Nagorno-Karabakh - A Frozen Conflict That Could Boil Over

Two states wedged between Europe and Iran are locked in an arms race and preparing for war. The international community, particularly the EU, might be able to slow down Armenia and Azerbaijan’s slide toward another devastating conflict. But it will have to shake off its indifference first.

The dispute over the mountainous province of Nagorno-Karabakh does not exactly rank high on the world’s to-do list. It was much the same in 1991, when amid the collapsing Soviet Union, two republics stumbling toward independence fell into an all-out war over this ethnically Armenian enclave within Azerbaijan.

By the end of hostilities three years later, some 25,000 people were dead and more than a million displaced. Some call this a frozen war, but since 1994, several hundreds have been killed in incidents across the ceasefire line that separates land occupied by Armenian forces and the rest of Azerbaijan.

Attempts to broker peace over the past dozen years have failed, and worse, a massive arms build-up has started. Boosted by oil revenues, Azerbaijan increased its military spending by a record 51% in 2004-05, and then raised it a further 82% in 2006.

The shopping spree has so far included large numbers of multi-launch rocket systems, new artillery, tanks and both F-15 and Mig-29 fighters. In 2007 President Ilham Aliyev promised to make Azerbaijan’s military spending equal to Armenia’s entire state budget.
But Armenia is hardly a tortoise in this race. Though its military budget is only about a quarter of its neighbour’s, it last year spent some $280 million on weapons – another record. Armenian officials boast they do more with less because they can get better deals on armaments from Russia.

True, open war will not start tomorrow and it may be as far off as 2012, when Azerbaijan’s oil revenues should peak, making the country’s leadership see it as the optimum moment to recover the occupied areas.

Still, such huge preparations ought to ring serious alarms, because the result of another all-out conflict would be almost certainly worse than the 1991-94 war. It would probably affect new oil and gas pipelines, and put a wedge between Russia and Turkey, which have strong allegiances to Armenia and Azerbaijan respectively.

As both Armenia and Azerbaijan head into an election year, with belligerent rhetoric all around, a comprehensive peace deal does not look imminent. The world should not sit back and watch 2008 become another record-breaking year for weapons manufacturers. 
The current negotiations – the ‘Prague process’, facilitated by the Minsk Group of the Organisation for Security and Co-operation in Europe (OSCE) and led by France, Russia, and the US – have been trying to get the two enemies to sign a document of basic principles.

Securing an agreement, even one that notes remaining differences, before the polls, would be a hugely important step. It would keep the process alive and provide a place-holder from which the presidents of Armenia and Azerbaijan could resume talks after the 2008 elections.

The international community must impress on Armenia and Azerbaijan the need for progress in peace talks and stop ignoring the conflict in its aid packages. The EU special representative for the South Caucasus, who does not have a seat at the table, should be an observer in the negotiations.

The EU could also move things along by promising that, once a peace agreement is reached, it would become a guarantor, sending peacekeeping and policing units, and offering a large financial plan for rehabilitation and resettlement. European Neighbourhood Policy funding, meanwhile, should be linked to progress in the negotiations, and promote confidence-building, as well as institution-building and respect for human rights and the rule of law.