Iran’s ongoing supply of drones for Russia’s war effort against Ukraine has made headlines around the world. However, what is not being talked about is Armenia’s involvement in this alliance. Yerevan now faces a crucial decision regarding its future as a democratic state.

While the world remains focused on the war in Ukraine, an important political game is being played in the South Caucasus. The local states of Armenia, Azerbaijan and Georgia now find themselves in rather different positions as external powers attempt to jostle for position in this fractious region.

The Russian invasion of Ukraine has destabilised not only Europe but also its neighbourhood and inevitably the South Caucasus. This region already has a complicated geopolitical milieu even without any external triggers. Regardless of the outcome, the war will result in a resentful spillover effect in the three countries of the South Caucasus, as they are connected to Russia through trade, remittances and tourism. The economic sanctions, imposed by the West, have enormously affected the rouble, decreasing the remittances sent from Russia by the Azerbaijani, Armenian and Georgian diasporas. Russia is and will be isolated and this will create difficulties for the nationals of the three countries living there.

The September clashes were the most serious armed incident between Armenia and Azerbaijan since the 2020 Karabakh war. Experts are speculating whether Azerbaijan is gearing towards a bigger offensive in southern Armenia or just trying to pressure Yerevan.

Moscow’s war in Ukraine has not only forced millions of Ukrainians to flee their home country but has also led hundreds of thousands of Russian citizens to seek exile abroad. Among the most popular destinations for Russians are two South Caucasian republics: Armenia and Georgia.

Since Russia’s full-scale invasion of Ukraine in late February, several hundred thousand Russians have fled the country. Some sources even estimate that more than one million Russian citizens have already gone into exile. Among them are some of the country's biggest celebrities, such as Alla Pugacheva, who settled in Israel, and music stars like Face and Zemfira, who both moved abroad out of fear of persecution for their anti-war activism.

The US has proven itself to be a firm supporter of Ukraine in resisting Russian aggression. Despite this, however, Washington has still not taken advantage of the various opportunities now presenting themselves in Eurasia and the strategically important South Caucasus.

Gross violations of the right to freedom of peaceful assembly are now being registered in Armenia during anti-government demonstrations. Journalists are also being subjected to violence as the country continues to face political upheaval.

Armenian economists, entrepreneurs and private business owners are warning about hardships that have arisen due to sanctions against Russia following its invasion of Ukraine. The risks and consequences for Armenia’s economy are severe.

Russia’s war against Ukraine has gone beyond the borders of the conflict between the two states and has knocked on the doors of all countries, targeting their economies first. The invasion of Ukraine by Russian troops led to a global economic backlash against Russia in the form of additional economic sanctions. These complement the package of sanctions initiated in 2014 following the annexation of Crimea and the war in Eastern Ukraine. These restrictions are still valid and have already had significant negative impacts on the Russian economy.

The war in Ukraine has also opened long-standing geopolitical wounds in the three states of the South Caucasus, which now find themselves on the frontline of the new Cold War. The modest reactions of Baku, Tbilisi and Yerevan to Russia’s aggression against Ukraine underline the precarious states the three countries find themselves in.

Russia’s war in Ukraine has geopolitical implications for Europe and beyond. This includes the three South Caucasus countries, all of which are members of the European Union’s Eastern Partnership initiative. Yet, governmental and societal reactions have varied in all three countries, with the Georgian government being cornered into a strategy of “non-deterrence”, the Armenian government subordinate to Russia’s security interests, and the Azerbaijani government pursuing its balancing policy while also seeking a strategic partnership with Moscow.

Yerevan’s close security links with the Kremlin have encouraged beliefs that the country simply follows orders from Moscow. However, Armenia’s diverse experiences related to the ongoing war in Ukraine show that this could not be further from the truth.

The Russo-Ukrainian War has left Armenia in a difficult situation. The state’s attempt to adopt a low-profile neutrality on the issue has been met with criticism at home and abroad. Given the country’s circumstances, however, it appears that this may be the best option currently available.

Armenia’s support for the recent CSTO intervention in Kazakhstan may seem unusual at first glance. However, this move is ultimately part of a wider strategy in Yerevan that involves both domestic and international affairs.

While China struggles to consolidate its economic position in the South Caucasus, Pakistan has cemented its strategic alliance with Azerbaijan. Simultaneously, India has entered a new phase of relations with Armenia. Even though the presence of Asian powers in the region represents an opportunity for economic development, it may also entail some risks.

Asian powers have recently shown increasing interest in the South Caucasus. In particular, Pakistan and India have stepped into the region, joining and partially balancing China's strong presence. Several factors have contributed to the entrance of these new Asian players and this is particularly true regarding the new balance of power established by the 2020 war between Armenia and Azerbaijan. At the same time, the European Union and United States’ lack of engagement with the region has left more room for action by other external powers.