RUSSIA HANGS TIGHT IN THE SOUTH CAUCASUS / GEOPOLITICAL FUTURES

Russia Hangs Tight in the South Caucasus

The Ukraine war may allow Moscow to loosen its grip here and there, but it’s not letting go.

By: Ekaterina Zolotova

Last week, European Council chief Charles Michel hosted a meeting between Armenian Prime Minister Nikol Pashinyan and Azerbaijani President Ilham Aliyev on security in the South Caucasus. 

On the eve of the meeting, U.S. Secretary of State Antony Blinken also spoke with Pashinyan and Aliyev. 

Notably, these discussions didn’t include Moscow, the traditional mediator between Armenia and Azerbaijan, but resulted in both countries agreeing to create a commission on delimiting their shared border. 

Amid Russia’s ongoing war in Ukraine, Moscow’s exclusion from the talks has raised questions over whether the roles of external players in the region are radically changing.

Russia’s Challengers

The South Caucasus, like Ukraine, is key to Russian security. 

Not only does the region hold geostrategic importance for the Kremlin as a link to other parts of Asia but it also has military-strategic significance as a buffer from the instability of the Middle East and a protector of the Black and the Caspian seas. 

Moscow thus has an interest in keeping the region friendly and relatively prosperous and conflict-free.

Russia’s influence in the region was strengthened after the 2020 war in Nagorno-Karabakh, a breakaway region of Azerbaijan. 

Moscow was key in bringing Azerbaijan and Armenia to the negotiating table and getting peace agreements signed, and deployed peacekeeping forces to the region. 

Russia is also a critical economic partner for countries of the South Caucasus. 

In Azerbaijan, 90 percent of grain imports come from Russia, and in Armenia, 69 percent of hydrocarbons came from Russia in 2020. 

Even in Georgia, which has had a complicated relationship to say the least with Moscow since the 2008 war, Moscow remains its second-largest trading partner after Turkey, accounting for 70 percent of wheat consumed in Georgia. 

But Russia’s “special military operation” in Ukraine has called into question its ability to maintain influence in its border regions, specifically Central Asia and the Caucasus. 

The countries of Central Asia – being highly dependent on Russia, committed to their neutral status and geographically more distant from Western countries – are less concerning for Moscow. 

The South Caucasus countries, on the other hand, are more vulnerable to external influence given their deeper links beyond Russia.

Since the Ukraine conflict began, external players have begun to test the waters to determine the durability of Russia’s presence in the South Caucasus. 

On March 17, Armenian Foreign Minister Ararat Mirzoyan traveled to Brussels to meet with NATO’s deputy secretary-general and expressed his satisfaction with talks his country held with the alliance. 

On March 30, Britain’s armed forces minister made his first visit to Baku and met with Azerbaijan’s defense minister and foreign minister. 

And last week, as mentioned, the EU held talks with the Armenian and Azerbaijani leaders and announced the creation of a commission to delimit their border. 

These talks were scheduled amid rising tensions between the two countries over Armenian accusations that Azerbaijani forces shelled the border village of Artsakh in Nagorno-Karabakh. 

Beginning on March 21, Azerbaijan reportedly blocked supplies of natural gas from Armenia to residents of the village, and on March 26, Nagorno-Karabakh authorities declared martial law. 

Moscow’s ability to negotiate a resolution to the dispute was questionable, especially after Azerbaijan’s denial of statements made by Russia’s Defense Ministry about the withdrawal of Azerbaijani troops from the village of Parukh in Nagorno-Karabakh.

Russia was also excluded from some recent regional economic initiatives. 

On March 31, Georgia, Azerbaijan, Turkey and Kazakhstan signed a declaration on the Trans-Caspian East-West Corridor. 

On April 11, the railway departments of these four countries announced that they would create a joint venture called the Middle Corridor to transport goods from China to Turkey and the Black Sea ports. 

The venture is expected to connect with the North-South International Freight Corridor through the ports of the Caspian Sea and expand the corridor to Iran and Arab countries along the Persian Gulf, East Africa and India, which could complement or even replace trade routes through Eastern Europe.

Amid the growing desire to avoid Russian energy, Azerbaijan’s and Turkey’s roles in European energy security are also growing. 

Azerbaijan supplies natural gas through Turkey via the Southern Gas Corridor to Italy, Greece and Bulgaria. 

It has already promised to increase supplies to Italy in 2022 to 9.5 billion cubic meters, compared to about 7 billion cubic meters in 2021.

Too Early

The meeting between Pashinyan and Aliyev was broadly seen as the first step of a departure by Armenia and Azerbaijan from Russia. 

With Russia bogged down in Ukraine, it would be stretched too thin to extinguish any potential flare-up in the South Caucasus, or so the thinking went. 

But though there is some truth to this line of thinking, it’s far too early to count Russia out.

For one thing, the tensions between Armenia and Azerbaijan are fairly mild, showing themselves only as periodic skirmishes after a truce rather than as a prelude to another full-blown war that could alter the regional balance of power. 

It’s true that Russia wants stability here, and it’s true that Russia probably doesn’t have the resources to resolve this particular conflict, so it is more than happy to have the EU mediating. 

In other words, Moscow is confident enough in its position to let someone else do the heavy lifting for now.

For another, there’s ample evidence to suggest Russia has no intention of letting Armenia and Azerbaijan leave its sphere of influence. 

Immediately after the meeting, Aliyev and Pashinyan held separate phone talks with Russian President Vladimir Putin to discuss peacekeeping efforts in the South Caucasus. 

(Not for nothing, Pashinyan also plans to pay an official visit to Moscow on April 18.) 

Baku and Yerevan still understand the importance of Russia in this regard, and they have emphasized that Russia will be involved in any decision they make with the EU. 

And because the U.S. and France have refused to cooperate with Russia as part of the Minsk Group, Moscow is basically the sole mediator within this framework. 

It still has peacekeepers in Nagorno-Karabakh, and it is still involved in border delimitation between Armenia and Azerbaijan.

In economic terms, Russia is practically irreplaceable in the short term. 

Countries of the South Caucasus will have a hard time finding another partner ready and able to trade energy and grain at the friendly prices Russia does. 

And even though the Ukraine war has compelled large European gas buyers such as Germany and Italy to purchase elsewhere, Moscow isn’t particularly worried that Azerbaijan will be able to replace Russian gas: Baku is ready to increase gas supplies to Europe only by 11 percent in 2022, and in any case the maximum capacity of the Trans-Anatolian Natural Gas Pipeline is 16 billion cubic meters per year.

Russia is also too important a transportation partner. 

State-owned Russian Railways recently announced that it is ready to facilitate transit along the Turkey-Azerbaijan-Russia route. 

Moscow is also mulling the development of the international North-South Transport Corridor, a special economic zone, construction of containers in the region, and reconstruction of the Volga-Caspian Sea Shipping Canal. 

It is also rumored to have plans to create a transnational transport corridor to convey agriculture products to Western Asia and the Middle East, where food supplies are hurting from anti-Russia sanctions. 

All these actions guarantee Moscow a certain amount of influence in the region, especially since these countries, and in particular Azerbaijan, will welcome the economic benefits of being a transportation operator.

As the war in Ukraine presses on, Moscow may allow itself to loosen its grip here and there, which will give countries like Azerbaijan and Armenia more room to maneuver with the West, but it will not surrender its influence in the Caucasus wholesale. 

After all, this region is essential: If Russia is ousted from the Caucasus, the entire space between itself and Turkey and Iran can turn into a zone of confrontation that may spread to Russian territory, which is a nonstarter for Russian security.