Nagorno-Karabakh, a mountainous area in the South Caucasus, has a troubled history. In 1923, Stalin made the region a part of Azerbaijan, despite the fact that most of the population was Armenian. Two decades ago, following the demise of the Soviet Union, Armenia helped the region fight a war of secession; the Armenian side killed countless civilians, and 900,000 of the Azerbaijanis who had lived in Nagorno-Karabakh for centuries were driven out.
In 1994, Azerbaijan agreed to a ceasefire that allowed Nagorno-Karabakh to function more or less as an independent state. However, the region still formally belonged to Azerbaijan, and Armenia, thinking itself the rightful owner, continued to occupy parts of it. This has led to continuing tension, and a 2008 U.N. resolution held that Armenia should pull its troops out.
At its Lisbon summit in November, NATO formally took Azerbaijan’s side, recognizing the country’s “territorial integrity, independence and sovereignty.” Eleven days later, an Organization for Security and Cooperation in Europe (OSCE) summit became the scene of another rather abusive round of recriminations between Armenia and Azerbaijan, but the OSCE could not come up with an action plan. Armenian president Serzh Sargsyan threatened to recognize the independence of Nagorno-Karabakh, a step that would lead to the incorporation of the region into Armenia. That could mean, if not war, then permanent hostility between Armenia and Azerbaijan.
The U.S. has displayed indifference, or at least apathy, toward the situation. This needs to change. Armenia’s threats reflect the facts that NATO disregarded Armenia’s claims and that the OSCE, largely because of distrust between the U.S. and Russia, cannot bring itself to function as intended (i.e., as a mediator). But the threats also reflect the fact that behind most of the headlines, this has been a very good year for Azerbaijan in its international relations, particularly its energy diplomacy. As a result, Azerbaijan has become more strategically important to the West, including the U.S.
Baku has stood its ground with Moscow. While doubling gas exports to Russia, it signed a major deal with BP to develop new gas holdings off its shores, thus not only maintaining its energy independence, but also demonstrating the importance of the planned Nabucco pipeline to Europe. Azerbaijan has also visibly improved its relations with Turkmenistan, to the point where a Turkmen decision to send its gas to Europe through pipes traversing Azerbaijan is now quite conceivable. Further, Azerbaijan signed a four-party deal to build an Interconnector that will send Azeri gas through Georgia and the Black Sea en route to Romania and then Hungary. This deal enhances Azerbaijan’s importance to Southeastern Europe as a reliable supplier of oil and gas. Also in 2010, Azerbaijan improved its ties and signed an energy agreement with Turkey.
While these agreements cannot hide the fact that no progress was made on Nagorno-Karabakh — over 30 serious incidents occur daily on the “Line of Contact” there — they do show Azerbaijan’s growing importance to Europe and self-confidence in international affairs. Armenia, by contrast, has little to show for its efforts except continuing dependence upon Russia. For example, because of its refusal to negotiate with Azerbaijan, Armenia remains estranged from Turkey — a situation that decreases Armenia’s GDP by 15 percent. Recent reports show that Armenia ran weapons to Iran, something that will hardly endear it to the West.
The visible tone of frustration expressed by President Sargsyan at the OSCE summit in Astana reflects the awareness that Armenian policy has hit a brick wall. Yet the country shows no sign of changing. Meanwhile, Azerbaijan’s spending on defense alone outstrips the combined budgets of Armenia and Karabakh.