Elkhan Nuriev, Co-Chairperson of the Southern Caucasus Crisis Management Study Group at the Partnership for Peace Consortium of Defense Academies and Security Studies Institutes, Garmisch (Bonn, Germany)


The 11th of September, 2001 has changed the philosophy of security relations. The horrendous terrorist attacks on the United States have influenced and still can affect international politics in the future. Certainly, the September 11 events have seriously altered the worlds geopolitics, including the regional situation in the volatile Southern Caucasus, where the three former Soviet republics of Armenia, Azerbaijan, and Georgia occupy an important geographical and geostrategic position, situated between Russia, Turkey, and Iran, and astride transit routes for Caspian hydrocarbons and trade routes between Europe and Central Asia. Especially following September 11 developments, the Southern Caucasus region has also emerged as an important partner for the United States in the war against international terrorism. As a matter of fact, events of recent months have indicated serious change in the dynamics of the Southern Caucasus, changes that may have long-lasting implications for Azerbaijans security and the future of the entire region. The major change is the growing importance of Azerbaijan to the United States, currently accompanied by an activation of American involvement in the region.

In the meantime, regional conflicts pose additional dangers to national security and stability of each independent state in the Southern Caucasus. Of all conflicts in the Southern Caucasus, the Armenian-Azerbaijani dispute over Nagorno-Karabakh deserves a special attention and requires a quicker resolution. The undeclared war between Armenia and Azerbaijan continues, creating a haven for mafia groups and international terrorists not only in the conflict-torn area but also in the entire region and even beyond. The fourteen-year-old Armenia-Azerbaijani conflict over Nagorno-Karabakh has been a crucial obstacle to the successful development of international oil contracts.1 The unresolved conflict has taken a heavy toll in terms of human lives. Many refugees still live in squalid conditions, and there is therefore growing pressure to address the problem. This increasingly complicates the peace process and results in a situation of no war, yet no peace, in the conflict-torn area.

Prior to 11 September and until now the post-Soviet life of three independent states of the Southern Caucasus has remained critically complex. The attacks of 11 September and their impact have brought new challenges faced by Azerbaijan and other countries of the Southern Caucasus. At the same time, Azerbaijan, Armenia, and Georgia have only revisited their own conceptions with regard to creating a stable security environment. In point of fact, all three states seek security, but their perception of threats and national security concerns greatly differ. Each of them has a completely different vision of possibilities for future peace, stability and prosperity in the region.

Obviously, in the post-11 September epoch Armenia, Azerbaijan, and Georgia are in historic transition, and are no more than weak nations with fragile statehood. And their present-day torturous struggle of independence is still going on, and is likely to continue for many years.

Old Problems and New Cycle of Instability in the Post-11 September Events

After gaining independence in 1991, Azerbaijan collided with immediate internal and external challenges to its territorial integrity and sovereignty. Although the early years of the post-independence period were very difficult, Azerbaijan, under the one-year rule of the popularly elected pro-Turkish President, Abulfaz Elchibey, succeeded in getting all Russian forces and border troops withdrawn.2 Mr. Elchibey promised democratic reforms within the country and quick victory in Nagorno-Karabakh. However, he could not accomplish the major parts of his presidential program, and the country began to slip rapidly into political and economic chaos. As a result, Mr. Elchibey, who Azerbaijani society perceived as a very naïve and inexperienced politician, was overthrown in June 1993 and was replaced by former Communist leader Heydar Aliev. Mr. Aliev, in turn, tried to balance the interests of the major powers to secure Azerbaijans independence. He began to pursue a more even-handed approach in foreign policy relations with neighboring countries. Since the Aliev presidency, Azerbaijan has come under severe pressure from Moscow to allow Russian military bases on its soil, but thus far has failed to do so. The Kremlin, using the Nagorno-Karabakh war as leverage, has heavily increased its influence in recent years with the purpose of re-establishing Russian control of the Azerbaijani-Iranian frontier by bringing back its border guards. Moscow very much hopes to benefit from the vast oil reserves of Azerbaijan, and has been forcing the Azerbaijani leadership to grant Russian corporation a greater share in Azerbaijan oil rights.

In the meantime, Azerbaijan remains very concerned about the continuing level of Russian-Armenian military cooperation. Arms transfers played a crucial role in Armenias seizure of large areas of Azerbaijan during the war, resulting in a million refugees and internally displaced persons.3 Ethnic Azeris from the part of Azerbaijan under Armenian control are prevented from returning to their homes by a heavily militarized ruling structure. Such a deadlocked situation of no war, yet no peace in the area of conflict and a number of other destabilizing factors have made Azerbaijan seek outside help from both the United States and Turkey to restore a seriously violated balance of power in the region. Azerbaijan in recent years has signed several defense treaties with Turkey, and has started to consider the possibility of inviting NATO bases on its territory.4

Accordingly, Russia and Iran have cited potential negative consequences of moving NATO bases to Azerbaijan. Both Moscow and Tehran view increasing American engagement and NATOs rapidly growing interest in the Southern Caucasus with suspicion. Baku, in turn, is ready to cooperate more fully with NATO and believes that, as the oil exporting infrastructure is developed, security concerns will draw Azerbaijan closer in the pursuit of true regional stability.

Strikingly, despite the strains of the fourteen-year-old conflict with Armenia, which have severely disrupted the national economy, Azerbaijan in recent years has made considerable economic progress due to the signing of numerous oil contracts and development of foreign investment processes. Particular attention is due the signing of the contract of the century in September 1994, which enhanced Azerbaijans role in the world and enabled the Azerbaijani leadership to provide the foundation for a Western presence in the Caspian Sea region. Correspondingly, Azerbaijan significantly contributed to the realization of such major regional projects as TRACECA, the Great Silk Road, alternative oil pipelines, and GUUAM. Nonetheless, mitigating these regional conflicts, fostering economic growth and strengthening independence of Azerbaijan and other former Soviet-ruled republics requires greater regional cooperation. GUUAM, BSEC, and TRACECA provide a modest foundation for such collaboration, but much work remains on security and border control issues relating to trafficking and terrorism.

Meanwhile, most of local politicians believe that even though Azerbaijan has a very rich history and culture, it has only been an independent state for the last eleven years. According to policy analysts and media commentators, Azerbaijan has demonstrated remarkable progress during the last decade; especially considering the countrys internal political situation during its first few years of independencewhen Azerbaijan faced an uncertain economic future, domestic political divisions, and Armenian aggression toward Azerbaijan.5

In the post-independence period, Azerbaijan has moved forward to develop economic cooperation with the United States and other Western democracies. Azerbaijani ruling elite has been very much looking forward to developing positive relationships with U.S. and international energy companies, foreign governments, and international lending organizations all of which have helped the local government in Baku to establish the basis for a long-term plan of energy-driven economic development and diversification. In point of fact, we are talking herewith about three emerging trendsthe strengthening of U.S.-Azerbaijani relations, Azerbaijans responsible strategies of development in its energy sector, and increased regional and international attention toward the resolution of the Nagorno-Karabakh conflict. Most of influential officials believe that a hard work on the mentioned three directions will help Azerbaijan continue to make a further progress toward political stability and economic modernization.

In truth, Azerbaijan has made its most significant advances in the energy sector and has emerged as one of the key players in the development and transport of Caspian oil and gas. During the mid-1990s, the Azerbaijani government realized that it would not be able to achieve satisfactory results based solely on the countrys own energy development experience and began a concerted effort to attract foreign investment. These efforts have been successful since foreign oil companies have already invested $6 billion on projects in the Azerbaijani energy industry and have committed to invest more than $10 billion over the next three years. Simultaneously, seeking direct political, economic, and security ties with the United States and European Union, Azerbaijan was able to formulate its own foreign policy strategy with a pro-Western orientation. Furthermore, Azerbaijans potential as a partner in the transport of Caspian oil was recognized in Western capitals. The fact that the commencement of Baku-Tbilisi-Ceyhan (BTC) Pipeline construction in September 2002 represented a major step in addressing one of Azerbaijans most serious economic issuestransporting oil and gas from the Caspian Sea to the international market, clearly testifies to the above-mentioned argument. This pipeline, which will cost $3 billion and will be capable of transporting 1 million barrels a day to the Turkish port of Ceyhan, will serve as Azerbaijans main export pipelineaugmenting already-existing pipelines from the Caspian to Russian ports.

However, the dynamics of the Nagorno-Karabakh conflict, geopolitical tensions, as well as many other factors that have profoundly affected the direction of Azerbaijani foreign policy continue to remain crucial for long-term stability in Azerbaijan. Moreover, the 11 September terrorist attacks in the United States dramatically altered geopolitical conditions in the Southern Caucasus. As a matter of fact, the U.S.-led war against terrorism in recent months has played a significant role in reshaping Azerbaijan foreign policy.

In the post-11 September epoch, Azerbaijans active participation in antiterrorism operations as well as recent accession into the Council of Europe and continuing attempts to integrate into the international community have made the ruling elite to take into account the new geopolitical factors, Western and Russian involvement, and the interaction between domestic and external pressures. In such a very complicated situation, Azerbaijani government should deal with the specific issues of present-day political life to respond to existing and future challenges in an ever-changing world. These mainly include the following: the influence of outside countries, such as Iran, Russia, United States and Turkey, transportation and energy infrastructure, including the Baku-Tbilisi-Ceyhan oil and Shah Deniz gas pipeline projects, regional cooperation on counter-terrorism, organized crime and trafficking of narcotics and human rights, conflicts, political succession, and the future of regional security situation.

In the new geopolitical environment in the Southern Caucasus, Azerbaijan is hoping to take advantage of new opportunities for cooperation with the United States. At the same time, the Azerbaijani ruling elite is very aware that Russia may be intent on reasserting its influence in the region while the United States is preoccupied with its antiterrorism campaign. Since the tragic events of 11 September, Azeri politicians have been very skeptical about so-called rapprochement between Russia and the United States in the context of the contemporary war on terror. In point of fact, Baku is suspicious of Moscows ostensible desire to join Washington to contribute toward maintaining stability in Central Asia and the Caucasus. Over the last several months, Moscow has been watching the increased U.S. activity in the region with the greatest anxiety. Moreover, Russia, along with China and Iran, has sought to foster the development of strategic trilateral cooperation, while trying to keep the United States out of the Caspian Basin or at least to minimize American influence in the region. Baku is therefore engaged in a very delicate political game of balancing between regional and great powers, a game that could have profound ramifications for the development of Caspian Basin natural resources.

Azerbaijan has been an enthusiastic supporter of the U.S.-led anti-terrorism campaign, sharing intelligence and granting fly-over rights. The U.S. Congress has reciprocated by bolstering support for President Heydar Alievs government, in particular voting to lift trade sanctions imposed during the height of the Nagorno-Karabakh conflict in 1992. The lifting of sanctions will facilitate aid and trade, as well as potentially boost Azerbaijani efforts to develop its oil and gas sector. Most of influential politicians identified the repeal of the Section 907 sanctions of the United States 1992 Freedom Support Act as an important priority for the Azerbaijan government.

While Azerbaijani leaders seem anxious to align themselves with the West in the hopes of reaping enormous oil and gas profits, they are taking care to assuage Russian security concerns, seeking to reassure Moscow that Bakus strategic cooperation with Washington is not a zero-sum gambit. Azerbaijans relationship with Russia, originally tense because of Russias position on the Nagorno-Karabakh conflict, has now improved substantially since Vladimir Putin became president of Russia in 1999. Azerbaijan and Russia have actually begun to cooperate on a wide array of economic and security issues. Mr. Aliev and other Azeri officials know that Russia retains powerful economic and political weapons that, if deployed, could hinderor even upendAzerbaijans development plans. Bakus tactics seem dedicated to addressing Moscows immediate strategic interests. Moscow, in turn, wants to resolve its Chechnya conundrum with the help of Baku, calling on the Azerbaijani government not to accept Chechen refugees and to repatriate those already in Azerbaijan.6

At the same time, Russia is keen to retain a controlling influence in the competition to develop Caspian Basin natural resources. Georgia figures prominently in the potential construction of a pipeline, known as Baku-Ceyhan, which would break Russias stranglehold on Caspian export routes. The pipeline as envisioned would take Caspian resources from Azerbaijan, via Georgia, to Turkey, bypassing Russia altogether. What is more interesting is that all of the recent and current domestic processes, including the contemporary geostrategic situation in the Southern Caucasus, have made President Aliev conclude an agreement about Azerbaijans leasing the Qabala radar station to Russia for ten years. Russia and Azerbaijan had been haggling over a lease extension for several years. Mr. Aliev, accommodating a long-standing Russian demand, had signaled his willingness to lease the Qabala early-warning radar station to Russia before his official visit in late January 2002.7

Meantime, the U.S.-led war on terrorism has given Azerbaijan one more chance to find its place within an inchoate geopolitical situation in the contemporary world. Since then, Azerbaijan has been at a very critical juncture of its development. Many Azeri officials are expressing growing concern at the deteriorating situation around the conflict-torn area.8 President Aliev now faces what may be the greatest challenge of his long professional career. Mr. Aliev is colliding with a very complicated dilemma. The Azeri President and his team are attempting to make a firm decision concerning whether to renew a war, to free the occupied lands, or to continue a search for a peaceful solution to the conflict.9 It is indeed a hard decision, not only for the ruling elite but also for the nation, which is still trying to preserve its newly gained independence without geopolitical interference from external forces.

Obviously, the present-day geopolitical deadlock around Nagorno-Karabakh conflict creates new challenges and options that indicate the seriousness of the upcoming crisis in the Southern Caucasus. The continuing Nagorno-Karabakh conflict, which infringes on the strategic interests of Azerbaijan, remains a major threat to the security of the Southern Caucasus. If it can be resolved, the long-term prospects for oil development and safe oil transportation are promising. Otherwise, the ongoing impasse will hamper regional development and foreign investment for years to come.

Competing Strategic Interests and Emerging Challenges in the Context of the War Against Terrorism

The problem of relations between Azerbaijan and its neighboring countries gains additional importance by virtue of the current geopolitical situation in the Southern Caucasus. In point of fact, the contemporary situation represents an obvious challenge to the independence of Azerbaijan and, particularly, a prospective threat to the military-political security of Azerbaijan.

Azerbaijan is trying to survive in a very unfavorable geopolitical environment. Azerbaijan is surrounded by geopolitical actors on three sides whose interests are far from coincident with the interests of Azerbaijan national security. Two of themRussia and Iranhold effective levers of influence on Azerbaijan and can actively use them to impede natural resource development in the Caspian Basin.

Both Russia and Iran have concerns about security on their borders, and about the potential alliance of Turkey with Azerbaijan. Moscow and Tehran are deeply suspicious and resentful of U.S. and NATO encroachments that promote democracy and development in the Southern Caucasus. Paradoxically, from the early period of post-Soviet independence, Armenia enthusiastically joined the Russian-Iranian alliance, essentially to realize its territorial interests.

Nevertheless, the interests of all three geopolitical actors in the Southern Caucasus coincide in most of the spheres and, proceeding from the similarity of the geopolitical formulas that lay at the root of the foreign policy behavior of Russia and Iran, the achievement of the traditional formal compromise regarding division of the region into spheres of influence turns into a more than technical task. In such a geostrategic situation, Turkey is the sole link for Azerbaijan to the Euro-Atlantic bloc. Azerbaijans close ties to Turkey further strain Turkeys already poor relations with Armenia. Feeling excluded from Caspian pipeline projects, Armenia has looked north to Russia and south to Iran for its security and energy needs. This volatile mix of conflicts is intensified by the presence of Russian military in the region. At the same time, the close geopolitical alliance between Turkey and Azerbaijan provides a fragile but vital balance of power in the Southern Caucasus, and prevents geopolitical isolation of the resource-rich region.

In the post-11 September era, the geopolitical situation in the Southern Caucasus is, to an ever-greater degree, a reflection of military and political events in the region, which at the moment are characteristic of the instability and unpredictability of the entire post-Soviet Caucasus. As a matter of fact, since the declared antiterrorism campaign began, Azerbaijan and Georgia have figured more prominently in the foreign policies of outside powers, which rigorously compete to extend their influence in this troubled area of the world. This, in turn, has resulted in the creation of two conflicting military and political alliances in the Southern CaucasusRussia and Iran versus the United States and Turkey. The three newly independent states of Azerbaijan, Armenia, and Georgia are becoming increasingly involved in the geopolitical intrigues of the key power players.10

Today, the major competing powers Russia, Iran, Turkey, and the United States are making every effort to play a more active role in the Southern Caucasus. They all have great concern regarding what happens in Azerbaijan and especially in the Caspian Sea region. For instance, if Russia considers the problem of an independent Azerbaijan as more an element of a complex of independent states in the entire Caucasus region, for Iran this problem takes on a somewhat different political form. The simple fact of existence of an even purely formally independent state of Azerbaijan is quite definitely (and not groundlessly) perceived as a real threat to national security of the Islamic Republic of Iran. In addition, the presence of the more than 20 million Azeris residing in Iran is the spark that is capable of blowing up the fragile powder keg that is the multinational structure of the Iranian state.

Tensions between Iran and Azerbaijan rose in July 2001, with an Iranian warship threatening to fire on an Azeri oil exploration ship in a disputed sector of the Caspian Sea. Irans air force intervention into the Caspian Basin not only served to escalate the situation but also did so much to deteriorate relations between Baku and Tehran that it nearly triggered a shooting war in the region. Since then, Iran has been very angered by its loss of influence in the Caspian Basin, and therefore Tehran has been trying to attempt to change the political and economic shape of the region. Furthermore, the current developments illustrate that the interests of Iran may be served even by the simple absorption of Azerbaijan on the part of Russia. In other words, the neutralization of the factor of independent Azerbaijan is in itself favorable to Iran, and in this connection Iran is able to make a gratuitous concession of Azerbaijan to Russia.

In the meantime, American foreign policy has thus far been grappling with some impediments arising from Russian-Iranian geopolitical maneuverings that hinder any serious U.S. activity in Azerbaijan and in the Caspian Basin. While Russia and Iran do not want to see the United States as a major arbitrator in the region, Azerbaijan and Georgia are trying to fully involve the United States in the geopolitical affairs of the Southern Caucasus. Washington, in turn, relying on Turkey, its NATO ally, has left these infant nations in a very complicated situation that merely results in leaving them face to face with Moscow.

Notwithstanding the increasing American involvement in the region within the context of the declared antiterrorism campaign, Washington more frequently officially reacts rather cautiously to the growing pressure that Moscow is placing upon Azerbaijan and Georgia. Moreover, prospects for a quick resolution of the Nagorno-Karabakh and Abkhazian conflicts today look gloomy despite international efforts to bring the warring sides to a peace agreement. Such a delicate situation, which actually freezes the conflicts and keeps geopolitical deadlock ongoing in the region, may force both Baku and Tbilisi to reconsider their foreign policy orientations and seek political support from the Kremlin for conflict resolution in the region.

As can be seen from the foregoing discussion, the stakes in the Southern Caucasus remain very high. Seemingly, the regions future is being decided right now. In truth, Azerbaijans political stability, the regional security environment, and the future geopolitics of the Southern Caucasus, including the independence of three post-Soviet statesAzerbaijan, Armenia, and Georgiaare already at stake while the Western world is fully engaged in its anti-terrorism campaign.

Conclusions and Outlook for the Future

The states of the Southern Caucasus face many of the developmental and security problems that plague other former Soviet republics and neighboring countries, including transparency, rule of law, and healthy democratic institutions. Azerbaijan and Georgia may also face the additional potential danger of emerging a new cycle of instability and political chaos inside their countries since two independent states will soon undergo succession of its top political leaders.

Azerbaijan, like all other newly independent states, has made a geopolitical breakthrough in the early post-independence period. Eleven years after the collapse of the Soviet Union, tensions between Armenia and Azerbaijan, however, remain unabated, and there is a risk of fresh violence flaring in the region while the United States and other Western democracies have focused their attention on the anti-terrorism campaign. The long-term security of Azerbaijan continues to be threatened by the lack of resolution of the geopolitical stalemate over Nagorno-Karabakh.

In the new geopolitical environment in the Southern Caucasus the major challenge will be to resolve the Armenian-Azerbaijani conflict over Nagorno-Karabakh and to move on to economic integration within the entire region. With the gradual defusing of the Nagorno-Karabakh conflict, Azerbaijan will be able to build a wider security system in the Southern Caucasus. If this is successful, Western business circles will regard the whole area as more attractive for an influx of capital. The alternative is too gloomy to contemplate: economic decline, poverty, and new ethnic conflicts that may further destabilize and divide the oil-rich country.

The United Nations and OSCE have not focused enough attention on this dynamic part of the world. They should, therefore, play a more assertive role in bringing about peace and stability in the region. Most significantly, the international and European organizations should assist Azerbaijan and other neighboring states in the region with choosing conciliation over confrontation. The international organizations should mobilize their efforts to facilitate a prospective dialog between warring sides with the purpose of promoting a mutual understanding and a lasting peace in the conflict-torn areas. The great powers, in turn, should make significant contributions toward alleviating the security situation and decreasing the potential for confrontation. Otherwise, any unresolved regional conflict will remain long time a breeding ground for extremism, aggressive separatism, and terrorist activities that may be eventually spread all over Eurasia and devastate numerous strategically important plans relating to Western democracies-funded transnational and regional projects.

In the post-11 September world, the transitional period in Azerbaijan will probably continue for a number of years, since a very long and very difficult struggle seems to await the Azeri nation in its quest to establish itself as a truly viable independent state. Long-term stability in Azerbaijan and in the entire Southern Caucasus is therefore crucial not only to nation-building efforts, but also to regional, European, and international security.

1 The Nagorno-Karabakh dispute is the first serious ethnic conflict on former Soviet territory. Tensions between Armenia and Azerbaijan escalated in 1988, and full-scale war broke out in 1992. The 1994 truce ended the war in which over 30,000 people were killed.
2 In Azerbaijan, it has been agreed that the early-warning military facility in Qabala, leased by Russia, will not qualify as an army base. Azerbaijan was, nevertheless, the first former Soviet-ruled republic to free its territory from Soviet military bases. In addition, Azerbaijan was the first to resist the allocation of Russian border troops and Russian peacemaking forces.
3 See: Azerbaijan Human Development Report 1996, Publication of the United Nations Development Programme/UNDP, 1996, Baku Office of the United Nations. See also: Chapter 8, Displacement in the Former Soviet Region, in: M. Cutts, S. Loughna, F. Nicholson, eds., The State of the Worlds Refugees 2000 Fifty Years of Humanitarian Action, UNHCR, Oxford University Press, Oxford, 2000, pp. 192-193.
4 Due to vast arms shipment from Russia to Armenia and because of broadening military cooperation between Moscow and Erevan, Azerbaijan had to work on the possibility of creating a military alliance with Turkey. For more information, see: E. Nuriyev, Geopolitical Breakthrough and Emerging Challenges: The Case of the South Caucasus, Perceptions Journal of International Affairs, Ankara, Turkey, Vol. VI, No. 2, June-July 2001.
5 See: Zerkalo/Ayna (Baku, Azerbaijan), 23 November, 2002.
6 During his October visit to Azerbaijan in 2001, Russian Interior Minister Boris Gryzlov particularly asserted that Chechen terrorists utilized Azerbaijan to engage in drug trafficking, and warned Azerbaijani officials about a risk of terrorist incidents being organized by Chechens residing in Azerbaijan. For more information, see: Turan News Agency, 30 October, 2001.
7 A deal on the leasing of the Qabala radar station to Russia for ten years was signed between President Heydar Aliev and his Russian counterpart Vladimir Putin during Mr. Alievs official visit to Moscow in January 2002. See also: RFE/RL Transcaucasia Report, 28 January, 2002.
8 Azerbaijan News Service (ANS), January 2002.
9 Azeri President Heydar Aliyev and his Armenian counterpart Robert Kocharian held their 23rd face-to-face meeting in Prague at the NATO summit (21-23 November, 2002). Both Presidents confirmed that they were determined for bilateral dialog. Although it is still difficult to talk about any achievement, the Presidents expressed their interest toward continuing peace talks.
10 For a more detailed analysis of this issue, see: E. Nuriyev, Shadow Pieces of the Caucasus Puzzle: A New Stage of the U.S.-Russian Confrontation in the Context of the War Against Terrorism, Zerkalo/Ayna, November 2001.

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