The South Caucasus: a pivotal region shaken by the war in Ukraine
The South Caucasus, a mountainous region that has been at the crossroads of great power interests for centuries, is undergoing a rapid transformation. The war in Ukraine and the resulting fragmentation of the world into blocs and groupings has forced the three countries that comprise the region – Georgia, Armenia, and Azerbaijan – to realign their foreign policy outlooks.
The region’s geopolitical positioning – a bridge between Europe and Asia that is surrounded by the mighty peaks of the Caucasus mountains – has been both its blessing and its curse. On the one hand, various nations could nurture their identities in its protected valleys and benefit from being guardians of trade flows that went through them. On the other hand, that strategic positioning made the region an arena for competition among the great powers surrounding it: Turkey, Persia-Iran, Russia, and the West.
Every major international crisis has put this positioning to a test, requiring local governments to use skill and wit to get through the turbulence. The 2022 invasion of Ukraine has been a shock to the current status quo that the Caucasus had not experienced since the Soviet collapse. The region is in a state of flux and the coming years will bring major changes, one way ar another. They will largely depend on how the broad conflict between Russia and the West in Ukraine and elsewhere would develop. Being at the crossroads, the three countries that comprise this region are now emerging as new buffer states in an increasingly fragmented world.
After Western countries introduced sanctions and other restrictions that severely limited trade between Russia and the West, the Caucasus turned into a natural connector for trade to continue flowing. The few major highways and railways that link Russia through the region to the outside world have suddenly become much more valuable to outside powers.
Right after the invasion, the overland route that links Russia directly with Turkey through Georgia turned into a giant line of trucks. A Chinese contractor is currently building a tunnel in Georgia near the border with Russia that should ease congestion, but that would hardly be enough to fulfill the demand. Other trade routes – the railway through Abkhazia and a highway through South Ossetia – have been sealed off for years because of the ongoing conflicts there.
The government of Georgia saw an opportunity in this context. Suddenly, the country of 3.6 million became more important and valuable to both sides of the Ukraine conflict. As Russia needed its logistical routes, while the West was worried that Georgia might deviate from its pro-Western path. Both Russia and the West tried to offer carrots to Georgia to make sure it sides with them: Moscow lifted visa restrictions and the ban on direct flights between Georgian and Russian cities in May 2023; the European Union upgraded Georgia to the official candidate member status in December 2023 though the prospect of the country actually joining the EU is still distant.
With this evolving status and emboldened by the sense of newfound economic clout, Georgia’s government began to assert itself. In May it passed a controversial law that is designed to curb the influence of Western-funded non-commercial organizations in the country. Despite popular protests in the capital Tbilisi and noisy complaints from Brussels and other European capitals the government of the Georgian Dream party managed to successfully push the law through the Parliament.
The day after the law was passed, the Georgian government also awarded the tender to develop its first deep-sea port on the Black Sea to a Chinese company. For years, the choice of a partner to develop this strategically relevant port (that is widely seen as a game changer for trade across the region) has been regarded as a harbinger of the country’s geopolitical orientation. In 2016, the project was awarded to a Western-led consortium, a decision that was reversed in Now the port will be developed by China, but Russia is also likely to benefit from its position right next to Georgia’s Abkhazia region it controls. Russia is building a navy facility in Abkhazia just 25 miles away from the new port that would allow it to exert influence over trade flows processed there.
In October, the government of the “Georgian Dream” Party will undergo an electoral test seeking to secure an unprecedented fourth term as the country’s ruling party. With the opposition splintered and unable to present a cohesive alternative to the Georgian voters (many of whom are already disillusioned with all political forces), it is not unimaginable that it might be successful.
The new map of trade flows that emerged after the war in Ukraine has also affected the calculus of Azerbaijan, an oil-rich republic on the Caspian Sea. Europe needed Azerbaijan’s gas after it decided to cut off most of the Russian deliveries. It also aimed to increase trade between Central Asia and China via the so-called Middle Corridor that runs through Azerbaijan and Georgia bypassing Russia. Moscow, on the other hand, needed Azerbaijan to develop another ambitious project to link Russia with Iran and then with India.
Suddenly all sides needed Azerbaijan. This offered an opportunity for its longtime leader Ilham Aliyev to move decisively to recapture the entire Karabakh region, still under Azerbaijani control. For decades the region of Karabakh, which is internationally recognized as part of Azerbaijan, has been contested between Armenians and Azerbaijanis. Thousands of soldiers died fighting over it, several presidents and diplomats buried their careers trying to solve the conflict, and hundreds of thousands of refugees had to flee their homes because of it. In 2023, more than 100,000 Armenians, who lived in the area for centuries, had to flee their homes fearing retribution. In June 2024, they were followed by Russian peacekeepers who completed their withdrawal from the region. Russia has stationed its peacekeepers in the area in 2020 as a result of an agreement between the players of the previous war over the region that was won by Azebaijan. But these peacekeepers could not prevent more violence when Azerbaijan moved to capture the rest of its territory. For the first time in its history, Azerbaijan controlled its own sovereign territory in full.
Now Baku, Azerbaijan’s capital, is ready to move further. Armenia wants to sign a peace deal with Azerbaijan and concentrate on its own development, but Baku’s demands increase with every turn of the negotiation process. For instance, with Moscow’s backing Azerbaijan is also trying to control a key trade link that would connect with its exclave Nakhichevan by railway through Armenia that would then run to Turkey. That would also create a direct railway link between Russia and Turkey.
Russia has aligned with Azerbaijan largely at the expense of its influence in Armenia. Moscow’s decision to stay away at the time when Baku reclaimed Karabakh was widely seen as a betrayal in Yerevan, the country’s capital. Armenia is now conducting a broad reconsideration of ties with Moscow. There is talk in Yerevan about pulling out of the Moscow-led security alliance, the CSTO, after Armenia’s membership in it failed to prevent its defeat in Karabakh and Azerbaijan’s occupation of several areas in Armenia proper.
Moscow is likely calculating that Armenia is just overwhelmingly dependent on Russia in economic and security terms. It is flanked by hostile  Turkey and Azerbaijan, while Iran in the north is in no way a replacement for the partnership with  Russia, especially in economic terms. The government of Prime Minister Nikol Pashinyan is also under increased stress as it tries to navigate the dire straits of the border delimitation process with Azerbaijan. Protesters in Yerevan have been demanding the government to not yield to Baku’s demands.
The war in Ukraine has pushed Georgia and Azerbaijan to become more pragmatic in their foreign policy outlooks. Armenia is still recovering from the shock of losing a war over Karabakh. Its course is likely to change again as it tries to build permanent peace with Azerbaijan. The upcoming elections in Georgia will likely determine the country’s long-term course. Azerbaijan has emerged as a major player in terms of logistics and energy politics. The region is still experiencing great turbulence and the final contours of the next stage of its development will largely depend on how the war in Ukraine proceeds.
Read also:
Oltre il Nagorno-Karabakh: l’ombra degli Imperi sul Caucaso
La fine del Nagorno-Karabach armeno
Il dilemma della Georgia tra Mosca, Washington e Bruxelles
