Russia’s economy continues to suffer following new western sanctions imposed after its invasion of Ukraine last year. Despite this, some regional states like Armenia are now acting as middlemen in attempts to bypass these new restrictions.

Azerbaijan’s victory in the Second Karabakh War two and a half years ago created a new security situation in the South Caucasus that raised concerns in certain states. This is particularly true in the case of Iran, which continues to pressure Baku through various means.

An interview with Thomas de Waal, a senior fellow at Carnegie Europe. Interviewers: Adam Reichardt and Agnieszka Widłaszewska

The war in Ukraine has all but turbocharged the inevitable coalescing of both the Russian and Iranian rogue states, which are bound solely by their blatant disregard for the rules-based international order. This reality is of particular relevance to the security of the South Caucasus.

The ruling Georgian Dream government has continued to frustrate wishes of Georgian society for integration with western bodies such as the EU and NATO, supporting a law that could directly challenge western integration. The Georgian public did not react to this subtly.

Georgia continues to struggle with issues surrounding its European integration. While the country’s own government remains unsure of its next move, the spectre of Russia and its authoritarian politics continues to loom large over Tbilisi.

Azerbaijan’s fight to regain control of the disputed Karabakh region has included more than fighting on the frontline. Throughout the three decades between the main Karabakh conflicts, Baku has attempted to use various cultural elements to promote its cause both at home and abroad.

Recent months have seen Azerbaijani protesters appear on the Lachin road leading to the parts of Karabakh controlled by Armenian separatists. While such actions may appear inconsequential at first glance, they are emblematic of a wider standoff that could impact regional peace.

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.

Karabakh remains a key global hot spot in terms of periodic clashes between conflicting parties – Armenia and Azerbaijan. The collective West has often been criticised because of its inability to take a leading role in the peace process, especially after the Second Karabakh War of 2020 enabled Russia to increase its influence in the South Caucasus. However, the ongoing war in Ukraine has influenced the Karabakh peace process, which in light of Russia’s shifting attention and declining resources has resulted in a weakened role for Moscow. There now seems to be momentum for the West to play an important role in the process, which will be beneficial for all parties. 

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.

After Azerbaijan’s victory in the Second Karabakh War in 2020, keeping the Azerbaijan-India partnership on pragmatic rails became a hard feat to pull off. Russia’s invasion of Ukraine and the ensuing sanctions, however, created new opportunities for Azerbaijan and India, with the International North-South Transport Corridor at the centre of this renewed co-operation.