Prisoner Of The Caucasus?

For much of the past three decades, the South Caucasus has been internally fragmented, with former imperial hegemon Russia attempting to manipulate the region’s multiple conflicts to keep Armenia, Azerbaijan, and Georgia from spinning too far out of Moscow’s orbit. Russia’s February 2022 invasion of Ukraine therefore created a fundamentally new reality for the South Caucasus (and for Eurasia writ large). Russian distraction both provided the three South Caucasus states new freedom of action and created opportunities for other regional and non-regional actors to bolster their political, economic, and security presence. These include the United States, which now has occasion to rethink its approach to a strategically significant region that has, arguably, been less of a priority in recent years.

Indeed, observers and officials in Armenia, Azerbaijan, and Georgia maintain diverging views of the challenges facing their region but are largely in agreement that U.S. engagement has been limited and haphazard, at a minimum, since Russia’s 2008 invasion of Georgia. The absence of a clear U.S. strategy has encouraged leaders in Azerbaijan and Georgia, in particular, to hedge by seeking some kind of accommodation with Moscow and cultivating other outside partners. This shift represents a stark reversal from the situation in the 1990s and early 2000s, when Baku and Tbilisi pursued a pro-Western orientation. While Armenia has followed a different trajectory, its pro-Western turn after the 2018 Velvet Revolution and its defeat in the Second Karabakh War (2020) remains tenuous, especially given Armenia’s political volatility and vulnerability to the ambitions of its stronger neighbors.

The South Caucasus has meanwhile become a theater for the emerging pattern of great power competition. With the stalling out of U.S. and European efforts to anchor the South Caucasus states to a Western political and security order, Russia has managed to maintain a strong foothold even with the diversion of resources and attention to the war in Ukraine. Moscow’s turn to geoeconomic tools has allowed it to align the self-interest of ruling elites across the region with its own campaign to evade Western sanctions and build an alternative regional order insulated from Western influence. China remains comparatively peripheral to the South Caucasus, but it is investing in infrastructure and manufacturing that could give it a greater stake in the region’s emerging transit nexus. Despite its escalating conflict with Israel, Iran too sees the South Caucasus as both an outlet and a potential threat.

Understanding the drivers of these shifts and their long-term implications has become increasingly important for the United States and its allies—particularly the United Kingdom, the European Union and its member states, and Turkey. To better understand how the South Caucasus states’ governments, expert communities, and populations perceive the region’s changing geopolitics, I conducted two separate research trips to the region in the spring and summer of 2024. The report that follows is based on dozens of conversations with officials, local analysts, politicians, members of civil society, journalists, and foreign diplomats in Baku, Tbilisi, and Yerevan, as well as Washington, D.C. It seeks to explain how the region’s three states and their people view the current era of great power competition, with an eye to providing recommendations for U.S. policymakers on how to engage more strategically across the South Caucasus.

Introduction

The three states of the South Caucasus—Armenia, Azerbaijan, and Georgia—sit at the center of a shatter zone and choke point where Europe connects to the Eurasian supercontinent. For centuries, the Greater Caucasus region, encompassing the South Caucasus, the Russian North Caucasus, and proximate regions of Iran and Turkey, has been a zone of contestation and conflict between rival empires. During the three-plus decades since the collapse of the Soviet Union, this pattern of strategic competition has reemerged. While the immediate post-Soviet period was characterized by Russia’s struggle to maintain its inherited power and influence and rival efforts by the United States and its allies in Europe to promote the region’s integration with an expanded Euro-Atlantic West, the South Caucasus today confronts a much more complex dynamic, with not just Russia and the Euro-Atlantic West, but also Turkey, Iran, and others seeking to shape developments across the region.

The South Caucasus has always been a challenging region for outside powers to navigate. The intersection between internal political struggles, separatist conflicts, and Russia’s post-imperial intervention has left the entire region deeply fractured. Each of the region’s three states has a different strategic outlook—and aspires to create its own security architecture with the help of rival outside actors. Armenia, Azerbaijan, and Georgia have all been scarred by the legacy of conflicts touched off by the collapse of the Soviet Union, including Russian-backed separatist conflicts in the Georgian regions of Abkhazia and South Ossetia/Tskhinvali (1991–94), the First (1988–94) and Second (2020) Karabakh Wars, and Russia’s invasion of Georgia (2008). Because of the geographic, ethnographic, and historical linkages between the South Caucasus and the Russian North Caucasus, moreover, Russia’s two wars in Chechnya (1994–96 and 1999–2009) and ongoing low-level Islamist insurgencies in other parts of the North Caucasus have also spilled into the South Caucasus. To a lesser extent, so too have conflicts in the wider Black Sea region, including the war in Ukraine.

▲ Figure 1: The South Caucasus. Source: CSIS Europe, Russia, and Eurasia Program.

In the wake of the Soviet collapse, the interests of the Euro-Atlantic West aligned with those of ruling elites in Armenia, Azerbaijan, and Georgia to carve out an independent role and resist Moscow’s efforts to wall off the region within a Russian sphere of influence. At its most ambitious, the United States and Europe pushed to integrate the South Caucasus (along with other states from the former Soviet Union) into a Western-led order, including trade and financial institutions, as well as via partnership and cooperation agreements with the European Union and NATO’s Partnership for Peace. To varying degrees, leaders in Armenia, Azerbaijan, and Georgia viewed engagement and integration with these institutions and the development of bilateral ties with Western states as both an aspiration and a hedge against a potential Russian resurgence. For majority-Christian Armenia and Georgia, the vision of “rejoining” Western civilization after centuries of domination by Eurasian empires exerted a powerful lure. Even in energy-rich Azerbaijan, Western-style secular modernity and Western living standards appealed even though the authoritarian governments of Presidents Heydar Aliyev (1993–2003) and Ilham Aliyev (2003–present) did not seek to emulate Western political models. Western officials, meanwhile, perceived independent South Caucasus states as both a bulwark against a Russian imperial resurgence and as an emerging corridor for bringing energy and other goods to global markets, reducing Russia’s domination of transit.

U.S. and European influence in the South Caucasus has, however, been declining for many years. Launched after the failure of a U.S. bid at the April 2008 Bucharest Summit to gain allied support for bringing Georgia (and Ukraine) into NATO, Russia’s August 2008 invasion of Georgia was an inflection point. Then–Russian president Dmitry Medvedev announced that Moscow had intervened to secure its “privileged interests” in the region. For leaders in Baku and Yerevan as well as Tbilisi, the war was also a “signal that the liberal norms and principles of the post-Cold War order were no [sic] effective protection against Russia’s revisionist ambitions.” Indeed, U.S. and European engagement in the South Caucasus became more cautious as Washington and Brussels subsequently pursued a “reset” with Moscow that prioritized securing Russian help on issues like providing logistical support for NATO operations in Afghanistan and curtailing the Iranian nuclear program. Even before the outbreak of full-scale war in Ukraine in February 2022, a seasoned observer of the region noted that “long-standing declaratory policies about the region’s centrality in the West’s foreign policy are becoming less and less credible.” Regional analysts today speak of a vacuum produced by diminished U.S. and European attention and the growing involvement of non-Western powers across the South Caucasus.

Despite a litany of challenges—not least the staggering financial and human costs of the war in Ukraine—Russia remains the most significant regional power. Meanwhile, neighboring Iran and—especially—Turkey have become major players in the South Caucasus over the past decade. While Russia, Turkey, and Iran have diverging strategic interests, they share a commitment to managing regional tensions without reference to Western-led multilateral bodies or liberal norms. Thus far, China has a limited regional footprint, though it could become a major investor in projects like Georgia’s deep-sea port at Anaklia. Other extraregional powers, including India, Israel, Japan, South Korea, and the United Arab Emirates, have all taken a greater interest in the South Caucasus as well. Partnerships with these actors hold some potential to bring new investment to the region. They also coincide with the long-standing aspiration of the South Caucasus states—as well as their partners in the United States and Europe—to reinforce the sovereignty and independence of the smaller states that (re-)gained their independence when the Soviet Union collapsed.

At the same time, the growing prominence of non-Western powers in the South Caucasus is evidence that the U.S. and European strategy of enmeshing the region in Euro-Atlantic institutions has run its course. Since 2008, the region’s states have become warier of Western promises and more confident in maneuvering between and among outside powers. The world, too, has grown more multipolar thanks to decades of growth across the Global South, an economic slowdown in Europe, and chronic political uncertainty across the West. Moreover, Russia’s war on Ukraine and crises in the Middle East pose acute challenges to international security, as does China’s growing military power. With Europe’s efforts to wean itself off Russian gas, alternative supplies from the Caspian Basin will remain important, but the boom in U.S. fracking and the accelerated push to develop green energy provide mounting competition.

A new U.S. strategy for the South Caucasus must grapple with this evolving strategic landscape. It should accept that while the South Caucasus is not going to be a central priority for the United States, the region maintains a geostrategic importance that outstrips the size of its population or GDP. The South Caucasus has added importance for the European Union and for individual U.S. allies, including France and Turkey (two states whose relationship—including in the South Caucasus—is quite contentious). Prospects for the expansion of the European Union into the South Caucasus remain uncertain, and the expansion of NATO into the region is even less likely. Even in the most optimistic scenario, only part of the region may join Euro-Atlantic institutions at some unspecified future point, perpetuating the problem of regional fracture.

More broadly, all three states face limited options, prefer to hedge against risks, and will resist efforts to force them into binary choices. In contrast to the 1990s, Armenia, Azerbaijan, and Georgia will all have to balance among multiple partners. As much as the United States would like to see Russian, Iranian, and Chinese influence rolled back from the South Caucasus, Washington has limited levers to achieve this goal, especially since the region’s states lack confidence in Western staying power and are wary of taking risks that could expose them to retaliation from their larger neighbors. The war in Ukraine is only exacerbating these concerns, as governments and populations in the South Caucasus generally believe Russia will come out of the war with its imperial ambitions intact and with greater capacity for coercing its neighbors. Given these limitations, a U.S. strategy for the South Caucasus should focus on the following:

• maintaining a free and open South Caucasus and opposing efforts by regional powers to exclude Western influence

• encouraging Armenia and Azerbaijan to make peace, while limiting Russia’s ability to manipulate or disrupt the process

• promoting democratic change in Georgia and Armenia and assisting them to thwart kleptocracy, state capture, and Russian subterfuge

• aligning objectives and resources more closely with the European Union and the United Kingdom, with a special focus on France (for Armenia) and Turkey

• fostering regional integration and connectivity

• seeking an outcome to the conflict in Ukraine that represents a strategic defeat for Russia and raises the cost to Moscow of further imperial aggression

The New Geopolitics of the South Caucasus

While the United States played a central role in helping the South Caucasus region’s states consolidate their sovereignty and independence in the wake of the Soviet collapse, today, many regional observers see the United States as passive, reactive, and distracted by other priorities. This lack of focus on the South Caucasus dates to the aftermath of the 2008 Russia-Georgia war, which made clear that Georgia’s Euro-Atlantic integration would cause major complications with Russia. Ensuing NATO summits repeated the mantra that Georgia (and Ukraine) would become members of the alliance, even as officials in Tbilisi put less and less stock in Western promises. Interest in new energy projects in Azerbaijan meanwhile stalled amid the Great Recession and Europe’s push to phase out hydrocarbons. For a time, the South Caucasus remained on the radar of Western policymakers as a transit corridor to support operations in Afghanistan. Since the last U.S. forces departed in August 2021, it has been difficult for Washington or Brussels to make the case for why the South Caucasus should be a priority as they emphasize bolstering Ukraine’s resistance against Russian aggression and containing the fallout of the Israel-Hamas war on the wider Middle East, as well as devote increasing attention to the Indo-Pacific region, all while continuing the transition to non-hydrocarbon energy resources.

Nor has the focus on what the Biden administration’s National Security Strategy calls “strategic competition with major powers” resulted in much attention to the role that the South Caucasus and other parts of Eurasia should play in this new era of competition. Since the Second Karabakh War, U.S. priorities appear to be to “reduce Russia’s preponderance, counterbalance Iran’s influence, moderate [Turkey’s] role, and prevent the consolidation of authoritarian power among Russia, [Turkey], Iran, and Azerbaijan.” Yet a common refrain in Baku, Tbilisi, and Yerevan alike is that the United States and Europe no longer have a vision or strategy for the South Caucasus—that in failing to articulate the stakes or devote adequate resources to the region, the Western powers have themselves contributed to the vacuum that Iran, Russia, Turkey, and others are now rushing to fill. Reversing that trend requires Western officials to make the case for why the South Caucasus matters in an era defined by strategic competition.

Much of the region’s significance for the United States and Europe stems from its geography. Georgia (including Abkhazia) controls long stretches of the eastern littoral of the Black Sea, currently one of the principal theaters of the war between Russia and Ukraine. Moscow seeks to dominate the Black Sea militarily, which could, in turn, allow it to isolate Ukraine and influence the foreign policy choices of the other littoral states—including NATO allies Bulgaria, Romania, and Turkey. As the Ukrainian coastal defense has exacted a toll on the Russian Black Sea Fleet and carried out attacks against military infrastructure on the Crimean Peninsula, Russia has pulled many of its naval assets to the eastern Black Sea. As part of this redeployment, Moscow is building up the Abkhaz port of Ochamchire, where it has announced plans to build a new naval base—a step that risks the expansion of the war in Ukraine to Georgia’s internationally recognized territory.

The South Caucasus also sits astride a key transit corridor. With Russia and Iran under sanctions, the South Caucasus represents the only viable overland route between Europe and the interior of Eurasia. Should Moscow and Tehran succeed in building a regional condominium in the South Caucasus, they would be able to further isolate Central Asia from Western influence. They would also be able to build up new transit infrastructure—roads, railways, as well as “soft” infrastructure—to deepen bilateral cooperation and more effectively evade international sanctions. The exclusion of Western influence from the South Caucasus would be an important contribution to Moscow’s aspiration, supported by Tehran and other authoritarian revisionist powers, to build up an illiberal regional order in Eurasia, apart from and at odds with Euro-Atlantic structures. Such a regional condominium would further marginalize the United States and its allies, allowing Russia (potentially along with Iran and Turkey) to impose its own destabilizing solutions on the festering conflicts in Georgia and between Armenia and Azerbaijan. It would also have negative implications for democratic rule in both Armenia and Georgia, where Russia has arrayed itself on the side of illiberal forces challenging the democratic gains of the past 15 years.

For much of the 1990s and 2000s, U.S. and European governments worked with the private sector as well as their counterparts in the South Caucasus (mainly Azerbaijan and Georgia) to develop projects like the European Union’s Transit Corridor Europe-Caucasus-Asia (TRACECA), the Baku-Tbilisi-Ceyhan (BTC) oil pipeline, and the South Caucasus (Baku-Tbilisi-Erzurum, BTE) gas pipeline. The role of Western companies and support from Western governments gave the United States and Europe a stake in the stability and independence of the South Caucasus states. Projects like BTC and BTE also allowed Azerbaijan and Georgia to reduce their economic dependence on Russia, in turn enhancing their strategic autonomy and allowing them to deepen cooperation with the Euro-Atlantic community. Armenia, which was excluded from these projects because of the closure of its borders with Azerbaijan and Turkey, had little choice but to remain deeply dependent on Moscow. In 2018, Brussels launched a new EU-Asia Connectivity Strategy emphasizing “sustainable, comprehensive, and rules-based connectivity” across the transportation, energy, digital, and people-to-people sectors.

The economic and strategic benefits of such projects, however, were uneven. TRACECA never fulfilled its founders’ ambitions, as some states remained wary of what they perceived to be an EU-driven initiative. Due to the conflict over Nagorno-Karabakh, transit investment, including through the European Union’s Eastern Partnership, did not connect Armenia to Azerbaijan and Georgia. Meanwhile, the volumes of oil and gas available from the Caspian Basin supplemented, but were never expected to replace, European imports from the Middle East and Russia. Though China’s 2013 announcement of the Belt and Road Initiative (BRI) renewed attention on east-west transit, wariness of Beijing’s aims in Western capitals, along with China’s more cautious approach to investment and slowing growth, have tempered expectations. The EU-Asia Connectivity Strategy remains short on funding.

Despite such challenges, the salience of east-west connectivity, and of the states in the South Caucasus, will only increase. While the bulk of EU-China trade is seaborne, overland transit increased markedly in the years leading up to Russia’s full-scale invasion of Ukraine. Much of this growth occurred along the so-called Northern Corridor connecting China to Europe across Russia. While this route is more direct and utilizes existing infrastructure, sanctions and the broader effort to reduce Europe’s dependence on Russia have made it a less reliable option. Trade volumes along the Northern Corridor plummeted by half in 2023 and are unlikely to recover with Russia under sanctions and the European Union seeking to decouple economically from Russia.

With the fading of the Northern Corridor, the main overland route from Europe to the Caspian Basin and beyond runs through the South Caucasus along the Middle Corridor, which encompasses a series of transit projects linking manufacturing hubs in China to markets in Europe. First proposed by Kazakhstan in 2013, the Middle Corridor remains for now more concept than reality. Regional states are nevertheless taking concrete steps to build it out, particularly through the Trans-Caspian International Transport Route, a partnership between transport and logistics operators in Azerbaijan, China, Georgia, Kazakhstan, Lithuania, Turkey, and Ukraine. For now, the bulk of this trade is intraregional rather than transcontinental. Nevertheless, it is recasting Eurasia’s economic and strategic geography, helping consolidate a stronger regional identity not tethered to the Soviet or imperial pasts. Promoting this development and the infrastructure underpinning it should be a key pillar of U.S. (and European) policy in the South Caucasus as well as Central Asia.

Great Power Competition in the South Caucasus

Even as the salience of the South Caucasus as a transit node is growing, regional (and global) geopolitics is becoming more multipolar. If strategic competition in the 1990s and 2000s implied a tug-of-war between Russian and Western concepts of regional order, all three South Caucasus states now prioritize a kind of multi-vector foreign policy that enhances their freedom of maneuver and insulates them from excessive dependence on any one partner. Each, moreover, effects that multi-vector approach in its own way. This divergence represents a departure from hopes for increasing cooperation between all three South Caucasus states and the Euro-Atlantic West in the first two-plus decades following the collapse of the Soviet Union.

Russia

Although Russian influence in the South Caucasus has declined in recent years, Moscow still regards the region as a strategic priority. Today, Moscow and Washington (together with Brussels) each seek to exclude the other from resolution of the Armenia-Azerbaijan conflict, while their political rivalry inside Georgia has become more zero sum. While Moscow had long sought to manipulate the region’s multiple conflicts to position itself as the key power broker, the war in Ukraine and the fall of the de facto Nagorno-Karabakh Republic (NKR) to Azerbaijan have eroded Russia’s ability to employ hard power in the region. Instead, Moscow is now prioritizing geoeconomic tools while pursuing greater alignment with Azerbaijan (though Baku views Turkey as its main strategic partner). It is also trying to hold onto its remaining political and economic levers in Armenia, though Yerevan increasingly sees it as an untrustworthy partner. Once nearly frozen, relations with Georgia are now improving as Moscow is enhancing its influence through ties with oligarch Bidzina Ivanishvili and his ruling Georgian Dream (GD) party, which held onto power after a disputed election in October 2024. Accusations of electoral fraud have triggered massive protests, deepening Georgia’s political uncertainty and further imperiling its ties with Western states and institutions. Bringing Georgia more fully under its influence would allow Moscow to keep Armenia dependent and limit Western influence there as well. Russia is, meanwhile, making common cause with Turkey and Iran to pursue a kind of regional condominium in the 3+3 format. With Western sanctions likely to target the Russian economy for the foreseeable future, Moscow is looking to the South Caucasus and neighboring states as routes for evading sanctions and to create new outlets to global markets.

Starting with the Second Karabakh War, Baku’s decision to restore its sovereignty over Armenian-controlled Karabakh by force challenged Russia’s longtime policy of managing the conflict to maintain leverage over both belligerents. Unwilling to provoke a conflict with Azerbaijan (and its ally, Turkey), Russia instead adopted a conscious policy of tilting toward Baku—whose offensive against the NKR provided proof that post-Soviet ethnoterritorial conflicts could be resolved militarily. The new understanding between Baku and Moscow was cemented by the signing of a Declaration on Allied Cooperation on February 22, 2022, just two days before the full-scale Russian invasion of Ukraine that committed the two sides to “striving to raise bilateral relations to a qualitatively new, allied level … to enable the strengthening of regional and international security and stability.”

While Armenia remains a nominal Russian ally thanks to its membership in the Collective Security Treaty Organization (CSTO) and a Russian military presence, the government of Prime Minister Nikol Pashinyan has accused Russia of failing to live up to its commitments during or after the Second Karabakh War. Yerevan has subsequently prioritized diversifying its international partnerships and accelerating integration with Euro-Atlantic institutions. Moscow still retains significant leverage, however. Armenia is a member of the Russian-led Eurasian Economic Union, and Russia is Armenia’s largest trade partner by orders of magnitude. Russian Railways owns Armenia’s rail lines, while nuclear monopoly Rosatom controls the Metsamor Nuclear Power Plant. Russia also provides the bulk of Armenia’s gas. An additional source of concern is Russia’s role in the protest movement led by Archbishop Bagrat Galstanian that has emerged to oppose Pashinyan’s efforts at a peace deal with Azerbaijan. Armenian analysts also perceive Russian influence operating through the Armenian Apostolic Church, the media, and online influencers, among other channels.

In Georgia, Moscow pursues a dual-track strategy of “land capture and state capture” designed to create points of leverage over the ruling elite and, should that fail, to continue chipping away at Georgia’s territorial integrity. While the ruling GD party has prioritized détente with Russia, public opinion limits its ability to shift Georgia’s foreign policy axis—even if creeping autocracy and state capture also damage relations with the United States and European Union. In addition to cultivating the self-interest of the GD elite, the Kremlin leverages deep-seated fear of conflict and the social conservatism of many Georgians to spark discontent over Tbilisi’s commitment to Western integration. The Georgian Orthodox Church maintains close ties to its Russian counterpart and emphasizes a similar narrative about Western decadence. Leaked e-mails also show Russian financing for the far-right Alliance of Patriots. Russia’s military presence in the breakaway regions of Abkhazia and South Ossetia/Tskhinvali also allows it to hold the remainder of Georgian territory at risk and provides a foundation for its policy of “borderization”—that is, gradually advancing the line of contact between occupied and unoccupied territory.

Meanwhile, Russia’s invasion of Ukraine both exacerbated tensions with the West and bolstered the importance of the South Caucasus for Russian efforts to insulate itself from sanctions and craft a new regional order. Within this new paradigm, Azerbaijan’s location astride the lines of communication connecting Russia and Iran became increasingly important. In the short run, Russia needs access to Azerbaijan to bypass sanctions; over the longer term, it aims to enhance the transit potential of the so-called International North-South Transit Corridor (INSTC) to Iran and the Indian Ocean as an alternative to the Western-backed Middle Corridor. More broadly, Moscow seeks to build a new regional order for the South Caucasus that empowers local actors to manage disputes in ways that accord with Russian interests, while walling off the region from Western influence. To varying degrees, it shares this aspiration with Azerbaijan, Iran, and Turkey. Having lost its standing as the main power broker in the South Caucasus, Moscow seeks to use the region in its larger strategy of challenging Western influence and undermining Western international institutions.

China

China is increasingly active in the region as well, primarily through promises of infrastructure investment in the context of the BRI. China is Georgia’s fourth-largest trading partner and Azerbaijan’s second-largest source of imports (after Turkey). Beijing has also been on something of a diplomatic offensive in the South Caucasus. Cooperation on transit and converging approaches to global order have left China de facto aligned with Azerbaijan in its still-unresolved conflict with Armenia, though Beijing hopes that a peace deal will open new investment opportunities across the region. It is also investing in Georgia’s critical infrastructure, with an eye to expanding trade along the Middle Corridor.

▲ Figure 2: Road and Rail Link from Turkey to Azerbaijan (“Zangezur Corridor”). Source: CSIS Europe, Russia, and Eurasia Program.

China has long had close ties with Azerbaijan, which is “positioning itself as a vital node” on the BRI and cultivating Chinese investment in sectors beyond oil and gas. Beijing, in turn, appreciates Baku’s multi-vector foreign policy and commitment to building strategic infrastructure projects, such as the Baku-Tbilisi-Kars railway and the Baku International Sea Port, that enhance connectivity with Europe. Beijing also supports the creation of the “Zangezur Corridor”—a dedicated road and rail link from Turkey across Azerbaijan’s Nakhchivan exclave and Armenia’s southern Syunik region to “mainland” Azerbaijan—despite Armenian opposition and concern that the corridor would compromise its sovereignty—as well as the Russian-backed INSTC. China and Azerbaijan signed a strategic partnership on the sidelines of the July 2024 Shanghai Cooperation Organization (SCO) summit, prioritizing cooperation on trade and transit while highlighting support for “equal and orderly global multipolarity, and universally beneficial and inclusive economic globalization, and [the promotion of ] world peace, stability and development.” Soon thereafter, Azerbaijan applied to become both a full SCO member and a member of BRICS. Baku, meanwhile, is also cooperating with Beijing on the redevelopment of Karabakh, including partnering with the Chinese telecommunications firm Huawei to introduce its “smart city” technology in the liberated areas.

It would also like more Chinese investment in green energy and to become a regional hub for the manufacture of Chinese electric vehicles.

Beijing and Tbilisi signed a free trade agreement in 2018 and a strategic partnership agreement in August 2023 during then–Prime Minister Irakli Garibashvili’s visit to China. The two sides agreed to “facilitate mutual investment and trade and promote cooperation in the areas of transportation” and promised that Beijing “will study the provisions of preferential loans for Georgia’s implementation of social and infrastructure projects.” In May 2024, Tbilisi announced that a Chinese-led consortium had won the tender to construct the Anaklia deep sea port—four years after it canceled a deal with a U.S.-Georgian consortium (and arrested the Georgian partners on money laundering charges that some observers believe were politically motivated).

Turkey

Turkey’s emergence as a major player in the South Caucasus has been one of the most significant factors reshaping regional geopolitics. While Azerbaijan—which commentators in both countries refer to as “one nation, two states”—remains the centerpiece of Turkey’s South Caucasus strategy, Ankara views the entire region as part of its strategic geography. In part, this view is the product of the ruling Justice and Development Party’s (AKP) aspiration to position Turkey as a strategically autonomous middle power. It is also a longer-term response to the Soviet collapse, which created new opportunities to connect with Turkic and post-Ottoman regions across Eurasia.

While Ankara supported Baku during and after the First Karabakh War, recent years have seen a dramatic expansion of the Azerbaijan-Turkey axis, along with Turkey’s more active participation in regional affairs. Turkish support was instrumental in Azerbaijan’s victory in the Second Karabakh War, with Ankara providing not only modern weapons (including uncrewed aerial vehicles), but also training, operational and strategic command of Azerbaijani forces, as well as mercenaries from Syria. Particularly important were three decades of Turkish training that helped modernize and professionalize the Azerbaijani armed forces, helping create a post-Soviet military culture that adheres in many ways to NATO standards. Outside the military sphere, Turkey is building a pipeline to bring gas to Azerbaijan’s Nakhchivan exclave, which currently depends on gas piped from Iran. Completion of this project could reduce Iranian leverage over Nakhchivan (and therefore Baku). If extended to Armenia and “mainland” Azerbaijan, it could also help the region’s energy markets diversify and function as a pillar of the emerging Middle Corridor.

Relations between Turkey and Armenia have been officially frozen since Armenian forces captured the Azerbaijani city of Kelbajar in 1993, but the two sides are laying the foundation to open the border and normalize ties in the event of a peace deal between Yerevan and Baku. Ankara strongly supports Armenia-Azerbaijan peace, which would benefit its own economy and enhance its strategic leverage, but is wary of causing tensions in its relationship with Baku. Despite tensions over Turkish influence in the port of Batumi (subject at times to Ottoman control and with a significant Muslim population), Georgia has looked to Turkey for security assistance ever since the 2008 war with Russia. Tbilisi’s interest in security cooperation with Ankara has only grown as Georgia’s relationships with the United States and the European Union face increasing headwinds.

Turkey is also motivated by a growing interest in connectivity with the Caspian Basin and Central Asia. Ankara and Baku are both looking to the Central Asian states to develop the Middle Corridor and—potentially—for security partnerships echoing the Turkey-Azerbaijan alliance. Through the increasingly ambitious Organization for Turkic States (OTS) and bilaterally, Turkey and Azerbaijan alike see an opportunity to profit from Russia’s distraction with Ukraine by helping the Central Asian states develop new outlets to global markets and enhance their own strategic autonomy. One of Ankara’s main objectives in the settlement of the Armenia-Azerbaijan conflict is the establishment of something like the “Zangezur Corridor,” which would allow for a dramatic expansion of east-west transit and help connect Central Asia to markets in Europe through the South Caucasus. Though Turkey is amenable to the idea of a South Caucasus regional condominium with Russia and Iran, it remains a largely independent actor with deep ties to the West. Leveraging those ties as well as Turkey’s growing interest in Eurasia should be a fundamental component of U.S. and European strategy: if EU and NATO expansion to the region is a bridge too far, a more robust and balanced Turkish presence could be one of the most effective bulwarks against Russia’s imperial resurgence.

Iran

While U.S. officials accuse Iran of behaving as “more of a revolutionary movement than a country,” its approach to the South Caucasus mostly remains grounded in considerations of raison d’état. Wary of the centripetal attraction that Azerbaijan’s secular culture could exert on its own large Azeri population, Tehran sided with Armenia during the First Karabakh War and has remained one of Yerevan’s major partners ever since. The Islamic Republic stood by its strategic partnership with Armenia during and after the Second Karabakh War, with state-run media blaming Azerbaijan—along with Turkey and Israel—for starting the war. Iranian officials emphasize that any forcible change to borders in the Caucasus is a “red line” that would position hostile forces on the Iranian-Armenian border, threaten connectivity with Russia, and potentially leave Iran wedged between hostile blocs to the south (the Gulf states and Israel) and the north (Azerbaijan and Turkey).

Alarmed by the scope and scale of Baku’s triumph in the Second Karabakh War and the prospect of a stronger Turkish military presence in the South Caucasus, Tehran has more recently stepped up its gray zone activities targeting Azerbaijan—while also dangling carrots, including joint naval exercises in the Caspian Sea. Tehran has also explored deepening transit cooperation with Baku—a possibility Azerbaijan uses as leverage to encourage Armenia to give in on the issue of transit across Syunik. Such cooperation would create a building block for the north-south transit scheme that Moscow is seeking—though Iran’s (and Azerbaijan’s) commitment to making the necessary investments remains questionable. Since 2020, Tehran has prioritized reopening two rail lines from the Iranian city of Jolfa ( Julfa) to Nakhchivan, one of which could then extend to Yerevan and Tbilisi, and the other to Russia. For Azerbaijan, the prospect of restoring these lines could not only enhance connectivity to Nakhchivan, but also provide an alternative to the “Zangezur Corridor” in the event Baku and Yerevan cannot find a mutually acceptable framework for administering the route. It would also contribute to Azerbaijan’s strategy of building both north-south and east-west connectivity as part of its multi-vector foreign policy.

Perspectives from the Region

More so than in earlier eras, the states in the South Caucasus themselves have agency and the ability to act on their own preferences. Governments and people in the region are wary of being embroiled in the major powers’ conflicts. As a senior Azerbaijani official bluntly put it, “we hate the idea” of great power competition and would prefer to have productive relations with Russia, the United States, Europe, Turkey, and others all at once. This sentiment is shared, albeit with varying shades of emphasis, in Tbilisi and Yerevan as well.

In crafting a more strategic approach to the region, the United States and its allies will have to recognize that reality. They cannot demand exclusivity from states deeply bound by history, culture, trade, and other links to their larger neighbors and with governments committed to the idea of a multi-vector foreign policy, something they share with many other states in Eurasia—and beyond. Because of proximity and economic ties, the South Caucasus will likely be a higher priority for Europe than for the United States. With China as the “pacing challenge” that the United States faces over the next decade, there is general agreement in Washington about the need for allies and partners to take on more of the responsibility for their own security. In the South Caucasus, that means the United States will have to lean more on the Europeans and on Turkey to promote regional peace, stability, and openness.

Azerbaijan

Azerbaijan has been the most active practitioner of this new multi-vector diplomacy. More explicitly than its neighbors, Azerbaijan makes clear that it does not want to take sides in the emerging era of great power competition. Instead, Baku aspires to maintain cooperative engagement across the emerging geopolitical and ideological divides in world politics, insulate itself from both instability in the region and Western democratic ideas, and maximize its global leverage. President Aliyev emphasizes his country’s self-sufficiency and commitment to the principles of “mutual respect, good relations, and non-interference” while rejecting “attempts by some countries or groups to monopolize the voice of the international community.” This aspiration rests on Azerbaijan’s increased self-confidence, born of its crushing victory in the Second Karabakh War. Facilitated by Azerbaijan’s strategic alliance with Turkey (and military assistance from Israel), that triumph allowed Baku to restore control over the former NKR and the surrounding regions occupied by Armenia in the early 1990s. Baku’s success restoring its territorial integrity without Russian help sharply diminished Russian leverage; unlike Armenia and Georgia, Azerbaijan (strongly backed by Turkey) can now engage Moscow on something approaching an equal footing.

While Azerbaijan’s immediate focus remains on the South Caucasus, Baku has also emphasized raising its global profile as a middle power. Baku expended significant diplomatic capital to secure the right to host the UN Climate Change Conference’s 29th Conference of Parties (COP29) in November 2024 and is pursuing membership in emerging global governance platforms like BRICS. Beyond the South Caucasus, Azerbaijan maintains a close partnership with Israel. While this relationship grew out of a shared concern about Iranian intentions, it has not stopped Azerbaijan from pursuing pragmatic cooperation with Tehran on transit. The signing of a strategic partnership agreement with China in July 2024 suggests the increased priority Baku assigns to Beijing as well. Azerbaijan recognizes that cooperation with China will be critical for its aspiration to leverage its potential as a transit corridor as it seeks to reduce its dependence on hydrocarbons. At times, Baku’s global aspirations are a source of instability. Officials in Paris accused Azerbaijan (and Russia) of having a hand in the anti-French demonstrations that broke out in the Pacific territory of New Caledonia in the spring of 2024—presumably in response to France’s longstanding support for Armenia and the signing of a weapons deal with Yerevan several weeks earlier.

Azerbaijan’s outlook is shaped by its own experience with the protracted Nagorno-Karabakh conflict as well as Russia’s invasions of Georgia (2008) and Ukraine (2014 and 2022). The lesson Azerbaijan took from these conflicts is that alignment with the West will not deter Moscow from using force to imperil smaller countries’ sovereignty and territorial integrity, and that at the end of the day, Azerbaijan can only rely on itself (and Turkey) to secure its interests. Rather than remain an object of contention between Russia and the West, Baku seeks to position itself as a self-interested, self-sufficient player. As one senior Azerbaijani official put it, “instead of making trouble, we’re inviting people to make money” by positioning Baku as an impartial actor in the region’s emerging transit and energy nexus. At least in the short term, this strategy has created difficulties in Azerbaijan’s relations with the United States and its allies. So, too, has the reintegration of Karabakh and the ensuing flight of the Karabakh Armenian population, not to mention Azerbaijan’s increasingly authoritarian political model at a time when Armenia seeks to emphasize its democratic bona fides.

U.S. frustration notwithstanding, Azerbaijani officials emphasize that Baku remains “Western-oriented,” especially in terms of its economic and energy policy. Azerbaijan’s National Security Concept, adopted in 2007, emphasizes “integration into the Euro-Atlantic area as the strategic choice.” Today, however, officials and analysts acknowledge that Baku is careful in discussing Euro-Atlantic integration, not disavowing it in principle, but in practice following a policy of nonalignment that prioritizes relations with Turkey. Baku remains an important partner in the energy sphere, providing the gas that fills the pipelines comprising the Southern Gas Corridor (SGC) between the Caspian Sea and Europe. The planned expansion of the SGC would see Azerbaijani gas reach consumers in the Western Balkans, helping the region reduce its dependence on Russia. Azerbaijan also positions itself as a keystone state of the Middle Corridor, pointing to the dramatic expansion of freight traffic along its rail system since the start of the war in Ukraine. In contrast to Armenia and Georgia, however, Azerbaijan remains a strategic partner of Russia, secured in part through assurances that it is not actively pursuing Euro-Atlantic integration (nor is Azerbaijan seeking membership in the Eurasian Economic Union).

Baku’s narrative emphasizes that the West (including the United States) exhibits a systemic pro-Armenian bias. Azerbaijan complains that the United States and the European Union have not been evenhanded in their treatment of the country—pointing at the West’s lukewarm support for the principle of territorial integrity with respect to Karabakh, public criticism of Azerbaijan’s human rights record, and what it sees as the West’s failure to condemn the killing of Azerbaijani civilians during the Second Karabakh War. Congressional actions like the Armenian Protection Act, adopted by the U.S. Senate in late 2023 to block all U.S. military assistance, feed this narrative as well. As in many other authoritarian states, Azerbaijan’s government perceives U.S. democracy support as a form of hostile interference in its internal affairs and rejects the framing of its conflict with Armenia in terms of autocracy versus democracy. Coupled with perceptions of declining U.S. influence in the region, this ideological dimension has been instrumental in Baku’s effort to shore up relations with Moscow. Meanwhile, U.S. officials accuse Baku of systematically targeting alumni of U.S.-supported exchanges and recipients of U.S. grants as part of a campaign to bolster Aliyev’s rule. They likewise complain that, despite Baku’s invitation to “make money,” in practice it discriminates against U.S. and European firms.

As relations with the United States and Europe have cooled, Aliyev’s government has deepened its alliance relationship with Turkey. This partnership dates to the 1990s, when then-President Heydar Aliyev, the current president’s father, first spoke of Azerbaijan and Turkey as “one nation, two states.” Energy provided the foundation for this partnership, with Turkish leaders looking to Azerbaijan to diversify oil and gas supplies and establish Turkey’s role as an energy hub for Europe. Over time, cooperation expanded to new areas, including security. One of the main fruits of Baku’s participation in NATO’s Partnership for Peace, organized around a 2004 Individual Partnership Action Plan (IPAP), has been to create a vehicle for military-strategic engagement with Turkey.

Turkish support has thoroughly transformed Azerbaijan’s Soviet-legacy military culture, slashed corruption, and promoted NATO interoperability. Turkey was instrumental at the strategic, operational, and tactical levels in enabling Baku’s victory in the Second Karabakh War, including through the deployment of Turkish advisers on the ground and in the Ministry of Defense. In June 2021, Azerbaijan and Turkey adopted the Shusha Declaration (symbolically signed in one of the regions the two countries’ forces had liberated the year before), committing to “coordinating their foreign policies” and providing that “if … there is a threat or an act of aggression from a third state or states … the parties will hold joint consultations and … [seek to] eliminate this threat or acts of aggression.” One well-informed Azerbaijani analyst described these commitments as akin to NATO’s Article V.

This partnership with Turkey goes beyond the military sphere. Azerbaijan is a major investor in the Turkish economy and a source of energy—which in turn gives Baku significant leverage in Ankara. At the regional level, Azerbaijan is an active participant in the OTS, an increasingly ambitious grouping seeking cooperation on trade, transit, and—potentially—military affairs among Turkey, Azerbaijan, and the Turkic-majority Central Asian states. Growing attention to the OTS coincides with expanding regional energy cooperation, including a 2021 Azerbaijan-Iran-Turkmenistan gas swap deal and the resolution of longstanding disputes between Azerbaijan and Turkmenistan over Caspian energy fields.

The Azerbaijani-Turkish alliance also allows Baku to engage Moscow from a position of strength—especially because Moscow prefers Turkey’s presence in the region to that of the United States or the European Union. Officials in Baku contrast their own pragmatic approach to Russia with what they portray as the needlessly antagonistic posture of Tbilisi and Yerevan. Pragmatic cooperation with Moscow is also easier for Azerbaijan in part because its authoritarian political system does not pose an ideological challenge for the Kremlin the way that the post–Rose Revolution (Georgia) and post–Velvet Revolution (Armenia) governments do. While Armenia and Georgia see a Russia weakened by its misadventure in Ukraine as dangerous and unpredictable, Azerbaijan perceives an opportunity—both because Russia is now distracted and less capable of projecting military power in the South Caucasus, and because Moscow now has a greater need for Azerbaijan and its neighbors to develop new trade and transit routes to compensate for the impact of sanctions and the loss of the European energy market. Exports of Russian oil and gas through Azerbaijan increased substantially following the February 2022 invasion of Ukraine, which cost Moscow much of its European market.

Meanwhile, Aliyev has taken advantage of the new dispensation to curtail points of Russian influence inside Azerbaijan. Aliyev replaced pro-Russian officials, including former Presidential Administration head Ramiz Mehdiyev, with figures closely aligned with Ankara, temporarily blocked Russian media outlets, and hit back at perceived efforts to stir separatist sentiments among Azerbaijan’s Avar and Lezgin minorities. While opening itself to Russian investment, Baku has resisted pressure to align itself with or join the Russian-led Eurasian Economic Union, though Aliyev has suggested that could change if it would be in Azerbaijan’s interest to do so.

One of Russia’s remaining levers is the provision contained in the 2020 ceasefire for Russian forces to oversee the “Zangezur Corridor.” Both Russia and Azerbaijan want to see this corridor established: Azerbaijan because it would allow for direct connectivity to Nakhchivan (and thence to Turkey), and Russia because it would provide an alternative to the idea of a Western-controlled Middle Corridor. Nevertheless, Azerbaijan is at best ambivalent about the idea of Russian personnel deploying along the route. Baku’s agreement to drop the “Zangezur Corridor” issue as a precondition for signing a peace deal with Yerevan suggests a degree of flexibility in this respect.

Maintaining a positive relationship with Moscow also gives Azerbaijan cover to work with the West on high-priority issues, including energy cooperation and support for Ukraine. Azerbaijan currently supplies gas to 10 European states, and, in July 2022, signed a memorandum of understanding with the European Union to boost oil and gas exports, which expansion of the SGC would facilitate. Baku is now working with Georgia, Romania, and Hungary on a cable under the Black Sea to bring electricity to Europe; the importance of this route could grow with the implementation of Aliyev’s vision for expanding green energy production.

Notwithstanding its strategic partnership with Russia and resistance to joining Western sanctions, Azerbaijan also helps enable Ukraine’s resistance to Russian aggression—an aspiration that lines up with Baku’s own longtime emphasis on territorial integrity. About a month before the Russian invasion, Aliyev traveled to Kyiv, where he and Ukrainian president Volodymyr Zelenskyy adopted a joint declaration affirming their “commitment to provide mutual support for the sovereignty and territorial integrity of our countries within internationally recognized borders.” Azerbaijan has provided humanitarian assistance throughout the conflict, including energy to support medical services and reconstruction assistance. Beginning in early 2023, Russian officials accused Baku of sending weapons to the Ukrainian military. Though Aliyev eventually denied that Azerbaijan was providing lethal military assistance, Azerbaijani weapons (including mortars, ammunition, and aerial bombs) have wound up in Ukrainian hands. Baku has also been in talks to provide Russian gas to Ukraine through its own transit infrastructure once Kyiv’s deal with Russian Gazprom expires at the end of 2024. Aliyev has expressed a willingness to help mediate an end to the Russia-Ukraine conflict, though noting that Azerbaijan has never taken the lead in such efforts.

Despite Azerbaijan’s military successes, the lingering conflict with Armenia remains a threat to regional stability and the long-term prosperity of the entire South Caucasus. With the full reintegration of Karabakh (without its ethnic Armenian population), Azerbaijan now faces the temptation to continue leveraging its military superiority to extract further concessions even if—as many Armenians fear—doing so leads to a new war that could draw in outside actors and threaten Armenia’s very existence as a state. This temptation is all the greater because militant nationalism has become an effective tool for political legitimation for Aliyev. While Baku celebrates the restoration of its territorial integrity after three decades, its occupation of some Armenian border villages, the mass displacement of Karabakh’s ethnic Armenian community, and the erasure of Armenian cultural heritage are all creating new layers of resentment. Azerbaijan recognizes that a durable peace is also in its own interest, but, compared to Armenia, lacks a sense of urgency to strike a deal.

According to Azerbaijani officials, the biggest remaining obstacle to a framework agreement is the reference to Armenia’s 1990 declaration of independence from the Soviet Union in the preamble to its constitution. Baku sees this reference as problematic because the declaration of independence speaks of the “Reunification of the Armenian SSR and the Mountainous Region of [i.e., Nagorno] Karabakh.” While Pashinyan has accepted the principle of Azerbaijani sovereignty over the territory of the Soviet-era Nagorno-Karabakh Autonomous Oblast (NKAO), Azerbaijani officials and analysts worry that his decision may not be binding on a future Armenian leader—or the Armenian Supreme Court. Even if such concerns seem exaggerated given the departure of the Karabakh Armenian population, Baku wants to leave nothing to chance, especially since Pashinyan’s opponents continue using the Karabakh issue to score political points.

One encouraging aspect of the peace negotiations is the ability of Baku and Yerevan to make progress without outside mediators. Prior to 2020, Russia had been the primary go-between for Armenia-Azerbaijan negotiations, with the United States and France also involved as co-chairs (with Moscow) of the Organization for Security and Co-operation in Europe’s (OSCE) Minsk Group. Since then, the combination of Azerbaijan’s military triumph and Russia’s pullback from the South Caucasus has created a fundamentally new reality. Even as Moscow continues seeking to insert itself into the negotiations, both Baku and Yerevan have expressed a preference for meeting bilaterally. Diplomats from both the United States and the European Union have helped facilitate talks (much to Moscow’s chagrin) but have been content to allow Baku and Yerevan to hammer out the outlines of an agreement on their own. On the one hand, that approach has allowed the two sides to build up trust; on the other, it risks allowing talks to stretch on interminably if Baku is not, in fact, serious about reaching a final agreement. Russia also remains in the mix. If Washington, Paris, and Brussels fail to make a convincing case that they are committed to hammering out a framework agreement, it might be easier for Moscow to convince both Baku and Yerevan that its negotiating platform is more likely to bring results.

Armenia

Armenia’s approach to the South Caucasus and the world has undergone significant change since the Velvet Revolution of 2018 that brought Pashinyan’s government to power. While Pashinyan initially maintained a policy of “complementarism”—maintaining traditionally close ties with Russia while deepening Armenia’s cooperation with the Euro-Atlantic West—defeat in the Second Karabakh War and the effective collapse of relations between Moscow and the West over Ukraine have left Yerevan in an awkward situation. These developments forced Yerevan to acknowledge that Azerbaijan (with Turkey) had unassailable military superiority and that membership in the CSTO and nominal alliance with Russia were of little practical value. With limited options, Pashinyan has prioritized negotiating a peace deal with Azerbaijan and buying time for Armenia to recover from its twin defeats in 2020 and 2023. Seeking economic, political, and military support from the West is a key pillar of this strategy, but expectations need to be managed. Although Pashinyan remains popular, he faces mounting pressure at home and likely a limited window of opportunity to reach a deal with Baku.

With few other options available, Yerevan has since 2020 prioritized gaining support from the United States and other Western powers. With Georgia’s democratic experiment tottering, Armenia has attempted to position itself as the most democratic and pro-Western state in the South Caucasus. While this approach reflects genuine change in Armenian society and politics since the Velvet Revolution, it is also a strategic calculation to offset what Yerevan sees as Russia’s betrayal and the continued military threat posed by Azerbaijan. With U.S. and European assistance, Yerevan is seeking to trim Russian influence without provoking a violent response from the Kremlin. It is meanwhile also pursuing partnerships with other actors, leaning into its longstanding relationship with Iran and purchasing weapons from traditional ally France as well as from India, Greece, Cyprus, and others. Though relations with Tbilisi are good, Georgia’s political uncertainty also poses risks, especially since Armenia’s borders with Azerbaijan and Turkey remain closed, and it lacks other outlets to global markets (apart from Iran) should Georgia fall under Russian control.

Throughout its post-Soviet independence, Armenia’s strategic perspective has been shaped by recognition of the country’s vulnerability. Victory in the First Karabakh War—especially Armenia’s occupation of seven Azerbaijani districts outside of the Soviet-era NKAO—fed Armenian hubris but exacerbated the country’s insecurity by stoking resentment in Azerbaijan and creating a dangerously unstable regional order. Until 2020, Yerevan’s only option was to rely on Russian protection at the cost of accepting limits on its sovereignty. Russia has maintained a military presence in Armenia (centered at the 102nd Military Base in Gyumri) since the Soviet collapse. Under the terms of a 1997 Treaty of Friendship and Cooperation, border guards from the Russian Federal Security Service (FSB) were assigned to patrol Armenia’s land borders with Turkey and Iran, along with Yerevan’s Zvartnots International Airport. The 1997 treaty also contained a mutual defense clause, later supplemented by Armenia’s membership in the CSTO, whose charter commits members to “joint measures … for the creation of a practical system of collective security that ensures collective defense in the event of threats to security, stability, territorial integrity [or] sovereignty.” In exchange, Armenia was able to purchase Russian weapons at subsidized prices—a dubious benefit since Moscow was also selling (more advanced) weapons to Azerbaijan at market prices.

▲ Armenian gunner. Photo: Bumble Dee/Adobe Stock.

Yerevan expected that Moscow and the other CSTO members would help deter an Azerbaijani attack and—if necessary—intervene to repel it. During the Second Karabakh War, however, the Kremlin made clear that the CSTO mutual defense provisions did not cover Nagorno-Karabakh, while claiming it had “completely fulfilled all of its multilateral and bilateral obligations [to Armenia], including in the realm of military-technical cooperation.” Moscow was instrumental in ending the fighting and, with the deployment of its peacekeeping contingent, agreed to take on the obligation of protecting the ethnic Armenian population in what remained of the NKR. However, the peacekeepers’ failure to clear the Azerbaijani blockade of the Lachin Corridor between Armenia and Nagorno-Karabakh opened the door to Azerbaijan’s lightning offensive to retake the NKR in September 2023 and the ensuing displacement of the region’s Armenian population.

Many Armenian observers now see the November 2020 ceasefire as the “last gasp” of Russia’s role as a security broker for the South Caucasus. The failure of that ceasefire and the ensuing Azerbaijani reconquest of Karabakh cemented a long-brewing mistrust of Russia. It also catalyzed support for seeking closer ties with the United States and Europe, emphasizing Armenia’s post-2018 democratic breakthrough and prioritizing security cooperation to hedge against the possibility of a renewed war with Azerbaijan. Part of that strategy entails chipping away at sources of Russian influence. Since the fall of Karabakh, Yerevan has joined the International Criminal Court (whose prosecutors have charged Russian president Vladimir Putin with war crimes) and secured the removal of Russian border guards from Zvartnots Airport and the border with Iran. It has also begun taking significant steps in the security realm, including beginning to build up a new air defense system without Russian involvement. Official figures indicate that purchases of military equipment from Russia plummeted from 96 percent before 2020 to less than 10 percent today.

Critics of Pashinyan argue that the pivot away from Russia is more demonstrative than real and suggest that Yerevan is attempting to instrumentalize the threat from Russia to secure support from Western states. Like several other states in Eurasia and beyond, Armenia plays an important role in Russia’s efforts to evade sanctions. Armenia-Russia trade has increased from around $2.5 billion in 2022 to $10 billion in 2024; meanwhile, trade between Armenia and the United Arab Emirates has increased by more than 15,000 percent—presumably the bulk of this growth represents the illegal transfer of sanctioned items to Russia. Yerevan has been cautious, moreover, about not crossing perceived Russian red lines. Though Pashinyan announced that Armenia would withdraw from the CSTO, it has in fact only “frozen” membership. While Armenia boycotts CSTO meetings, it hosted the most recent Eurasian Economic Union summit in fall 2024. Negotiations on an updated Armenia-NATO Individually Tailored Partnership Program to replace the existing IPAP were halted—though local observers disagree over the cause. As one prominent opponent of the Armenian prime minister noted, the Kremlin has never treated or spoken of Pashinyan in terms similar to those it reserves for Zelenskyy or former Georgian president Mikheil Saakashvili, pointing out that public criticism of Pashinyan never comes from Putin himself, but rather from mouthpieces like Foreign Ministry spokeswoman Mariya Zakharova.

Whatever the nature of its approach to Moscow, Yerevan has in recent years prioritized expanding and further institutionalizing the Western presence both inside Armenia and in the wider South Caucasus. Despite the halting of talks on replacing the IPAP, Armenian officials emphasize that cooperation with NATO remains a “priority direction.” The U.S. held the bilateral Eagle Partner military exercises with Armenia in both 2023 and 2024. Armenia also seeks to further institutionalize relations with the European Union in the framework of the November 2017 Comprehensive and Enhanced Partnership Agreement—a compromise agreed when Armenia declined under Russian pressure to sign an association agreement with the European Union. Yerevan invited EU monitors to observe compliance with the 2020 ceasefire, and in 2023 welcomed an unarmed EU mission (the EU Mission in Armenia, EUMA) to “contribute to human security in conflict-affected areas in Armenia and contribute to build confidence between Armenia and Azerbaijan.”

While Baku (and Moscow) object to the EUMA’s presence, Armenian observers regard its deployment along the border with Azerbaijan as a strategic victory that enables trilateral Armenia-EU-U.S. talks and therefore helps bring in the “invisible hand” of Washington. Brussels and Yerevan then agreed on a new partnership agenda “establishing more ambitious joint priorities for cooperation across all dimensions” in February 2024 and agreed to open visa liberalization talks a few months later. Yerevan is now feeling out the response to a potential bid for EU membership. In the meantime, a new resilience and growth plan adopted in early 2024 aims to bolster Armenia’s access to the EU market and reduce its exposure to Russia. Yerevan regards these agreements in part as a mechanism for ensuring Western buy-in for its security.

France remains the key European power driving the EUMA and is Armenia’s most important partner in Europe. As part of Yerevan’s strategy of reducing its dependence on Russia, it has turned to France and other international partners for security assistance as well. In October 2023, Yerevan and Paris signed an agreement for the sale of French military equipment, including night-vision goggles, air-defense radars, and armored personnel carriers. Paris was also instrumental in efforts to use European Peace Facility funds to improve Armenia’s military readiness. Despite Hungarian opposition that delayed approval, the European Union agreed in July 2024 to spend €10 million on civilian protection, improving Armenia’s logistical capacity, and promoting interoperability. While Azerbaijani (and Russian) commentators criticized these deals, both Armenian and French officials emphasized their defensive nature. Armenia continues seeking additional weapons and equipment from France, including more openly offensive systems it could use to impose costs for further aggression.

France is not Armenia’s only source of non-Russian military equipment. Armenia is also seeking additional weapons sales from the United States, but officials are frustrated with what they see as Washington’s slow-rolling of purchase requests, especially for air-defense systems that the United States has prioritized for other theaters. In 2022–23, Yerevan signed a series of defense agreements with India amounting to more than $1 billion, including contracts for howitzers, rocket launchers, and air-defense systems. In 2024, India sent its first permanent defense attaché to Yerevan. The alignment between Armenia and India is a consequence in part of Pakistan’s alignment with Azerbaijan and Turkey, but also of New Delhi’s interest in the INSTC and other transit projects in the South Caucasus. Iran, too, is interested in these projects and has continued to support Yerevan despite Pashinyan’s efforts to cultivate ties with the United States and Europe. While Tehran and Yerevan have both denied thinly sourced news reports about Iranian weapons sales, Iran has spoken up for Armenia’s territorial integrity and threatened to intervene militarily in the event Azerbaijan attempts to force open the “Zangezur Corridor.”

One of the principal benefits for Yerevan of a peace deal with Baku would be to facilitate a resumption of ties with Turkey. Though Ankara appeared willing to seek normalization during the period of 2009–10 “football diplomacy,” it was dissuaded by the backlash from Baku. Today, Turkey has made clear that it will not open its border with Armenia or pursue normalization until the signing of a peace deal. Ankara and Yerevan are nevertheless both taking steps to move quickly once a deal is signed. In 2021, Ankara appointed a special representative for normalization with Armenia. Since then, Turkish president Recep Tayyip Erdoğan and Pashinyan have met on the margins of major events (most recently, the September 2024 UN General Assembly) and reached an agreement—still unimplemented—to open their mutual border to citizens of third countries. Armenian observers remain frustrated at the pace of negotiations, believing Ankara is on board with Baku’s strategy of extracting maximum concessions before striking a deal.

The restoration of Armenia-Turkey relations after more than three decades would upend regional geopolitics. It would allow Turkey to play a larger role as a transit state and security provider throughout the South Caucasus. Given Turkey’s importance to the United States and Europe, many in Yerevan also recognize that normalization with Ankara is critical to the larger strategy of seeking closer ties with the West. With Russia’s strategic retreat and the perceived waning of Western influence in Azerbaijan and Georgia, Turkey could emerge as the strongest power in the region. That prospect is a source of anxiety in Yerevan, given the long, complex history of Armenia-Turkey relations, the very close Azerbaijan-Turkey alliance, and Ankara’s openness to something like a regional condominium with Moscow and Tehran.

Some Armenian analysts and officials nevertheless see a larger Turkish role in the region and within Armenia as a potential hedge in the face of uncertainty about Western commitments and the possibility of a more aggressive Russia. Though Turkey is not exactly a Western state, it is a member of NATO and de jure a candidate for membership in the European Union. Unlike Russia, it would be unlikely to interfere to prevent Armenia or its neighbors from seeking deeper integration with either NATO or the European Union. And while Erdoğan’s government pursues both accommodation with Russia and the creation of a “Turkish axis,” it is not clear that a future Turkish government—especially one headed by the opposition Republican People’s Party—would maintain the same outlook. In addition to resentment over Turkey’s role in the Karabakh conflicts, skeptics of greater reliance on Turkey (including Archbishop Bagrat) worry about Armenia’s potential “vilayetization,” that is, being subsumed into a Turkish sphere of influence. The Karabakh issue also complicates this debate, as figures from the former NKR administration and their supporters oppose ceding greater influence to Ankara, given its role in the conflict and continued support for Azerbaijan.

Grappling with defeat in the Second Karabakh War, the fall of the NKR (and the flight of its population to Armenia), continued military inferiority, and the stance of both Russia and Turkey, Armenia badly needs an agreement to end the war with Azerbaijan. Unfortunately for Yerevan, the Azerbaijani side is aware of this desperation, which gives Baku an incentive to drag out the process. Pashinyan’s challenge lies in maintaining domestic political cohesion while finding a formula that will get Baku to “yes” and fending off Russian attempts to hijack the peace process for its own ends. Pashinyan has acceded to demands to recognize Azerbaijani sovereignty over the territory of the former NKR despite opposition from political rivals, former NKR officials, and influential diaspora organizations. Yerevan still worries about the potential for Azerbaijani aggression. Many Armenian observers would like for the United States and its allies to take a tougher line with Baku, above all by making clear that Azerbaijan would face unacceptable consequences for using force against sovereign Armenian territory.

While Baku has agreed to postpone the issues of ethnic exclaves left over from the Soviet era and the status of the rail and road connections between mainland Azerbaijan and Nakhchivan, the latter, in particular, remain obstacles to a lasting peace. Armenia insists that it will not compromise its sovereignty by allowing an extraterritorial transit corridor exempt from Armenian customs and border controls; it is for that reason that Yerevan rejects the term “Zangezur Corridor.” While Baku insists (officially) on fulfilling the terms of the 2020 ceasefire agreement calling for the presence of Russian security forces along the corridor, Yerevan argues that the ceasefire is, in other respects, already a dead letter given Azerbaijan’s offensive to retake Karabakh and the departure of the Russian peacekeepers. Armenian observers point out that Azerbaijan has other options for accessing Nakhchivan, and that the emphasis on the “Zangezur Corridor” is therefore about gaining political advantage or controlling territory. They also suggest that Baku may be carrying water for Moscow (or Ankara) by putting forward unacceptable conditions designed to prevent the conclusion of a final agreement.

Armenia is now moving ahead with plans to create an alternative transit project on its territory known as the Crossroads of Peace, aiming to supplement existing north-south road networks between Georgia and Iran with new east-west routes, including restoration of the railway between Yeraskh (Armenia) and Horadiz (Azerbaijan). While Yerevan promotes this Crossroads of Peace as an alternative that would obviate the need for the “Zangezur Corridor,” Pashinyan’s announcement was made without consulting the other interested parties in the region. Aliyev termed it a “PR exercise intended to prevent … the Zangezur Corridor.” Even as Baku has agreed to delay the resolution of the transit issue, Azerbaijani officials and analysts are critical, noting that while Armenia is not in a position to develop the Crossroads of Peace proposal on its own, international investors have little interest in a project that lacks buy-in from the wider region. Azerbaijan’s position is effectively that Armenia has a choice of either finding a mutually acceptable formula to implement the “Zangezur Corridor” or risk remaining isolated as the South Caucasus gradually reintegrates.

With an agreement to postpone the transit issue, the main obstacle to a framework deal appears to be Baku’s insistence that Armenia amend its constitution to break the link with the 1990 Declaration of Independence referring to Armenian sovereignty in Nagorno-Karabakh. Undertaking that kind of constitutional change requires Pashinyan to spend real political capital, especially as Armenia has grown progressively more democratic in recent years (Baku is therefore also demanding a referendum to ratify any constitutional change). Yerevan rejects the idea that an outside power has the right to dictate what can and cannot be in its constitution. Nevertheless, Pashinyan ordered the drafting of a new constitution, making explicit that Armenia nurses no claim to Karabakh. Because Pashinyan set a deadline of December 2026 for completing the constitutional overhaul, Baku will still be able to point to the constitutional issue as an obstacle to reaching a deal for at least another two years. Breaking this impasse will be among the principal tasks faced by international mediators in the interim. Even if the constitutional issue is resolved, Armenian analysts worry that Baku will start imposing new conditions, such as demanding the dissolution of the OSCE Minsk Group.

Georgia

Georgia’s trajectory has been equally complex. Officials emphasize that Tbilisi’s priorities remain the restoration of the country’s territorial integrity following the 2008 war with Russia and securing Euro-Atlantic integration—a stated objective since the 2003 Rose Revolution. Under the influence of its chairman, former prime minister and current honorary party chair Bidzina Ivanishvili, the GD has, however, overseen a process of state capture that has eroded Georgia’s (already imperfect) democracy and hollowed out institutions. Following October 2024 elections that saw GD return to power amid accusations of fraud, Tbilisi suspended EU accession talks, while still claiming that it would achieve EU membership by 2030. Some observers assess that what Ivanishvili ultimately wants is for Georgia to adopt the Azerbaijani model of a strongly centralized state capable of playing Russia and the West off against each other. Others assess that Ivanishvili wants to create a one-party state aligned mainly with Moscow’s interests.

Several Georgian analysts link this campaign to a dawning recognition by Ivanishvili and the GD elite that enhancing democratization and rule of law to qualify for EU membership would jeopardize their hold on power. State capture and kleptocracy are increasingly aligning the interests of Georgia’s ruling elite with Russia, where Ivanishvili made his fortune and maintains close business and political ties. While the GD appears motivated more by hanging onto power at any cost rather than on pulling Tbilisi into the Russian orbit per se, it shares an interest with Moscow in limiting the spread of Western influence and consolidating Georgia’s drift toward authoritarian kleptocracy. The hollowing out of the state, repression of civil society, and alienation of the West have created greater dependence on Moscow, which in turn is pressuring Tbilisi to make a more decisive break with the West. Some Georgian observers also worry that Ivanishvili could solicit Russian help to keep the GD in power in the face of large-scale popular mobilization.

For much of the past decade, GD leaders employed pro-Western rhetoric—while taking concrete steps that complicated or delayed Tbilisi’s path into Euro-Atlantic institutions. Former Georgian prime minister Garibashvili, of the GD, participated in NATO’s 2014 Wales Summit, where the alliance announced a Substantial NATO-Georgia Package (SNGP) to “strengthen Georgia’s ability to defend itself and advance its preparations for membership.” GD leaders also signed an EU association agreement in June 2014 and submitted a formal application for membership in March 2022, just weeks after Russia’s invasion of Ukraine. Though current officials, including Prime Minister Irakli Kobakhidze, continue touting Georgia’s EU and NATO aspirations, they have been sharply critical of Western “interference,” in the form of criticism directed against the Russian-inspired foreign influence law Tbilisi adopted in May 2024, or against efforts to manipulate the October 2024 elections in the GD’s favor. They have also engaged in a systematic process of purging the bureaucracy of Western-trained and openly pro-Western officials.

Georgia’s drift is in part a product of disappointment with the fruits of the Rose Revolution and the efforts of Saakashvili, who served two consecutive terms as president from 2004 to 2013, to deliver on promises of Euro-Atlantic integration. Saakashvili bet big on the United States and NATO, including with the deployment of Georgian forces to Iraq and Afghanistan. These efforts helped secure the 2008 NATO Bucharest Summit’s pledge that Georgia would eventually become a member of the alliance. They also delivered substantial U.S. and European support, which made Georgia among the largest recipients of U.S. financial assistance on a per capita basis. These investments, in turn, produced a cadre of well-trained, Western-oriented officials and activists who carried forward reform. These officials also gave the United States and the European Union a direct stake in Georgia’s future.

Georgian leaders (and much of the public) were subsequently disappointed by the Western reaction to Russia’s August 2008 invasion and occupation of South Ossetia/Tskhinvali and Abkhazia. Many Georgians believe that Saakashvili’s unbridled enthusiasm for the West cost the country its territorial integrity without bringing either security or prosperity. After Saakashvili’s United National Movement party was voted out of office in 2012, the new GD government promoted a policy of engagement and eventual normalization with Moscow, while attempting to maintain “strategic ambiguity” about Georgia’s place between Russia and the West. Though the two countries still lack diplomatic relations, GD governments have overseen the restoration of economic ties with Russia, which is now Georgia’s second-largest trade partner; the resumption of flights between Tbilisi and Moscow; and the establishment of a visa-free regime that allowed tens of thousands of Russians to relocate to Georgia in the months after the full-scale invasion of Ukraine. By a significant margin, most Georgians nevertheless continue favoring closer political and economic ties with the West, including integration with both the European Union and NATO.

Despite strong public support for Ukraine, the Russian invasion accelerated the GD’s turn against Western influence. Claims about a “Global War Party” seeking to have Tbilisi open a second front in the war against Russia resonated with Georgians still scarred by the 2008 war; one current official half-jokingly suggested there are two types of people in Georgia: “people who are afraid of Russia and people who are afraid of Russia very much.” In April 2024, Ivanishvili gave a speech lashing out at the West, claiming that “despite the promise made at the Bucharest Summit in 2008, Georgia and Ukraine were not allowed to join NATO and were left outside. All such decisions are made by the Global War Party, which has a decisive influence on NATO and the European Union, and which only sees Georgia and Ukraine as cannon fodder.” Georgian analysts and Western officials point to this speech as evidence of Russian influence over Ivanishvili or, at a minimum, evidence that as long as his version of the GD is in charge of the country, it will be impossible for Georgia to have normal relations with Western countries or institutions.

This rhetorical turn against the West has also provided cover for the GD’s domestic crackdown, including the adoption of a law against foreign influence in April 2024 and further curbing LGBTQ+ rights in October 2024. Analysts have different theories to explain the decision to adopt these laws in the face of overwhelming public opposition. Some observers see these laws as efforts by an exhausted and unpopular party to hang onto power; others see them more as a kind of down payment to Moscow, an acknowledgment that Georgia’s current rulers can be relied on to do what it takes to remain within what one called Russia’s “strategic perimeter.” In other words, the fact that such decisions complicate Georgia’s path to integration with the European Union and NATO may be precisely the point. Other analysts suggest that Tbilisi is trying to promote a bidding war between Moscow and Brussels for its loyalty or, like Baku, trying to appease Moscow on issues of high importance to secure greater strategic autonomy.

▲ May 2024 protest in Tbilisi, Georgia. Photo: Maiko/Adobe Stock.

Polls consistently show that restoring Georgia’s territorial integrity remains a higher priority even than Euro-Atlantic integration. Ahead of the October 2024 elections, GD-aligned figures hinted that Moscow could offer carrots related to these occupied territories after the election. In May 2024, Kobakhidze marked Georgian independence day by promising that Georgia would achieve EU membership by 2030 together with Abkhazia and South Ossetia/Tskhinvali. Russian officials finally were forced to deny GD-supported rumors that Moscow was open to making a deal that would return South Ossetia/Tskhinvali and Abkhazia to Tbilisi’s control in exchange for Georgian neutrality or pledges to join the Eurasian Economic Union. Russian foreign minister Sergey Lavrov later stated that Moscow would be ready to promote “reconciliation” between Tbilisi and the breakaway regions. However unrealistic the prospect that Moscow would return these territories, the GD recognizes that holding out the possibility of some kind of deal can work to its political advantage.

While Georgian foreign policy remains dominated by navigating the competition between Russia and the West, Tbilisi is also interested in diversifying its international partnerships. It has positive relations with Turkey despite tensions over Turkish influence in Muslim-majority areas of the country and Turkey’s wider ambitions in the Black Sea region. Like its neighbors, Georgia recognized the impact of Turkish military support in Azerbaijan’s victory over Armenia in 2020. Official circles in Tbilisi are interested in developing more of a strategic military partnership with Ankara, which has been involved for decades in protecting critical infrastructure in both Azerbaijan and Georgia. They worry, however, about the implications for Georgia’s sovereignty, especially since Turkey is—along with Russia—amenable to the idea of a regional 3+3 mechanism designed to wall off the South Caucasus from U.S. and European influence. Some suggest, however, that the United States could act as a third party in the Georgia-Turkey relationship to help Tbilisi engage Ankara more strategically—especially under a post-Erdoğan government.

China is increasingly visible in Georgia as well, even if regional observers are skeptical that Beijing regards the South Caucasus in general and Georgia in particular as priorities. Georgian critics note that while the 2023 Sino-Georgian strategic partnership mentions Georgia’s commitment to the One China principle, it does not include reciprocal language on South Ossetia/Tskhinvali and Abkhazia belonging to Georgia. China’s main interest is transit, notably Georgia’s role in the Middle Corridor. For Tbilisi, the partnership with China also offers access to financing (including from the Asian Infrastructure Investment Bank) and technology free from the political conditionality demanded by Western institutions, as well as an opportunity to hedge against the dangers of being caught in a direct Russia-West clash. One current official, critical of the GD, suggested that the ruling party believes both that “the future belongs to China” and that partnering with Beijing will help offset the costs Tbilisi has endured because of sanctions on Russia.

In May 2024, Tbilisi announced that a Chinese-Singaporean consortium had won the tender to construct Georgia’s first deep seaport at Anaklia for container shipping. For years, U.S. officials encouraged the project even though it was likely to have only marginal impact on U.S. economic interests and despite doubts whether such a port could be financially viable, as well as concerns whether its location adjacent to Abkhazia might expose it to political risk in the event of Russian frictions with Georgia. Tbilisi explained the decision to award the contract to the Chinese-Singaporean consortium as a consequence of receiving no other complete bids, though other commentators suggested the decision reflected a strategic decision to align more closely with Beijing. To concerns about the prospect of Chinese geopolitical influence, officials note that the Georgian government will retain a 51 percent ownership stake.

State capture and the GD’s accelerating authoritarian drift have created a dilemma for the United States and the European Union. On the one hand, Washington and Brussels have invested substantial resources in Georgia in the three-plus decades since its independence, especially since the Rose Revolution. These investments have had a palpable impact in terms of aligning Georgia with Western norms and standards. The Georgian public remains strongly Atlanticist in its outlook despite the GD’s blistering criticism of both the United States and the European Union (a criticism that officials claim is often employed instrumentally). Engagement, including the implementation of agreements like the European Union’s visa liberalization regime, allows Washington and Brussels to maintain connections with ordinary Georgians and keep the reservoir of pro-Western sentiment filled. It also encourages Tbilisi to continue cooperating behind the scenes on issues of importance to Washington, such as counterterrorism and law enforcement. Despite difficulties with the GD and Ivanishvili, bilateral U.S.-Georgia defense cooperation remains robust—even with Washington’s decision to “indefinitely postpone” the July 2024 Noble Partner joint exercise in response to accusations that the United States was seeking to drag Georgia into the Ukraine war. Though Saakashvili and his allies argue that the GD has been facilitating efforts to evade sanctions on Russia, U.S. officials state that Tbilisi has been proactive about information sharing and implementation of sanctions.

Maintaining an engagement policy amid the GD’s anti-Western turn and crackdown on civil society can, however, also look like appeasement of bad behavior, feeding a narrative that the West can be pushed around because it is afraid of “losing” Georgia to Moscow. As the internal situation deteriorates, Washington and Brussels have moved gradually to impose costs. These include the cancellation of Noble Partner, pausing Georgia’s EU accession talks, and imposing sanctions on individuals connected to “anti-democratic actions.” Following crackdowns on peaceful protestors in Tbilisi, the United States withdrew from its strategic partnership agreement with Georgia in late November 2024. Despite discussions about potentially sanctioning top officials, including Ivanishvili and Kobakhidze, Washington and Brussels have so far stopped short.

Elements of a U.S. Strategy for the South Caucasus

Despite the sharply diverging perspectives of officials and analysts in Baku, Tbilisi, and Yerevan, there is agreement in all three capitals on two topics: that the United States and Europe lack a clear or positive vision for the future (and are therefore unwilling to devote the resources necessary to show that the South Caucasus remains a strategic priority); and that they do not want to find themselves on the front lines of a new era of great power competition. Irrespective of whether the perception of Western distraction and vacillation is accurate, it matters insofar as it shapes the expectations and calculations of regional leaders. Challenging this perception of Western disinterest will require investment of greater time and resources, even if the South Caucasus will never be a first-order priority for either Washington or Brussels. It will also require pushing for a positive outcome in Ukraine, which observers in the region see as a bellwether for potential Russian aggression against other neighbors and for Western prestige and influence. An outcome that looks like a victory for Moscow will reinforce fears of continued Russian imperial aggression and the narrative of Western retreat and weakness sparked by the 2008 Russia-Georgia War. That outcome would reinforce Baku and Tbilisi’s desire to hedge, while leaving Yerevan further isolated.

In developing a strategic vision for a new era, the United States needs to avoid the trap of forcing the states in the South Caucasus—individually or collectively—to make binary choices between Washington and Moscow (or Tehran, Beijing, etc.). In other words, the United States needs to acknowledge the region’s complicated geography and ensuing vulnerability while avoiding raising undue expectations about NATO or EU involvement. That recognition does not mean abandoning the ambition to reduce Russian or Chinese influence, but rather accepting limits, working with allies, and understanding the priorities of regional leaders and publics. With those caveats, a new U.S. strategy for the South Caucasus should prioritize the following aims.

Maintaining a Free and Open South Caucasus

The most important goal for the United States is ensuring that the South Caucasus remains open to the wider world, that is, ensuring the independence, sovereignty, and territorial integrity of all three states and preventing the region from falling under the domination of one or more external powers. The idea of a free and open South Caucasus is in keeping with how the United States thinks about other strategically important regions characterized by a mixture of allies, partners, and rivals—including the Indo-Pacific and the Arctic. Rather than present leaders in Armenia, Azerbaijan, and Georgia with a binary “with us or against us” choice, the United States and its allies should focus on helping regional states improve their capacity and resilience to coercion by their larger neighbors (Russia above all). Doing so requires leveraging the interest of elites in Baku, Yerevan, and Tbilisi to maintain their own strategic autonomy—even if these elites will sometimes make decisions to which Western leaders object (including through cultivating ties with Russia, Iran, or China). It also requires accepting or even encouraging these states to deepen ties with other outside players—from Israel and the UAE to South Korea and India—for investment, military assistance, and diplomatic support.

As a former Georgian official argued, the United States and its allies would have more credibility if they could convince elites in all three countries that Euro-Atlantic states and institutions “are coming to the region forever.” In practice, that would mean ensuring a serious, credible path to Euro-Atlantic integration for interested countries, even if conditions at the moment appear unfavorable. It would also include developing and deepening military-to-military ties, even if stopping short of establishing a military presence. Failing that, limited numbers of trainers and observers (such as the EUMA and a similar EU Monitoring Mission in Georgia) can signal that Washington and Brussels have skin in the game. So, too, can Western investment in priority sectors of the economy, including infrastructure, clean energy, transportation, and others. Securing such investment will depend on creating competitive investment climates in the South Caucasus states, which the involvement of U.S. allies and partners can further strengthen.

The European Union and NATO should both develop credible plans (with timelines and conditions) for managing the aspirations of Armenia and Georgia to seek a Euro-Atlantic future. Relaunching EU accession talks with Tbilisi if and when Georgia returns to a more democratic path should be a priority. Brussels should also begin planning now for how to handle a membership request from Yerevan. While NATO is unlikely to bring in any of the South Caucasus states in the near future, the alliance should encourage all three states to deepen their participation in the Partnership for Peace consistent with their interests and capabilities. Whatever commitments NATO makes to Ukraine after the end of major combat operations should serve as a model for increasing ties and enhancing the resilience of democratic states in the South Caucasus as well. The United States should also encourage efforts by individual allies, including Turkey and France, to train and equip regional militaries and promote interoperability when doing so serves allied interests.

▲ Checkpoint on the road from Lachin to Khankendi (Stepanakert), Azerbaijan (formerly the capital of the de facto Nagorno-Karabakh Republic). Photo: Jeffrey Mankoff.

Advancing Armenia-Azerbaijan Peace

A lasting peace deal between Baku and Yerevan would fundamentally transform the South Caucasus. While a comprehensive deal seems distant, a framework agreement laying the foundation for mutual recognition and opening of borders appears within reach. Unfortunately, the window of opportunity will not remain open permanently. In Armenia, Archbishop Bagrat and others are encouraging the perception that Pashinyan is too passive and accommodating toward both Baku and Ankara. Any kind of breakthrough is unlikely in the months leading up to Armenia’s next election, which must be held by 2026. Meanwhile, it appears that Azerbaijan is waiting to see how the incoming Trump administration defines its priorities before committing to a deal, despite being willing to take incremental steps in the interim. Russia’s role could also be an important consideration for Baku. Thanks to these multiple political calendars, the first half of 2025 could offer an opportunity to bridge the remaining gaps between Baku and Yerevan, now principally centered on the issue of the Armenian constitution. Despite Aliyev’s demand for ironclad guarantees that seem difficult for Armenia to make, creative diplomacy, with the right mixture of carrots and sticks, might produce a formula acceptable to both sides.

The challenge for Washington and Brussels lies in simultaneously enhancing Yerevan’s security margin while coming up with the right inducements to convince Aliyev that he has more to gain from striking a deal now—one that would accord full legitimation on Azerbaijan’s reintegration of Karabakh and (conceivably) open the region up to Western investment. While Azerbaijani officials reject accusations that they are dragging out the negotiations, they claim that the West could do more to bring the talks to a successful conclusion. One official involved in the talks with Armenia suggested that the United States and Europeans need to “sweeten the deal” for Baku—even if only symbolically—to show that they value peace for its own sake and are not solely committed to supporting Armenia. The same official urged Western powers to engage proactively with Ankara to lay the foundation for opening the Turkish-Armenian border. Given the challenge of securing funding for hydrocarbon projects, green energy investment could be an area of particular focus. The U.S. administration will also have to hold the line against calls in Congress to impose additional sanctions on Azerbaijan. It should also, however, make clear to Baku that it will face unacceptable costs—including personal sanctions and asset freezes targeting top officials—if it carries out military actions that imperil Armenia’s territorial integrity.

Armenia, meanwhile, wants more assurances related to its security should it sign a deal. Even if it does not provide weapons, the United States could allow Armenia to source more U.S. dual-use capabilities, continue the annual Eagle Partner exercises, and, with other partners, consider establishing a consular presence in Syunik to provide additional reassurance. As much as Baku objects to the presence of the EUMA and France’s role (though not, interestingly, India’s) in building up Armenia’s military, such reinforcement to restore something like a balance of power is a necessary part of the package.

A peace deal would also advance prospects for agreement on the fraught issue of the “Zangezur Corridor.” Having Armenian buy-in for the expansion of transit across Syunik would advance the cause of regional integration and improve prospects for the Middle Corridor. Without sustained Western attention, however, the regime governing the eventual “Zangezur Corridor” will likely tilt more toward the interests of Russia. Once an Armenia-Azerbaijan framework agreement is in place, therefore, the United States should remain engaged with Baku and Yerevan to work out the parameters of a mutually acceptable arrangement that reflects liberal principles and prioritizes the shared U.S. and European interest in enhancing east-west transit.

Committing to a Democratic Georgia

The full impact of Georgia’s October 2024 elections will take time to sort out. The United States and the European Union should continue to find ways to strengthen independent civil society while imposing costs on Ivanishvili and high-ranking members of the GD for electoral manipulation and postelection violence by state actors. Given the scale of U.S. and European investment in Georgia’s post–Rose Revolution democratization, both Washington and Brussels have incentives to encourage its continuation, along with Georgia’s opening to the West, while recognizing that under GD rule, Georgia is becoming both more authoritarian and hostile to the West. Georgia’s future matters for geopolitical reasons as well. Should Tbilisi take a strong anti-Western turn or invite further Russian influence, the United States and Europe will also lose leverage with Azerbaijan and—especially—Armenia, which depends on Georgia for its access to Europe.

Ahead of the October vote, the European Union suggested that Tbilisi’s candidacy could be jeopardized if it did not follow through on promised reforms and/or if the elections were not free and fair. Brussels also warned that it could impose a “temporary suspension” of the visa-free regime. While further negotiations on EU accession are impossible under current conditions (even if Tbilisi were to reverse its freezing of the accession process), suspension of the visa-free regime would be counterproductive, primarily affecting the large pro-Western contingent in Georgian society who travel regularly to Europe. Targeted travel bans would be more effective. Whatever happens, Washington and Brussels should maintain a strong commitment to the Georgian people, who remain, on the whole, supportive of Georgia’s European future, and to the strengthening of independent civil society.

Despite the GD’s hollowing out of the Georgian state, many career officials and members of the armed forces remain ardently pro-Western. The United States and Europeans should do what they can to maintain ties with these cadres while sustaining cooperation on issues like counterterrorism, sanctions implementation, and law enforcement. That means maintaining the visa-free regime, offering refuge to embattled democracy campaigners (if necessary), and ensuring that the consequences of democratic backsliding target the individuals responsible for designing and implementing them.

Washington made a good start in suggesting that it was preparing a sanctions package targeting Ivanishvili and other senior officials personally. It should expand the list of senior officials, GD operatives, and members of the security services it is prepared to sanction, especially following the post-election crackdown on protestors and members of the opposition. The loyalty of some of these individuals—even GD members—to Ivanishvili is questionable, and many could likely be persuaded to avoid illegal actions that would jeopardize their access to Western assets or travel. If and when Georgia achieves a genuine democratic breakthrough, the United States and the European Union should be prepared to move quickly with new assistance to consolidate these gains and encourage the new government to move quickly on reforms. Possible steps include resuming high-level dialogue, encouraging investment in priority development projects like the Black Sea electricity cable, and liberalizing trade.

Enhancing Coordination between Allies

For the United States to maximize its impact in the South Caucasus, it needs to work more closely with allies whose stake in the South Caucasus is more direct—above all, the European Union and its member states, the United Kingdom, and Turkey. Georgia and possibly Armenia are contemplating a potential future inside the European Union, while Azerbaijan considers Turkey as its closest friend. Ankara sees the European Union and individual European states like France as outside meddlers in the South Caucasus, while Brussels sees Turkey as a destabilizing force that remains uncomfortably close to Moscow. The combination of deepening EU involvement with Armenia and Turkish support for Azerbaijan risks exacerbating the region’s fissures but also creates potential leverage to support diplomacy between Baku and Yerevan.

Turkey remains the region’s biggest wild card. Ankara has worked out a modus vivendi with Moscow based on partially overlapping aspirations to reshape the global order and a strong personal relationship between Erdoğan and Putin. Turkey might not take action to oppose Russia’s vision of a regional condominium in the South Caucasus; just as it prefers littoral states take responsibility for the security of the Black Sea, it remains open to regional management of conflicts in the South Caucasus. At the end of the day, however, Turkey remains a NATO member and key ally of the United States. It has benefitted from the erosion of Russian power in the South Caucasus, which facilitated its alliance with Azerbaijan and its contributions to the economy and security of Georgia. In the event of a peace deal between Armenia and Azerbaijan, Turkey’s involvement could have a transformative impact on the entire region. Should that happen, Armenia as well as Georgia will want the United States and the European Union to provide reassurance that enhanced Turkish influence will not come at the expense of their sovereignty or vital interests.

Officials and observers around the region have taken note of Ankara’s success at modernizing and upgrading the Azerbaijani military, a process that rooted out much of Azerbaijan’s Soviet-era strategic culture and facilitated greater NATO interoperability. While the Turkish-Azerbaijani relationship is unique, it provides something of a template for leveraging Turkish interest to accelerate the region’s post-Soviet transformations in ways that will make all three states more secure and more resilient to Russian influence. However, Georgia and—even more—Armenia remain wary of Turkish ambitions. Armenia’s deepening strategic partnership with France provides it a measure of needed reassurance but may not be sufficient on its own.

The United States is the only actor capable of managing these tensions and providing the assurances that Armenia and Georgia will need to pursue greater cooperation and coordination with Ankara. Washington should make cooperation in the South Caucasus a priority in bilateral relations with Ankara, helping to channel Turkish interest in directions that enhance stability and security for the entire region while creating another area of mutual U.S.-Turkish coordination. Better aligning U.S. and Turkish interests in the South Caucasus can help pull Ankara away from supporting the idea of a regional condominium with Russia and Iran (while the perception of declining U.S. interest in the region would only reinforce the Erdoğan government’s interest in making common cause with them).

The United States and Europe should encourage greater Turkish economic and strategic engagement in the South Caucasus as a joint endeavor, not as an alternative to declining U.S. and European interest. They will have to counter the perception that greater Turkish involvement amounts to the abandonment of Armenia and Georgia by the West that will result in their eventual “vilayetization” by continuing to invest in Armenia and Georgia’s (subject to internal developments) democratic transformations while maintaining bilateral trainings, support for independent civil society, and other forms of engagement. The United States can also help bridge the gaps between its allies France and Turkey in the South Caucasus, especially if an Armenia-Azerbaijan peace agreement allows Paris and Ankara to stop looking at the region as an arena for proxy competition.

Promoting Regional Integration and Connectivity

As in the 1990s, the ability of the South Caucasus states to maintain their sovereignty and independence demands that governments have legitimacy and can engage productively with the outside world. Enhanced connectivity in the form of pipelines, railways, roads, electricity cables, and the like is critical for insulating all three states in the region from dependence on their larger neighbors. The 1990s mantra “happiness is multiple pipelines” remains relevant in today’s era of shifting energy demand and mounting strategic competition; that is why the Middle Corridor concept is so appealing to governments in Baku, Yerevan, and Tbilisi. Compared to the 1990s and early 2000s, though, the interest of Western governments and international financial institutions (IFIs) in boosting transit infrastructure across the South Caucasus lags. The shale revolution and the emergence of other global energy sources have diminished the relative importance of Caspian energy. At the same time, Western budgets are stressed, the interior of Eurasia occupies a less prominent place in Western geopolitical thinking, and the push to reduce hydrocarbon demand complicates efforts to invest in new pipelines or production sites. Nevertheless, promoting connectivity and regional integration remains a critical element in ensuring that the South Caucasus remains fully sovereign and independent in an era of great power competition.

As in the 1990s and early 2000s, the United States and Europe should prioritize investment in new infrastructure projects to promote connectivity and regional integration. While oil and gas pipelines were the focus of earlier efforts, today the focus should also include, along with SGC expansion, railways, roads, airports, power grids, clean energy generation, and similar projects (particularly since Western-backed development institutions are now reluctant to invest in hydrocarbon projects). It can also diminish the appeal of Russian-backed projects like the INSTC that struggle to attract funding because of sanctions and Moscow’s larger economic uncertainty. Azerbaijan’s stated interest in clean energy in the context of its COP29 chairmanship and commitment to reconstruction in Karabakh provide an immediate opening. Funding for such projects will have to come primarily from private sector sources (which will only invest in projects with a reasonable prospect of financial viability). Governments and IFIs can, however, set priorities and catalyze private sector interest, as they did in the early 2000s with the BTC pipeline. They can also help the South Caucasus states develop regulatory and policy frameworks for managing such projects.

Priority should go to projects that enhance connectivity between the South Caucasus and Europe via Turkey and/or the Black Sea, such as the ongoing Black Sea power cable project. In the short term, such investment incentives can be offered to both Baku and Yerevan to follow through on a framework agreement and the opening of the border. Over the longer term, credible commitments to invest in infrastructure can improve access to Europe, along with promoting intraregional integration. The political fragmentation of the South Caucasus has a reciprocal relationship with economic fragmentation. Building greater economic interdependence among the region’s three states—once Armenia and Azerbaijan have found a stable modus vivendi—would further align their interests and develop common perspectives on their shared challenges.

Shared infrastructure would also create a platform for regional political cooperation. Because of the diverging political and economic perspectives of the region’s three states, the South Caucasus rarely functions as a cohesive region, allowing outside powers to play the three states off against one another. While developing a common regional identity and habits of regional cooperation is a task for leaders in Baku, Yerevan, and Tbilisi, the United States and the European Union can provide support and encouragement. Here Central Asia offers a useful analogue: the United States was instrumental in promoting the C5+1 format (i.e., the five regional states plus the United States) as a framework for addressing common challenges. With time, regional states developed their own C5 platform for managing regional challenges and engaging with other outside powers. After an Armenia-Azerbaijan framework agreement, Washington and Brussels should encourage a similar C3+1 (or C3+2) format for the South Caucasus. The Central Asian version took off in part because of consistent high-level U.S. engagement; a similar commitment from senior leaders at the State Department, White House, and other agencies would be necessary in the South Caucasus as well.

Conclusion

The emergence of great power competition as an organizing principle in world affairs overlaps with and is contributing to the current moment of flux in the South Caucasus. Whatever else they disagree on, leaders and analysts in Baku, Yerevan, and Tbilisi agree that the West has reduced its interest and lacks a positive vision for the region, and has been too reactive in the face of renewed Russian, Iranian, Chinese, and other engagement—in part because of the war in Ukraine and other urgent global challenges. They also agree, however, that it would be disastrous for the region to become an arena for great power competition.

If the emphasis of U.S. and European policy was for many years to bring the South Caucasus (as much of it as possible, anyway) into a Western-led regional order, today, the challenge lies in preserving the ability of the South Caucasus states, collectively and individually, to pursue their own interests at the interstices between the competing great powers. That ambition may be more limited than what the United States and the European Union hoped for in the early 2000s, but it is in keeping with the need for both Washington and Brussels to prioritize and shepherd resources as they face a wider array of problems around the globe. Allowing the South Caucasus to follow its own development path and ensuring that it remains open to the wider world would benefit the region and its people. It would also contribute to the larger imperative of preventing the emergence of a regional condominium among authoritarian, revisionist powers seeking to wall off Eurasia from Western influence.

Jeffrey Mankoff is a distinguished research fellow at National Defense University’s Institute for National Strategic Studies (INSS) and a senior associate with the Europe, Russia, and Eurasia Program at the Center for Strategic and International Studies (CSIS) in Washington, D.C. His research focuses on Russian foreign policy, Eurasian geopolitics, and the role of history and memory in international relations.