A frozen conflict heats up

By bne IntelliNews June 22, 2012

Clare Nuttall in Almaty -

Nine soldiers were shot dead in a series of clashes on the border between Armenia and Azerbaijan in June, in the deadliest few days the troubled region has seen in four years. While the situation is now calmer, it has raised fears of an escalation in the frozen conflict over the disputed enclave of Nagorno-Karabakh.

The recent violence took place during US Secretary of State Hillary Clinton's visit to the South Caucasus. Three Armenian soldiers were killed and several soldiers from both countries injured in a shootout on June 4, which Armenia's Defence Ministry said was caused by an "invading" group from Azerbaijan. The following day, five Azeri soldiers were killed in two separate incidents. A statement from Azerbaijan's Ministry of Defence said that a group of Armenian "saboteurs" tried to "infiltrate a position of the Azeri armed forces" early on June 5, and four Azeri soldiers died in the ensuing battle. A fifth soldier died in a nearby skirmish later in the day.

The shootings on June 4 and 5 took place on the border between Armenia proper and Azerbaijan, rather than on the de facto border dividing Azerbaijan from Nagorno-Karabakh, which has seen numerous clashes in the last 15 years. Since then, there have been no further deaths, but there are reports from the unrecognised Nagorno-Karabakh Republic's Defence Ministry of a higher level of activity on its de facto border with Azerbaijan. On June 18, the Ministry said that Azeri soldiers had violated the ceasefire agreement signed in May 1994 no less than 1,000 times between June 10 and June 16.

Despite the signing of a ceasefire agreement in May 1994, Armenia and Azerbaijan have never signed a peace settlement to end the war that broke out in the early 1990s over the tiny Nagorno-Karabakh enclave, which was part of the Soviet republic of Azerbaijan, but had a mainly ethnic Armenian population that declared its independence in 1991. When Baku tried to regain control of the republic by force, Azeri forces were driven out by Karabakhis supported by the Armenian army. While Nagorno-Karabakh is now de facto independent and closely integrated with Armenia, under international law it remains part of Azerbaijan, and Baku shows no sign of giving up its claim on the territory.

All-out war

Incidents on the Armenian-Azeri border and the dividing line between Azerbaijan and Nagorno-Karabakh are not uncommon; more than 60 people have been killed in skirmishes between Armenia and Azerbaijan since the beginning of 2011. But the June incidents were the deadliest for several years.

There are growing concerns that rather than being isolated incidents, the recent clashes could escalate into a full-scale war between Armenia and Azerbaijan. Another frozen conflict also in the South Caucasus exploded into all-out war in August 2008 when a similar series of incidents on the border between Georgia and the self-declared republic of South Ossetia took place in the first half of 2008, before erupting into a five-day war between Georgia and Russia, which had consistently supported the breakaway South Ossetian republic.

Both Armenia and Azerbaijan have steadily increased military spending in recent years. Azerbaijan, which has considerably greater spending power thanks to its oil and gas revenues, has embarked upon a massive military build-up, with the implicit threat that it might try to re-take Nagorno-Karabakh by force. Azerbaijan almost doubled its defence budget from $1.59bn in 2010 to $3.1bn in 2011, equivalent to 6.2% of GDP. In fact, Azerbaijan's military budget for 2011 was around 30% higher than the entire Armenian budget for all sectors of the economy, allowing Baku to invest in cutting edge Russian and Israeli military hardware.

But even with Azerbaijan's financial advantage, Armenian and Nagorno-Karabakhi forces are considered to be at least a match for Azerbaijan, which also would have more to lose from a new outbreak of war. "The possibility of a larger-scale conflict is relatively low. There would be huge pressure on both Baku and Yerevan, especially from the US, to prevent a wider conflict. Despite the spending on the Azerbaijani military, it is not yet as strong as the Armenian army, and Baku wouldn't want to risk losing even more territory," Anna Walker, senior analyst for Central Asia and the South Caucasus at Control Risks Group, tells bne. "An escalation would also put Azerbaijan's oil and gas export potential at risk. During the Russian-Georgian war, oil and gas transport was halted even though no pipelines were directly attacked."

Past experience has shown it is not unusual for both sides to up the ante when there is a high-profile visitor in the region, as during Clinton's visit in early June. The change of leadership in Russia and to a lesser extent France - the third co-chair country of the OSCE Minsk Group, which is working towards a settlement of the conflict - has also created a higher than usual level of uncertainty about the settlement process.

Efforts by the international community to bring about a peace deal between Armenia and Azerbaijan appeared to progress in recent years following the election of new presidents in both countries - Ilham Aliyev in Azerbaijan and Serzh Sargsyan in Armenia. Both Aliyev and Sargsyan have been more amenable than their predecessors to opening talks, and for the first time since 1994 a series of meetings have taken place between the two presidents. Every meeting took place under the aegis of Russia's former president Dmitry Medvedev, who was replaced by Vladimir Putin in March 2012. "Dmitry Medvedev made a lot of effort to bring the two sides together. There are concerns that with Vladimir Putin back in charge, Russian engagement may weaken," Walker points out.

Clinton's initial warning in Yerevan on June 4 that the incidents could lead to "a much broader conflict" has been followed by more international efforts to calm the situation, with the presidents of the US, France and Russia meeting during the G20 summit on June 18 to discuss the issue. The foreign ministers of Armenia and Azerbaijan, Edward Nalbandian and Elmar Mammadyarov, met in Paris on the same day in a "positive, constructive atmosphere," with both ministers agreeing to continue working with the Minsk co-chairs and to carry out confidence building measures. But the meeting was short on concrete progress, and came just four days after Nalbandian had flatly turned down an appeal from OSCE chairman Eamon Gilmore for the Azeri army to withdraw its snipers from the border.

A frozen conflict heats up

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