It’s make or break time for Nagorno-Karabakh’s future

The year-long negotiations between Armenia and Azerbaijan on a peace agreement have reached a critical moment. Since May, leaders and their representatives have regularly convened in various capitals worldwide. And today, delegates are due to begin several days of talks in Washington DC.

While some of those involved acknowledge progress, stating that almost half of the document has already been agreed, the path to a successful end remains distant. The main point of disagreement remains the lack of compromise on the key and most difficult issue – the fate of ethnic Armenians in Nagorno-Karabakh.

This issue has been a central element in the Armenian-Azerbaijan conflict, which has remained unresolved since the collapse of the Soviet Union. Nagorno-Karabakh is a small enclave populated by Armenians located within the territory of Azerbaijan. Following the war in the 1990s, the Armenian side emerged victorious and controlled territories extending more than twice the size of Soviet era boundaries of the region for over 25 years. After the defeat in the 2020 war, around 120,000 local Armenians reside in a much smaller territory patrolled by Russian peacekeepers. All the territories around the enclave are now controlled by Azerbaijan.

Over the past year, the Armenian leadership has made significant concessions, such as officially recognising Azerbaijan's territorial integrity, including Nagorno-Karabakh. But in order to proceed with the peace treaty Armenia is insisting it includes special rights and ensures the security of Nagorno-Karabakh’s Armenian population. International mediators also want special measures due to decades of conflict and the recent 2020 war that claimed over 7,000 lives in just six weeks. The de facto leadership of Nagorno-Karabakh itself continues to assert its independence, even though the entity remains unrecognised by any state in the world.

The outcome of the talks largely hinges on what stance Azerbaijan will take. For Baku, any options considered must align with the objective of securing complete control over the Armenian-populated territory. It rejects reopening discussions on the enclave’s status, which persisted for almost 30 years without results.

International mediators see a way out by giving Baku and Stepanakert a chance to start talks on ways to continue living next to each other. The proposal was first put forward by European mediators a year ago and was promptly supported by their American counterparts. In April, the Russian foreign minister also spoke in support, but there have been no signs yet that Moscow is ready to push for the process to move forward.

Those involved in this week’s Armenian-Azerbaijani peace talks say if direct dialogue does begin between Baku and Sepanakert, Yerevan and Baku will be able to proceed with signing the peace deal in the near future.

What could Baku-Stepanakert talks look like?

Both the president of Azerbaijan and the de facto leadership of Nagorno-Karabakh have spoken about their readiness to consider such negotiations. But many elements of the future process still remain unclear, including the format, agenda, location of the meetings and role of outside mediators. These factors can significantly influence not only the prospect of a deal but also its effectiveness and potential success.

Stepanakert is probably the party most interested in launching these talks. The last seven months have been particularly difficult for the local population. It started with the Baku-backed activists that blockaded the only road that connects the enclave with Armenia. That halted the movement of people and led to shortages of food products and medical supplies. In April, the situation deteriorated further, when Baku installed a checkpoint on this road.

In June, following a brief exchange of fire, Azerbaijan closed the checkpoint even for humanitarian cargo such as food and medication, which was being delivered to Nagorno-Karabakh by Russian peacekeepers and the International Red Cross (ICRC). On top of this, for over four months the local Armenians have faced a shortage of electricity supply and no natural gas due to the damage of the supply routes from Armenia that cross over the Azerbaijani-controlled territory in the conflict zone. As of Sunday, the ICRC is now able to conduct medical evacuations, though deliveries of food and medicine are still cut off.

When similar problems emerged in the past, Stepanakert would address them through the Russian peacekeepers or use its own contacts on the Azerbaijani side. None of these channels function anymore. Since the EU and US started pushing for the launch of Baku-Stepanakert talks, all parties have become particularly wary of not conceding on the format and content of the future talks even before they start.

Azerbaijan now refuses to have either formal or informal talks with the de facto officials of Nagorno-Karabakh. Instead, it invites them to Baku to demonstrate that the talks can be only about incorporating the enclave to its direct rule.

“All we hear is that each and every problem will be resolved when we agree to ‘integrate’ to Azerbaijan on their terms,” one de facto official said. “But we do not need a meeting just for the sake of meeting. We must show our people that this dialogue with Baku will be genuine.”

Mediation comes with more presence on the ground

Another crucial aspect of any Baku-Stepanakert talks is whether they would involve foreign mediators. Azerbaijan advocates for direct negotiations, similar to communication that is in place between Baku and its provinces. Conversely, Stepanakert believes that the participation of international actors is indispensable for ensuring the sustainability of any future agreements.

The knock-on effect of the war in Ukraine has complicated matters.

In previous decades, the OSCE Minsk Group, led by co-chairs from Russia, France, and the US, played a prominent role in the Nagorno-Karabakh conflict. Communication between Western and Russian envoys came to a standstill following the onset of the Ukraine war. Western diplomats say that despite formal assurances of willingness to separate the Nagorno-Karabakh issue from the Ukraine confrontation, Russia is reluctant to engage.

“None of us desires another war in this region,” a Western diplomat told me last autumn. But in Moscow, officials are deeply suspicious of the West’s intentions. “We will not aid them in ousting Russia from the South Caucasus ourselves,” a Russian diplomat remarked this spring. As a result, Russia, the US, and the EU are all independently pursuing negotiation processes between Yerevan and Baku.

Much now depends on whether Baku would be willing to give the talks with Stepanakert a chance. Azerbaijan’s leadership harbours mistrust towards counterparts in Armenia and Nagorno-Karabakh. The negotiation process has seldom facilitated discussions on comprehensive approaches and solutions.

After three decades of conflict, it is time to give the real talks a chance. Azerbaijan is undoubtedly aware that a mass exodus from Nagorno-Karabakh driven by fear and uncertainty would result in substantial global repercussions, potentially impeding the country in various ways. It could have a detrimental impact on Baku's reputation as a dependable trading partner, thereby affecting its thriving economy, which has benefited from Western countries seeking alternative energy exporters in light of the conflict in Ukraine. By heeding international appeals and entering the talks with Stepanakert, Baku can reassure Armenians that they would have a chance to continue living in Nagorno-Karabakh.

The stakes, including the threat of a new war and significant regional changes amid the events in Ukraine, are too high to now consider the possibility of abandoning the process.

As one official, who was at the helm in the early 1990s, told me, it is now a time for creation and compromise, not for making the same mistakes these nations made when their states regained independence after the collapse of the Soviet Union.

“We should not resume killing each other while others strengthen their statehood and continue to develop,” the retired official said.