Strategic Analysis Caucasus Brief

Bi-weekly review (11.4.  – 25. 4. 2022)

Tomáš Baranec 

Armenia

Hrazdan Power Plant, Armenia. Photo: Chris Hall/ Shutterstock.com

Pashinyan begins to face criticism for negotiations with Baku home and in Nagorno-Karabakh

Armenian Prime Minister Nikol Pasinjan is facing sharp criticism from the opposition and the separatist de facto government of Nagorno-Karabakh after acknowledging that his government may have to recognise the change in the status of this unrecognised region due to international pressure.

On April 13, Pashinyan delivered a report to the National Assembly on the implementation of the government’s program for 2021. In his speech, the PM stressed that Armenia has never had territorial claims against Azerbaijan, and the issue of Nagorno-Karabakh is not a matter of territory but of rights. Guarantees of the security of the Armenians of Nagorno-Karabakh, ensuring their rights and freedoms, as well as clarifying the final status of Nagorno-Karabakh are of fundamental importance for Armenia. At the same time, Pashinyan emphasised a significant nuance:

“If earlier we put the status of Karabakh as a basis and, based on this, guarantees of security and rights, now we are laying the basis for guarantees and rights of security, based on this status. In other words, we state that the status in this situation is not a goal, but a means of ensuring the security and rights of the Armenians of Nagorno-Karabakh.”

This statement follows as signs of progress in peace talks between Pashinyan and Azerbaijani president Ilham Aliyev start to appear. Both leaders met in Brussels on April 6 and had a phone call several days later. Recent signals from Yerevan have pointed to significant concessions: Senior officials have said they are willing to recognise Azerbaijan’s territorial integrity, which many interpret as the government’s willingness to cede control over Nagorno-Karabakh.

However, as diplomacy between Armenia and Azerbaijan has gained pace, resistance in Armenia has grown to what many fear will be unacceptable concessions on their side. The two opposition blocs of the Armenian parliament announced on April 12 that they would be boycotting the body’s sessions for the week and walked out en masse. They would instead be travelling to towns on Armenia’s border and to Nagorno-Karabakh, the territory at the heart of the conflict with Azerbaijan, they said. But when a group of MPs tried to enter Karabakh, they were stopped by Russian peacekeeping troops and not allowed to enter.

As Eurasianet reports also, authorities in self-proclaimed Nagorno-Karabakh have spoken out against the Armenian government for signalling a willingness to make concessions that would allow Azerbaijan to regain control over the territory.

“Any attempt to incorporate Artsakh into Azerbaijan would lead to bloodshed and the destruction of Artsakh,” said Davit Babayan, the de facto foreign minister of Karabakh, using an alternate Armenian name for the region. “And after the destruction of Artsakh, there would be no Republic of Armenia,” he said on April 14 at an extraordinary session of the territory’s parliament.

At the end of the session, the de-facto parliament issued a statement declaring that: “Any change of Nagorno-Karabakh’s status is unacceptable.”

In the uncertain situation, some in Karabakh are advocating for an unlikely solution: for the territory to become part of Russia.

The prime minister, on April 14, again pushed back against claims that he was sacrificing the Armenians of Karabakh. “What I’ve been saying has been all about not surrendering Karabakh,” the prime minister said in a special session of parliament. “We are saying that the people of Karabakh must not leave Karabakh, the people of Karabakh must live in Karabakh, the people of Karabakh must have rights, freedoms, and a status,” though he did not elaborate on what that status might be.

In this respect, Armenian political analysts told Caucasian Knot that the autonomy of Nagorno-Karabakh within Azerbaijan will lead to the exodus of the Armenian population from this territory; while the signing of a peace treaty with transferring Nagorno-Karabakh under Azerbaijan’s control will spark mass protests in Armenia

Sources:
  • MEJLUMYAN Ani, Eurasianet.org, “Officials in Karabakh break with Armenia over negotiations“, https://eurasianet.org/officials-in-karabakh-break-with-armenia-over-negotiations
  • MEJLUMYAN Ani, Eurasianet.org, “Armenian opposition resists as diplomacy with Azerbaijan advances“, https://eurasianet.org/armenian-opposition-resists-as-diplomacy-with-azerbaijan-advances
  • JAM News, „Armenian PM: NK status is not a goal, but means to ensure the security of Armenians“,Caucasian Knot, „Armenian political analysts voice out risks of changing Nagorno-Karabakh’s status“. https://www.eng.kavkaz-uzel.eu/articles/58836/
For additional information, see:
  • The Prime Minister of the Republic of Armenia, „Prime Minister Nikol Pashinyan’s speech at the National Assembly during the discussion of the performance report of the Government Action Plan for 2021“, https://www.primeminister.am/en/statements-and-messages/item/2022/04/13/Nikol-Pashinyan-Speech/
Pashinyan met Putin to discuss the Nagorno-Karabakh agreement

During the two days visit, both leaders discussed the issues that concern the Armenian society most of all – the settlement of the Nagorno-Karabakh conflict, the effectiveness of the activities of Russian peacekeepers, informs JAM News.

„We have reached an agreement with President Putin on a number of important issues, including the security of Nagorno-Karabakh, the unblocking of regional infrastructure and demarcation of Armenia and Azerbaijan’s borders“, Pashinyan told Vyacheslav Volodin, the Speaker of the Russian Parliament, in a televised meeting on April 20.

The two leaders also agreed to “accelerate” the formation of a commission aimed at coordinating the demarcation and delimitation of the state borders between Armenia and Azerbaijan by the end of April — according to an agreement reached by Aliyev and Pashinyan in Brussels earlier in the month. Both leaders also spoke about the successful launch of the 3 + 3 regional cooperation platform in the South Caucasus.

As OC Media adds, the heads of the Armenian and Russian security councils, Armen Grigoryan and Nikolay Patrushev, respectively, signed an agreement concerning information security, which included the „exchange of data to identify, prevent, suppress, and investigate offences related to using information and communication technologies for terrorist and other criminal purposes“.

Armenian PM also reflected on criticism that is willing to abandon Nagorno-Karabakh Armenians. According to Pashinyan, after November 9, 2020, when the statement on the cessation of hostilities in Karabakh was signed, no document on the settlement of the Nagorno-Karabakh conflict was discussed at the negotiating table: “I say confidently that during this period, there were no, and at the moment, there are no, projects on the Nagorno-Karabakh settlement. There is not even a draft that lies on the table or is in circulation”.

The prime minister ruled out the possibility of signing any document without discussing it in society and gave guarantees that “the fate of Artsakh cannot be decided behind people’s backs”.

Sources:
Armenia and Russia are working to de-dollarise bilateral trade

Armenia and Russia are working on plans to conduct trade in their own currencies, rather than dollars, to mitigate the effects of international sanctions against Russia for its attack on Ukraine. Armenia already has begun paying for its Russian natural gas imports in rubles, reports BM.ge.

“The issue of a ruble-dram swap is under discussion. As a result, we will have rubles to pay for imports from Russia, and Russian banks will be able to provide their clients with drams at the market rate,” Economy Minister Vahan Kerobyan told Eurasianet. He did not offer a specific date when that might happen.

Independent experts in Armenia see the logic behind rubles since the economies are already so closely tied through exchange and the remittances of the large Armenian population working in Russia. These factors define the Armenian economy, and even with expectations that the Russian market will shrink and migrant labourers will lose jobs, the arrangement will not change overnight.

“It is beneficial for Armenia to pay for Russian goods in rubles since our country receives a lot of money in rubles from Russia through tourism channels and private money transfers from Armenian migrants working in Russia,” Haykaz Fanyan, an economist in Yerevan, told Eurasianet. “In addition, settlements in national currencies will help avoid transaction costs when exchanging currency. And these are big numbers when it comes to multi-million-dollar deals.”

Because the ruble trade is two-way, there is little worry about a major impact on the dram, said Karen Zakarian, director of Finarm Association of Financial Market Participants, an industry group. “If Armenia receives a mass of rubles, but pays for Russian goods with them, then there is nothing to worry about. Here the state or the Central Bank will not interfere. They would intervene only if the flow of the ruble to Armenia were one-way,” Zakarian told Eurasianet.

Using rubles does not help Armenia avoid the fallout from Russia’s economic slump, however. Sanctions on Russia were quickly felt in Armenia, which was forced to raise its baseline interest rate by 125 points to 9.25 per cent last month.

Russia is Armenia’s most significant foreign trade partner.

According to National Statistical Committee, Armenia’s foreign trade turnover with Russia in January-February this year amounted to over $475.2 million, an increase of 61.4% compared to the first two months of 2021. Armenia’s exports to Russia over the reporting period of 2022 amounted to over $147.8 million (a 43.1% increase), while imports surged by almost 69% to $351 million.

Sources:
For additional information, see:

Azerbaijan

Industrial part of Baku, Azerbaijan. Photo: Denis Sv/ Shutterstock.com

Regional leaders contemplate the future of the OSCE Minsk Group

While Azerbaijani president Ilham Aliyev claims that the mandate given to the OSCE Minsk Group to resolve the conflict in Nagorno-Karabakh is de facto invalid, the Armenian PM Nikol Pashinyan believes all co-chairing countries remain committed to their mandate.

On April 8, Russian Foreign Minister Sergei Lavrov, after negotiations with his Armenian counterpart Ararat Mirzoyan said the OSCE Minsk Group was no longer able to continue its mediation in settlement of the conflict. Lavrov explained this by the fact that the other two co-chairs – the United States and France – did not want to work in the same format with Russia amid the war in Ukraine. He even accused them of “Russophobia”.

Several days later, Aliyev criticised the format for its alleged passivity. “As for the OSCE Minsk Group, immediately after the war, the co-chairs of the Minsk Group arrived in Baku. This was their first and last visit to Azerbaijan after the war.

Azerbaijan itself resolved this conflict. Allowed by military-political means. Although the mandate given to the Minsk Group to resolve the conflict actually de jure remains in force, de facto it can no longer be considered valid,” he said.

The President of Azerbaijan stressed that over the past year, the country had not received any proposals from the OSCE Minsk Group co-chairs: “Our foreign minister met with the co-chairs of the Minsk Group at various international events, and we asked them: tell us, what do you intend to do? The Nagorno-Karabakh conflict has been settled, and there is no and will not be an administrative territory called “Nagorno-Karabakh” in the territory of Azerbaijan. Tell us what you intend to do so that we know and express our opinion. For more than a year, we have not received any proposal on this issue, he stressed, as cited by JAM News.

On April 22, Pashinyan told the parliament sitting highlighting the international mandate of the OSCE Minsk Group co-chairmanship within the framework of the Karabakh conflict settlement was an important outcome of his negotiations with the Russian president Vladimir Putin.

“Considering that the Russian, American and French Co-Chairs visited Armenia before my visit to Moscow, we can say that the talks about the dissolution of the OSCE Minsk Group are baseless,” the Prime Minister said. “We clearly see that all co-chairing countries remain committed to their mandate of settlement of the Nagorno-Karabakh conflict, despite the fact that the events unfolding in Ukraine have created difficulties for the joint work of the three Co-Chairs,” PM Pashinyan added.

Sources:
Azerbaijan starts to pay Russia for gas in rubles

“Moscow has taken preventive measures to reduce risks, appeared from West’s actions. Moscow has made a more active transition to operations in national currencies with other countries, including Azerbaijan,” said Director of the Fourth Department of the Russian Foreign Ministry for CIS Countries Denis Gonchar, APA-Economics reports citing Russian media.

He noted that according to expert estimates, about 30% of all trade between Russia and Azerbaijan is carried out in rubles, and the architecture of Russian-Azerbaijani economic relations as a whole is not very sensitive to negative external factors and quickly adapts to non-standard situations.

Source:
  • APA.az, „Azerbaijan starts to pay Russia for gas in rubles“, https://apa.az/en/energy-and-industry/azerbaijan-starts-to-pay-russia-for-gas-in-rubles-374356
Russian peacekeepers increase the number of posts in Nagorno-Karabakh

Following the incident on March 24, in which Azerbaijani forces occupied the village of Farrukh (Armenians call this village Parukh) and the height of Dashbashi (Karaglukh) in the part of Karabakh where Russian peacekeeping forces are temporarily stationed, Russia increased the number of posts in the region.

In early April, there were changes in the deployment of peacekeepers in the territory they control in Karabakh. Thus, according to the Russian Ministry of Defense, six new posts of the peacekeeping contingent have been created, and their number has grown to 33, although there have been 27 posts since the deployment of the contingent, reports JAM News.

According to military expert Adalat Verdiyev, the increase in the number of observation posts contradicts the tripartite statement of November 10, 2020:

“That document clearly indicates where the peacekeepers will be stationed, what equipment they will use, what technical means they will be equipped with.

Security expert Ilham Ismail noted that specific reasons could explain the increase in the number of observation points for peacekeepers:

“As you know, despite the warnings of the Azerbaijani army, in some areas of the village of Farrukh, illegal Armenian armed forces dug trenches and built defensive structures. As a result of adequate response from the Azerbaijani Armed Forces, control over the height of Dashbashi and the village itself passed to the Azerbaijani army.

Ismail emphasises that Sergey Lavrov’s angry messages towards Brussels during a press conference after a meeting with his Armenian counterpart Ararat Mirzoyan were unequivocally addressed to Baku: “Russia cannot accept the fact that the EU is mediating peace negotiations, especially at a time when this country is waging war in Ukraine. That’s why the Kremlin resorted to leveraging. The increase in the number of observation posts should be regarded not as an expansion of the peacekeeping activities of the Russian army but precisely as a method of pressure.

If we read the news about the violation of the ceasefire at the border or in Karabakh itself in the coming days, then this will not cause surprise. Azerbaijan must be ready for such provocations”.

Meanwhile, Russian Senator Viktor Bondarev wrote in his telegram channel that Russia guarantees assistance to Armenia in ensuring its security in cases if its integrity, independence and sovereignty are threatened.

“We cooperate through the CSTO and guarantee assistance in ensuring Armenia’s security in cases if there is a threat to its integrity, independence and sovereignty. The Russian military base in Armenian Gyumri is an outpost for protection of the Asian region from external aggression,” Bondarev wrote.

Sources:
  • JAM News, “Peacekeepers increase number of checkpoints in Karabakh – what does it mean for the region?“, https://jam-news.net/peacekeepers-increase-number-of-checkpoints-in-karabakh-what-does-it-mean-for-the-region/
  • Arka.am, “Russian Senator says peacekeepers in Nagorno-Karabakh prevent possible genocide of civilians“, https://arka.am/en/news/politics/russia_senator_says

Georgia

Pro-Ukraine rally, Batumi, Georgia. Photo: Omer Karabacak/ Shutterstock.com

Opposition leader wins first round in de-facto South Ossetia presidential poll

On April 10, de-facto South Ossetian state-run news agency RES reported that the leader of the opposition Nykhas Party, Alan Gagloyev, had come first in the first round of South Ossetia’s presidential election, surpassing the vote count of incumbent president Anatoly Bibilov.

With 95% of ballots counted, Gagloyev had received 37% of votes (10,705) while Bibilov trailed on 33% (9,706), citing the Central Election Commission (CEC).

In the early hours of Monday morning, President Bibilov conceded that a runoff was inevitable.

“As a presidential candidate, I am happy to have a rematch in a runoff with Alan Eduardovich Gagloyty [the Ossetian version of Gagloyev’s surname] because two ideologies are to compete in the second round. I presume you all understand what ideologies I am talking about”, Bibilov wrote on his Telegram channel without specifying further.

Tskhinvali-born Alan Gagloyev, 41, has led Nykhas since 2020. The party holds four seats in the 35-seat South Ossetian Parliament. Gagloyev, then an employee of the local KGB, first ran for president in 2017, though he failed to win more than 10% of the vote. In addition to losing, he was accused by several rivals of abusing his office to mobilise voters. According to Ekho Kavkaza, Gagloyev’s parents, Eduard Gagloyev and Zalina Tibilova, died during the 2008 August War.

The vote was condemned as illegitimate by a number of countries and organisations, including the Georgian government, the EU, NATO, the US, Azerbaijan, and Ukraine.

Opposition MPs issued an appeal in which they called on residents of South Ossetia to vote in the second round of the presidential election for Alan Gagloev. Fourteen members of the de facto parliament of South Ossetia issued an appeal to voters. “You and we have gone together through a difficult path of struggle against the lawlessness and arbitrariness of the current government. For several years we have been resisting flagrant violations of the law, relying on the support of our voters, the vast majority of the peoples of South Ossetia. At the recent presidential election held in the republic on Sunday, our people actively supported the need for change,” reads the text of the document, the original of which was posted on Alan Gagloev’s Telegram channel on the evening of April 12.

Journalists contacted by the Caucasian Knot link Gagloev’s election success with Bibilov’s administrative resources. Alik Pukhaev, a blogger and the author of the “Rajdian” podcast project, is sure that the incumbent used his administrative resources in the course of the election. “Despite the use thereof and speculations on the topics of joining Russia, candidates from the power cannot win. The population of Ossetia is very well separating populism from real actions. They saw how administrative resources were used; the incumbent’s main rivals were not allowed to campaign. As a result, we got a protest-minded population; and voters preferred Alan Gagloev as a protest candidate,” Alik Pukhaev has stated, believing that in the second round, Gagloev had more chances to win.

Sources:
  • OC Media, „Opposition leader, wins first round in South Ossetia presidential poll“, https://oc-media.org/opposition-leader-wins-first-round-in-south-ossetia-presidential-poll/
  • Caucasian Knot, Parliamentary opposition urges to support Gagloev in the presidential election in South Ossetia, https://www.eng.kavkaz-uzel.eu/articles/58797/
  • Caucasian knot, “Journalists link Gagloev’s election success with Bibilov’s administrative resources”, https://www.eng.kavkaz-uzel.eu/articles/58779/
Georgian  parliamentary delegation visited Bucha and Irpin

A Georgian parliamentary delegation has visited the war-ravaged Ukrainian cities of Bucha and Irpin, where Parliamentary Speaker Shalva Papuashvili vowed Georgia would not facilitate the evasion of Russian sanctions, writes OC Media.

Papuashvili strongly condemned Russia’s invasion of Ukraine during his delegation’s visit to the two Ukrainian cities on April 16. The same day, in a surprise visit, the opposition United National Movement (UNM), Georgia’s largest opposition party, sent its own separate delegation to Kyiv — the delegation included party chair Nika Melia and former president of Georgia Giorgi Margvelashvili.

The visit to Bucha and Irpin followed the delegation’s meetings with Stefanchuk in the Verkhovna Rada, Ukraine’s Parliament, in Kyiv earlier that day. Papuashvili drew comparisons between Russia’s invasion of Ukraine with the conflicts over Abkhazia and South Ossetia and underlined a need for a speedy investigation into alleged Russian war crimes. The visit, according to the Speaker of the Rada, is an outstanding demonstration of solidarity with the Ukrainian people.

The visit “in brotherly Ukraine” illustrates Georgia’s unwavering and undivided support for Ukraine, the Georgian Parliamentary Chairperson stated on Facebook. “We couldn’t have done it any other way since our countries are so close.” Papuashvili said that Georgians had memories of “our own Buchas and Irpins” from the battles in the 1990s and the August 2008 Russo-Georgian War in occupied Abkhazia and Tskhinvali Region/South Ossetia.

Sources:

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