A delegation from the Caspian Policy Center (CPC) visited Baku October 23-27 to learn about Azerbaijan’s current intentions and overall foreign policy outlook.  Rapid and surprisingly positive shifts in connectivity and regional engagement were evident on the visit, while relations between Azerbaijan and the West seem to be mutually disappointing.  Baku’s relations with its neighbors have also undergone a fundamental shift, as Russia’s lessened engagement in the region has enabled Baku to resolve some issues itself. 

The remarkable speed of changes ongoing in Azerbaijan and the surrounding region was evident to the delegation, as well as an eagerness to move forward with the peace process with Armenia, a desire that might be matched in Yerevan’s high corridors.  “There is no time to waste” was the mood in Baku, as well as the sense that the three Caucasus countries can now manage to resolve many/most issues by themselves.  The increasingly frequent engagements between the Armenian and Azerbaijani decision makers have yielded the most positive movement in decades.

The Zangezur Corridor

Resolving the transit corridor impasse was clearly a major concern in Baku.  Earlier negotiations with Armenia apparently broke down over a number of critical details, including the Zangezur corridor which would connect Azerbaijan through a 40-kilometer road and rail line through Armenia’s Syunik Province to Baku’s Nakhchivan exclave.  

After talks repeatedly failed over corridor technicalities, CPC heard that Azerbaijan took Zangezur off the table, to enable negotiators a chance to find common ground on remaining issues.  However, Armenian Prime Minister Nikol Pashinyan’s subsequent “Crossroads for Peace” proposal at the Silk Road Summit in Tbilisi appears to accept connectivity in the disputed corridor, noting the opportunity for all sides to benefit from peaceful relations and enhanced energy and trade connectivity.  

CPC learned that Iran and Azerbaijan have apparently concluded an agreement to construct a bypass railway passage instead of using the Zangezur corridor, should an agreement with Yerevan not be reached.  The rail passage and accompanying gas pipeline would parallel an existing Iranian road that skirts the border with Armenia and would connect Azerbaijan directly with its Nakhchivan exclave.  

About 100 miles longer for Middle Corridor cargo than Zangezur, the alternative route would also complete the linkage from Central Asia across the Caspian Sea and the South Caucasus to Türkiye and serve as a “Plan B” option.  However, it would circumvent and completely isolate Armenia from potential trade and energy connectivity along the Middle Corridor.  Re-establishing connectivity with Armenia and onwards to Türkiye appears possible now in the Azerbaijani capital.  While Baku has a Plan B, there is a need to avoid having an angry neighbor cut out of long-term trade and energy arrangements.  

Foreign Actors

To a large degree, France is seen as a spoiler for Azerbaijan’s relations with the West.  Repeated statements made by the French President derailed the proposed Grenada peace talks when Azerbaijani leaders interpreted Macron’s position to be biased towards Yerevan over Baku.  A French-proposed United Nations Security Council resolution condemning Azerbaijan has further exacerbated relations between Baku and Paris and remains a major stumbling block.

Meanwhile, growing cooperation between the five Central Asian countries and Azerbaijan was evident in mutual investments, particularly for connectivity.  CPC traveled to the Port of Baku and observed recently completed massive new terminals and facilities to accommodate Central Asian grain and fertilizer.  Turkmenistan is also expected to increase trade volumes from its major port, further boosting Middle Corridor cargo transiting the Azerbaijani port.  The expanding facility is visibly becoming a regional hub for north-south and east-west trade within a region of 140 million people.

Next steps

There appears to be a new interest and movement in Baku towards building an integrated Caucasus region, as well as for greater unity with Central Asia, with energy and trade incentivizing progress.  There is also some cautious optimism over the progress of discussions with Armenia.  Re-opening a transit corridor through Armenia would create a peace dividend and greatly increase the capacity of the Middle Corridor, particularly for Central Asia and the Caucasus.  

Optimism around a peace agreement between Baku and Yerevan should prompt engagement by Washington and Brussels to assist in peace-building and confidence-building measures.  Baku is looking to resettle its internally displaced population back to Karabakh (a population that has grown from 600,000 in the early 1990s to an estimated 1,000,000-plus today) and Yerevan its 100,000 ethnic Armenians who recently departed Karabakh.  Both Caucasus governments have sent positive signals to work together on assisting returnees, but the international community is probably best positioned and experienced in how to reintegrate the displaced.

For the moment, Azerbaijani and Armenian senior leaders appear to be looking forward, not backward.  This is a critical moment; both countries are seeking common ground and historic deadlocks are eroding.  If the countries of the Caucasus can avoid the willful distractions and efforts by external elements to disrupt that have plagued past relations, this peace process very well might now have a chance.