Peace in Southern Caucasus: What Awaits Russia in Azerbaijan?

On September 20, 2023, the source of fundamental instability in the South Caucasus disappeared. No one is shooting or laying mines in Karabakh anymore, there is no constant threat of another outbreak of hostilities and their escalation to a large-scale war, the tension on the Armenian-Azerbaijani border has decreased almost to zero. A completely new situation has emerged in the region: the South Caucasus has become 100% safe and stable. Potential risks surely remain, but they do not have the political and/or physical resources to materialize. The main pacifying factor is that none of the regional states is interested in new wars with each other. Azerbaijan has no claims to Armenia’s territories, Armenia has renounced its claims on Azerbaijan’s territories (although they have yet to be eliminated from the Armenian Constitution), it makes no sense for Iran to attack Azerbaijan as an ally of Russia and Turkey, and Georgia will never dare to go to war with Russia. Yes, the peace treaty between Azerbaijan and Armenia has not yet been signed, and the Armenian-Azerbaijani and Armenian-Turkish borders have not been opened yet, but these bilateral issues do not constitute a region-wide problem. Even if not de jure, then at least de facto, South Caucasus is now a peaceful region, once again.

Peace in South Caucasus is what Russia sought for three decades, but it was restored at a price—a temporary ratcheting up of anti-Russian tendencies in Armenia. Yet, it is beyond any doubt a geopolitical and geo-economic gain or dividend in Russia’s foreign policy balance. Now that the task has been accomplished, it is time we summarized the outcomes of the conflict and determined what adjustments Russian policy may need in connection with this drastic change on the ground. While much work is yet to be done to heal the relations with Armenia, removing uncertainties and re-establishing the once close ties—as regards the relationship with Azerbaijan, which won the Karabakh war not only for itself but also for the entire region, it is already possible to speak with confidence about the outlook for allied interaction in the new historical era.

The peaceful mode of the South Caucasus existence has yet to be conceptualized. There will surely be no “end of history”, which some may envision after many years of confrontations have come to an end. The completion of the post-Soviet transition in the region is obvious after the political minefield laid during the Soviet era has been defused. Yet this is not the end, but the beginning of a better life ahead. The fundamental principles in the foreign policy pursued by Russia and Azerbaijan determine the solely constructive direction in the development of their relations. The latter need to be protected, since extra-regional forces will not give up their attempts to undermine peace in the South Caucasus. Nevertheless, both Moscow and Baku have been used to defending their national interests and the interests of their allies.

An epilogue for Karabakh

On September 20, 2023, a historic event took place. Its scale and impact on the future of South Caucasus and Russia’s policy in this region has yet to be comprehended. The separatist hotbed in Karabakh, which had been supported by Armenia militarily, diplomatically and financially for 32 years, declared itself liquidated following a one-day counter-terrorist operation launched by the Azerbaijani Armed Forces. On that day, Baku restored the constitutional order of the Republic of Azerbaijan across the entire Karabakh economic region, and the remnants of the Armenian armed forces were disarmed and withdrawn to the territory of Armenia within a week. Thus, both sides of the Armenian-Azerbaijani settlement resolved the “Karabakh issue” in respect of Yerevan’s claim to establishing a second Armenian state on Azerbaijani lands and their subsequent annexation by Armenia. The Azerbaijani authorities used force to ensure security in Karabakh, while the Armenian authorities, instead of launching hostilities against the Azerbaijani army or organizing a “Karabakh government in exile,” ordered the closure of the separatist project in Khankendi (Stepanakert).

On September 20, 2023, the source of fundamental instability in the South Caucasus disappeared. No one is shooting or laying mines in Karabakh anymore, there is no constant threat of another outbreak of hostilities and their escalation to a large-scale war, the tension on the Armenian-Azerbaijani border has decreased almost to zero. A completely new situation has emerged in the region: the South Caucasus has become 100% safe and stable. Potential risks surely remain, but they do not have the political and/or physical resources to materialize. The main pacifying factor is that none of the regional states is interested in new wars with each other. Azerbaijan has no claims to Armenia’s territories, Armenia has renounced its claims on Azerbaijan’s territories (although they have yet to be eliminated from the Armenian Constitution), it makes no sense for Iran to attack Azerbaijan as an ally of Russia and Turkey, and Georgia will never dare to go to war with Russia. Yes, the peace treaty between Azerbaijan and Armenia has not yet been signed, and the Armenian-Azerbaijani and Armenian-Turkish borders have not been opened yet, but these bilateral issues do not constitute a region-wide problem. Even if not de jure, then at least de facto, South Caucasus is now a peaceful region, once again.

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Peace in South Caucasus is what Russia sought for three decades, but it was restored at a price—a temporary ratcheting up of anti-Russian tendencies in Armenia. Yet, it is beyond any doubt a geopolitical and geo-economic gain or dividend in Russia’s foreign policy balance. Now that the task has been accomplished, it is time we summarized the outcomes of the conflict and determined what adjustments Russian policy may need in connection with this drastic change on the ground. While much work is yet to be done to heal the relations with Armenia, removing uncertainties and re-establishing the once close ties—as regards the relationship with Azerbaijan, which won the Karabakh war not only for itself but also for the entire region, it is already possible to speak with confidence about the outlook for allied interaction in the new historical era.

Russian-Azerbaijani baggage

How does Azerbaijan enter the new historical era of South Caucasus from the perspective of Russia’s interests? First of all, this country is friendly towards Russia; moreover, it is a reliable and problem-free ally. Second, it is a truly independent state that builds its foreign policy in accordance with its national interests. Third, it is a responsible and sober-minded participant in international relations, always honoring its obligations. Finally, it is a wealthy economic partner. All of these factors together determine the synergy of Russian and Azerbaijani regional policies. Let us look at them in greater detail.

Sovereignty is the fundamental basis of the modern policy pursued by the Republic of Azerbaijan. Unlike many states of similar size that prefer the role of satellites to regional and world powers, Baku seeks independence in external contacts. The Republic prefers to interact with all partners via direct bilateral ties and participates only in those international organizations that pursue economic cooperation and have no hidden political agenda dictated by influential stakeholders. Moreover, even in economic integration projects, Azerbaijan prioritizes its own benefits from membership—for example, it has not joined the WTO because the conditions do not satisfy the national leadership.

Azerbaijan has no expansionist plans, nor dreams of political “relocation” to the West, so typical of some post-Soviet regimes. The country wants to live a tranquil life “at home” in peace with large neighbors (Russia, Turkey, Iran), small neighbors (Georgia, Armenia) and overseas nations (Central Asian states, for example), fostering mutually beneficial business ties with all external partners. Azerbaijan is working to preserve and develop its national identity rather than making any attempts at importing someone else’s ideology, being a country with fragile statehood. This is what the sovereignty of a healthy state is about: it has everything it needs to live independently (including the ability to defend its own goods against foreign encroachment), and it does not need anything from others.

For Russia, the sovereignty of states is one of its key foreign policy tenets. It is impossible to build sustainable relations with satellite nations, as they drift wherever the political winds of the host state blow. Negotiating and concluding agreements with them is a waste of time and effort, because they are not, as such, true actors in international relations, shifting all responsibility for their words and actions to their masters. Independence in foreign policy is the principle which Moscow urges all nations of the world to follow, seeing it as a lynchpin of global geopolitical balance. In Azerbaijan, Russia finds an exemplary realization of the sovereignty model suitable for smaller nations.

Sobriety and responsibility are the second distinguishing feature of Azerbaijan’s policy, complementing the staunch resolution to defend national sovereignty. Baku soberly assesses both its capabilities (limitations and development potential alike) and its position at the crossroads of interests promoted by regional and world powers. The Azerbaijani authorities do not get involved in others’ political scams, where sooner or later they will have to take sides, strictly adhering to the norms of international law and being able to find compromises in contacts with cooperative countries. Most importantly, they honor agreements and implement them, which means a predictable foreign policy.

More than 30 years ago, when national leader Heydar Aliyev came to power, the Republic staked on developing as many mutually beneficial economic ties with near and overseas nations as possible and it has shown itself to be an extraordinarily stable business partner over these decades. The political situation does not affect Azerbaijan’s cooperation with its economic partners. After the Karabakh war, Paris has consistently been worsening its relations with Baku for the sake of Armenian diaspora votes and colonization of Yerevan, while the France-based Total Energies continues its operations on Azerbaijani fields. In the EU as a whole, one can see a kind of “split personality” towards Azerbaijan: while the European Commission extols the import of Azerbaijani natural gas, the European Parliament and PACE rage over the fact that Baku neglects Brussels’ wishes.

For Russia, a sense of responsibility is another valuable feature of foreign nations. Keeping the commitments is the very nature of normal foreign policy relations, both under international law and under bilateral/multilateral arrangements. Unfortunately, sovereignty does not always mean reliability or sanity in external contacts, as is exemplified by the United States. When it comes to Azerbaijan, Russia can rest assured that all formal and informal agreements will be honored. There is equal confidence that Baku will not participate in anti-Russian campaigns, jeopardizing the entire set of benefits from its alliance with Russia.

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Azerbaijan’s economic soundness is largely a function of its sobriety and a sense of responsibility. The Republic’s advantage is its hydrocarbon wealth, but, firstly, these commodities still need to be delivered to buyers, and second, oil and gas resources are in the end exhaustible, so the economy has to be diversified as widely as possible. To address both problems, the Azerbaijani authorities initiate, organize and implement major infrastructure projects at the international level. Azerbaijani gas flows to Italy and the Balkans over the Southern Gas Corridor, Azerbaijani oil reaches the Mediterranean coast through the Baku-Tbilisi-Ceyhan pipeline, both being Baku’s 21^st century projects.

Azerbaijan is active in unlocking its potential rather than waiting for proposals and financing to come from abroad. Thanks to this proactive stance, two global logistics routes currently run through the territory of the Republic: the matter regards the North-South corridor that opens access to Iran and Pakistan for Russia over landmass (and sea access to India via Iranian ports); and the East-West corridor, which allows China and Central Asia to transport cargo to Turkey and Europe. Baku honors its obligations fully and ahead of schedule—for example, the Azerbaijani section of the railroad, which is part of the North—South International Transport Corridor, has already been built, its launch being delayed only because of Iran’s procrastination. Within the East-West route, Azerbaijan is developing the Middle Corridor project, the Baku-Tbilisi-Kars railroad being its operational part; as for the Zangezur Corridor project—the Azerbaijani section—the plan calls for its completion already in summer 2024.

For Russia, Azerbaijan’s economic soundness is of value, given that the space for business cooperation is expanding. Azerbaijan has invested over USD 1 billion in Russian enterprises, whereas Russian companies have invested over USD 4 billion in Azerbaijani projects. Trade turnover is growing at double-digit rates: in 2022, the growth rate stood at 23.9% (USD 3.71 billion), in 2023—17.5% (USD 4.358 billion), Russian exports accounting for three-quarters of this volume. The number of joint ventures and Russian companies operating in Azerbaijan has exceeded 1,000. It is extremely important that Baku implements its part of the initiated projects using own funds and Russia does not have to help it financially, unlike the Iranian case where Moscow has to assist Tehran with the completion of the Astara-Resht railroad section of the North-South ITC.

Azerbaijan’s friendliness towards Russia is also a consequence of its sobriety and its sense responsibility. Russia and Azerbaijan border on each other in the South Caucasus and the Caspian Sea, being brought together by centuries-old ties. Unlike neighboring Georgia and Armenia, where historical and humanitarian factors do not prevent the authorities from aspiring to Euro-Atlantic integration projects, Azerbaijan sees Russia as a naturally prioritized partner. A distinctive feature of the Republic is an emphasis on the Russian language: out of 4,500 Azerbaijani schools, 340 (which translates to 140,000 children or about 10% of all students) are taught in Russian; in other 3,000 schools Russian is learnt as a foreign language; over 15,000 students are enrolled in Russian language departments of Azerbaijani universities. Of course, the traditions of Azerbaijani multiculturalism, which manifests itself in respect for all nationalities, religions and languages, also play a major role, but the statistics on Russian-language education indicate that the Azerbaijani leadership recognizes and encourages Russia’s special place in the Republic's foreign relations.

It is impossible not to mention the personality factor in the phenomenon of Azerbaijan’s friendship with Russia. The mutual understanding between President Vladimir Putin and President Ilham Aliyev stands out even against the background of the Russian leader’s contacts with the leadership of other nations participating in Russian integration projects. They always discuss cooperation, avoiding sensitive issues. Ilham Aliyev, continuing the cause of his father Heydar Aliyev, is the author of Azerbaijan’s modern foreign policy course, and focusing on deeper relations with Russia is his deliberate choice. His strongest decision of recent years was the signing of the Declaration on Allied Cooperation between Russia and Azerbaijan on February 22, 2022. Throughout the 20 years of Ilham Aliyev’s presidency, Azerbaijan has behaved as a reliable partner and ally of Russia.

Plans in the era of peace

What will Moscow and Baku work on together now—after the resolution of the “Karabakh issue” and the upcoming presidential elections in Russia and Azerbaijan in February-March? Since both states are stable and are very likely to remain stable in the post-election period, first of all, the implementation of the 2018 Roadmaps and the provisions of the Declaration on Allied Cooperation will be gaining pace. The dependability of relations between the two nations in the era of peace in the South Caucasus was recently confirmed by the signing in Baku of a more detailed economic and socio-humanitarian roadmap specifying a plan for cooperation in 2024-2026.

The new roadmap demonstrates the scope and scale of Russian-Azerbaijani economic ties: the governments are going to support bilateral cooperation in small and medium-sized entrepreneurship, industrial manufacturing (primarily oil and gas as well as agricultural engineering), mutual export-import of foods and other agricultural produce, improvement of sales markets, and mutual increase in tourist flows. Entrepreneurial contacts will be supported by both governments through the organization of business missions and interregional forums. It is also planned to increase the number of Azerbaijani students in Russian universities, to hold advanced training courses for school teachers and a whole range of sports and youth events, to enhance the focus of specialized ministries on the development of joint projects in the field of culture and vocational education.

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Completing the work on global infrastructure projects is a special priority in the new era. While Iran, with Russia’s assistance, is getting ready to build the Astara-Resht railroad section, Russia and Azerbaijan will be busy remodeling border entry points and adjacent road infrastructure so that the North-South International Transport Corridor roads and customs might have a margin of safety in the future. As regards the Zangezur corridor, the sides will jointly influence Armenia, which has not yet started building its section through Meghri, and keep the construction of bridges on the Iranian section under their control. Today, Azerbaijan’s logistical opportunities for the export-import of goods are more important for Russia than ever—launching the Zangezur corridor and improvement of the Baku-Tbilisi-Kars route will create a new global North-West route.

In the political sphere, Moscow and Baku have yet to get Yerevan to sign a peace treaty. Here, as in the economic sphere, the positions of Russia and Azerbaijan coincide, and the recent statement by Armenian Prime Minister Nikol Pashinyan on the need to replace the Armenian Constitution (which contains claims to Karabakh) suggests that their joint efforts are yielding results. Russia has the task of keeping the Armenian authorities from excessive leaning towards the West, while Azerbaijan’s goal is to launch the process of Azerbaijanis once ousted from Armenia getting back there. And the allies may well turn to each other for help on these issues. Baku is guaranteed Moscow’s help in defending the outcome of the Karabakh war, and Moscow is guaranteed Baku’s help in combating anti-Russian tendencies in the region.

The peaceful mode of the South Caucasus existence has yet to be conceptualized. There will surely be no “end of history”, which some may envision after many years of confrontations have come to an end. The completion of the post-Soviet transition in the region is obvious after the political minefield laid during the Soviet era has been defused. Yet this is not the end, but the beginning of a better life ahead. The fundamental principles in the foreign policy pursued by Russia and Azerbaijan determine the solely constructive direction in the development of their relations. The latter need to be protected, since extra-regional forces will not give up their attempts to undermine peace in the South Caucasus. Nevertheless, both Moscow and Baku have been used to defending their national interests and the interests of their allies.