Azerbaijan signals dissatisfaction with stalled peace process in Karabakh Russia's new emissary in Karabakh?

On November 17, President Ilham Aliyev received the delegation of the European Union and a number of Eastern Partnership member states, led by Special Envoy of the European Union for the Eastern Partnership Dirk Schuebel, to discuss the perspectives of future cooperation. The meeting could be just another routine trip of the EU officials to Baku if not for President Aliyev's critical statements regarding the ongoing process around the Karabakh region with the involvement of Russia, a key mediator of the peace negotiations between Azerbaijan and Armenia.

Although 2022 slightly comes to an end, the peace process between Baku and Yerevan stalled with Russia attempting to impose its own agenda. Since the recent border clashes between Armenia and Azerbaijan, official Baku keeps signalling that it is vitally important to sign a final peace treaty and proceed with border delimitation/demarcation in order to avoid further hostilities. However, Russia's recent "enthusiastic" mediation efforts appeared to be insufficient to address the concerns of Baku and Yerevan.

On the contrary, Vladimir Putin's recent statement at Valdai Forum on October 27 that “the Western option assumes that Karabakh will remain as part of Azerbaijan. So, Armenia should decide with whom it wants to solve this issue" highlighted Moscow's vision regarding "resolution plan of Karabakh issue." Vladimir Putin's public confession that the Russian peace plan does not envisage the Karabakh region as an integral part of Azerbaijan raised eyebrows in Baku and stirred public debates, whereas Armenian Prime Minister Nikol Pashinyan stressed that Armenia agreed with the proposed Russian plan, not Western.

Such statements of Vladimir Putin immensely caused a schism between Baku and Moscow, though not an open confrontation. The situation worsened with the appearance of Armenian-origin Russian tycoon Ruben Vardanyan in Karabakh in September 2022, who obtained Armenian citizenship and denounced the Russian. Officially, Vardanyan relocated to Karabakh with the invitation of Araik Harutunyan, the chief of the de-facto separatist regime. As such, on November 4, Ruben Vardanyan was appointed as Minister of State by Arayik Harutyunyan, succeeding Artak Beglaryan.

However, Vardanyan's rise to power within the separatist regime did not raise questions in Azerbaijan but also in Armenia due to his involvement in Russian politics and economics; the businessman was one of the founders of Troika Dialog, a multinational investment firm that was identified in an OCCRP investigation for its involvement in a large-scale money laundering scheme which channelled $4.6 billion of wealth from Russia to the West between 2006 and 2013.

Ruben Vardanyan’s “unexpected” relocation to Karabakh and skyrocketing career increased fury in Azerbaijan as the local authorities are confident Vardanyan’s decision to engage with the region has not been taken independently, but with the push from Moscow. Given the current circumstances and events around Vardanyan’s rise, it is likely that the "power transition" within the separatist regime in Karabakh will occur soon. Araik Harutunyan, whose image as a public figure has been damaged following the results of the second Karabakh war in 2020, is set to be replaced by a well-known figure with vast resources. Therefore, the gradual power transition within the de-facto separatist regime looks inevitable.

President Aliyev seemed to be frustrated with the fact that Russian leadership may not be happy with Azerbaijan's reconciliation efforts with the ethnic Armenian community in Karabakh, which could potentially pave the way for the final peace agreement and withdrawal of the Russian peace contingent from Karabakh. This thesis now sounds more reliable with President Aliyev's statement that Ruben Vardanyan was sent to Karabakh from Moscow with a clear agenda. Vardanyan’s embracement of more power in Karabakh would suit Russia due to his principal stance that Karabakh cannot be under the jurisdiction of Azerbaijan and make the reconciliation attempts more complicated.

However, Ruben Vardanyan does not rule out the possibility of talking with the Azerbaijani authorities claiming that “I did not participate in the war, I did not fight, and in this regard, it may be easier for them to talk to me than to the people who went through the war in Karabakh.”

Nevertheless, Baku is highly sceptical about Ruben Vardanyan's role in the process perceiving it as another tool for exerting pressure on Azerbaijan Russia. In his recent statement to talk to Karabakh Armenians, President Aliyev mainly refers to individual communication options avoiding referring to it as a separate political entity. Also, by ruling out the prospect of holding talks with Vardanyan and mentioning Moscow’s role, Aliyev may want to signal that Ruben Vardanyan may be arrested in a particular operation by Azerbaijani forces if the situation escalates. However, at the first stage, official Baku will likely attempt to exert more influence on Vardanyan by challenging his efforts to attract additional regional investments flowing mostly from Armenia and Russia.

From the point of view of Azerbaijan, Armenia's efforts to torpedo the peace negotiations by referring to the point of autonomy of Karabakh Armenians in Sochi and Brussels meetings could trigger the next round of deadly hostilities resulting in a complete loss of connection of the region with Armenia.

As time flows, Azerbaijan and Armenia are still unable to reach a consensus over the Karabakh issue and border demarcation process citing national interests and security concerns. Simultaneously, mediation efforts of the West are insufficient amid Russia's and, to some extent, Iran's efforts to destabilize the situation, even more pushing the process to a dead end. Undoubtedly the EU would push for another comprehensive face-to-face meeting of Azerbaijani and Armenian leaders in Brussels in early 2023, as the failure to do that may provoke another round of violence in the region.