Armenia in a Region of Change
Armenia in a Region of Change


by Richard Giragosian

It has been almost fifteen years since a cease-fire effectively ended the open war over control of Nagorno Karabakh. But for nearly every month since the signing of that May 1994 cease-fire agreement, the relative calm of the front-line separating Armenian and Karabakh forces from Azerbaijani troops has been disturbed by sporadic exchanges of sniper fire. And just as the Karabakh issue has been the central driver of the dispute between Armenia and Azerbaijan, the inherent insecurity and vulnerability of the Armenian-Azerbaijani border areas have led to a virtual cold war in the region.

A related impediment to even a semblance of relations between Armenia and Azerbaijan is the fact that while the cease-fire has "frozen" the Karabakh conflict, the ongoing international mediation effort seeking to reach a negotiated resolution to the conflict has only tended to keep passions and politics enflamed on both sides.

Most crucially, the mediation effort of the Karabakh conflict, carried out by the Organization for Security and Cooperation in Europe's (OSCE) so-called Minsk Group, provides one of the few venues for Armenian and Azerbaijani officials to meet face to face. Of course, there are several other multinational arenas where the official representatives from Armenia and Azerbaijan meet, such as the Council of Europe, UN and even the NATO Parliamentary Assembly, it is only the Minsk Group that brings them together to address bilateral issues.

Such limited diplomatic exchange between Yerevan and Baku, which is exacerbated by the reliance on outside powers to provide a reason or venue, only fuels mistrust and complicates even the simplest need for minimal contact. Such a need for some sort of communication, for example, was most apparent during the outbreak of wild fires in and around Nagorno Karabakh in the summer of 2007.

Facing a shared threat from natural disasters like seasonal wild fires or flooding, which recognize no borders, neither Armenia nor Azerbaijan is equipped to manage or contain such cross-border threats that necessitate at least a sharing of information, if not cooperation.

Misperception and misunderstanding

There is also a deeper problem, reflected in the dangers from nearly a 20-year absence of relations. More specifically, there is a deep-seated misperception on both sides, whereby Armenians and Azerbaijanis have increasingly distanced themselves from the earlier history of being neighbors. The collective memory of Soviet-era ties and relations has been tainted by the dominance of more painful remembrances of war, on both sides. This has only prompted each side to rely on stereotypes, making even the longer-term potential for a normalization or even acceptance of each side more difficult.

The hardening of both language and image has demonized each side. It has also infected the peace process, which is already burdened by an overall lack of transparency and inadequate public awareness of the status of the peace process. Moreover, the Minsk Group is inherently a closed and secretive process that results in misunderstandings and even misinformation. Such a negative effect is even more pronounced because not enough is being done by both the Armenian and the Azerbaijani governments to prepare their populations for a possible peace agreement.

A related shortcoming is tied to the fact of a lack of public disclosure of information concerning the peace process, a situation that only encourages misinformation and misunderstanding. While Armenia must do much more to engage its citizens in the peace process, for its part, Azerbaijan needs to similarly prepare its public. And for Azerbaijan, the secrecy and lack of information concerning the peace process tends to strengthen and enhance the militant rhetoric that Azerbaijani leaders are so fond of using against Armenia.

Similar challenges, but shared future?

Although few in either Armenia or Azerbaijan would care to admit it, the two rivals share some of the same fundamental challenges, including the need to weather external pressure and the burden of entrenched corruption. In fact, although both countries share a statistical record of impressive double-digit economic growth, there is a deeper and disturbing undercurrent of inequality running through Armenia and Azerbaijan alike. Manifested through a mounting socioeconomic divide and an economic polarization of society, both Armenia and Azerbaijan face a widening gap in economic inequality and income disparity. Such socioeconomic division can be seen more prominently in Armenia in recent years, as the authorities have been inept at correcting the disparities in wealth and income or in combating entrenched corruption.

Yet compared to Azerbaijan, Armenia holds one ironic advantage—the lack of energy resources. The apparent disadvantage of Armenia's lack of oil, for example, is actually a comparative advantage in terms of disparities in wealth and income. This "advantage" is particularly evident in the case of energy-rich Azerbaijan. Specifically, the challenge for Azerbaijan stems from the fact that economies endowed with natural resources have shown that such resource wealth has only tended to hinder political modernization and distort economic development in three ways.

First, the over-reliance on energy as both a source for state revenue and as the center of economic activity distorts economic development and diversification, and thwarts economic reform. Second, without strict controls and transparency, it fuels corruption and widens the social divide between a small wealthy elite and an impoverished majority.

And thirdly, the "inherited" nature of resource wealth also hinders the development of political institutions, fosters authoritarian governance and weakens the rule of law. Such "entitlement" from a resource-rich state like Azerbaijan is driven by the lure of immediate energy revenue, rather than from the more difficult task of forging institutions and economic structures capable of generating national wealth on their own.

Racing to the bottom

Against the backdrop of years of rivalry and undeclared but looming hostilities, Azerbaijan has led the region in a "race to the bottom," by spurring a virtual arms race through a sharp increase in its defense spending on a massive scale. After several rounds of an annual spike in defense spending by Baku, Yerevan feels compelled to keep pace, fueling the buildup and only hardening positions in the region. Over the medium term, the danger for Armenia is not simply to match Azerbaijan's military spending and rearmament. The danger is also expressed by the fact that the compulsion to increase the Armenian defense budget may crowd out other priority areas for state investment, especially in the social sector, thereby not meeting the country's critical needs for its future generations. This is not meant to dismiss the pressing challenge of a shifting military balance of power in the region, but is instead a warning that not all national power stems from military might and that Armenia is also faced with other long-term needs just as crucial to its national security.

Aside from the more general competition over arms spending, Armenia has also witnessed the darker side of Azerbaijani hostility. The recent five-year anniversary of the death of an Armenian military officer, commemorated on February 21, reminded many in Armenia that Azerbaijani aggression is more serious than the mere rhetoric of its leaders. The anniversary marked the tragedy when Azerbaijani Army Lieutenant Ramil Safarov axed to death Armenian officer Gurgen Margaryan during an English-language study seminar conducted by NATO in Budapest, Hungary.

This brutal murder only reinforced the image of the Azerbaijani military as a force without honor or norms, especially as the killing was in a dormitory, not on a battlefield, and was, ironically, executed during a "Partnership for Peace" seminar. It also confirmed the fact that the future course of Armenian-Azerbaijani relations, or lack thereof, will remain dominated by security issues, and complicated by Azerbaijan's desire to build a new military.

Azerbaijan's Military Aspirations

In terms of the outlook for bilateral relations, the largest obstacle comes from Azerbaijan's military aspirations. As one of the most militarily ambitious of the former Soviet states, Azerbaijan has repeatedly asserted a commitment to building a modern, self-sufficient armed forces on its own terms, rejecting the patronage of both NATO and Russia. Still, the course of military reform in Azerbaijan has been particularly difficult in recent years. And despite a sharp increase in its annual defense budget financed by its energy wealth, the outlook for Azerbaijan's rise as a regional power is far from certain.

Despite the benefits of three consecutive years of defense budgets of more than $1 billion, Azerbaijan has accomplished little, with no new advanced weapons systems, little by way of modern equipment and even less in terms of training or investment in manpower. Assessing the three branches of Azerbaijan's armed forces, it is clear that the army and air force both continue to suffer from neglect and under-investment, with continued shortages of spare parts and poor equipment maintenance. In addition, the Azerbaijani Air Force continues to suffer from shortfalls in munitions, ordnance and even aviation fuel, making the service the least combat-ready force within the Azerbaijani armed forces. The Azerbaijani army, traditionally the core service of the armed forces, also lacks power projection capabilities and is far from attaining even a minimum level of combat readiness.

Thus, the real potential for building a modern armed forces in Azerbaijan remains little more than a distant promise at this stage. And even with the enormous state budgets for defense, a relatively small proportion of defense spending has actually been spent on arms, training and essential equipment. Moreover, although the future trajectory of Azerbaijan as a regional military power seems certain, it will remain dependent on at least a decade of sustained and serious military reform before Azerbaijan can even begin to realize its potential as the dominant military power in the region.

The centrality of the Karabakh issue

Returning to the core of the Armenian-Azerbaijani problem, Karabakh is the central issue. Recent events have only tended to enhance the centrality and significance of the Karabakh issue. For example, the recent Russian decision to recognize the independence of Georgian regions Abkhazia and South Ossetia should be understood as a decision related to Russian policy regarding Georgia and the United States. Further, Russian recognition is not simply a decision concerning an affirmation of the right to self-determination. In fact, Russia has already privately assured Azerbaijan that despite the decision, Moscow continues to recognize Azerbaijan's "territorial integrity" and stressed that Nagorno Karabakh is a unique case, with important differences from the models of Abkhazia and South Ossetia. The Russian ambassador to Azerbaijan has even publicly confirmed that the "agreement" reached in July between the Russian and Azerbaijani presidents (during President Dmitry Medvedev's visit to Baku), in which Russia pledged to uphold Azerbaijan's territorial integrity, still remains in force.

Thus, in terms of the broader perspective, despite the apparent link to the Karabakh issue, whereby the decision seems to strengthen the case for Karabakh's right of self-determination over Azerbaijani territorial integrity, the significance of the Russian decision is limited.

Regarding Azerbaijan, there are already many inside the Azerbaijani government and even the military that see no real value in retaking Nagorno-Karabakh. And many in Baku see the value of Karabakh for their national interests as limited. In other words, Karabakh has no economic value or even military significance for Azerbaijan. But what they want are two essential things: First, they want to be seen as gaining something in return for losing Karabakh; Second, they are desperate to regain the areas of Azerbaijan proper, outside of the Karabakh borders, in order to restore their border with Iran, as a strategic necessity. Yet such thinking in Baku regarding the Karabakh issue is not widely held and is challenged by the threat or demands of powerful Azerbaijani nationalism, and reflects a sense that with the influx of its oil wealth, Azerbaijan is not happy at having "lost" Karabakh.

But what is most worrisome is the fact that that Azerbaijan seems to be dangerously committed to launching a new war to retake Karabakh. It seems there is no longer a question of if there will be an Azerbaijani military offensive, but a question of when. Fortunately, given the poor state of readiness of the Azerbaijani armed forces, which is seriously undermined by corruption and poor conditions, Azerbaijan is at least 8-10 years away from becoming a serious military power.

But time is on their side and their future emergence as the strongest military power in this region is a serious possibility. Even more distressing is the fact that Azerbaijan sees a different lesson from the recent conflict in Georgia. Many leading Azerbaijani officers see that the most serious Georgian mistake was not Saakashvili's decision to launch a military campaign to retake South Ossetia, but rather, launching military operations before they were ready.

Thus, the Azerbaijani view is that they have learned from the Georgians that it is better for them to wait until they are strong enough and ready to wage war to retake Karabakh. And this may mean that the most serious aspects of the Armenian-Azerbaijani problem are not the Azerbaijani military challenge and the unresolved Karabakh conflict, but rather, the combination of the two issues as one powerful and looming threat.

Originally published in the May 2009 ​issue of AGBU Magazine. Archived content may appear distorted on your screen. end character

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