Soon after signing the Turkish-Armenian protocols in October 2009, Turkish officials asserted that their ratification would depend on developments in the Nagorno-Karabakh conflict resolution process, i.e. the return of the territories surrounding Nagorno-Karabakh to Azerbaijani control. However, during the recent visit of Turkish Prime Minister Recep Tayip Erdogan to Moscow, his Russian counterpart Vladimir Putin declared that attempts to normalize Armenian-Turkish relations and solve the Nagorno-Karabakh issue simultaneously should be abandoned. It has become clear that conflict resolution depends on Russia’s will to exercise pressure on Armenia – and that, in turn, depends on Azerbaijan’s readiness to make concessions. If Azerbaijan agrees to sell all its gas to Russia, pressure on Armenia may lead to a deal on Nagorno-Karabakh, but that will result in stronger Russian dominance in the South Caucasus and endanger Europe’s energy security.

When Armenia’s incumbent president Serzh Sargsyan initiated the so-called “soccer diplomacy”, many Armenian observers were skeptical: in their view, Sargsyan was advised to do so by Russian officials. However, Western actors became enthusiastic about the prospect for Armenian-Turkish reconciliation. The seriously flawed election of 2008 and the following violent crackdown on opposition protesters that elevated Sargsyan to power, as well as the continuing oppression against political opponents, resulted in little criticism of Sargsyan’s administration.

Sargsyan’s predecessor, Robert Kocharyan, criticized the “soccer diplomacy”, while the nationalist Dashnaktsutiun Party left the governmental coalition and tried to launch mass protests. The opponents of Armenian-Turkish reconciliation, who also favor keeping the status quo in Nagorno-Karabakh, actually came out as the “bad cops”, improving Sargsyan’s international image of a realistic politician trying to put an end to a decades-long enmity.

On the other hand, the main opposition force, the Armenian National Congress (ANC) led by former president Levon Ter-Petrossian, Sargsyan’s principal rival in the 2008 election round, also criticized the “soccer diplomacy”. Ter-Petrossian immediately warned that Turkey would not normalize relations unless Armenian forces are withdrawn from Azerbaijan’s territory and blamed Sargsyan for his alleged intention to make unilateral concessions in exchange for external legitimacy. In their public statements, ANC leaders denounced Western actors, treating them with bitter sarcasm for backing Sargsyan. This also unintentionally contributed to improving Sargsyan’s image.

However, it is seldom taken into consideration that Sargsyan, who like his predecessor Kocharyan comes from Nagorno-Karabakh and has close ties with Russia, may also wish to maintain the status quo. Armenian state officials, the military establishment and politically aligned businessmen do not experience hardship as a result of the closed borders. Quite to the contrary, economic preferences in exchange for political loyalty provide many opportunities for making money fast. The military establishment also benefits from corruption in the army – one of the largest armies in the world in proportion to the country’s population. If the Nagorno-Karabakh conflict is solved and borders are opened, economic competition could render existing monopolies inefficient and lead to decreased military spending, which would reduce the profits and political influence of the loyal establishment.

Sargsyan could therefore be considered the main winner if Turkey does not ratify the Turkish-Armenian protocols. His international image will not be overtly damaged if the reconciliation process falls apart due to Turkey’s stance, so Western actors may prefer to continue dealing with Sargsyan rather than seeing him replaced. The ANC has, for its part, assured that it will abstain from radical anti-government actions in face of a threat of unilateral concessions on Nagorno-Karabakh. With support from Russia, Sargsyan can stay in office without facing any serious trouble, internal or external, that could force him to resign. Such a situation may be preferred by Russia as well, if Azerbaijan insists on diversifying its gas exports.

Russian dominance in the region will be reinforced also if Azerbaijan’s frustration with the conflict resolution process leads to a military operation, the possibility of which has been underlined frequently by Azerbaijani officials (President Ilham Aliyev, Defense Minister Safar Abiyev, and Ambassador to Russia Polad Bulbuloglu). Large-scale fighting would be a political, economic, and demographic disaster for Armenia, but Azerbaijan would be unlikely to achieve its objective. Russia would be the main winner politically and economically, as oil and gas prices would grow drastically, and the construction of the Nabucco pipeline would be postponed indefinitely. Iran would be another beneficiary.

Peace and stability in the South Caucasus are crucial for the success of the Nabucco pipeline project, and the West’s wish to reach a quick solution of the Nagorno-Karabakh conflict and normalization of Armenian-Turkish relations is understandable. But as the prospect of swift Armenian-Turkish reconciliation becomes weaker, it seems that hastily tailored U.S. and EU policies have not provided the expected results. For now, it seems that the main outcomes are an increased strategic advantage for Russia, a failure for democratic development in Armenia and, worst of all, a risk of a new war in Nagorno-Karabakh.