Looming Dangers One Year after Nagorno-Karabakh Escalation

The room housing refugees in the former Soviet sanatorium just outside Baku was getting a much-needed facelift: new black-and-silver floral wallpaper "to make it more attractive to the future in-laws of my daughter who are not displaced like us", said Bayram, an Azeri veteran of the 1988-1994 Nagorno-Karabakh conflict. Bayram remained steadfast in his support for Azerbaijan's role in last spring's violent clash with Armenia. "Of course I know what war is and what the consequences can be", he explained. He pointed to his leg, maimed by artillery fire almost 25 years ago, and to the poor conditions of the refugee shelter where his family has lived for over twenty years. "But I have sent my eldest son to the army anyhow. He is an officer, and I have told him to fight - to take care, but to fight for his homeland."

Last year's escalation in Nagorno-Karabakh, which began in the early hours of 2 April, killed up to 200 people. However, like many Azerbaijanis whose families have been displaced by the conflict, Bayram's patriotic pride overtook his concern for lost lives. Bayram had hoped the fighting would result in the return to Baku's control of Nagorno-Karabakh and its surrounding districts - held by ethnic Armenian forces since the 1994 ceasefire - so he could go back home.

Across the Line of Contact (LoC), the militarised zone that has separated Armenian and Azerbaijani forces since 1994, conversations in Armenia's capital Yerevan were like stepping through a mirror. "Don't you understand that Baku lost last April?" a prominent Armenian expert remarked, challenging the mainstream analysis that Baku's gaining control over two strategic heights was a significant first since 1994, if not in military terms, then certainly in terms of Azerbaijan's posture. "We are now prepared and ready to inflict major harm on the Azerbaijanis if they attack, so they do not feel they can get away with this", another Armenian analyst said. Such sentiments are even more sharply expressed in Nagorno-Karabakh itself, where people are deeply concerned for their security.

Conversations on both sides of the divide reveal a new and dangerous situation: that renewed appetite for confrontation has engulfed a conflict once considered frozen but which - with clashes escalating since at least 2012 - is particularly dangerous now given both countries' more powerfully equipped armies, and Armenia's and Azerbaijan's respective military commitments with Russia and Turkey. In 2015, Azerbaijan spent $3 billion on its military, strategically diversifying acquisitions, with weapons systems purchased from Russia, Turkey, Israel and Pakistan, among others. This sum was more than Armenia's entire national budget that year, yet Yerevan still sought to catch up, benefiting from more advantageous tariffs and a credit from Russia.

Armenia and Azerbaijan each finds the current status quo unacceptable for different reasons. Before committing to talks, Yerevan urgently wishes to see improved security, including for people whose daily lives are severely impacted by ongoing escalations along the LoC and the international border between the two countries. Baku wants to have guarantees that there will be substantive progress in settlement talks, including the return of districts surrounding Nagorno-Karabakh as a first step. The prevailing dynamic, compounded by an absence of confidence between the sides or in the settlement process, lends itself to further violent flare-ups that contain grave local and regional risks.

There is a long-standing conflict settlement mechanism, the Minsk Group of the Organisation for Security and Cooperation in Europe (OSCE). But in the absence of a re-invigorated process with high-level backing from the three Minsk Group co-chairs - Russia, the United States and France - the conflict will remain a dangerous tinderbox in the heart of the South Caucasus, between Russia, Turkey, Iran and what the EU considers its Eastern Neighbourhood.

The Frozen Settlement Process

Bayram, the Azeri veteran, said he was disappointed when a ceasefire was brokered by Moscow four days into the April 2016 fighting. Like many displaced people and other ordinary citizens in Azerbaijan, he felt elated that some small but strategically significant land fell into Baku's hands as a result of the fighting, and that the widespread post-1994 myth of Armenian forces' invincibility was broken. But he and others in Azerbaijan were also frustrated not to see "more progress", even if it were to come with a much higher death toll and other costs.

The high pain threshold of both parties in the quest for their desired outcome in the settlement of the conflict bodes ill for finding a political solution. Russia-led attempts to broker a deal last year revealed that a zero-sum logic continues to dictate not only the approach to the substance of the settlement process but also to the process itself. The gulf between Azerbaijani society on the one hand, and the Armenian and Armenian-Karabakh societies on the other, is widened by the lack of contact between parties. Only isolated civil society actors seek the construction of cultural or political bridges. In the year that has elapsed since April 2016, space for discussing mutual concessions has by and large closed.

Yet last year's conflict did briefly revive the all but moribund settlement process, as detailed in Crisis Group's July report, "New Opening, or More Peril?". Summits in Vienna last May and St. Petersburg in June agreed on an investigative mechanism and an increase in the number of OSCE monitors, as well as on proceeding with substantive talks. Yet by late summer, the process ground to a halt and deadly incidents have recurred with varying degrees of intensity.

"We cannot talk when we are being attacked", explained an official in Yerevan. "The only way to get to substantive talks is to have months of quiet on the Line of Contact". Beyond the security imperative, Yerevan is reluctant to return lands around Karabakh unless other aspects of the settlement - including Nagorno-Karabakh's future status - are clarified, guided by a principle of "nothing is agreed until everything is agreed". Armenians fear losing strategic advantage if they do not secure their desired political outcome on the status of Nagorno-Karabakh, namely its self-determination outside of Azerbaijan. Indeed, the return of even some of the districts around the contested heartland would make Karabakh much harder to defend for the Armenians.

For its part, Baku resents the current status quo on the ground and fears that any security arrangements insisted upon by Yerevan would only cement it. Officials in Baku say the increased number of monitors and the investigative mechanism agreed upon last summer are only acceptable if linked to broader substantive progress in the talks.

With frustrations mounting on both sides and the process stalled, incidents along the LoC will likely intensify. Baku in particular shows public readiness to use force to achieve its goals. Ministry of Foreign Affairs officials explain that Baku has renounced the use of force if the conflict is settled within the framework of Azerbaijan's territorial integrity. Failing that, Azerbaijani analysts say, the threat of violence continues to be a legitimate means to put pressure on the adversary.

Meanwhile, Armenian and de facto Armenian-Karabakh forces - two intertwined structures - have focused on new fortifications systems on the Armenian-controlled side of the LoC, as well as on an internal overhaul of command structures. Some Armenian voices, including inside Nagorno-Karabakh, even speak of seizing more territories if they are attacked, in order to increase the security belt and have more to trade in future negotiations.

With both sides now poised to retaliate quickly to any escalation, and without the element of surprise, renewed fighting would likely exceed the unprecedented levels seen last year.

Moscow's Uncertain Role

On the international diplomatic front, for the last decade, Moscow has de facto been the prima inter pares in the Minsk Group, and it was Moscow that brought about a cessation of hostilities in April 2016. Moscow is the only one of the three co-chair countries which currently seems to have the bandwidth and interest to invest high-level political capital into the conflict.

Diplomats talk about another push for progress in the talks, which Moscow is ostensibly preparing in the foreseeable future. A meeting of Foreign Ministers after the Armenian parliamentary elections on 2 April - coincidentally, the first anniversary of the escalation - should ideally lay the groundwork for a summit of the two Presidents. One desirable approach that is apparently being considered by the Minsk Group co-chair countries would include a combination of a possible declaration of both parties; an expression of support by the Minsk Group co-chairs; and a potential UN Security Council Resolution, according to diplomats based in the region. However, agreement on the details would still be needed at the Presidential level.

With Russia's long history of rule over the Caucasus region, and a continued sense that the South Caucasus is a sphere of privileged Russian interest, Moscow's influence has many facets. Russia is the leading supplier of weapons to both Armenia and Azerbaijan. Russia also has close cooperation with Armenia through the Moscow-led Collective Security Treaty Organisation and the Eurasian Economic Union, of which Armenia is a member. While Moscow has not formally said it is interested in having peacekeepers in the region, a Russian official informally said that "of course [sending peacekeepers is in] our interest and we are pursuing it". According to a gentlemen's agreement in the context of the settlement process no co-chair or neighbouring country should provide peacekeepers.

Baku and Yerevan share a deep reluctance to accept Russian peacekeepers in Karabakh. Both see this scenario as the ultimate loss of sovereignty and a return to their once subservient role within the Soviet Empire. "We have been able to keep Russia out of our domestic politics", a former Azerbaijani politician said. "Having their boots in Karabakh would mean they would have a very different say over our internal issues". Likewise, an opposition-minded figure in Yerevan pointed out it was a paradox that while Armenia hosts a Russian military base, no one in Armenia wants to see Russian peacekeepers in Karabakh itself.

A decade or more ago, Armenian analysts often referred to the Balkans - where Operation Storm restored Croat control over Srpska Krajina though it violated the mandate of the UN peacekeepers deployed on the ceasefire line - as an example for why international security arrangements may not be reliable. Today, notwithstanding the role of Russia as Armenia's primary strategic partner, Crimea's 2014 annexation by Russia is causing concern that the use of force cannot be excluded, even if international guarantees are in place.

Baku, on the other hand, has seized on the biting sanctions imposed by the U.S. and its European partners on Russia to pursue in various international fora Azerbaijan's de jure claim to the territory it sees as occupied, referring also to UN Security Council resolutions of the early 1990s. "After Crimea, the international community's reluctance to use the term occupation and impose sanctions against Armenia is becoming untenable," a pro-government Azerbaijani analyst said.

No Alternative to Political and Diplomatic Solutions

A year on from the April 2016 flare-up, positions have significantly hardened. Both sides seem prepared to engage only on their own terms and neither society is ready to consider mutual concessions. Any discussion in Baku of the settlement process and its basic principles automatically assumes the determination of the future political status of Nagorno-Karabakh within Azerbaijan - something Armenians say is unacceptable. On the other hand, discussions in Armenia over the return of lands surrounding Nagorno-Karabakh to Azerbaijan have been difficult and, since last April, have become a non-starter. Although, Armenian President Serzh Sargsyan in the past has said this remained a negotiating chip.

In fact, the distinction between Nagorno-Karabakh proper and the surrounding districts held by Armenians has been largely effaced in the discourse, especially in the months since April 2016. Armenia's former president, Levon Ter-Petrossian, remains a lone voice urging Armenians to proceed with the return of the districts around Nagorno-Karabakh, but few agree with him. The Karabakhi activist living in Yerevan explained simply: "This would lead to civil war".

Against the backdrop of political deadlock, risks of escalation on the battlefront are growing dangerously. Most Western diplomats agree that the risks are high, yet they also stress that none of the regional powers are interested in a conflict that could ultimately ensnare them. Russia and Turkey's current geopolitical cooperation regarding the war in Syria increases the chances that they would work to minimise any misunderstandings that might lead to a wider conflagration in the Caucasus theatre.

Even a medium-scale intensity conflict between Baku and Yerevan is likely to have disastrous humanitarian consequences. Given the close proximity of civilians to the front lines, heavy casualties would be likely from shelling or other military deployments. Both sides alleged that the other engaged in atrocities during the April 2016 escalation, which Minsk Group co-chairs condemned in their December 2016 statement. Humanitarian agencies in the region are beefing up their capacities and developing contingency plans.

The destructive potential of renewed conflict should compel both parties back to the negotiating table. If the mooted new meeting between the presidents of Armenia and Azerbaijan materialises, it could help inject new impetus into the stalled process. Baku and Yerevan have already, in theory at least, committed to the basic principles for the settlement developed by the OSCE Minsk Group. The elements, as formulated by Minsk Group co-chairs countries, include: "the return of the territories surrounding Nagorno-Karabakh to Azerbaijani control; an interim status for Nagorno-Karabakh providing guarantees for security and self-governance; a corridor linking Armenia to Nagorno-Karabakh; future determination of the final legal status of Nagorno-Karabakh through a legally binding expression of will; the right of all internally displaced persons and refugees to return to their former places of residence; and international security guarantees that would include a peacekeeping operation".

In spite of divergent interpretations of a number of those elements by each party, the OSCE Minsk Group should redouble its efforts to galvanise substantive talks while pushing for implementation of the measures agreed in Vienna. Russia will likely play a leading role in this, but needs the support of the U.S. and France. Washington and Paris should back up these efforts at highest levels, despite the Trump presidency's apparent disengagement from the region and France's electoral preoccupations. The EU should use its bilateral relations with each of the countries to reiterate not only the unacceptability of the status quo, but also the unacceptability of a repeat of last April's hostilities. The EU has long sought to support pro-peace discourses in both societies. This kind of investment should be a renewed priority so that people like Bayram, as well as his Armenian counterparts, do not depersonalise each other.

A lasting settlement will mean living side by side, taking into account the needs of both parties. For now though, there is a wide gap between what outside mediators see as a fair formula and what seems acceptable to local communities. Until this gap closes, the risks of war will remain very high.