Russia’s new meddling in the Caucasus

Throughout history, European powers have often descended upon the Prague Castle in the Czech Republic to sign peace treaties and end conflicts. It is where the German Brothers’ War was settled in the 19th century, and where the Peace of Prague pathed the way for an end to the Thirty Years’ War — perhaps the most destructive conflict in Europe’s long and bloody history.

Last autumn, the castle’s medieval halls served as a crucial backdrop once more, this time for the first ever summit of the European Political Community. And one of the main items on the agenda were talks aimed at ushering in a peace deal between Armenia and Azerbaijan to finally bring the three-decades-long dispute over Nagorno-Karabakh to a lasting resolution.

At the summit, peace seemed more attainable than ever, as Armenian Prime Minister Nikol Pashinyan and Azerbaijan’s President Ilham Aliyev confirmed they would recognize each other’s territorial integrity and sovereignty, adopting the United Nations’ Alma Ata 1991 Declaration as the basis for border delimitation discussions.

This is significant, as up until that point, Armenia’s leadership had never recognized Karabakh as the sovereign territory of Azerbaijan. But despite such crucial progress, reality has, of course, proven more complicated. And though peace between Armenia and Azerbaijan is still possible, there’s now a new obstacle standing in the way — and it’s backed by Russia.

Before reclaiming much of its lost territory in a rapid, six week-long war in 2020, Azerbaijan was cut off from Karabakh for 24 years, as an Armenian military presence turned the region into a parastate backed by Yerevan. And since the end of hostilities, Baku has moved quickly to reintegrate the region, with vast sums invested into a massive mine-removal operation, and so far, the first 200 families from among the 600,000 Azeris internally displaced from the first war have already begun returning.

Bringing closure to the Azeris, who were victims of the First Nagorno-Karabakh conflict in the 1990s is a priority for Baku — however, there’s also a need to accommodate and integrate the region’s large ethnic Armenian population, as there can otherwise be no lasting peace.

Karabakh may be Azerbaijani territory, but a significant majority of its current residents identify as Armenian, and today, they are living in a unilaterally declared independent exclave within Karabakh, which illegally seceded from Azerbaijan in the early 1990s. This breakaway state has never been recognized by a single member of the international community — including Armenia itself. But after three decades of self-rule, Karabakh’s Armenians are now worried about their future status as an ethnic minority in Azerbaijan.

Assuaging these concerns and guaranteeing the rights, security and religious and cultural freedoms of ethnic Armenians was a key aim of the Prague talks — and significant advancements were made. But then, just a month later, the mood changed dramatically following an intervention by Russian-Armenian oligarch Ruben Vardanyan.

Born in Yerevan, Vardanyan made his riches in Russia during the decade of gangster capitalism following the collapse of the Soviet Union. Described as the “father of the Russian stock market,” he cut his teeth in investment banking before going on to sit on the boards of some of Russia’s biggest companies, many of which now find themselves on Western sanction lists.

Departing his birthplace in 1985, Vardanyan lived in Moscow for many years before suddenly renouncing his Russian citizenship last September and relocating to Karabakh, becoming the region’s de-facto state minister. The oligarch showed scant interest in Karabakh before this point, but he’d clearly spotted an opportunity to earn a profit: Two long-dormant gold mines reopened mere months before his arrival.

Indeed, the timing of Vardanyan’s arrival was peculiar. He came just as Azerbaijan was set to begin talks with the region’s Armenian leadership, who had sent signals to Baku’s negotiators that they recognized their future lay as a protected minority inside Azerbaijan. But now, with Vardanyan as leader, their stance has become obstructionist — the oligarch and the government in Yerevan are publicly opposing each other.

The worry is that Vardanyan will now use this influence to turn public opinion among Karabakh’s Armenian community against peace, which would be disastrous for the interests of both Baku and Yerevan.

It raises the question: How did Vardanyan suddenly become so influential in Karabakh, and who helped him get to this position?

The two main regional powers active in the South Caucasus are Turkey and Russia. The former is a firm ally of Azerbaijan, and while the latter has traditionally backed Armenia, Pashinyan has been public in his criticisms of the Russia-led Collective Security Treaty Organization for failing to provide his country with sufficient support — a move that can be read as an indirect criticism of the Kremlin.

The danger here is that all this may lead other malign actors to see that the terms of the Russian ceasefire and peacekeeping agreement isn’t worth the paper it’s written on, increasing the risk of soldiers, military contractors and new landmines moving freely over the legal borders of Azerbaijan as well. And should this happen, the threat of a new conflict would dramatically escalate.

Politico