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For Azerbaijan, Armenia’s Political Upheaval is a Double-edged Sword
For Azerbaijan, Armenia’s Political Upheaval is a Double-edged Sword
Report 207 / Europe & Central Asia

Azerbaijan: Vulnerable Stability

If it continues to ignore the need for economic and political reform, Azerbaijan will squander an historic opportunity to use the country’s energy resources to build a more durable state system and a prosperous nation.

Executive Summary

Ilham Aliyev’s presidency has been marked by stabilisation of the political life of the country and economic growth driven by oil exports. This stability, however, has come with the consolidation of authoritarian rule, greater suppression of freedoms and an increased reliance by elites on corruption and patronage networks to dominate virtually all aspects of public life. With a marginalised and demoralised opposition, little independent media and rent-seeking elites who have vested interests in the preservation of his power, Ilham Aliyev has a level of control over society that his father never possessed. The international community has little leverage with which to pressure the regime, but it should do more to persuade the leadership to see that even its own self-interests lie in gradual but genuine liberalisation.

The government has developed effective methods for keeping political forces, non-partisan civil groups, media, religious communities and independent business alike from becoming self-sustainable challengers. It appears to have deliberately promoted a sense of impunity so as to ingrain self-censorship in the public and discourage any unsanctioned collective action. Due to restrictive readings of the existing laws, it denies the right to freedom of assembly. Opposition demonstrations are regularly prevented and sometimes violently broken up. Civil activists often find themselves at the mercy of local authorities and are occasionally denied the right to hold activities outside of the capital. The denial of registration for NGOs and religious communities has been used as a tool to restrict their activities. Mosques have also been shut down by the government on questionable grounds, raising the spectre of pushing them underground and stoking radical tendencies.

Although President Aliyev exerts firm control over the government, he is not all-powerful. He depends on the elite to preserve his power, and unless a direct challenge is involved, he is not interested in revising the delicate balances within the system by removing powerful subordinates, even if he is unsatisfied with performance. As a result, domestic politics are shaped less by unequal opposition-government contests than by internal dynamics and occasional power struggles within the ruling elite.

Oil revenues have further entrenched a stagnant political system, making it even more resistant to reforms. But the oil revenues are levelling off and are projected to gradually decline within a few years, which could lead to economic problems and growing public frustration. The closed political system prevents meaningful debate on Azerbaijan’s long-term challenges and stimulates a sense of apathy and distrust. To protect state stability, a start on economic and political reform is essential.

The continuation of “business as usual” runs the risk that Azerbaijan could squander an historic opportunity to use its energy resources to build a more durable state system and a prosperous nation. The growing over-reliance on the energy sector, discrepancies in wealth distribution and public disenchantment with both the government and traditional opposition parties increase the likelihood of a surge in radicalism and instability in the medium to long term. It is in the regime’s own interest to open up political space, take steps to rein in corruption and de-monopolise the economy, while it still stands on solid financial and political ground. Azerbaijan has already reached the peak of its oil-driven GDP growth rates, which ran as high as 35 per cent in 2006 but are expected to slow to about 3 per cent in 2010 and 0.6 per cent in 2011. If the authorities further delay reform, they may lose the ability to control future developments and meet growing public expectations.

President Aliyev could reinforce both his domestic and international credentials by embracing deeper structural change. Genuine steps towards reform could also engender a more sympathetic attitude from the international community towards his most important policy problem, the conflict with Armenia over Nagorno-Karabakh. In the meantime, continued backsliding on human rights, including politically motivated arrests and the persecution of government opponents, casts a shadow over Azerbaijan’s relations with important allies. International actors need to impress on the leadership that they run counter to both the country’s international commitments and the government’s own interests.

Baku/Tbilisi/Istanbul/Brussels, 3 September 2010

President of Azerbaijan Ilham Aliyev visits the Alley of Martyrs, a cemetery and memorial dedicated to those killed by Soviet troops during the 1990 Black January crackdown, in Baku, the capital of Azerbaijan, on 20 January 2018. AZERBAIJANI PRESIDENCY / HANDOUT / Anadolu Agency

For Azerbaijan, Armenia’s Political Upheaval is a Double-edged Sword

Azerbaijan regards Armenia’s “velvet revolution” as both hopeful and worrying. Baku hoped Yerevan’s new leadership might bring a fresh approach to negotiations over the Nagorno-Karabakh enclave. But, thus far, to many Azerbaijanis that leadership sounds less flexible than its predecessor.

The springtime political upheaval in Armenia stunned neighbouring governments – not least that of Azerbaijan. Since 23 April, when mass demonstrations impelled Armenia’s long-time leader Serzh Sargsyan to resign, the Azerbaijani authorities have struggled to understand the implications for the three-decade-long conflict between Azerbaijan and Armenia over Nagorno-Karabakh.

Prior to Armenia’s “velvet revolution”, observers in the Azerbaijani capital Baku believed Sargsyan would continue indefinitely as prime minister. At the outset of the anti-Sargsyan unrest, the demonstrations were small, and Azerbaijanis remained doubtful that the unrest would force a change in Armenian politics. They drew comparisons to “electric Yerevan” – the 2015 protests in the Armenian capital against electricity rate hikes. Even as the demonstrations grew, the Azerbaijani authorities did not imagine that Sargsyan would step down. Every previous uprising in the region had had a “geopolitical colour” – some relation to the standoff between Russia and the West – and they did not know what to make of a popular revolt centred solely on national politics.

Baku wants to see a step-by-step formula for resolving the Nagorno-Karabakh conflict, with the return of some lands as negotiations continue.

Sargsyan’s exit was not unwelcome, however. On a key Azerbaijani demand vis-à-vis Nagorno-Karabakh – the return of seven Armenian-controlled districts adjacent to the territory – Baku had long viewed him as inflexible. Baku wants to see a step-by-step formula for resolving the Nagorno-Karabakh conflict, with the return of some lands as negotiations continue, so as to produce the first tangible results since the 1994 ceasefire and build confidence in the peace process. Yet Sargsyan – like Armenian leaders before him – stuck to a “land for status formula”. Despite adopting a formal position that the seven Armenian-controlled districts were “not Armenian homeland”, he insisted that those districts would be returned to Azerbaijan only after Nagorno-Karabakh’s status was resolved.

In recent years, Baku also had thought Sargsyan was damaging the settlement process by investing his political capital in trying to normalise relations with Turkey and reopen the Armenia-Turkey border rather than in resolving the conflict with Azerbaijan. Baku has always seen the border’s reopening as conditional on Nagorno-Karabakh progress.

These incompatible positions ended up foiling both Armenia-Turkey normalisation (despite Yerevan’s efforts, Ankara ultimately supported Baku’s stance on the border issue) and progress in the Nagorno-Karabakh talks, which are deadlocked. For several years, the Armenian and Azerbaijani leaders have met only at long intervals. Currently there are no plans for another meeting.

Baku thought that the surprise political transition in Armenia might bring a way out of the impasse. Were there progress toward resolution of the conflict, Azerbaijan might be willing to see Armenia join long-term regional integration projects, from the Baku-Tbilisi-Kars railway to the oil and gas ventures involving Azerbaijan, Georgia and Turkey. But this initial optimism has faded. Azerbaijan now views the “velvet revolution” as a double-edged sword: it got rid of Sargsyan, but it also brought to power leaders entirely unknown to Baku whose statements on Nagorno-Karabakh, at least for the time being, sound harder-line.

A Cautious Azerbaijani Response to Armenian Upheaval

Prior to, and even during Sargsyan’s ouster, there had appeared to be a heightened risk of skirmishes along the line of contact between Armenian forces in Nagorno-Karabakh and the Azerbaijani army. Several opinion makers in Azerbaijani media – some having misread the situation, others playing to nationalist sentiment to raise their profiles – called for military strikes to regain territory or held out war as an option had the upheaval in Armenia worsened. In Armenia, as noted in an earlier Crisis Group commentary, there were reports of Azerbaijani movements at the line of contact (which Baku denied). 

But in contrast to the pundits, most high-level officials in Baku remained calm in their statements. The Azerbaijani government feared Yerevan would provoke a confrontation so that the Armenians who had gathered on the streets to protest against the government would rally round the flag instead. It thus refrained from bellicose language, opting to “wait and see” how the Armenian tumult would end.

Baku rooted its caution in the perception that any military action, even a small provocation, would unify Armenians behind the government, possibly leading the demonstrations to dissolve. Similarly, Armenian protesters, led by the formerly obscure MP Nikol Pashinyan, who is now prime minister, seemed aware of that risk. Sasun Mikaelyan, a deputy from Pashinyan’s minority Yelk faction, said, “reports of Azerbaijani military activity are untrue”. Whether or not he meant it to, Mikaelyan’s statement echoed that of Hikmet Hajiyev, spokesperson for the Azerbaijani foreign ministry, who had said: “Allegations of the deployment of manpower and military equipment by Azerbaijan to the front do not correspond to reality”.

Azerbaijan had good reason to be transparent about its intentions. In 2008, when Sargsyan first came to power, deadly fighting (which each side accuses the other of starting) along the line of contact had coincided with a police crackdown on demonstrators in Yerevan. Tens of thousands had been protesting the outcome of the presidential election; their candidate, Levon Ter-Petrosyan, had lost to Sargsyan. The fighting helped change the mood in Armenia, redirecting anti-government anger outward.

Elites in Baku also worried that any military activity at the line of contact would incur an international backlash, casting Azerbaijan in a negative light as the “velvet revolution” proceeded. They had hoped that Azerbaijani President Ilham Aliyev’s cabinet reshuffle, his most significant to date, following his election win on 11 April, would generate some positive international coverage. Baku wanted to present this change as a first step toward reform at home. Instead, the Yerevan events overshadowed the cabinet reshuffle, leaving it almost unnoticed.

After Sargsyan’s departure, officials in Baku expressed concern that the Armenian demonstrations might inspire opposition groups in Azerbaijan, always a source of government anxiety. This concern had immediate consequences, namely parliament’s proposal to impose new penalties for violations of the already stringent rules about rallies and demonstrations.

Pashinyan’s Election and the View from Baku

Nikol Pashinyan was elected prime minister of Armenia on 8 May, with the backing of the Republican Party that had ruled under Sargysan.

The first misperception is that Pashinyan is a dove on Nagorno-Karabakh.

Overall, Baku recognises that, in the short term, the new premier is unlikely to adopt a radically different position on Nagorno-Karabakh from that of his predecessor. That said, opinion in Baku is marked both by potential misperceptions about the new Armenian premier and a number of fears.

The first misperception is that Pashinyan is a dove on Nagorno-Karabakh. Some Azerbaijani analysts cite as evidence his links to the former Armenian president, Ter-Petrosyan, who was forced to resign in 1998 by elite opposition to his perceived openness to compromise on the conflict. But in reality, little suggests Pashinyan is a dove, and though he backed Ter-Petrosyan against Sargysan in 2008, the two have never shared policy ideas on Nagorno-Karabakh.

Second, many in Baku believe that Pashinyan’s rise to power could signal a shift in Armenian relations with Russia. This partly relates to the new premier’s 2017 statement that Armenia should leave the Eurasian Economic Union (EEU), Russia’s counterpart to the trade agreements sponsored by the European Union. Yet this pronouncement should not be taken at face value: at the time, Russia had just sent a shipment of arms to Azerbaijan, and Pashinyan was speaking in anger. He did not support the later decision of his Yelk parliamentary faction to incorporate an anti-EEU stance into its platform. Indeed, since becoming prime minister, Pashinyan has taken pains to ensure he is not seen as anti-Russian. During a meeting with Russian President Vladimir Putin in the Black Sea resort of Sochi on 14 May, he gave a speech providing assurance that “nobody has ever questioned the strategic importance of Armenian-Russian relations, or ever will”.

Many Azerbaijani experts nonetheless persist in misinterpreting the 2017 statement as a “policy of blackmail” aimed at extracting more from Moscow. They believe that when that gambit fails, Pashinyan will pivot toward the West, leading to a deterioration in Armenia-Russia relations that will benefit Azerbaijan. As the former foreign affairs minister, Tofig Zulfugarov, put it, “Azerbaijan should be ready for negotiations and war simultaneously, and wait for Armenians to make new mistakes”.

A pro-government analyst was blunter, telling Crisis Group, “there is an expectation that if Nikol Pashinyan makes one wrong move, Moscow will punish Armenia, and increase support for Azerbaijan. This support also would mean giving the green light to Azerbaijan to take back territories via military intervention”. In reality, however, a major shift in Armenia-Russia relations for now appears unlikely.

Baku also has a number of concerns related to the change in leadership. The first relates to the fact that Pashinyan heads a minority government vulnerable to challenge. He appears likely to call snap parliamentary elections – he promised to do so before he was named prime minister and a fresh poll would give him the chance of strengthening his position in parliament. At least until that vote, the Nagorno-Karabakh issue will likely remain a pressure point deployed by the opposition (which holds the majority in parliament) against Pashinyan – any sign that the new premier is insufficiently tough could be used to undermine him.

Once he does call for a vote, Nagorno-Karabakh could easily become the main campaign issue. In such contests, said Farhad Mammadov, director of the Azerbaijani president’s Centre for Strategic Studies, “we should expect loud populist, maximalist promises from political parties and leaders regarding the settlement of the conflict”. Pashinyan himself has promised to increase the military budget and made hard-line pronouncements on Nagorno-Karabakh that could be escalatory.

The second concern, in Baku’s eyes, relates to the negotiating format for talks on Nagorno-Karabakh. For now, that format names Armenia and Azerbaijan as the two parties to the talks, and designates the two countries’ leaders as the main interlocutors.

Until recently, that meant the presidents and the foreign ministers. But now that Armenia has moved from a presidential to a parliamentary system of government, the prime minister (briefly, Sargsyan, and now Pashinyan) is Yerevan’s main representative. More to the point, parliament has veto power over even a basic formula for peace. The prime minister will have to put any decision up for a vote. A premier reluctant to make peace could stand by as deputies voted no on a prospective agreement. Even one ready to risk his political career for peace would need to win parliamentary backing.

For Baku, the participation of Karabakhi Armenians in talks about the territory’s status is acceptable only if Karabakhi Azerbaijanis displaced from their homes by war are also present on an equal footing.

For Baku, more troubling still for the negotiating format is the new Armenian leadership’s stance, made official after Pashinyan became prime minister, that the de facto Nagorno-Karabakh authorities be represented in talks over the enclave. Pashinyan had made this demand in April 2016, when he was an MP. At that time, officials in Baku interpreted him as playing domestic politics in reaction to the Sargsyan government’s losses in the war; since the ex-leader was of Karabakhi origin, and presented himself as a defender of de facto Nagorno-Karabakh, he was vulnerable to attack on that point. But they take the reiterated demand much more seriously.

For Baku, the participation of Karabakhi Armenians in talks about the territory’s status is acceptable only if Karabakhi Azerbaijanis displaced from their homes by war are also present on an equal footing. That demand, in turn, Yerevan rejects. The format has implications for status: Yerevan argues that Karabakhi Armenians need to be present as representatives of a nation that claims self-determination outside of Azerbaijan; Baku argues that, at a minimum, both ethnic communities need to be present to discuss self-determination within Azerbaijan. If and when talks resume, they could bog down in this dispute.

As for Pashinyan’s statement regarding the Karabakhi Armenians, senior Azerbaijani officials interviewed by Crisis Group said, “this will be perceived as a reason for war. The de facto Nagorno-Karabakh is an interested party and so should not be at the table in the negotiations, like the Azerbaijanis of Nagorno-Karabakh. This was agreed upon back in March 1992 at the OSCE (Organization of Security and Co-operation in Europe) Ministerial Council meeting in Helsinki, where the Minsk Group was established”. If the new Armenian premier pushes hard on this point, Baku will dismiss him as uninterested in negotiation. It will then likely wait for the outcome of Armenia’s snap elections, if they take place, before taking any action. But one of the biggest reasons for past escalations in the Nagorno-Karabakh conflict has been the parties’ lack of faith in negotiations to deliver concrete results. If there is a sense that talks are stalled, non-diplomatic options, including the tactical use of force, may become more tempting.

Any escalation on the ground, even if small or inadvertent, could result in numerous casualties.

Baku’s third concern is the possible reopening of the airport in Nagorno-Karabakh. The airport has been ready for business since May 2011, but it remains non-operational due to warnings from Baku. The senior Azerbaijani officials said, “the reopening of this airport would constitute a casus belli”. In reality, however, Pashinyan has as yet made no statement on this topic.

Most dangerous would be de jure recognition of the de facto Nagorno-Karabakh authorities by Armenia, which is unlikely, but if it happens would be viewed as extremely provocative in Baku and could even spark some form of escalation. During the April 2016 escalation, Armenian MPs introduced a bill to that effect, but the majority shelved it.

Any escalation on the ground, even if small or inadvertent, could result in numerous casualties, given the high combat readiness on both sides of the heavily militarised line of contact and the risk that outside players would be dragged in.

Refrain from Provocations

The Azerbaijani side has lately been using bold rhetoric of its own, naming Yerevan and other parts of Armenia, where Azerbaijanis lived prior to the breakup of Soviet Union, as historical lands and invoking a right of return. This talk is not new, but in 2018 it has become a cornerstone of President Aliyev’s speeches on Nagorno-Karabakh. On 18 April, Aliyev stated, “we would like the world community to know that not only Karabakh, but also present-day Armenia is historical Azerbaijani land”. This statement triggered a wave of emotional criticism on the Armenian side, where it was perceived as an open threat. 

In interviews with Crisis Group, Azerbaijani officials soft-pedaled Aliyev’s intent, saying, “these statements mention only that Azerbaijanis live in these territories and they have rights. This is a response to the maximalist position of Serzh Sargsyan on Nagorno-Karabakh, rejecting the return of lands. In this way we are setting our maximalist position”. Whatever the case, in the interest of building trust with the new Armenian leadership, Baku should desist from this rhetoric.

In the interim, the two countries should convene an urgent meeting of their foreign ministers. It would also be useful to upgrade (rather than overhaul) the negotiation format. At present, talks depend exclusively on high-level meetings. Separate meetings between personal representatives of the Armenian prime minister and Azerbaijani president could reduce the risk of misunderstandings during the intervals when the leaders and foreign ministers are not talking. These personal representatives could serve as a back channel, ensuring that any messages are accurately transmitted and understood. Such a format was useful in the 1990s, helping build trust and resolve thorny issues. At the same time, the Minsk Group co-chairs and the European Union should step up their engagement with both sides to reiterate the importance of refraining from provocations during the pause in negotiations.