Nagorno-Karabakh conflict unlikely to escalate

Nagorno-Karabakh conflict unlikely to escalate
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The surge of violence along the contested border of the Nagorno-Karabakh breakaway republic came as a stern reminder of the danger posed by the frozen conflict to Caucasus stability. However, international interests in the area make a wider escalation unlikely.

In April 2016, heavy fighting broke out along the Nagorno-Karabakh Line of Contact (LoC). Clashes pitting Azerbaijani against Armenian and Nagorno-Karabakh military units lasted four days and left approximately a hundred combatants and a dozen civilians dead. Clashes took place on the northern extremity of the LoC as well as throughout the central and southern sectors of the contested area. Both camps used armoured units as well as artillery and rocket fire in what was the worst round of fighting since the 1994 ceasefire.

A ceasefire freezing the hostilities was agreed by both parties on April 5th. Since then, violence drew down but sporadic cross-border fire continued to be reported. The reasons behind the short conflict remains unclear as both parties continue to blame the other. It appears that Azerbaijan may have wanted to test its combat readiness and try to gain strategic ground along the mountainous regions of the LoC.  The tangible results of the fighting are limited. Following the April ceasefire, Baku gained very little ground and the Yerevan-Stepanakert strategic position in the breakaway region has not been dismantled.

Nagorno-Karabakh: A Cold War burden

The Nagorno-Karabakh frozen conflict is a deadly legacy of the disintegration of the Soviet Union. In 1988, fighting erupted between Armenian ethnic separatists supported by Yerevan and Baku in south-western Azerbaijan. The conflict was part of the rise of nationalist sentiments following the downfall of the USSR. It lasted until 1994 and left approximately 30,000 dead. Following the ceasefire, the breakaway region set up political institutions and became a de facto unrecognised sovereign republic with an independent militia supported by Armenian forces. While Yerevan claims that the region is an integral part of Armenia, Azerbaijan does not recognise Stepanakert independence.

While the conflict has been frozen since 1994, the LoC is periodically subject to cross-border clashes of varying intensity. Spikes of violence have occurred in 2008 and 2010 as ceasefire violations prompted rival sides to engage in limited offensives. 2014 and 2015 marked a surge in localised clashes that led to several high-profile incidents, including the downing of a Nagorno-Karabakh military helicopter in November 2014. Throughout the early months of 2016, the situation escalated as the tempo of border clashes increased.

Russian sphere of influence and tensions with Turkey

The Caucasus is within Russia’s historic sphere of influence and Moscow maintains strong ties with both Yerevan and Baku.

Armenia is a member of the Collective Security Treaty Organisation (CSTO) and the Eurasian Economic Union (EEA). In addition, Russia maintains an active military presence in Armenia via its 102nd military base in Gyumri and since December 2015 both countries have an integrated air defence system.  While Azerbaijan is not so closely linked to Moscow, the country has deep relations with Russia and relies on it for arm sales.

Russia is in fact the first arm supplier of both Armenia and Azerbaijan. Both countries have been acquiring hundreds of millions worth of Russian modern military hardware. This situation gives Moscow a strong political influence on the region’s state of affairs and enabled Russia to push for a prompt ceasefire while hostilities were underway in early April.

Russia’s influence in the region is also part of a wider geopolitical power struggle between Moscow and Ankara. Turkey has strong political, economic, military and cultural ties with Azerbaijan. Since Azerbaijan’s independence it has been strengthening these relations by building them on a shared ethnic and religious heritage.

Given the current animosity between Russia and Turkey sparked by their competing positions in regard to the Syrian conflict, the rivalry between Armenia and Azerbaijan has the tendency of becoming a backdrop for tensions. In 2015, Turkey strongly denounced the Armenia-Russia air defence agreement. 

Troubled economies in a strategic region

While the region is locked in deep-rooted tensions between several players, two factors make it unlikely that the Nagorno-Karabakh clashes will degenerate into a wider conflict.

The economic outlook of Armenia and Azerbaijan would not enable them to sustain a protracted conflict. On one hand, the IMF reviewed its economic outlook for Armenia in April, downgrading the growth expectations to 1.9% for 2016 and increasing the expected unemployment rate to approximately 18%. On the other hand, Azerbaijan has suffered from the drop of oil prices in late 2015 and early 2016.

This forced the government to review its national budget, implement capital control measures and face a wave of protests. Given this situation both countries are unable to sustain a protracted conflict that would shift beyond the Nagorno-Karabakh LoC. In addition, both Russia and Turkey are unlikely to sacrifice their economic and political interests in the region by sponsoring a proxy war in the Caucasus, a region whose stability benefits both camps.

The stability of the region is also pivotal for the global economy as several oil and gas pipelines transit through western Azerbaijan. The Trans-Anatolian Natural Gas Pipeline (TANAP) as well as the South Caucasus Pipeline and the Baku-Tbilisi-Ceyhan (BTC) pipeline all transit in areas north of Nagorno-Karabakh. These pipelines are strategic for Turkey and Europe’s energy needs as well as for the export of Azerbaijani fossil products.

Given the fact that all actors involved in the Nagorno-Karabakh tensions have direct or indirect interests in the pipelines, it is unlikely that any of them would push for a conflict that would risk interrupting the flow of energy in the region or damaging the pipelines’ structure.

Forecast

In the foreseeable future the Nagorno-Karabakh conflict is expected to remain a frozen conflict leading to periodic surges of violence along the LoC. Azerbaijan or Armenia will not try to push for any bold manoeuvre that would strategically upset the current status quo, as Russia would respond by using its political and military leverage to maintain a situation of stability in a region of primary interest for its weakened economy.

Categories: Europe, Security

About Author

Riccardo Dugulin

Riccardo Dugulin is an analyst at Drum Cussac, a global business risk consultancy. He specializes in supporting international organizations and large corporations operating in emerging markets by providing them with critical risk management intelligence. His regions of expertise are the Near East, the Gulf, North Africa and Continental Europe. He previously worked as project manager for a French medical assistance company. He gained field experience in the Middle East having worked for leading think tanks in Dubai and Beirut. Riccardo holds a Master in International Affairs from the Sciences Po – Paris and a Bachelor in Middle Eastern Studies from the same university. Follow him on Twitter @RiccardoDugulin.