How the Conflict Over Ukraine Affects Security in the South Caucasus
Against the background of the present stage of the conflict over Ukraine, the South Caucasus is experiencing perturbation. Three examples rise immediately to mind: elements of the 10 November 2020 tripartite between Armenia, Azerbaijan, and Russia that ended the Second Karabakh War statement (and the arrangements that have derived from it) are being suboptimally implemented; the leaders of Georgia’s breakaway region of South Ossetia continue to hold out the possibility to conduct a referendum on “unification” with Russia; and the uncertain outcome of the talks in Vienna to revive the Iran nuclear deal. Such and similar examples have led all three South Caucasus states (Armenia, Azerbaijan, and Georgia) to pursue variants of a policy some call “neutrality” and others “hedging” between the parties to the conflict over Ukraine.
Located at the intersection of Europe, Russia, and the Greater Middle East—and thus constituting the western part of the Silk Road region, as defined by the Editorial Statement of Baku Dialogues—the South Caucasus is one of the most important and, at the same time, one of the most potentially explosive areas bordering the West. Over the past several decades, developments within all three South Caucasus states have contributed to a general sense of insecurity within the region. These include, most obviously, ethno‑political conflicts, civil wars, and color revolutions; the lackluster development of Western‑style governance institutions; and the widely‑held perception of ongoing high levels of corruption.
Even the potentially positive strategic consequences of the outcome of the Second Karabakh War—namely, the prospect for the normalization of two sets of bilateral relationships (Armenia‑Azerbaijan and Armenia‑Türkiye) and the unblocking of all economic and transport connections in the region—have been overshadowed by the ongoing restructuring of world order, manifested by the increase of geopolitical volatility and ambiguity due to the major escalation of the conflict over Ukraine whose present phase began on 24 February 2022. The effects of the Western‑led sanctions and export restrictions regime against Russia have spilled over into the South Caucasus— notwithstanding the fact that none of the region’s states have formally aligned themselves with them.
This essay provides an overview of the reverberations of the conflict over Ukraine towards the South Caucasus, with a focus on its impact on the region’s political, economic, and security environment.
Regional Security Patterns
The South Caucasus is located in a geopolitically complex neighborhood, as it borders Iran, Russia, and Türkiye. Each of these external powers have critical political, economic, and security interests, as do more distant powers like the U.S. and the European Union. All in various ways, and using various means, are engaged in exercises of influence that target the three states of the South Caucasus. These neighbors and more distant powers each seek to leverage the fact that developments in the region are traditionally conflict‑driven: the South Caucasus has experienced a number of separatist conflicts and interstate wars that, taken together, provide fodder for multiple intra‑regional contradictions and enmities.
For reasons having to do with these intra‑regional conflicts but also with what Venera Fritz, a World Bank official now working on governance issues in the Western Balkans, has called “inherent state weaknesses,” the South Caucasus as a whole remains exposed to the influences of its larger neighbors, who play significant roles in shaping regional security dynamics. Conflicts have also played a key role in generating political instability in the region, which has made the three Caucasus states both economically vulnerable and led them each to search for outside support and protection. Thus (at least from a Western perspective), unresolved intra‑regional ethnic and territorial conflicts relegate the South Caucasus to the “at risk” category.
But there is an additional distinction that needs to be made, namely one regarding political orientation and collective defense groupings. In this regard, the South Caucasus can be said to represent a microcosm of global power dynamics: pro‑Russia in the case of Armenia, pro‑West in the case of Georgia, and, as my IDD colleague Damjan Krnjević Mišković has described Azerbaijan’s posture, “equilibrium (but not necessarily equidistance).”
The South Caucasus can be said to represent a microcosm of global power dynamics: pro‑Russia in the case of Armenia, pro‑West in the case of Georgia, and ‘equilibrium (but not necessarily equidistance)’ in the case of Azerbaijan.
To wit: Armenia is a member of both the Russia‑led Collective Security Treaty Organization (CSTO) and the Eurasian Economic Union (EAEU). Armenia is also a treaty ally of the Russian Federation and plays host to a Russian military base in its second‑largest city, Gyumri. This base garrisons 5,000 Russian military personnel and, according to a 2010 agreement, will remain in Russian hands until at least 2044. Russian FSB troops are also responsible for policing the Armenian border with Türkiye and Iran.
Contrast this with Georgia. Tbilisi has consistently pursued its goal of both NATO and EU membership (with regards to the former, the Atlantic Alliance first acknowledged this aspiration in Article 23 of the 2008 Bucharest Summit Declaration; with respect to the latter, in late June 2022 the EU stated it will be “ready to grant the status of candidate country to Georgia once the priorities specified in the [EU] Commission’s opinion on Georgia’s membership application have been addressed”).
Azerbaijan, for its part, has pursued a policy consistent with its status of what Nikolas Gvosdev of the U.S. Navy War College has described in the Fall 2020 edition of Baku Dialogues and elsewhere as a “keystone state” of the Silk Road region. Manifestations of this policy of strategic maneuvering in furtherance of its national interests include active membership in the Non‑Aligned Movement, which it currently chairs, upholding its strategic partnership with NATO member state Türkiye, and maintaining what is officially termed “allied interaction” with Russia.
Ongoing conflicts of one sort of another involving the three South Caucasus states play an important role in Russia’s regional penetration and ongoing influence: Armenia is perhaps the Kremlin’s closest and most reliable ally, Russia is a conflicting side in the case of Georgia, Moscow is a major arms supplier to Azerbaijan, and, since the end of the Second Karabakh War, Russian peace‑keepers operate in a part of the former Nagorno‑Karabakh Autonomous Oblast (NKAO) with the consent of both Baku and Yerevan.
At the same time, as mentioned above, such conflicts have increased the incentives of two of the three South Caucasus states to seek alliances with other regional powers or blocks: with Türkiye in the case of Azerbaijan and Western structures in the case of Georgia. Tbilisi’s imprudent quest for membership in one such block (NATO) at the expense of another other (CSTO) led to a decrease in regional security and was undeniably a contributing factor to the 2008 Russo‑Georgian war, given the strategic posture of Russia (the de facto leader of the CSTO) that this represented the crossing of a red line, since it considers the South Caucasus to be a part of its sphere of interest—its “near abroad,” as the Kremlin used to call this part of the world. All in all, engagement with the region by the leading external powers is one of the most prominent security‑related issue that is common for all the South Caucasus republics, as their involvement increases unpredictability in the geopolitical environment.
Another key element of regional security dynamics, which represents an overarching problem for regional stability, is the set of unresolved ethno‑territorial conflicts in the South Caucasus. The existence of break‑away, unrecognized entities add to the region’s security challenges, as these represent sources of instability (e.g., threat of low‑level violence, refugee and IDP burdens, undermining the functionality of legitimate states and governments, hampering development).
The current escalation of the conflict over Ukraine, depicted by some as representing the onset of a new Cold War (as an addition to the growing Sino‑American geopolitical bifurcation, which has been called Cold War 2.0), follows in general terms a similar pattern of unpredictability akin to the one observed in the South Caucasus over the past decades (i.e., risks of explosion and manipulation by outsiders of unresolved ethnic conflicts conjugated with the involvement of global powers into a rivalry over spheres of influence). This only adds salience to the clear signaling of all three South Caucasus states about the danger of being perceived through the same geopolitical playbook by the major external players.
Russia’s prominent role in the affairs of the South Caucasus, heightened by the new regional geopolitical reality deriving from the 10 November 2020 tripartite statement, has directly affected the response of all three South Caucasus states to the hostilities that have broken out in Ukraine.
The Imperative to Balance
Russia’s prominent role in the affairs of the South Caucasus, heightened by the new regional geopolitical reality deriving from the 10 November 2020 tripartite statement, has directly affected the response of all three South Caucasus states to the hostilities that have broken out in Ukraine. This points directly to some of the reasons why the three South Caucasus states have avoided direct and overt criticism of the sort expressed by Western countries towards Russian involvement in that conflict.
Other reasons include their uncertainty regarding Western support and the perceived vulnerability to Russian sensitivities and counteractions of one sort or another. All in all, the South Caucasus states are facing challenging choices. Two can be highlighted here. First, to one degree or another, all three South Caucasus countries have close political relations with both sides. Second, Russia is one of the primary trading partners for all three countries. Thus, hard realities must be acknowledged: Armenia, Azerbaijan, and Georgia are dependent on Russia in political, economic, trade, security, energy, and transport spheres. Not entirely, of course, and not all equally, and also not all in the same way. But none can act without strategically calculating the effects of their policy choices on Russia. The conflict over Ukraine is quite instructive in this regard.
Azerbaijan has a special relationship with both parties directly involved in that conflict (i.e., with both Kyiv and Moscow). Without Russia, the tripartite statement ending the Second Karabakh War would not have been possible: its peacekeeping force ensures that hostilities do not resume, which in turn ensures that fragile stability is maintained. On the other hand, Russia’s military presence on the ground (coupled with its diplomatic and economic leverage) has impacted on the geopolitical balance of power in the South Caucasus: for decades, the conflict over Karabakh was the only one in the post‑Soviet space that did not have a Russian military presence (the presence of a small Turkish peacekeeping contingent since the end of the Second Karabakh War has helped to balance this out, but not in a geopolitically game‑changing way). At the same time, Azerbaijani Ukrainian relations are strategic too, and Ukraine has consistently been a vocal supporter of Azerbaijan’s sovereignty (and vice versa). Azerbaijan has also made numerous very public demonstrations of humanitarian solidarity since the onset of the present stage of the conflict over Ukraine, and, in addition, Baku and Kyiv are both members of the GUAM Organization for Democracy and Economic Development, together with Tbilisi and Chișinău.
A good example of Azerbaijan’s strategic posture can be found in a pronouncement made by President Ilham Aliyev on 29 April 2022 to a distinguished group of foreign experts co‑convened by ADA University’s Institute for Development and Diplomacy (IDD) and the Center of Analysis of International Relations (AIR Center). “The signing of a Declaration on Allied Interaction with Russia […] was based on our strategic interests because it’s our neighbor,” he said. But this document, and the strategic posture that informed the decision to sign it, has not stopped Azerbaijan from reaffirming its principled policy regarding the territorial integrity of all UN member states, including Ukraine. “We do it publicly, [we] do not hide behind the big tree. We say what we mean.” And then, drawing on his own country’s experience, Aliyev added:
The most important is never agree to occupation. You know, during times of negotiations [between the two Karabakh wars], there were different moments and different messages which I was receiving from Western colleagues, and one of them was that ‘you have to take into account the reality. Azerbaijan lost the First Karabakh War and your’—how to say—‘actions must be based on the reality.’ There have been attempts to advice us that we need to consider issues related to our territorial integrity. And I was always saying ‘no.’ […] So [the] first [lesson], based on our experience, is never agree on [a] violation of territorial integrity—in any case. Second, what lesson I learned from this time of occupation—to rely on your own resources. Third, do not rely on international organizations’ decisions and resolutions. They don’t have any value.
Although public opinion in Georgia is not favorably inclined towards Russia for obvious reasons, the present government has pursued a pragmatic and balanced policy towards the conflict over Ukraine: the prime minister has taken a neutral stance while clearly articulating the possible consequences for Georgia in openly opposing Russia’s “special military operation.” At the same time, Georgia has begun the formal process of seeking membership in the European Union on the coattails of Ukraine’s bid to do so—with less success (for now) than Tbilisi had hoped to achieve.
Among the three South Caucasus states, Armenia has the least room for maneuver and is severely constricted in pursuing a balanced policy towards the conflict. As mentioned above, Yerevan is a treaty ally of the Russian Federation and a member of both the CSTO and the EAEU (unlike Azerbaijan and Georgia). Moreover, the memory of Ukraine’s political support for Azerbaijan during the Second Karabakh War is still very much alive in the country’s public consciousness; on the other hand, Yerevan is aware that showcasing support for the Russian position in the conflict over Ukraine may further isolate Armenia and increase its dependence on Russia. This may help explain its recent interest in engaging with Azerbaijan on elements of a peace deal through the facilitation of the EU Council president, Charles Michel, rather than exclusively through Russian mediation.
The Karabakh Conflict
The conflict over Karabakh represents the key security threat to the region and has dominated foreign policy and national security discourse in both Yerevan and Baku since they both regained independence three decades ago. In this regard, Armenia opted to ally fully with Russia. Baku, on the other hand, sought to address its vulnerabilities through the pursuit of a multi‑vectoral foreign policy. This led, inter alia, Azerbaijan to establish a strategic relationship with NATO member state Türkiye; this has culminated in the June 2021 signing of the Shusha Declaration on Allied Relations. Amongst many other points, this document focuses on defense cooperation, affirms joint efforts by the two armies in the face of foreign threats to regional security, and announces a shared commitment to establishing new transportation routes.
The conduct of a balanced foreign policy by Azerbaijan remains critical to the preservation of the outcomes of the Second Karabakh War and the normalization of relations with Armenia through peace talks.
As noted above, Baku’s multi‑vectoral foreign policy posture also led Azerbaijan to sign a Declaration on Allied Interaction with Russia in late February 2022, i.e., on the eve of the start of the Kremlin’s “special military operation.” This document aims at deepening diplomatic, political, and military cooperation between the two states. Widely viewed as a way to balance the impact of the Shusha Declaration, it has garnered further attention in light of the escalation of the conflict over Ukraine and Russia’s recognition of Ukraine’s breakaway territories, notwithstanding the fact that its timing was largely coincidental since negotiations on its language had gone on for a year or so. Still, the relevance of Article 1 of this document is not to be discounted in light of the events taking place outside the South Caucasus: “The Russian Federation and the Republic of Azerbaijan build their relations on the basis of allied interaction, mutual respect for independence, state sovereignty, territorial integrity and inviolability of the state borders of the two countries, as well as adherence to the principles of non‑interference in each other's internal affairs, equality and mutual benefit, peaceful settlement of disputes and non‑use of force or threat of force.” Baku views this language as explicitly preempting the possibility of the Kremlin recognizing ethnic‑Armenian territorial claims to the former NKAO. Given the presence of Russian peacekeepers in a part of the former NKAO, the conduct of a balanced foreign policy by Azerbaijan remains critical to the preservation of the outcomes of the Second Karabakh War and the normalization of relations with Armenia through peace talks.
Moreover, there was a noticeable uptick in the number of reported tensions and ceasefire violations in Karabakh starting from the onset of the latest escalation in the conflict over Ukraine. These were relatively common prior to 24 February 2022, but they ones gained additional attention and salience given the onset of the war and the fact that both Azerbaijani and Armenian media reported on the transfer of Russian peacekeepers from the Karabakh theater to the Ukrainian one.
This escalation, which now appears to have moved beyond its peak, led to Russian accusations in past months that Azerbaijan was violating the terms of the first tripartite statement, which in turn spurred discussions in Azerbaijani society about Russian peacekeepers continuing to tolerate the presence of Armenian forces in the peacekeeping zone—i.e., on sovereign Azerbaijani territory—in violation of Article 4 of this document (“The peacemaking forces of the Russian Federation shall be deployed concurrently with the withdrawal of the Armenian troops”).
Referendum in South Ossetia?
Similar in some ways to Azerbaijan’s situation, Georgia must also deal with separatists that have gained de facto control of parts of its sovereign territory. Unlike Azerbaijan but in some ways similar to Ukraine, the country has been engaged in a direct military conflict with Russia (the 2008 Russo‑Georgian war) and its separatist regions Abkhazia and South Ossetia have been recognized by Russia. Thus, in the current war between Russia and Ukraine, Georgia sees direct and powerful parallels, which in turn has spurred Tbilisi to emulate Kyiv’s strategic moves. For instance, Georgia followed Ukraine in formally applying to join the European Union in early March of 2022, which is consistent with Tbilisi’s longstanding status as the most active South Caucasus state in pursuing closer ties with both the EU and NATO. Regretfully, from Tbilisi’s point of view, the EU has demonstrated less willingness and enthusiasm to both symbolically and concretely embrace Georgian aspirations than it has Ukrainian ones.
On the other hand, Georgia has followed Azerbaijan in pursuing a pragmatic and balanced policy towards the conflict over Ukraine, which caught some Western observers by surprise. Thus, the day after the start of the Russian “special military operation” in Ukraine, Prime Minister Irakli Garibashvili announced that his government did not intend to join any sanctions effort against Russia: “I want to state clearly and unambiguously, considering our national interests and the interests of the people, that Georgia does not plan to participate in the financial and economic sanctions, as this would only damage our country and populace more,” he said. This has remained Georgia’s policy, despite criticism from the political opposition and rallies openly supportive of Ukraine. At the same time, Georgia has provided diplomatic support for Kyiv in multilateral fora like the UN and the OSCE and has also sent humanitarian aid to Ukraine.
Amid the Russian recognition of Ukraine’s two separatist regions (the self‑styled Donetsk People’s Republic, or DNR, and the Lugansk People’s Republic, or LNR)—which precipitated by mere hours the escalation of the conflict over Ukraine— the de facto rulers of Georgia’s separatist entity of South Ossetia made public announcements on potentially rejoining Russia and initiated discussions on conducting a referendum on that issue. While the Georgian prime minister has called this proposal unacceptable and illegitimate, Russia’s presidential spokesperson Dmitry Peskov initially stated that Russia would treat with respect the opinion of the people of South Ossetia. Since that time, Russia has backtracked on this declarative support. The issue has been made dormant, but this does not mean it cannot be brought back to prominence at a later date.
Manipulation Around A New Nuclear Deal with Iran
The armed intrusion of Russia into parts of Ukraine has impacted upon the policy and posture of the South Caucasus’ southern neighbor, Iran. On the day that Putin announced the onset of his “special military operation,” Iran’s president, Ayatollah Dr. Seyyed Ebrahim Raisi, spoke with the Russian president. Here is an excerpt from Tehran’s official readout of the call: “Dr. Raisi stated that the expansion of the NATO to the east creates tensions, stressing, ‘the expansion of the NATO is a serious threat to the stability and security of independent countries in different regions.’ The President expressed hope that what is happening ends up to the benefit the nations and the region. Referring to the nuclear talks, Dr Raisi also stated that the Islamic Republic of Iran is seeking a lasting agreement, not a shaky one, adding, ‘providing a credible guarantee, ending political claims, and the actual lifting of sanctions are among the necessities of reaching a lasting agreement.’”
The allure of reviving the nuclear deal with Iran has never been more salient. This is a direct yet unintended consequence of the escalation of the conflict over Ukraine.
Negotiations on the restoration of the 2015 nuclear deal with Iran—the Joint Comprehensive Plan of Action (JCPOA)—are approaching their end point, but the conflict over Ukraine has made an agreement both more difficult to get over the finish line and more urgent to complete successfully. With the U.S. and the EU making political choices to dramatically reduce and even terminate their imports of Russian hydrocarbons, oil and gas prices have skyrocketed and stand at or near record highs. The geo‑economic consequences of lifting the various sanctions and embargoes imposed on the country (Iran possesses the second‑largest gas proven reserves and the fourth‑largest proven oil reserves)—which would in turn enable Iranian hydrocarbons to flood the global market whilst opening the way for massive foreign investment in Tehran’s poorly‑maintained oil and gas sector—would be potentially game‑changing. From this standpoint, the allure of reviving the nuclear deal with Iran has never been more salient. This is a direct yet unintended consequence of the escalation of the conflict over Ukraine.
This set the stage for recent developments in the nuclear deal negotiations. By all accounts, Russia had been playing an important and constructive role in the talks since they restarted nearly two years ago (and were kicked into a higher gear in the wake of the Iranian elections that took place in June 2021). Numerous reports indicated that Washington and Tehran were close to a deal. However, a new demand expressed by Russian foreign minister Sergey Lavrov in early March 2022, made amid reports of an imminent agreement, cast a shadow on the negotiations. Russia had demanded written guarantees that the Western‑led sanctions and export restrictions regime imposed on the country due to the conflict over Ukraine would not interfere with its present and future economic ties with Iran.
Frozen territorial conflicts, the ongoing power struggle of great powers for influence in the region, the unpredictable nature of threats, and intra‑regional ethnic tensions all contribute to present and potential threats to regional security.
Russia’s demands were widely seen as seeking to ensure its long‑standing relationship with Iran would not be negatively affected by what would amount to a reintegration of Iran into the world economy. Russia, in other words, was not willing to demonstrate altruistic goodwill to the West on a security and economic issue of grave Western concern at a moment when the West was itself actively working against the security and economic interests of Russia. By mid‑March 2022, the situation appeared to have been resolved. At a joint news conference in Tehran with his Iranian c o u n t e r p a r t , Lavrov indicated that “we received written guarantees. They are included in the text of the agreement itself on the resumption of the Joint Comprehensive Plan of Action on the Iranian nuclear programme.” Reports indicate that these were not as broad as the Kremlin had initially demanded but no details have been forthcoming. There was a subsequent period that appeared to cast doubt on the likelihood of a deal. The issue involved the question of America’s refusal to lift its designation of the Islamic Revolutionary Guard Corps from its Foreign Terrorist Organization and Specially Designated Terrorist lists. But this appears to have been overcome. It appears that talks are back on track as of this time of writing—geopolitical tensions notwithstanding—thanks to the mediation of EU officials like Josep Borrell, the EU’s chief diplomat. Speaking in Tehran in late June 2022, Borrell stated that he is “very happy […] that we will resume the talks on the JCPOA in the coming days. […] We are going to break this stalemate and stop this escalation process in which we were."
A positive outcome is still not a foregone conclusion, however. Should an agreement on the nuclear deal between the great powers and Iran be achieved— which would include the lifting of at least some of the sanctions imposed on Iran (whether by the UN Security Council or unilaterally by the West) and in turn enable Iran to sell its oil and gas with fewer (if any) restrictions—the consequences for the South Caucasus would be severalfold.
First, the importance of the South Caucasus as a transit corridor for the flow of goods, services, and energy resources would increase—perhaps dramatically—over time. Second, the prospects for some sort of armed conflict involving Iran, Israel, and the United States, which in one way or another would be sure to affect the South Caucasus, would decrease. This is an important but underappreciated potentiality: Azerbaijan and Armenia (both states border Iran) would naturally become transit states, if not destination countries, for refugees fleeing the country and creating a humanitarian crisis. An armed conflict would also pose a direct threat to regional energy infrastructure traversing Azerbaijan and Georgia; and it would also make landlocked Armenia even more isolated within the region.
Iran’s rapprochement with the West would dramatically reduce one of the biggest threats to regional stability; it would also enable Iran to become an important energy diversification partner for the region and the West.
Two Silver Linings?
As combat between Russia and Ukraine continues and intensifies, the South Caucasus states find themselves—through no fault of their own—both impacted by the geopolitical implications of the situation and in need to respond to new security challenges. Much of this stems from Russia’s role in ongoing regional disputes and conflicts, which makes Moscow’s posture a critical factor in their response. All this will continue to have an impact on the complexity and fragility of security threats in the region. Frozen territorial conflicts, the ongoing power struggle of great powers for influence in the region, the unpredictable nature of threats, and intra‑regional ethnic tensions all contribute to present and potential threats to regional security.
A door has been opened for all three South Caucasus states to prudently leverage geopolitical vicissitudes for the benefit of their respective populations, and thus the region as a whole.
Nevertheless, two silver linings to the escalation of the conflict over Ukraine in the context of the South Caucasus seem to be visible. First, the European Union has further increased its presence and engagement in the region. The EU seems more open to political and economic rapprochement with the region, as reflected in its facilitation to the process of normalization between Armenia and Azerbaijan as well as its willingness to take (admittedly) tentative steps in advancing Georgia’s membership prospects. Second, the restoration of a nuclear deal with Iran, which would include the lifting of at least some of the sanctions imposed on the country, would be greeted positively by its Tehran’s northern neighbors. Iran’s r a p p r o c h e m e n t with the West would dramatically reduce one of the biggest threats to regional stability; it would also enable Iran to become an important energy diversification partner for the region and the West.
It may very well be, ironically, that geopolitical circumstances beyond the region could have a positive impact on the relative vulnerability and fragility of the South Caucasus. Of course, this should not be understood to mean that the region will all of sudden transform itself into a global paradigm of secure prosperity; but it ought to be understood to mean that a door has been opened for all three South Caucasus states to prudently leverage geopolitical vicissitudes for the benefit of their respective populations, and thus the region as a whole.
