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The Nagorno Karabagh Conflict:
    Why Precipitated Optimism has Backfired

Armenian News Network / Groong
June 1, 2001

By Khatchik Derghoukassian and Richard Giragosian

The recent announcement by the officials mediating the Nagorno
Karabagh conflict, - that their planned summit meeting originally
announced for Geneva is now postponed, - affirms recent reports that
domestic opposition to the mediation initiative remains firmly
entrenched in both Armenia and Azerbaijan.  The Organization for
Security and Cooperation in Europe (OSCE), the international security
body mediating the Nagorno Karabagh conflict, explained that after a
regional tour earlier in May they found that `the people of Armenia
and Azerbaijan are not yet prepared to accept the proposed solutions
to the problem.'  The postponement may indeed offer a necessary
respite, allowing both leaders to forge a new consensus among their
people and offering the OSCE mediators a more realistic timeframe for
drafting a new peace plan.  The delay may also afford a modification
of the initiative's overall lack of transparency and stress on secrecy
throughout the process.

The last several months have seen an abrupt acceleration in the
mediation efforts of the international security organization long
engaged in seeking a negotiated resolution to the Nagorno Karabagh
conflict. This sudden flurry of effort by the international mediators
utilizes the structures and mandates of the OSCE, or more specifically,
through its special `Minsk Group' working group empowered to solely
address the Karabagh conflict. The composition of the Minsk Group,
with its three equal chairing nations, - France, Russia, and the United
States, - greatly influences the course of the mediation effort. Much
attention has already been devoted to analyzing the course of the
mediation and the important considerations and implications for
Armenia and Karabagh.  But it would be further insightful to approach
the study of this ongoing process from a more fundamental, broader

Looking broadly at the past several months of the OSCE initiative, the
talks convened in strict secrecy in Paris and Key West have tended to
obscure more fundamental aspects of the Karabagh peace initiative.
The mediation effort has now gone beyond the earlier stage of talks,
as seen in the fifteen meetings between the presidents of Armenia and
Azerbaijan.  The mediation effort has now entered the new, more
complicated stage of a formal peace process, complete with the
mechanisms and devices of the OSCE institutional structure seeking to
both cajole compromise and coerce concession. The OSCE peace process,
together with its inherent lack of transparency and the exertion of
political leverage by its Minsk Group co-chairing nations, is now
engaged in a coordinated effort to stabilize the region.

New Regional Dynamics

Against the backdrop of this new initiative, there is a set of new
regional dynamics that greatly enhances the geostrategic standing of
the region and has attracted much attention by regional and world
powers.  Perhaps most significant is the position and policy approach
of the United States.  On only his tenth day in office, U.S. President
George Bush was discussing the details of the Karabagh conflict with
French President Jacques Chirac during the Paris meeting of the
Armenian and Azerbaijani leaders. In his tenth week in office,
President Bush was meeting with the Armenian and Azerbaijani
presidents in the White House following the conclusion of several days
of talks opened by Secretary of State Colin Powell.  This early Bush
Administration effort of engagement in the Karabagh conflict is
actually part of a broader strategy with policies regarding the
Caspian region placed as a subset to overall U.S.-Russian relations.
In this context, the U.S. is seeking to implement policies in
coordination, rather than in confrontation, with Russia.  Moreover,
Washington is currently following Colin Powell's lead in constructing
a consensus approach to the whole of Eurasia, from Russia in the east,
spanning the Caspian, and on to Central Asia bordering China in the
West.  Thus, the OSCE initiative, led by Washington, but coordinated
with Paris and Moscow, represents only one element of a Grand

Changing U.S.-Russian Relations

The overarching regional dynamic defining the scope of the OSCE
initiative is the modified approach to U.S. relations with Russia.
The first impression of the American president to the Russians was
fearful apprehension, stemming from his rhetorical hard-line
flourishes articulated by Bush in the campaign and during his first
weeks in office.  From his heralding of unilateral missile defense to
his rabid reaction to Russian overtures to Iran in weapons sales and
nuclear assistance, the Bush team first appeared as a Reagan
administration revisited.  This trend waned, however, as the more
realistic and less rhetorical approach of Secretary of State Colin
Powell overcame the more conservative camp centered around Defense
Secretary Donald Rumsfeld.

Seeking to draft a new post-Yeltsin blueprint based more on common
interests than conflicting aims, the Bush Administration has quietly,
but steadily, revised its dealing with Russia.  The most conspicuous
sign of this new approach is seen in Central Asia, with the
U.S. pursuing a constructive and cooperative policy in support of
shared Russian interests in containing the increasing Islamic threat
to the Central Asian states.  This bilateral cooperation seeks to
stabilize the region and enhance security through coordinated moves
between Washington and Moscow.  For the United States, the converging
interests in a stable Central Asia also assists in the overall
U.S. strategy dealing with China.  A stable and secure Central Asia is
in both Russian and American interests and is made more important as a
counterweight to the gradually broadening of Chinese influence and
expansion throughout the region.

Therefore, the new effort to pursue a cooperative approach with Russia
based on shared interests is also at the core of the OSCE initiative.
In the words of the U.S. official acting as Minsk Group co-chair,
Ambassador Carey Cavanaugh explained, `today, I would say that the
outlook and perspective of Moscow, Washington and Paris are virtually
identical.  That has made for a much greater chance of finding a
settlement and moving this forward... There are lots of reasons that
lead to a different response from Moscow that is favorable.' (1)
Russian cooperation with the United States (and France) in the OSCE
Minsk Group's initiative is also a direct result from its propensity
to balance the North Atlantic Treaty Organization (NATO), which by
virtue of its expansion and exclusion of Russia, is seen as a grave
security threat.  And by utilizing its position as a Minsk Group
co-chair, Russia is seeking to capitalize on its regional advantage
over the U.S. in terms of its proximity and patience, a policy
`designed to provide Russia with a more stable zone of geopolitical
influence.' (2)

A Sidelined Turkey

A second regional dynamic tied to the OSCE initiative is the
consideration of the regional powers.  The reliance on Turkey as
Washington's proxy power in the region has already been significantly
undermined by the Turkish decline from a stable and secure government
capable of countering Russian assertions of power in the region to an
economically wounded and politically feeble regime.  This sidelining
of Turkey as deputy and junior partner to the traditional U.S. foreign
policies governing relations in the Transcaucasus, has led to a
revision of Washington's short-term options in the region.  Although
the severity of the Turkish crisis is recognized as a paralyzing
impediment for Turkey today, it is also seen in both Washington and
Ankara as a temporary situation.  The International Monetary Fund
(IMF) has been spurred to rescue the Turkish economy and with the
pressure of the U.S. and the European Union (EU), has pledged more
than half of the overall $16 billion in aid recently secured for
Turkey.  The EU, in particular, sees the Turkish crisis as a threat to
its own security and stresses IMF support, also to dismiss any
suggestion of EU support.  Fear of an unstable Turkey in proximity to
its borders is rampant in Europe.

The wishful thinking on the part of the U.S. regarding the state of
Turkey actually fails to recognize the true condition of the patient.
Even with the IMF infusion of billions of dollars in loans, - the
latest IMF `bailout' of an economy in crisis, - Turkey is threatened
by fundamental ailments. The more realistic prognosis sees Turkey
stricken by a near financial collapse, an ailing economy, and a
bankrupt political system. (3) These fundamental problems effectively
sideline Turkey as regional actor for at least the short-to-medium-term,
and even necessitates a lessening of regional tension to allow a
period of political recuperation. Such a lessening of regional tension
includes a softening of Turkey's hard-line position seeking to limit
the passage of Caspian oil through the Bosphorus, an end to Turkish
covert support for Chechen rebels, and a curbing of Turkish military
assistance to the region.

The diminished role of Turkey offers some positive factors to regional
stability, as mentioned above, and may even spur progress in the
Karabagh peace process if Turkey is forced to abandon its earlier
insistence for a direct role in the talks.  More generally, the bias
of the Turkish position in the Karabagh conflict, complete with its
ignored complicity in the Azerbaijani-imposed blockade of Armenia and
its record of Turkish assistance to Azerbaijan, should have already
disqualified it from a proper role in the mediation effort.

An Opening to Iran

The third regional element is the ongoing U.S. overture to Iran.  In a
subtle process launched in the last years of the Clinton administration,
the U.S. is continuing to rethink its approach to Iran.  This effort
has been spurred with the coming presidential elections in Iran, a
contest featuring the reformist camp of President Khatami under threat
by the traditional conservative religious theocracy, and accelerated
by the proliferation threat posed by the recent Russian-Iranian moves
toward increased weapons sales. Interestingly, the Bush Administration
recognizes that Iranian policies toward the region has become solidly
`Russian centric,' in the words of Iranian expert Mohiaddin Mesbahi,
(4) with Russia as a strategic balancer, if not partner.

This recognition contributes to the overall course of bettering
U.S. relation with Russia, and sees the constructive engagement of
Russia as an additional means to build a more positive relationship
with Iran.  Moreover, Washington is seeking to build regional policy
on the reality that Russia is also Iran's natural competitor in the
region but understanding the need to overcome the fact that prior
U.S. containment of Iran has only encouraged Iran's partnership with
Russia and has enhanced Russia's regional role.  Thus, the policy of
constructive engagement with Iran would allow the U.S. to strengthen
its geostrategic position in the region in the long run, and may
reasonably reduce Russia's role by removing its place as Iran's
strategic balancer.

The Timing of the OSCE's New Initiative

The most interesting question raised by this new focus on Karabagh
should be posed in terms of timing.  The OSCE, both as an institution
and, at times, from an individual member state initiative, has been
engaged in mediating the Karabagh conflict for more than nine years.
This leads to the first question.  Why such a sudden flurry of
activity with the Minsk Group's launching a new initiative with
important meetings in Paris, Key West and, at some future date in
Geneva?  What has really changed, either on the ground in the region,
or in the foreign capitals of these nations, that has necessitated
such an abrupt diplomatic initiative?

The answer to this question of `why now' is to be found in a very
unlikely place.  The answer is two-fold.  First, there is new
opportunity for the OSCE's engagement as the converging interests of
regional and world powers are now coinciding with the set of these new
regional dynamics.  Secondly, and even more crucial to interpreting
the OSCE's initiative, the answer is to be found in Baku.  There has
been a subtle and gradual shift underway in Azerbaijan's strategic
approach toward the Karabagh issue for some time.  This shift in
Azerbaijani strategy rests on the internal necessities posed by the
looming succession question and due to the realization that its prior
policy has not worked.  Azerbaijan has recognized the futility of its
long-standing strategy of trying to `bleed' Armenia economically.  The
Azerbaijani government began to modify its strategy several months
ago, redirecting its policies from a focus on economic pressure to one
of political and diplomatic dimensions.

The New Azerbaijani Strategy

Since the conclusion of last November's parliamentary elections in
Azerbaijan, there has been a considerable redirection of its national
interests and long-term strategic policies. In terms of decision-making
and governance Azerbaijan is in reality a one-strongman state, led
and dominated by Heidar Aliyev. The Azerbaijan of the Aliyev-era is
currently locked in a transitional stage, seeking to secure stability
and legitimacy as the challenge of succession approaches and as the
regional realities are changing. The promised wealth and prosperity
of the Caspian continues to be far below expectations, Baku's growing
internal challenges continue to mount, and its traditional reliance on
exploiting the Russian-Turkish rivalry has proven disappointing in the
past few years.  All these factors have contributed to the need for a
shift in policy.

As the OSCE peace process moves from the preliminary stage of
`proximity talks' to a more institutionalized peace process to be
launched in Geneva, this new Azerbaijani strategy seeks to force
Armenia (and by extension, Nagorno Karabagh) into an untenable
position.  Utilizing the postponement of the Geneva stage as a useful
period of domestic consolidation, Aliyev is preparing for the
presentation and consideration of a new draft peace plan by the Minsk
Group.  Yet Azerbaijan is also forging ahead with its new policy.
Timed to garner the most political and diplomatic leverage possible,
Aliyev is steering the peace process in a favorable direction,
utilizing the OSCE as an effective vehicle to advance his revised
national priorities and isolate the Armenian position into a cage of
diplomatic confinement.

The Aliyev strategy aims at manipulating the OSCE initiative in order
to gain new leverage over Armenia.  By obscuring the true nature of
the Karabagh conflict, and by adopting a devious outward appearance of
reason and righteousness, Aliyev is steadily constructing a diplomatic
fagade of sincerity, with a deceptive willingness to negotiate and
settle the conflict.  Much of this deception has already succeeded as
few have questioned Aliyev's apparent willingness to accept a peace
plan based on the `common state' model, whereby new `horizontal'
relations between Azerbaijan and Karabagh would form the basis for a
new Azerbaijan, recast as a vague and undefined `common state' entity.

Azerbaijan has never accepted this common state model before and it
would be a mistake to blindly accept this very premise given the
realities of the Aliyev regime. But to gain an acceptance of the
Azerbaijani fagade is to award Aliyev with an early, undeserved
diplomatic victory. By manipulating the OSCE process and by adroitly
leading the Minsk Group into drafting a peace plan that would be
unacceptable to Armenia, Aliyev may emerge as the diplomatic winner
despite being the military loser.  If the OSCE falls into this
quagmire by putting forth a peace plan in violation of Armenia's
national interest and, therefore, mandating an outright Armenian
rejection, Aliyev will effectively present himself as the statesman
and demand that the international community reward him with a new
regional policy isolating Armenia and allowing for the ambitious
energy projects to proceed without further consideration. The end
result would be to overturn the isolation of Azerbaijan, manifested by
Washington's Section 907 restrictions (5) and the European reluctance
to fully engage Azerbaijan, and portray Armenia as the new `regional
pariah state.'


The precipitated optimism after the Paris and Key West talks has
backfired as the conflicting parties were not ready to conclude an
agreement during a period of important changes not yet clear enough to
confirm the direction of their foreign policies.  The consolidation of
the course of the new U.S. `Grand Strategy' for the region, as well as
the Russian reconsideration of its role as regional power vis-`-vis
this new American direction, remain too premature to judge. In other
words, we may very well be standing at a stage of renewal, as the
parameters of the traditional `Great Game' are modernized.

The leaderships of both Armenia and Azerbaijan have not been able to
follow this shift and are only now in a phase of reviewing their
position and strategy.  The regime of Azerbaijani President Aliyev,
however, has apparently already redesigned the course of its policy,
relying heavily on the strategy of gaining advantage in the shaping
and manipulation of international public opinion.  With impressive
help from Turkey, Azerbaijan is trying to gain new ground in the world
press, academia and through the diffusion of its national position
through specialized international publications.

Although discrepancies within the Azerbaijani society and political
elite do exist, the process is directed and driven by the president,
in a traditional `strongman' leadership style even more pronounced
given that pluralism is not particularly appreciated, and by the fact
that the opposition is far too marginalized to be able to exert
influence on this discourse.  Ironically, the more hard-line position
heralded by the nationalist opposition tends to actually help
President Aliyev by positioning him as more of a statesman and less of
a strongman.

In Armenia, the political process in the wake of Key West has
generated a more introverted debate shaped by a scarcity of accurate
information on the actual negotiations.  The deliberate use of certain
concepts by some key officials within the closed inner circle around
Armenian President Kocharian has in recent weeks only exacerbated
internal discord. Specifically, the presidential negotiating team has
provoked internal turmoil in what seems to be a direct attempt to
fragment the opposition and marginalize the opposition. In contrast
with Aliyev, however, Kocharian is significantly less well positioned
to take advantage of the political opposition. Partly due to the depth
of pluralism in Armenia, the discord over the Key West process that
has erupted in Armenia demonstrates the near impossibility for any
Armenian head of state to impose an agreement on the people without
fatally damaging his legitimacy.

Since assuming the presidency in 1998 after the discrediting of former
president Levon Ter Petrosian, President Kocharian has embraced the
Minsk Group scheme of negotiations with an emphasis on direct talks
with his Azeri counterpart. Both the series of direct talks and the
OSCE mediation effort to date have been shrouded in secrecy.  This
secrecy and lack of any degree of participation beyond the small,
closed circle of advisers and officials around the president has
seriously undermined the political capital legitimizing his
negotiating authority, and as this closed circle has narrowe even
further amid the public perception that Armenia is being subjected to
substantial pressure to grant concessions in return for a settlement,
this political capital began to quickly erode. Moreover, the
continuing shrouding of the OSCE initiative has only contributed to
public cynicism and doubt.  This skepticism and the eroding political
capital held by the leadership are now seriously obstructing efforts
to revise a new Armenian negotiating strategy. It seems that the only
prudent course for the Kocharian government to overcome these
constraints, therefore, is to broaden the official circle
participating in the negotiations.  Additionally, this broadening of
participation must be supplemented by the inclusion of larger, more
representative sectors of Armenian politics as elements in a new
direction aimed at countering Azerbaijan's new diplomatic offensive
and seeking to restore a national consensus.  This is paramount in
order to regain the power of unity that was so crucial to the initial
victory in Karabagh and effectively defeated the overwhelming
Azerbaijani threat.

As for the three co-chairing nations of the Minsk Group, their
repeated imperatives calling on the Armenian and Azerbaijani leaders
to prepare their public opinion for the forthcoming deal has only
provoked a defensive cynicism and was simply perceived as an external
threat.  And within this delicate process affecting the security (and
perhaps survival) of a conflict-weary population, whispers of mutual
concessions amid a time of internal political discord only reveal the
need for greater openness and honesty in mediating this conflict.

Another important issue aside from the lack of transparency is the
structural format of the negotiations.  Formally including the Nagorno
Karabagh leadership in the negotiation table, as the OSCE has promised
at various times, could help to provide an atmosphere of trust and
reduce the increasingly destabilizing political tension.  Such a
change is well advised, and should be the natural follow-up to
including Iran in the mediation effort.  These remedies should have
formed the premise of the mediation effort already, especially given
the importance of seeking a complex resolution to a conflict that
impacts not just the states of the Transcaucasus but all nations
pursuing agendas of influence in the Caspian.  But the biggest
challenge lies in the need to balance the demands of national interest
over the constraints of nationalism.  Only with this balance can a
negotiated resolution to the Nagorno Karabagh conflict be both fair
and long lasting.


(1) Remarks before an April 23, 2001 forum `Negotiations on
    Nagorno-Karabagh: Where do we go from here?' sponsored by Harvard
    University's Caspian Studies Program.
(2) Smolnikov, Sergei.  `Russia's Euro-Atlantic Puzzle.'  Seton Hall
    Journal of Diplomacy and International Relations, Winter/Spring
    2001, Volume II, Number 1.  P. 62.

(3) `Turkish Bailout is joined to a Political Overhaul.'  The New York
    Times, May 18, 2001.

(4) Comments by Professor Mohiaddin Mesbahi of Florida International
    University at an October 2000 conference on Central Asia and the
    Caucasus convened by the U.S. National Intelligence Council (NIC).

(5) Section 907 of the Freedom Support Act codifies formal restrictions
    on U.S. assistance to Azerbaijan until such time that Azerbaijan
    takes `demonstrable steps' to end its blockade of Armenia and
    represents the most visible sign of Western reluctance to fully
    engage Azerbaijan.

Khatchik Der Ghougassian is a Ph.D. student of International Relations
in the School of International Studies, at the University of Miami. He
has written as a political analyst in the Armenian and Argentinean

Richard Giragosian was a professional staff member with the Joint
Economic Committee, U.S. Congress specializing in international
relations and economics in the former Soviet Union and China.  He is
the author of the monthly newsletter, "TransCaucasus: A Chronology."

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