Topic of the week: The three intractable issues that could still torpedo a peace deal between Armenia and Azerbaijan

CAUCASUS / CENTRAL ASIA - Report 24 Jul 2023 by Ivan Tchakarov

Due to some travelling plans, we are issuing our Caucasus and Central Asia Weekly earlier rather than later in the week. While we have focused in recent publications on core macro issues in the region related to growth, external positions and currencies, we now veer away from the beaten path and choose to offer our musings on some, in our view, less well understood technical considerations related to the possible signing of a peace deal between Armenia and Azerbaijan. While this issue is equally relevant for both countries, it constitutes the key risk to the continuing stellar performance of the Armenian economy, as we argued last week.

The breakthrough statement of Armenia's Prime Minister last October announcing the agreement to recognize Nagorno-Karabakh as part of Azerbaijan, and the ensuing active shuttle diplomacy between Moscow, Washington DC and Brussels created the impression of an impending peace deal between Armenia and Azerbaijan. These hopes have so far failed to materialize. We here focus on identifying the reasons behind the slower-than-anticipated progress and, in particular, on some technical considerations underpinning the ongoing negotiations between the two parties.

In essence, we claim that these technical considerations may be much more intractable than the initial optimistic vision of speedy progress projected last year. This is not to say that they will preclude the successful conclusion of a peace deal, but they may serve to underscore that there are still many stumbling blocks in the process.

Now read on...

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