July 6, 2023

BACKGROUND: Russia’s influence in its neighborhood needs little introduction; it has long been the economic, military and political hegemon in the region, and was of course the “first among equals” in the USSR. Russia exercises this hegemony in the region through several vectors; international organizations like the Collective Security Treaty Organization (CSTO), the Commonwealth of Independent States (CIS), the Eurasian Economic Union (EEU) and the Shanghai Cooperation Organization (SCO). These organizations bind the states that partake in them to Russia, through cultural, economic or military ties.

However, the states of the Caucasus and Central Asia have long been pursuing a multi-vector foreign policy. This is particularly obvious in the SCO, where the Central Asian states (except Turkmenistan) participate in open cooperation with China, India and Pakistan, as well as Russia. The states of Central Asia and the Caucasus engage with China, the U.S., the EU as well as regional powers like Iran and Turkey, navigating the increasingly complicated relations between these powers for their advantage. With Russia’s full-scale invasion of Ukraine, however, this strategy has become hard to sustain as a consequence of Russia’s increasing international isolation. Russia is increasingly economically and politically isolated through sanctions, and the Western powers have threatened to sanction Russia’s partner-states should they aid it in its invasion. Consequently, these states have distanced themselves from Russia – none of the South Caucasian or Central Asian states recognize the Russian-occupied states in Ukraine, nor their annexation, and have either voted for or abstained from voting on UNGA resolutions condemning the invasion. Moreover, elites in these countries have seen the tides turning since Russia will be severely weakened regardless of the outcome, and are thus looking for more reliable partnerships with the U.S., EU and China. 

However, since Russia cannot be discounted as a player in the region, the majority of states are not voicing direct opposition to the war. There are different reasons for this –Armenia, for example, needs to preserve its security partnership with Russia whereas Kazakhstan has close economic ties with Russia, a large ethnic Russian population, and a relatively weak security apparatus.

IMPLICATIONS: For some states in the region, the war in Ukraine represents a decisive turning point in the regional balance of power; for others, it presents a challenge that must be overcome informally at the risk of diminishing their strategic opportunities. 

The South Caucasian states belong to the former. Most notably, the need for manpower in the war has severely weakened Russia’s military presence in the South Caucasus – which has emboldened Azerbaijan to increase the pressure on Armenia. This effort has been successful – since the beginning of Russia’s full-scale invasion of Ukraine, Azerbaijan has been able to obtain guarantees from Armenia that all but declare an end of Armenian support for the self-declared Republic of Artsakh. The EU views Azerbaijani oil and gas as an alternative to the increasingly inaccessible Russian supply, and Baku’s partner Turkey has effectively diminished the influence of Tehran and Moscow in the region (much to the chagrin of both). Erdogan’s victory in Turkey’s elections, Pashinyan’s attendance at the former’s inauguration, as well as personnel changes in the Turkish government, demonstrate that Turkey is becoming the primary power in the region. 

In Central Asia, the SCO has yielded both positives and negatives for Russia. Russia has developed existing partnerships with so-called “friendly nations” since its isolation began in earnest last year, and the SCO provides a perfect template for this. However, the SCO states have not been vocally supportive of the Russian cause in Ukraine. On the contrary, the SCO has called for the restoration of international law in the region. This can be carefully interpreted a call for an end to the conflict, or more ambitiously understood as a call for Russian withdrawal from Ukraine. While several, if not all, of the other SCO member states are ready to mediate a peace deal between Ukraine and Russia, Russia has not agreed to anything. Furthermore, other flashpoints in the region – the Tajik-Kyrgyz border, the instability of the Taliban regime, and the fickle nature of other SCO partners such as India – may see Russia sidelined within the organization in favor of Beijing, New Delhi and Islamabad, at least as far as the Central Asian states are concerned.

The war also implies economic considerations for the South Caucasian and Central Asian states. Due to Russia’s need to dodge sanctions on needed Western goods, the GDPs of these countries grew in 2022. Russia attaches renewed importance to them, particularly as the rest of the world grows weary of economic ties with Russia. The states of Central Asia and the Caucasus have also enjoyed an increase in trade with Russia, which seeks to bridge the gap caused by sanctions, both in terms of actual financial capital and sanctioned goods through “parallel exports.” While these economic exchanges are officially denied, they have brought benefits to the economies of the partaking states. 

These benefits are nevertheless a double-edged sword. Assessments of the economies of these countries all point to a brief period of growth. For example, while an influx of Russian citizens fleeing the country may bring some renewed productivity, this will likely end up dissipating gradually (and indeed very quickly should the war end and Russians return to their country). Moreover, a great influx of Russian migrants is likely to have a social impact, especially in countries like Georgia and Armenia. Thus, while increasing trade with Russia has brought economic benefits, it also increases the reliance on Russia for further economic growth. 

CONCLUSIONS: The war in Ukraine has provided analysts with an oxymoron; it is driving the Post-Soviet South both away from and towards Russia. Politically, the greatest changes have been in the South Caucasus, where a period of Azerbaijani and Turkish ascendancy in the region is likely to endure as a normalization of relations with Armenia, and a (potentially non-peaceful) resolution of the conflict in Nagorno-Karabakh is combined with the ensured longevity of both countries’ current regimes. Yet, across the entire region, the economic outlook is much more complicated. Several of the states have received temporary economic benefits, yet these are in the end temporary and extremely uncertain. Economic benefits based on informal sanction dodging, an influx of draft-dodgers and refugees and the goodwill of both global and regional powers is bound to produce a great level of uncertainty. These states are used to conducting multi-vectoral foreign policies, however, by trying to play off both sides in this conflict, the leaderships of some states, Armenia and the Central Asian states in particular, may end up making themselves more economically reliant on an increasingly erratic and isolated Russia. 

AUTHOR’S BIO: Alexander Yeo is a PhD candidate at the University of Glasgow. Emil A. Souleimanov is a professor at Charles University.