This month’s flare-up may represent more than another clash between Armenians and Azerbaijanis.
By: Ekaterina Zolotova
On July 12, Armenian and Azerbaijani forces clashed in the Tovuz border region – far from the disputed region of Nagorno-Karabakh, where such clashes usually take place – and the sporadic violence has continued ever since. At first, the countries’ two larger neighbors with a geopolitical interest in the region, Russia and Turkey, did not interfere.
On July 23, however, Russian forces took part in pre-planned exercises with Armenian troops.
The Azerbaijani government promptly announced that it would host large joint air and ground exercises with Turkey. Armenia’s position against Turkey is fixed, a product of a century of bad blood, but Azerbaijan has traditionally attempted to balance between Russia and Turkey.
This month’s flare-up, however, may represent more than another scuffle between Armenians and Azerbaijanis. It may instead mark the beginning of a gradual realignment by Baku away from balancing and toward Ankara.
Turkey’s Ascent, Russia’s Descent
Turkey’s and Russia’s interests intersect in the Caucasus. For Russia, having allies in the South Caucasus guarantees a degree of stability in its border regions. Moreover, Azerbaijan provides Russia with strategic access to the Middle East.
Turkey, which is enmeshed in the gradual construction of a neo-Ottoman project to establish its dominance in the region, needs allies like culturally close Azerbaijan. Azerbaijan also has energy reserves, which are valuable for Turkey’s ambitions to become a regional gas center.
The Russian and Azerbaijani economies were bound together under the Soviet Union, and the two have maintained close economic, political and energy ties ever since. Their trade relationship is extensive, but Russia’s share of Azerbaijan’s total trade is diminishing: In the 1990s, Russia accounted for about 20-25 percent of Azerbaijan’s trade, but in the 2010s that share hovered around 8 percent.
Turkey’s share, on the other hand, has been growing: Total trade between the two amounted to $4.5 billion in 2019 (an increase of 33 percent from the previous year, and higher than the Russian-Azerbaijani figure of $3.02 billion, which was itself the highest in the past 10 years).
Azerbaijani President Ilham Aliyev has said he wants bilateral trade with Turkey to reach $15 billion a year and to increase energy exports to Turkey.
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Speaking of energy, Russia and Azerbaijan are increasingly looking like competitors in the oil and gas sector rather than partners. Baku’s attempt to enter the European Union’s energy market through Turkey, bypassing Russia, makes Moscow nervous.
Previously, Azerbaijan had used Russian pipeline networks to ship energy to Europe, which gave Russia control over the amount of Azerbaijani supplies in Europe.
The construction of pipelines through Turkey, however, is not subject to Russian influence.
Such projects, especially gas projects, have become important for Azerbaijan, which supplied 82 percent of its gas exports to Turkey in 2018.
These include the Baku-Tbilisi-Ceyhan oil pipeline, which transports Caspian oil to the Turkish port in Ceyhan, and the South Caucasian gas pipeline from Baku through Georgia to the border with Turkey, both of which were completed over a decade ago.
More recent endeavors include the Trans-Adriatic Pipeline, which will connect Greece, Albania and southern Italy, and the Trans-Anatolian Gas Pipeline, or TANAP, which was completed in 2018 and merged with the Trans-Adriatic Pipeline.
Russia has the TurkStream gas pipeline to Turkey (commissioned in January of this year), which targets the same market as TANAP, but Moscow has struggled to maintain its share of the market.
For example, in March 2019, Russia was the leader in gas exports to the Turkish market at 33 percent, but a year later, Azerbaijan had surpassed Russia with 23.5 percent. (In fact, Russia fell into fifth place, with 9.9 percent.)
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The other area in which Turkey is gaining ground on Russia is Nagorno-Karabakh. Russia traditionally acts as a mediator in the conflict, yet it continues to support Armenia, conduct exercises with its military, and supply Yerevan with weapons.
Indeed, ever since Vladimir Putin became president again, he seems to have largely ignored the resolution of Nagorno-Karabakh while intensifying military cooperation with Armenia through the Collective Security Treaty Organization. (The need for Armenia’s full cooperation in the then-budding Eurasian Economic Union no doubt played a part.)
Meanwhile, relations between Russia and Azerbaijan had cooled, thanks to a dispute over the Gabala radar station, Moscow's refusal to sell combat aircraft to Baku, and the ending of an agreement over the transit of Azerbaijani oil through Russian territory.
Turkey, on the other hand, broadly supports Azerbaijan, which it has pledged to back in the current conflict. Partly this is due to Ankara’s neo-Ottoman ambitions in the region that call for the imposition of “One people, two countries” there, and partly it’s due to historically tense relations with Armenia. (Turkey refuses to accede to Armenian demands to acknowledge the Armenian Genocide, and Armenia refuses to ratify the Treaty of Kars, which laid the groundwork for the modern borders of Armenia, Azerbaijan and Turkey.)
Turkey also partners with Georgia, which Ankara sees as a transit country and which relies heavily on energy supplies from Azerbaijan.
And then there are the economic factors at play. Since 2014, the Russian economy has been struggling with sanctions and with fluctuations in the price of oil, on which its health depends.
The Kremlin has tried to implement the necessary structural reform to stimulate the economy, but its efforts have largely failed, hence its renewed attention on reanimating the economy rather than on finishing expensive boondoggles with other countries.
The Turkish economy has its share of problems, but laying itself exclusively at the mercy of the oil markets isn’t one of them.
Russia is losing ground to Turkey in terms of investments as well. Azerbaijan has invested more than $17 billion in the Turkish economy, and Turkey has invested over $12 billion in the Azerbaijani economy. SOCAR, Baku’s state oil company, has new plans and projects that raise total investments in the Turkish economy to about $20 billion. Russia has invested only about $4.7 billion in Azerbaijan, while Azerbaijan has invested $1.2 billion in Russia.
Azerbaijan's Goals
Azerbaijan understands that larger and more powerful countries will always be interested in its affairs. But Baku has its own goals. It’s been independent for only a short time, and it has every intention of maintaining its sovereignty.
Like other former Soviet republics, Azerbaijan has a host of economic problems, not least of which is its own dependence on energy exports. It needs allies that will buy its goods and thus fund its government.
But it’s in no hurry to fully commit to any one ally. (Not that anyone has asked it to.) It benefits more from balancing both sides; it’s not part of Europe’s or Eurasia’s formal architecture, but it still needs Russian trade, just as it still needs European energy customers. Turkey is an important economic partner in that regard.
But any major move toward one side or the other heightens the risks of internal destabilization and losing all the economic benefits that come with balancing, not just for Azerbaijan but for the region as a whole, since it would necessarily pit Russia against Turkey.
It’s simply more profitable for Baku to rely on Russia and Turkey and turn into a logistic hub between Europe, the Middle East and Central Asia.
The country can thus afford some tactical adjustments in the short term that will keep its foreign policy essentially intact.
But it’s possible that will change as Russia loses ground to Turkey.
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