Circumventing Russia: Can the South Caucasus connect the West to the East?
Belt and road Initiative and its reshaping
To understand the potential role of the South Caucasus in current geopolitical shifts, we need to look beyond the region. Let us start with a project as old as the Armenian and Georgian alphabets - the Silk Road. Initially renamed the One Belt One Road investment plan and now rebranded by China as the Belt and Road Initiative (BRI), the road - or should I say roads - is intended to connect Chinese markets with European markets. Essentially, the new initiative is the updated and revamped version of the Silk Road. Developed by China in 2013, the initiative aims to connect the Chinese market with more than 70 countries across Eurasia. The initiative aims to increase China's economic and geopolitical influence and create an interdependent market for China. The initiative proposes three routes starting from China:
1) The Northern Belt, which goes through Central Asia and Russia to Europe.
2) The Central Belt, running through Central Asia and Western Asia to the Persian Gulf and the Mediterranean; in addition, a road to the Indian Ocean through Pakistan is planned.
3) The Southern Belt, which runs through Southeast Asia, the Indian Ocean connecting to the African continent, and then through Europe via the Suez Canal to Greece and beyond. This route is more maritime, while the others cross more land and countries.
Before the Ukraine War, the BRI focused mainly on the Northern Belt, as it crosses fewer countries and creates mutual relations between Russia and China, contributing to the flourishing cooperation between the two great powers. After the confrontation between Russia and the West, the main communication channels connecting Russia with Europe have been cut off due to EU sanctions imposed on Russia and Russian counter-sanctions banning EU trucks from entering the country. These factors also affect transfers coming from Chinese markets via the BRI's Northern belt. While China has been affected by Russian actions in Ukraine in terms of connectivity, it has also benefited a great deal from Russia. Most notably, China has been buying natural gas from Russia at a 50% discount since September, and trade between the two countries has increased by nearly 36% since the war in Ukraine.
With the complication on the Northern Belt, the Southern Belt can also become a major problem for China. The sea route passes through the Strait of Malacca - one of the most important strategic points between Malaysia, Singapore and Indonesia. Eighty percent of crude oil shipped to China is transported through the strait, and an estimated 36-44% of exports from China are routed through this narrow body of water. Beijing considers the strait both an important strategic location and China's "Achilles heel," as a blockade of this strait would lead to a total collapse of the Chinese economy. Therefore, China is actively seeking alternative trade and energy routes.
This is where Central Belt comes into play. With the extra money saved by discounts on energy resources, China began to look at the central route of the BRI as an alternative to the Russian-dominated Northern Belt and its "Achilles heel," the Southern Belt. However, conflicts such as the Russian-Georgian war in 2008, the crisis in Afghanistan, the Nagorno-Karabakh conflict between Armenia and Azerbaijan, tensions between Azerbaijan and its Caspian Sea neighbors, sanctions against Iran for its human rights violations, and many other tensions have prevented the BRI's central route from reaching its full potential.
Nagorno-Karabakh war and the Central Belt
The Central Belt, which runs through all of the above countries and conflict zones, has been and continues to be severely affected by the consequences of the above problems. The main obstacle in the South Caucasus, the region through which the Central Belt runs, was the Nagorno-Karabakh conflict that began in the late 1980s between Armenia and Azerbaijan and led to two wars in 1992-1994 and 2020. Since the beginning of the conflict, Azerbaijan and later Turkey have closed their borders with Armenia. Thus, the conflict served as a hub that closed off communication not only between neighbors but also with other actors outside the region.
After the first Nagorno-Karabakh war, a ceasefire agreement was signed between Yerevan and Baku in 1994, which ended with Armenian troops taking control of Armenian-populated Nagorno-Karabakh and surrounding areas. However, ongoing tensions and 25 years of unsuccessful negotiations between Armenia and Azerbaijan led to another war in 2020. The war in Nagorno-Karabakh in 2020 fundamentally changed the situation in the South Caucasus. The war, which lasted 44 days, ended with Azerbaijani forces taking control of seven regions around the formerly Armenian-populated Nagorno-Karabakh Autonomous Oblast (NKAO), as well as other territories in the region. The newly won territories led to the extension of the Azerbaijani-Iranian border and the establishment of the new Armenian-Azerbaijani border in the southern part of Armenia. The November 9 agreement that ended the war included points about opening all transportation routes in the region and ensuring a connection from Azerbaijan to its exclave of Nakhichevan through Armenia.
China and other players during the war
The "big" players also had their share in the war and contributed to it. First of all, China was an invisible actor in the war in Nagorno-Karabakh. According to the Civil Aviation of Armenia Azerbaijani planes made over 100 flights to China and back with alleged humanitarian aid to Baku at a time when most other countries were trying to maintain their neutrality and not send anything to either side. If this information is true, we can assume that China was interested in an Azerbaijani victory and, in particular, in opening the corridor that will connect Azerbaijan with Nakhichevan. In addition, a strong alliance formed during the war between Azerbaijan, Israel, Turkey, and Pakistan, all three of which supported Baku in the war against Armenia. As a result of the war, Turkish influence grew immensely in the region and in Azerbaijan itself.
The second country that plays a role is Iran, which remained neutral during the war and made some attempts to mediate cease-fire negotiations. Tensions arose between the Islamic Republic and Azerbaijan when several Azerbaijani missiles landed on Iranian rather than Armenian territory. This led to the mobilization and deployment of Iranian air defense systems in close proximity to the conflict zone. Although Iran publicly congratulated Azerbaijan on its victory in the war, the Islamic Republic has reservations.
First, the elongation of the border between Iran and Azerbaijan could lead to an expansion of Baku's influence over the ethnic Azerbaijani population in the northern part of Iran. Second, Israeli influence in Baku is a major concern in Tehran, and certainly the war has caused that influence to increase to the extent that the Israelis are buying large tracts of agricultural land from Azerbaijan in the newly gained territories near Iran. Iran's third concern is its border with Armenia. The Armenian-Iranian border has been Iran's main link to other markets, and Iranian leaders have been clear in their position to oppose any change to this border. Initially, Baku called for the creation of a so-called Zangezur corridor-a corridor that would connect Azerbaijan with Nakhichevan and that would have additional territorial status and essentially separate Iran and Armenia. Iranian leaders have spoken out against the plan more than once. One of the latest warning came in October 2022, when Iranian President Ebrahim Raisi warned against any border changes in the region during his meeting with President Aliyev. In addition to the verbal warnings, the Islamic Republic also opened a consulate general in the city of Kapan - the regional center of the Syunik region. This can be interpreted as a direct indication of Iran's plan to expand relations with Armenia and warn Azerbaijan once again against border changes and, in particular, against invading the Syunik region.
Russia’s role during and after war
Russia, on the other hand, tried to help Armenia in one way or another, but did so in its own way. In one-on-one interviews conducted after the war, some experts emphasized that the Russians tested their weapons in this war primarily in terms of effectiveness against Bayraktar's glorified unmanned aerial vehicles or drones. According to local soldiers in Nagorno-Karabakh, Russia closed and opened its airspace whenever it felt like it. The rapid modernization of Russian armored vehicles and air defense systems between the end of the war in NK and the beginning of the war in Ukraine can be considered evidence for this theory. Moreover, Russia decided to punish Armenia and Armenian leadership for its Velvet revolution in 2018 and increasing cooperation with the West - a scenario quite familiar to Georgia, Ukraine and other post-Soviet states. However, Russia's main goal was to ensure a physical presence in Nagorno-Karabakh and Armenia-particularly in a location from which they could control the potential alternative to the Northern Belt, the Central Belt. It is a goal they have achieved through the deployment of peacekeepers in Nagorno-Karabakh and through the November 9 declaration. The ninth point of the agreement states, "All economic and transport connections in the region shall be unblocked. The Republic of Armenia shall guarantee the security of transport connections between the western regions of the Republic of Azerbaijan and the Nakhchivan Autonomous Republic in order to arrange unobstructed movement of persons, vehicles and cargo in both directions. The Border Guard Service of the Russian Federal Security Service shall be responsible for overseeing the transport connections".
After the Nagorno-Karabakh war, difficult and protracted negotiations are still underway to open communications between Armenia and Azerbaijan. In addition, Yerevan and Ankara have initiated a normalization process between the two countries, whose borders had been closed since 1992. These processes could lead to the unblocking of all communication channels in the region and eventually serve as part of the Belt and Road Initiative. After the Nagorno-Karabakh war, another long-standing problem was also resolved: Azerbaijan and Turkmenistan had a 30-year-old conflict over the use of a disputed hydrocarbon field, accompanied by mutual threats and disagreements. However, a few months after the war, a memorandum of understanding was signed between the two countries, opening new doors for potential new connections across the Caspian Sea that are another piece of the Belt and Road puzzle. Moreover, the Trans-Caspian Pipeline seems to be a possible project that can be implemented in the new reality.
Another piece of the puzzle was put together on September 14 on the sidelines of a Shanghai Cooperation Organization summit in Samarkand. China, Kyrgyzstan and Uzbekistan signed an agreement to build a rail link connecting the three countries to Europe, bypassing Russia.
International North-South Transport Corridor (INSTC)
Parallel to the BRI's Central Belt, there is another route being considered by a different group of stakeholders. The International North-South Transport Corridor (INSTC) is a 7200 km project that starts in India and crosses the sea to the Iranian port of Chabahar, which is exempt from Western sanctions. From Chabahar, it splits into two directions, one leading to Central Asia and bypassing Pakistan, while the other branch is intended to connect India with Russia and Finland via the Chabahar port in Iran and Azerbaijan. The project aimed to connect Indian markets to European markets via the Russian-Finnish border and reduce the cost of transporting goods from India to Europe and vice versa. However, the war in Ukraine had a major impact on this route, as well as on the Northern Belt. Here, too, there is a big question mark over the effectiveness of the project due to Western sanctions against Russia.
Consequently, India has started to look for new opportunities and possibilities to connect with the European market. The most likely and convenient route will be through the South Caucasus, which will once again increase the importance of the region for global trade routes and give Armenia a chance to become part of the infrastructure. Armenia is trying to use its good relations with India and Iran to ensure that the corridor passes through the country and connects the part between Iran and Georgia. Early indications point to some development of the project. Armenia is rebuilding its roads at a rapid pace-particularly the so-called North-South highway that connects the country's border with Iran to its border with Georgia. Progress was halted by the Nagorno-Karabakh war in 2020, when Armenia lost control of part of the route between the southern towns of Kapan and Goris and had to build an alternative road. The road is being built with the help of a €2.6 billion aid package from the EU that Armenia received in 2021 to promote democracy and recover from the Nagorno-Karabakh war. In addition, the Armenian government has signed new economic cooperation agreements with India and military cooperation treaties. Rising tensions between Iran and Azerbaijan also indicate that the new road will most likely pass through Armenia and connect to the Black Sea.
So we currently have two routes that have potentially major impacts on global trade and transportation: the Central Belt and the revamped International North-South Transport Corridor, which will likely be redesigned and renamed in the near future. Both routes will most likely pass through the South Caucasus. However, the countries of the South Caucasus have their own ideas about the logistics of the projects. Politically, we are clearly divided into different sides: The first side is represented by the alliance of Azerbaijan, Turkey, Pakistan and Israel, while the second side consists of Armenia, Iran and India. Georgia is trying to play a neutral role, as it will benefit from all the connections unless a certain scenario develops. Finally, there is Russia, which also plays a role.
The November 9 declaration, which states, "The Border Guard Service of the Russian Federal Security Service shall be responsible for overseeing the transport connections," demonstrates Russia's interests and goals. In this way, Russia successfully gains control over the connecting road between Azerbaijan and Nakhichevan, which passes through the Armenian province of Syunik, and, in other words, control over the Armenian part of the Central Belt. Moreover, control over this corridor also means indirect control over INSTC, which has to cross the Russian-controlled road. Thus, Russia will again have control over all connections between the Asian markets of India and China and Europe.
However, it seems that the current Armenian government and society have had enough of Russian influence in the country and essentially the hostage situation the country found itself in since the signature of strategic alliance with Russia and joining the Collective Security Treaty Organization (CSTO). The CSTO is an intergovernmental military alliance in Eurasia consisting of six post-Soviet states: Armenia, Belarus, Kazakhstan, Kyrgyzstan, Russia, and Tajikistan. Under the CSTO's 4th Article, aggression against one member of the alliance is considered aggression against all members, a mechanism similar to the North Atlantic Treaty Organization. Both Russia and the CSTO are obligated to protect Armenia in the event of an attack on its sovereign territory by a third party, as stipulated in the numerous agreements signed between the countries and in the treaty. However, after the Nagorno-Karabakh war in 2020, Azerbaijani forces have continuously shelled, attacked, and occupied Armenia's sovereign territories. The latest Azerbaijani attack, which took place on September 13-14, 2022, resulted in over 200 dead Armenian soldiers and the occupation of some 60 square kilometers of Armenian territory within two days. Neither Russia nor the CSTO responded, despite the fact that this is provided for in the CSTO statute and the Russian-Armenian strategic alliance agreement. The escalation in September led to massive protests by Armenian society against Russia and the CSTO. It also led to a visit to Armenia by Nancy Pelosi, Speaker of the U.S. House of Representatives.
With Russia's support, Azerbaijan has forced Armenia to sign a deal that will open the links between Armenia and Azerbaijan. This includes the road connecting Azerbaijan to Turkey via Armenia. Russia insists on its presence on these roads, which means that Armenia would have no control over its communications. Armenia receives little support from the U.S., which is based on protecting the country's democracy and sovereignty. The urgent task for Armenia now is to maintain sovereignty over its territory, i.e., to push back the Azerbaijani forces that are currently on Armenian territory and to ensure that the roads that run through the country are not controlled by third parties, in this case Russia.
In conclusion, I allow myself to be naive and optimistic. If Armenia and Azerbaijan agree to a deal which will ensure a sustainable peace, opening of all communications in the region and will not impose Russian border control on these communications, the South Caucasus would have a chance to free itself from Russian influence. It could become an interdependent transport hub connecting the East with the West and the North with the South. Only under these circumstances the South Caucasus would be the crossroad for all sides and literally the center of the world - as its inhabitants have thought of it for the last 2000 years.
Hayk Toroyan is a graduate of the Central European University's Nationalism Studies program (Budapest, Hungary). He also holds BA and MA degrees in International Relations from Yerevan State University. At Central European University, he defended his Master's Thesis titled: “Challenges and opportunities for peacemaking in the Nagorno-Karabakh conflict”.
Since 2010 Hayk has been working with CMI (Crisis Management Initiative) – Martti Ahtisaari Peace Foundation. In 2016 he became CMI’s Regional Coordinator in the South Caucasus. Previously Hayk worked at the Armenian UN Association, the OSCE Office in Yerevan, as well as in the sphere of media and advertisement. Hayk also worked at the Jinishian Memorial Foundation, facilitating and implementing debate trainings in schools across all regions of Armenia. Hayk regularly provides workshops and lectures for students in Armenia and from Eastern Europe on conflict analysis and conflict resolution.
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