The Armenian Institute of International and Security Affairs
It’s highly likely that Azerbaijan, being armed in such rapid temps, will never agree on peaceful resolution of Artsakh conflict, even if the Armenian side is ready to return the liberated territories, including Qarvachar and a greater part of former Lachin region. The maximalism of Aliyev’s regime and torpedoing of a reasonable compromise is being fueled by inflated self-overestimation from petrodollars. In reality, though, this disproportion is a real menace for the security of both Armenia’s and Artsakh’s citizens.
Constant threats of Aliyev the juior towards Armenia, proclamation of the world’s Armenians as Azerbaijan’s enemy, announcing Yerevan, Zangezur and Lake Sevan as “historical territory of Azerbaijan’s ancestors”, should become a serious concern for the citizens of both Armenia and Artsakh. From now on, neutralization of the threat of Aliyev’s regime towards not only Armenia’s security, but its existence as well, must become a priority of foreign and military policies the sooner the better.
In the meantime, while the ruling party having come into power through forged elections in Armenia, proceeds with poor and ineffective governance, the level of corruption in the country is still immense, and houndreds of thousands of citizens migrate, Aliyevs regime has ungrounded hope, that, at last, it would be able to gain such a military advantage towards literally “bleeding Armenia and Artsakh”, then without hesitation, at a proper moment it will resume war and reach cherished goal.
Throughout the last 10 and especially 4-5 years Azerbaijan’s strategic currency reserves, formed from backups of oil foundation and Central Bank, as well as from treasury means of the Ministry of Finances, have increased 30 times, reaching USD 50 billion.
But the West has vital and influential financial levers over Azerbaijan. One of them is the fact, that Azerbaijan’s currency reserves are deposited exclusively in western banks. In case of war it’s not excluded, that under certain circumstances they can be frozen and not allocated to Aliyev. Another lever is the possibility of sharp decrease of oil production volumes by western companies in Azerbaijan.
Funds, which have already been accumulated by Baku, are sufficient for the coming 20 years to spend about USD 2 billion for the purchase of armament each year. This is an indicator, to which Armenia can’t reach at the same period, even if as a result of a miraculous transformation, like regime change, national unity and mobilization of the nation’s power, the annual GDP growth will become 10-15%, and foreign investments will be ten times more as compared to current situation.
As per some calculations, if oil price remains even on the current level, USD 58 for a barrel, and the gas price – USD 104 for 1000m3, 10 years later – in 2025- Azerbaijan’s strategic currency reserves will grow by 10-20 billion, reaching USD 70 billion.
Figure 1. Azerbaijan’s military expenditures 1999-2014 (USD)
The problem under this research is observation not only of tactics and strategy of the Armenian side in case of Azerbaijan’s attack, but also political possibilities and consequences of such scenario, following which any opportunity given by Azerbaijan, will be first and foremost used by Armenia to strike militarily and to defeat enemy’s main attack, its strategic weapons and infrastructures, then under the threat of invading to the territory of Azerbaijan or its realization, peace will be imposed in the form of final trilateral agreement, in which recognition of Artakh’s independence within its constitutional boorders will be provided.
Sustainability of current ceasefire, as well as its end and resumption of military actions are anchored not only on the military component, but on a political as well. Is the political component favorable now? If yes, is this going to last forever for the republics of Armenia and Artsakh?
Under the deepening confrontation between Azerbaijan and the West “giving the green light” by the latter, and especially the USA, shouldn’t be excluded before imposing final peace to Azerbaijan by Armenian military forces.
The possibility to get West’s support will grow, if Armenian forces express readiness to enter the war by certain purposes and conditions consentient with it, among them non-targeting the energy pipelines stretching from Azerbaijan to Europe.
It’ll be more profitable for Armenia to reach to an agreement with the West not striking energy pipelines, and gaining support from the West instead. The Kremlin’s awareness on the availability of such an agreement can itself have a preventive value, and result in not instigating Azerbaijan to resume the war: one of the main reasons of its instigation remaims the assumption, that Azerbaijan’s agression will result in elimination of energy pipelines in the aftermath of Armenian counter-atack that can boost the growth of oil’s world price, acting as a lifeline for Russia’s economy even for a certain period.
By any excuse, whether energy pipeline defense in case of NATO, or support to Armenia within responsibilities of the CSTO (if e.g. Azerbaijan attacks the territory of the Republic of Armenia) in case of Russia or CSTO forces, unilaterally entering the region (first and foremost to Azerbaijan) by a third party can entail in invasion into the territory by other forces.
Moreover, it refers not only CSTO or NATO or Russia and the USA, but also Turkey under the “one century mandate” pretext of defending Nakhijevan, or Iran, for the pretext to provide security of Iran-Armenia road of strategic importance, or, to prevent the possible humanitarian disaster in Talish regions in case of escalation of the situation. In any case, capabilities of western countries and Iran to deploy forces in the region, and especially on the conflict zone, as compared to Russia are very limited though.
In case of a likewise scenario, Azerbaijan can turn into a zone of sectoral presence for extra-regional forces, the future of which will be negotiated between the forces deployed in the region, following the example of post-war Germany.
Resolution of Artsakh conflict under favorable conditions for Armenia and on the basis of shadow agreements with the West can result in strengthening of Armenia’s sovereignty up to liberation from the colonial contract on gas monopoly with Russia signed in 2014.
Otherwise, if after lifting sanctions over Iran an agreement is reached between Tehran and the West in the near future (based on which Iranian and even Turkemenistan’s gas will be supplied to Europe, and one of its possible routes is through the territory of Armenia), then as far as in case of Armenia, the West and Iran will have to come to such an agreement not with Armenia’s authorities, but with the Kremlin.
In that case “Gazprom,” more precisely, Russian bureaucrats and oligarchs, but not Armenia and its people will gain tremendous dividends. Upon the roughest calculations, for transition of 50m3 gas from Meghri to Bavra, about 600km, Armenia, in case of acting as an independent player can gain USD 1 billion net profit (transition of 1000m3 gas for 100km is estimated by USD 3,4). The issue of supplying Iran’s oil and gas to Europe is among the crucial issues, which, in the end made the West to close a deal with Iran.
If republics of Armenia and Artsakh will have to undertake preventive military actions independently, for the purpose of imposing peace to Azerbaijan, then Russia’s and Iran’s interests and possible responses should be taken into account, and not to lead communication and cooperation tubes of the countries to a deadlock. To that end it’s of utmost importance to accurately analyse extra-regional interests, from the perspective of final resolution of Artsakh problem through military means.
As a guarantee for Azerbaijan’s renouncement of further revanche ambtitions, after the war Armenia may put the issue of fully provision of autonomous status to national minorities, i.e. Talishes, Lezgins, Tats and Avar-Tsakhurs. In other words: Azerbaijan’s federalisation by affiliate participation of all nations living in the country, formation of a common state under international control, by full decentralization of power and integration of peacekeepers in the regions.
The research was conducted and scenarios were developed by the author in July 2015. The full version of the research will be available on AIISA website (www.aissa.am) after the expert round table on the topic.