Stratfor Worldview: What to watch for as Armenia-Azerbaijan peace talks gain momentum

US-based website Stratfor Worldview has published an article focusing on the recent peace talks between Armenia and Azerbaijan. Caliber.Az reprints some passages from the article.

A possible peace treaty between Armenia and Azerbaijan would bring stability to the South Caucasus and weaken Russia's influence in the region, creating opportunities for a growing economic presence of Türkiye and the West. On August 31, Armenian Prime Minister Nikol Pashinyan and Azerbaijani President Ilham Aliyev met in Brussels for talks mediated by European Council President Charles Michel, the fourth discussion in this format. No concrete policy changes regarding the disputed Nagorno-Karabakh region nor breakthroughs in broader peace negotiations were announced, but the two leaders agreed to "continue substantive negotiations" at the level of foreign ministers on drafting a peace treaty. Armenia and Azerbaijan's foreign ministers will meet next month; the two countries' presidents are also slated to meet again in November. The ongoing flurry of diplomatic activity is related to the scheduled departure of Armenian soldiers from Nagorno-Karabakh by the end of September, which will complete the main stipulations of the 2020 cease-fire agreement that ended the six-week war between Armenia and Azerbaijan.

The Azerbaijani and Armenian commissions tasked with determining the borders between the two countries met in Moscow on August 30. The commission, which held its first meeting in Moscow on May 24, was set up to delimit Azerbaijan and Armenia's joint border as part of their peace process and is next scheduled to meet in Brussels in November.

The likely withdrawal of Armenian troops from Nagorno-Karabakh in the coming weeks will further cement Azerbaijan's advantage in the bilateral dispute. A complete withdrawal of Armenian troops from the region is a precondition for further progress on a peace treaty with Azerbaijan. Such a withdrawal would leave the self-proclaimed Nagorno-Karabakh Republic's ethnic Armenian defence forces vulnerable to Azerbaijani forces, who have retained a decisive advantage in personnel, equipment and positioning in Nagorno-Karabakh since the end of the latest armed conflict in November 2020. Limited transportation routes due to the region's mountainous terrain would also make it militarily unfeasible for Armenian forces to return to the region by seizing a corridor if Azerbaijan launches a large-scale military action against Nagorno-Karabakh. But despite these risks, Armenia will likely still stick to the pledge it made in July to pull out all of its conscripts in Nagorno-Karabakh by September, as not doing so could trigger additional clashes or even another full-scale war with Azerbaijan — which, given Baku's more powerful forces, would be costly and likely yield little benefit for Yerevan.

Even if Armenia reneges, Azerbaijan is unlikely to trigger a greater conflict in Nagorno-Karabakh, but will retain this option should diplomacy and more targeted use of force fail to change Armenia's course. Azerbaijan is unlikely to pursue seizing control of the region by force — at least for now. Instead, Baku will attempt to use its current leverage to convince Yerevan to conclude a peace deal...

Although Armenia proper is part of Russia's security umbrella through its membership in the Collect Security Treaty Organization, some Armenians are sceptical that Moscow could and would be willing to help Armenia in the case of a renewed war amid Russia's invasion of Ukraine...

Armenia and Azerbaijan have also remained secretive regarding their exact proposals for a permanent peace treaty, likely to prevent political backlash in either country from undermining talks. But this secrecy breeds distrust, which could eventually endanger a deal by increasing the risk of violence. This risk of backlash is especially pronounced in Armenia, where many are distrustful that their government will give too many unsavoury concessions to Baku, who they believe is not even negotiating in good faith anyway...

Following the August 31 meeting between Armenia and Azerbaijan's leaders, EU President Charles Michel stressed that ''public messaging [was] critical'' in ''preparing both sides' populations for a long-term sustainable peace''.

Should a peace deal keep moving forward, it would result in a relative decline in Russia's influence in the South Caucasus would decline in favour of Türkiye and the West in the coming years. The signing of a peace treaty would likely prompt both Armenia and Azerbaijan to deepen their ties with Türkiye and the European Union at the expense of Moscow, because of the perception of better economic opportunities... A peace deal with Azerbaijan, however — and the likely subsequent normalization of Armenia's ties with Türkiye — would change that calculus by removing the immediate threat of war. Over time, this could see Armenia increasingly question its close relationship with Russia, and whether the benefits of maintaining those ties still outweigh the costs — especially amid the war in Ukraine...

The combination of a peace treaty and a reduction of Russia's involvement in the South Caucasus could make EU and Turkish investors perceive the region as less risky, opening the door to their greater economic presence. These investors' increased activities would, in turn, challenge Russia's role in the region, as much of the investment would involve transport infrastructure bypassing Russia through routes such as the Trans-Caspian Corridor. The resulting increased competition for economic influence in the region would become yet another aggravating factor in the already complex triangle of Russian-Turkish-EU relations.

Russia's foreign ministry has repeatedly expressed its displeasure over the European Union's role in mediating a solution to the Nagorno-Karabakh conflict. On August 31, the spokesperson for Russia's foreign ministry said that the bloc's activity in the South Caucasus is conditioned on ''geopolitical ambitions'' and an attempt to ''shamelessly usurp the laurels of mediation'' from Russia.