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Nagorno Karabakh Could Become Conflict or Economic Opportunity

The situation in Nagorno Karabakh remains unclear. On Sept. 28, the president of the unrecognized government in Nagorno Karabakh, Samvel Shahramanyan, signed a decree officially dissolving the state effective Jan. 1, 2024, and the local ethnic Armenian population has been advised to consider the reintegration proposals being put forward by Azerbaijan. Ethnic Armenians continue to flee to Armenia, mostly out of fear for the future. This is despite statements by Azerbaijan’s President Ilham Aliyev, declaring that their rights would be protected. The Armenian government claims 84,000 of some 120,000 have already left in the last days. Moreover, negotiations for a peace treaty between Armenia and Azerbaijan is said to be in the works but it is not at all clear whether this will materialize.

The obvious solution is for residents of Nagorno Karabakh to remain in their homes, and for a much needed program of economic development to occur through the cooperation of both Armenia and Azerbaijan. Such a perspective was in fact made by Kremlin spokesman Dmitry Peskov, who told reporters on Sept. 28 that a peace treaty would open the doors for implementing various transportation projects. “There are plans to develop transport, communications, and logistics in the region. This is extremely important for Azerbaijan, Armenia, and Russia. We hope that this work will continue,” Peskov said.

Peskov was alluding to the International North South Transportation Corridor, as both Armenia and Azerbaijan lay along its path. The nearly 30 years of conflict has left both countries with serious communication problems. Armenia could only carry out land transportation of its foreign trade via Georgia and Iran, since its border with Turkiye, an ally of Azerbaijan, was closed. An exclave of Azerbaijan called Nakhchivan lies in between Armenia and Iran. While rail lines connect all of these locations they have been blocked because of 30 years of conflict. No direct rail links pass through the short Armenia-Iran border. If a lasting peace could be arranged, both countries would become hubs for east-west and north-south corridors, creating a win-win situation.

Nonetheless the danger of a broader conflict remains. Intelligence sources very well informed on the situation fear that this could not be the end of the conflict and that a war between Armenia itself, and Azerbaijan should not be ruled out. Big mouth interventions such as those made by USAID Administrator Samantha Power or the meddling of the European Union only make the situation worse given the isolation of Armenia both geographically, and politically.