Armenia, Azerbaijan and the unfinished peace

The South Caucasus is beginning to shed some of the gloomy epithets that have clung to it over the years. It is no longer ‘conflict-wracked’ or ‘turbulent’ and sometimes nowadays even the opposite. Since the start of the Iran conflict at the end of February, flight maps have shown a narrow band of aeroplanes swarming across the mountainous region between the Black and Caspian Seas, as they avoid both Russia and Iran. This is now a region between other people’s conflicts and less defined by its own.

The major reason for optimism is that Armenia and Azerbaijan are slowly moving towards a peace agreement that would see them normalise relations for the first time since they both became independent with the end of the Soviet Union. The conflict between them that dates back to 1988 is over. When the closed Armenia-Azerbaijan and Armenia-Turkey borders finally open, that will turn the South Caucasus from a roadblock into a hub, a through-route for East-West connectivity and transit.

The picture is far from perfect. Russia is a diminished presence in the region but is still trying to flex the muscles of a hegemon, demanding that Armenia show loyalty or face economic punishment. The third country in the region, Georgia, is moving backwards, away from being an open, functioning, pro-European democracy towards being a closed one-party state led by a kleptocratic elite – although this self-isolation strangely also helps drive Armenia-Azerbaijan normalisation.

The Armenia-Azerbaijan peace process came at great human cost, after renewed bouts of displacement and destruction in the last six years. The status quo was broken because Azerbaijan inflicted two heavy military defeats on the Armenian side, in the second of which, in 2023, it captured the Armenian-populated enclave of Nagorno-Karabakh, forcing the flight of its 100,000 Armenian inhabitants. That physically erased the region of Nagorno-Karabakh, which had been the main cause of contention between the two countries, now enabling them to recognise each other’s territorial integrity.

Although a return to conflict now looks highly unlikely, full peace is not yet guaranteed. The immediate future of the process currently relies on the success or failure of one charismatic but erratic individual, Armenian prime minister Nikol Pashinyan. He and his Civil Contract party face parliamentary elections on 7 June, which are also a plebiscite on his pursuit of a peace process with Armenia’s historic enemy.

In an age where multipolarity has replaced multilateralism, the region is a laboratory of sorts for a new kind of transactional politics exercised by small states. The idea that the region is bipolar, caught in a binary clash between Russia and the West, does not apply today – apart from in the minds of Kremlin strategists. Instead the South Caucasus is a geopolitical marketplace. The European Union, China, the Gulf States, India, Turkey and the United States are all present here. In this crowded field, Russia is now one among many.

Each of the three South Caucasus nations is diversifying its options in its own way, having chosen a distinctive strategy.

Pashinyan is seeking a diversification of Armenia’s foreign policy options, attempting an experiment of living without reliance on Russia. Prior to 2020, it was a very different country. Armenia was still the victor in its conflict with Azerbaijan, defending the territorial gains it made in the conflict of the 1990s, but at the cost of closed borders with both Azerbaijan and Turkey and a tight and almost suffocating alliance with Russia.

Armenia is now learning that defeat can have benefits. Having struggled with successive semi-authoritarian regimes, it is now the most democratic of the three countries in the region, the place where you can breathe most freely. It can open up more if Pashinyan’s Civil Contract party wins the election, if he successfully completes the peace process with Azerbaijan and Turkey and if the closed borders re-open.

Pashinyan’s pitch to voters promotes the idea of what he calls ‘Real Armenia’: one that prospers within its internationally recognised borders, makes no territorial claims against Azerbaijan and Turkey, diversifies its international partners, and loosens the grip Russia holds over the country’s economy, security sphere and energy provision.

This is a repudiation of the doctrine that was orthodoxy among Armenian politicians and citizens for three decades: that Armenia must make sacrifices in order to ensure the secession of the disputed region of Nagorno-Karabakh, Armenian-populated but internationally recognised as being part of Azerbaijan.

The corollary of that strategy was dependence on Russia. In a process that began in the 1990s and deepened in the 2000s, Armenian presidents struck a Faustian bargain with Moscow, which preserved their wins on the battlefield in return for military and economic support. Russia kept a military base, provided border-guards, supplied energy and took over almost all major economic assets in the country. In 2013, former president Serzh Sargsyan came close to signing an Association Agreement with the European Union, but abruptly changed his mind when Putin reminded him of the security implications of offending Russia. Overnight Sargsyan was persuaded to join Russia’s Eurasian Economic Union instead.

That period has now ended. The fall of Karabakh heralded the end of the era of broader Russian influence in the region, as Moscow lost the biggest lever it had over both Armenia and Azerbaijan – the conflict between them.

Pashinyan has exploited this moment and Russia’s distraction in Ukraine. He is building relationships not just with Europe, but with other partners, such as India. He has already frozen Armenia’s participation in the Russia-led security pact, the Collective Security Treaty Organisation (CSTO). He has met Ukrainian president Volodymyr Zelensky and said publicly that he is not Russia’s ally when it comes to Ukraine.

The Kremlin’s response to this has been belated and somewhat desperate. Asked about Armenia’s developing relationship with Europe by journalists on 9 May, Putin said that his problems with Ukraine had started because of Europe and warned the Armenians that they ‘should not take it to the extreme’.

As in Moldova last year, Moscow is now trying to influence the June election. In a last-minute intervention, Russia, along with Belarus, Kazakhstan and Kyrgyzstan, issued a statement demanding that Armenia make a choice about whether it wants to be a member of the Eurasian Economic Union or the EU. Russia has found pretexts to halt imports of Armenian agricultural products and mineral water on sanitary grounds – weapons that Moscow has previously used against Georgia. It can also raise the price of gas

These measures will be painful for Armenia, but the experience of Georgia and Moldova shows that these kind of tactics alienate more voters than they persuade. Since the loss of Karabakh and the inaction of Russian peacekeepers in defending it in 2023, Armenians have registered unprecedented levels of distrust in their former big patron.

Pashinyan’s Civil Contract party is likely to win the elections, more or less by default, not because the prime minister is still popular – he isn’t – but because Armenia’s opposition is even less competent or impressive and too associated with Russia. One opposition party is associated with the discredited former president Robert Kocharyan. Another is led by the Russian-Armenian businessman Samvel Karapetyan, who is currently under house arrest, and has delegated his inexperienced son and nephew to conduct the campaign for him, with feeble results.

Winning the election may be the easy part for Pashinyan, however.

The 17-point agreement on normalising relations between Armenia and Azerbaijan, negotiated bilaterally by the two sides, was initialled by Pashinyan and Azerbaijani president Ilham Aliyev in the White House last August. There are already positive effects: there have been no casualties reported on the borders of the two countries, where shooting incidents used to be frequent. A border demarcation commission has picked up momentum. Experts and academics have begun to visit each other’s countries.

However, Azerbaijan still has terms. Before he puts his signature to the peace agreement and it goes for ratification and takes full effect, Aliyev insists that Armenia must have a new constitution, removing a reference to the 1990 Declaration of Independence, which affirms Armenia’s union with Nagorno-Karabakh. That, says Aliyev, constitutes a territorial claim over Azerbaijan and must not be present in Armenia’s constitution if peace is to be achieved.

That means that, for full peace to be ratified, Pashinyan must first win two thirds of the seats in parliament in the June election, thereby gaining a majority that enables him to call a referendum on a new constitution. Then he must win the referendum as well. As any British person can tell you, when asked a binary question many voters will find reasons to vote No rather than Yes, some of which are only tangentially related to the actual question being asked. Most Armenian experts think that the vote will be a very close call.

This gives the Russians a target to aim at. Moscow is trying to interfere by financing opposition parties and using social media to spread false rumours about the current government. Even if the ruling party wins, Russian efforts may depress turnout and give the impression of a victory that lacks full legitimacy, paving the way for a No vote in the constitutional referendum.

The government’s new western friends are doing their best. The European Political Community summit in Yerevan in May, attended by the leaders of the European Union, France, Great Britain and Canada among others, followed by the first-ever EU-Armenia summit, signalled where Europe’s preference is, even if none of the leaders mentioned the election. Financial assistance for infrastructure projects and moves towards visa liberalisation are designed to reward Armenians for their new pro-European sentiments.

US president Donald Trump was less circumspect. In a post on Truth Social on 28 May, he announced, ‘Nikol has my COMPLETE and TOTAL Endorsement for Re-Election on 7 June 2026.’

The United States stepped in as the unexpected new broker last year. In contrast to some of the overblown claims about other successful peace agreements, Washington’s involvement in this process is substantial and more likely to deliver results.

In early 2025 both Armenian and Azerbaijani leaders were coming to conclusions, separately, that Russia’s traditional claim to be the main broker must be rejected. US envoy Steve Witkoff’s offer to convene a top-level meeting was therefore warmly received.

The White House meeting on 8 August made the United States the guarantor of a new planned transit 43-km route connecting Azerbaijan with its exclave of Nakhchivan across southern Armenia. The route is named the Trump Route for International Peace and Prosperity (TRIPP). It was the main rail artery between the two countries shut down by the conflict more than 30 years ago, hurting both Armenia and Nakhchivan. Restoring it will give a major economic boost to both countries, begin to build economic inter-dependence between them, and also provide an alternative east-west railway route between Turkey and Central Asia.

Will all this attention and effort be enough? There is still much that can undo it. The US effort is real, and has been followed by visits to the region by both Vice-President JD Vance and Secretary of State Marco Rubio this year. Unusually for a foreign project under this administration, the US government has found financing for it and is collaborating with European governments. The naming of the route after himself should lengthen Trump’s attention span and drive the ambition to complete the railway before his presidential term ends in 2028.

Unfortunately, the Trump White House has slowed down the implementation of TRIPP with its disastrous war in Iran. The projected railway is, after all, situated right on the Armenia-Iran border and it is not possible to put US technical experts on the ground at the moment. All sides want to make progress, but will have to do so within new constraints.

The prime minister’s biggest immediate problem is not Russia or the attention of his new allies but probably himself. Ever since he came to power on a wave of street protests in 2018, he has made it all about him. His style of government is extremely personalised rather than institutionalised. His behaviour is erratic. Though more democratic than his Azerbaijani counterpart, he shares the same paternalistic assumption that the public must be told what to think and not engaged in dialogue.

On the campaign trail Pashinyan has lashed out angrily at those who disagree with him, especially Armenian refugees from Karabakh. In one incident, he lambasted a Karabakhi who was later arrested on suspicion of hooliganism. ‘You should have gone and died in place of our children,’ Pashinyan shouted at the man. This will cost Pashinyan votes and augurs badly for his efforts to build a consensus in Armenian society about the peace process with Azerbaijan.

Then there is Azerbaijan, which holds the keys to a successful peace process.

Azerbaijan emerges from the tumult of the last five years as a victor, having recovered all the territory it lost to Armenian forces in the 1990s. It has also made itself the most powerful country in the region thanks to very successful multilateral diplomacy. Somehow, in the last six years President Aliyev has signed bilateral agreements not just with Turkey, its traditional ally, but with Russia, the European Union and the United States. In April, he hosted Ukrainian leader Zelensky.

In February, Aliyev said that the war is over with Armenia ‘and it is a very good feeling’. Azerbaijan has started allowing wheat and fuel to be delivered to Armenia for the first time. Azerbaijani and Armenian experts have begun visiting the other side’s capitals, with the official blessing of the government.

However, by insisting that Armenia must hold a constitutional referendum over a legal issue that few people had noticed, the Azerbaijani side is signalling that it is still very cautious, unsure if it is ready for this momentous step. Azerbaijan is still refraining from approving bigger confidence-building measures to support Armenia. In particular, Aliyev successfully uses all the resources he can to dissuade his close ally, Turkish president Recep Tayyip Erdogan, from normalising relations with Armenia before Azerbaijan does. He does so even though most of the Turkish foreign establishment is keen to take advantage of the good fortune of having Pashinyan in power and Russia’s distraction in Ukraine to make a historic deal with Armenia.

The paradox of Azerbaijan is that its foreign policy is a model of open diplomacy, while domestically the country has never been so closed. Six years after COVID, the pandemic is still used as an excuse to keep all land borders sealed. At a time when it badly needs international assistance to help rebuild and resettle the territories ravaged by Armenian forces and recovered by Azerbaijan in 2020, the Baku government has pushed almost all the UN agencies and the International Committee of the Red Cross out of the country. As it reaches out to the European Union, it keeps political prisoners who pose no threat to the authorities in jail.

Most difficult of all for Azerbaijan’s leader is the challenge that, having spent more than 20 years attacking Armenian ‘aggressors’ and ‘occupiers’ in almost every speech he made, having driven out the occupiers, Aliyev has now begun to commit himself to a new script of partnership with the enemy. Azerbaijan can no longer be defined as a country that must mobilise against Armenia. It must find a new unifying national narrative – a task made more difficult by the fact that the oil-boom years are over and there is no longer a big cash surplus to spend on keeping the public happy.

All this is making Azerbaijan temporise and take things slowly. Yet time is of the essence. The peace process still needs the commitment of Pashinyan, the active involvement of Washington and Europe and the non-interference of Russia, none of which can be taken for granted in the coming years. The forthcoming election in Armenia is only the next test of many before we can speak confidently not just of the end of conflict, but of full peace in the South Caucasus.