The economic development of the South Caucasus still lags behind its neighbors even 25 years after Armenia, Azerbaijan and Georgia became independent states. The three countries have grown apart and although they are all full of potential, the reality has not lived up to it yet.
An outbreak of the conflict over Nagorny Karabakh in April 2016, in which 200 people died, reminded that Armenia and Azerbaijan are still hostage to the unresolved tensions. The long-term repercussions and cost of the Armenia-Azerbaijan conflict are high. Due to the conflict, Armenia still has two of its four land borders closed, with Turkey and Azerbaijan, and it is overly dependent on Russia. Azerbaijan, in contrast, has recently turned to be more authoritarian and inward-looking, although it had managed to solve its humanitarian problems due to the Karabakh conflict.
The ability to manage its conflicts makes Georgia unique. The unresolved conflicts in Abkhazia and South Ossetia are not a brake on domestic progress and aspirations for Euro-Atlantic integration. Although Georgia lost both regions in the 2008 war with Russia, this has also enabled Tbilisi to free itself and move faster towards Europe. Georgia has also managed to sustain its democracy and held competitive democratic elections in October 2016. Democracy has been upheld through different periods when the country was led by Eduard Shevardnadze, Mikheil Saakashvili and Bidzina Ivanishvili.
All three countries, however, remain to be swayed by the current developments in the region. First, Russia continues to be their most influential neighbor. Although Moscow still does not have formal diplomatic relations with Tbilisi, both countries restored trade and communications in 2012. As to Armenia and Azerbaijan, Russia has been able to strengthen relations with both. Yet, a quarter-century of independence has exacerbated certain developments that enable all of them resist Russian influence. For example, knowledge of the Russian language and exposure to the Russian media are all slowly decreasing and Russia’s image has suffered as a result of the conflict in Crimea.
Second, the Syrian war, which is not far the Southern Caucasus geographically, has had a profound impact on the region as well. Armenia has accepted tens of thousands of Syrian Armenian refugees and Azerbaijan and Georgia have seen recruits from their countries join the ranks of so-called Islamic State, which has now prompted both of them to implement policies to deal with returnees from Iraq and Syria.
In the light of this dynamics, the European Union should focus on helping all countries with state-building instead of positioning itself as a “strategic ally”. Brussels should help maintain US support for the Nagorny Karabakh OSCE Minsk Process, as the co-chair of the OSCE Minsk Group, while promoting open debate in the society as well as push for the creation of a specialized group for the Karabakh conflict that could work on plans for peace-keeping and reconstruction. In Georgia, the EU should continue building military relations but without the promise of a NATO membership and declare the policy of “non-recognition and engagement” for Abkhazia and Ossetia.
‘Whither the South Caucasus?’ – Working Paper by Thomas de Waal – Center for Transatlantic Relations.
(The Working Paper can be downloaded here)