Russia’s recent contacts with Azerbaijan and Turkey revealed Moscow’s intention to further increase its role as a player in the South Caucasus, and possibly, to help these countries and Armenia normalize their relations. The main question is whether Moscow will act on moving the main political obstacle, the unresolved problem of Nagorno Karabakh, from its deadlock.

Russia has launched a policy to further develop its presence and influence in the South Caucasus. On July 3-4, new Russian President Dmitri Medvedev paid an official visit to Azerbaijan and signed a Declaration of Friendship and Strategic partnership. So far, the term  “Strategic partnership” was used by Russia referring to only one of the South Caucasus countries: Armenia, which is not only its leading economic and political partner, but also a member of the Collective Security Treaty Organization, the Russian-led military bloc. The principal goal of this policy change lies first of all in Russia’s goal to strengthen its participation in Azerbaijan’s energy sector. In particular, Gazprom is set to purchase in Azerbaijan in the coming years as much natural gas as possible to fulfil its own export commitments, and of course, to preserve further its dominant position in energy transportation on the territory of the former Soviet Union. A similar offer was made a day later in Turkmenistan, where Medvedev visited following Baku.

Russia also made efforts to activate its dialogue with Turkey, as Russian foreign minister Sergey Lavrov visited Ankara on July 1-2. Among the reported topics of the Russian-Turkish talks were the situation in the South Caucasus, including the discussed was the reopening of the Turkish-Armenian land border, closed by Turkey in 1993 as an act of solidarity with Azerbaijan. Russia seems to be interested in activating Armenian-Turkish relations, as shown by the initiative of the Armenian President Serzh Sargsyan to invite his Turkish counterpart to Yerevan this fall. The fact that Sargsyan’s statement was made during his visit to Moscow on June 23 is an indication that Russia had encouraged Armenia to do so, whereas previously, Russia was reluctant in encouraging re-activating contacts between Armenia and Turkey. It is possible that the change of policy is linked to Russia’s new political goals in the South Caucasus.

Russia seems to have good incentives to expand its presence in the South Caucasus. In the case of Azerbaijan, the driving force is Russia’s interest in the energy reserves of this country, together with other potential interests which may arise in the future in this rapidly growing economy. As for the Turkish-Armenian relations, Russia’s immediate interests may well be of an economic nature as well. Russia has had extensive involvement in many sectors of the Armenian economy, and Turkey might be its closest and best market should the Turkish embargo on Armenia be lifted. Armenia could export electric energy, mining production, chemicals and many other goods and services to its western neighbor, and in many of these spheres Russian private or state-owned capital has interests.

Concern over growing instability in the Greater Middle East also makes Russia interested in having a more stable situation on the Turkish-Armenian border. However, all of this can become reality only in the case of positive developments around Nagorno Karabakh, where the positions of Armenia and Azerbaijan are still mutually exclusive. Armenia supports the ambitions of the de facto Karabakh authorities for independence, while Azerbaijan insist on its territorial integrity. In this respect, Moscow has to keep a delicate balance between Armenia and Azerbaijan. The above-mentioned Baku declaration read:  “The parties underline the importance of a rapid settlement of the Nagorno Karabakh conflict on the basis of generally recognized norms and principles of international law, and first of all, on securing sovereignty,  territorial integrity and the inviolability of state borders, as well as on the relevant resolutions of the UN Security Council and the decisions of the OSCE.” Thus, this language is one Azerbaijan would be satisfied with, and it did generate a negative reaction in Yerevan, though not on an official level. On the other hand, Medvedev did not directly support the Azerbaijani position, as he declared during the meeting with reporters in Baku that Russia would prefer to see “a mutually acceptable solution to this matter,” and expressing a hope that resumption of direct talks between the presidents of Azerbaijan and Armenia would bring positive results. Thus, he declared support for the principle of territorial integrity, but avoided any formula that could be directly interpreted as a Russian recognition of the specific region of Nagorno Karababkh as part of Azerbaijan. In this way, Moscow left all possibilities open for its manoeuvres and for future pressures on both Armenia and Azerbaijan. In principle, this may enhance Russia’s political influence in the South Caucasus, and give it additional leverage to influence the processes in the region. 

Turkey’s reaction to the Russian and Armenian initiatives is not clear yet, which may among other be the result of the domestic political crisis in the country.

As shown by Russia’s recent moves, Moscow is striving to activate its political and economic role in the South Caucasus. Armenia, Russia’s close ally in the region, is interested in this perspective, but this may come at the cost of concessions on the Nagorno Karabakh issue.