors that are contributing to the changing climate and context of
Nagorno Karabakh conflict.
Changing Geopolitical and International Context
In the early years of the conflict Armenia enjoyed favorable attitude of international community thanks
to both its widespread diaspora and limited capability of Azerbaijan to challenge Armenian
propaganda. For example, thanks to strong Armenian lobby in US Congress, Azerbaijan could not
benefit from Freedom Support Act with amendment 907. Azerbaijan put serious political and diplomatic
effort to confront Armenian influence and managed to balance that with expanding its ties and
presence in international platforms. On the other hand legal cases opened against Armenia by
Azerbaijani people displaced from occupied territories. Recent decision by European Court of Human
Rights is another indication of strengthening Azerbaijani position. The court found that the denial by
the Armenian Government of access to the applicants homes constituted an unjustified interference
with their right to respect for their private and family lives as well as their homes.(2)
Armenian Economy: Lagging Behind
With no significant natural resources and industry Armenian economy is highly dependent on external
finance flow and remittances from Russia. Although economic growth picked up between 2001 and
2010 (see picture 1), it failed to sustain the upward momentum. In hopes of developing its crumbling
economy Armenia was in negotiations with European Union to sign the Association Agreement,
however Armenian presidents abrupt decision to join Russia-led Eurasian Economic Union and
abandon its aspirations for European future further solidified its entanglement to the vicious circle of
stagnation. The gap between Azerbaijan and Armenian economy has widened to the extent that
latters economy accounts only 1/7 of the first. (Picture 1). Stagnating economy and worsening living
conditions in the country forcing Armenian population to leave the country permanently. Official figures
indicate steep decline of population from 3,5 million in 1991 to less than three million in 2013.

Both declining economic capacity and population are depressing Armenias ability sustain competition
with Azerbaijan (Picture 2). Armenias intransigent behavior in peace talks has become self-defeating
given its exclusion from almost all regional economic projects. Recent protests that flared up after
electricity price hike shows economic and political vulnerability of Armenia.

Changing Military Balance

Along with economic stagnation Armenias options to match up Azerbaijans military modernization are
becoming limited. As it is in the size of GDP, Armenias military spending is more than seven times
smaller than Azerbaijans (Picture 3). In 2014 Armenia allocated 388 million dollars for military
expenditures whereas Azerbaijan yielded 3,5 billion dollars for its defense budget (over 4 percent of
the GDP). It is not just the amount of spending that shifts the balance of power. Azerbaijan acquired

modern weaponry and made significant structural military reforms while taking part in joint military
drills and international trainings. In a meantime Armenia received low cost Russian military hardware
(also recent 200 million USD Russian credit to purchase arms from Russia) but this is short of
maintaining balance of power.

Changing international and local environment of Nagorno Karabakh conflict is dictating new set of
comprehensive reading of the issue. To see the recent push for the facilitation of high level talks bear
fruit, a lot will depend on seriousness of international commitment and Armenias will to face the
realities and its eagerness to become integral part of the regional development.

Footnotes
1. http://beta.trtworld.com/news.php?q=europe-russias-lavrov-calls-to-solve-nagorno-karabakhconflict-4729 retrived 21/07/2015
2. http://hudoc.echr.coe.int/eng?i=001-155353#{"itemid":["001-155353"]} retrieved 21/07/2015

Note: The views expressed in this analysis are the author's own and do not necessarily reflect the
Institute's editorial policy.