The return of the Nagorno-Karabakh region to Azerbaijani sovereignty marks the most significant event of 2023 for both Baku and Yerevan. After decades of crisis, permeated by wars and skirmishes, the standoff found its resolution following a swift offensive by Azerbaijani forces on September 19. This offensive ended almost 30 years of autonomy, with regional authorities surrendering a day after the rapid fall of their armed formations, which could not withstand the advance of the numerically superior and better-equipped Azerbaijani forces.
As swiftly as the Azerbaijani military operation concluded, the dilemma of the Armenian inhabitants' fate, who had been the overwhelming majority in the region, came to a near-final close. Collectively, they decided to move to Armenia amid concerns about potential genocide, which Baku vehemently denied.
With the disbanding of the regional authorities and Yerevan's formal acquiescence to the new reality, relations between Baku and Yerevan have entered a new phase. Armenian Prime Minister Nikol Pashinyan admitted that transferring sovereignty over Nagorno-Karabakh to Azerbaijan was inevitable due to the 2016 negotiations, but this matter was never discussed in Armenia due to psychological and emotional reasons.
Baku has begun integrating the region back, facilitated objectively by the mass exodus of Armenians from Nagorno-Karabakh to Armenia. Azerbaijan plans to resettle more than 140,000 former refugees in the region by the end of 2026.
Lingering Issues
Despite statements of readiness to negotiate a peace agreement from both countries' officials, their views on the region's economic future appear contradictory. Armenian Prime Minister Nikol Pashinyan introduced a "world crossroads" initiative to develop transport connectivity with all neighbors – Georgia, Azerbaijan, Iran, and Turkey. However, Hikmat Hajiyev, the Assistant to the Azerbaijani President, retorted that Baku no longer needs the corridor across Armenian territory.
Another significant issue is border demarcation. Yerevan believes Soviet-era maps from 1975 should form the basis for this task, with Pashinyan affirming that Armenia recognizes Azerbaijan within Soviet borders. Azerbaijani President Ilham Aliyev insists on "fair terms" to resolve the border issues but has not provided specifics.
The unresolved matter of prisoner exchange and the search for missing persons persists. Yerevan claims the fate of 1016 Armenians remains unknown, while Baku speaks of nearly 4000 missing citizens, amid mutual accusations of inflating figures.
Baku demands Yerevan's agreement on constructing the Zangezur corridor, a critical route linking mainland Azerbaijan with Nakhchivan and Turkey. Baku insists the road must have extraterritorial status to prevent Armenian border guards from inspecting vehicles. In response, Yerevan expresses interest in opening regional communications but not at the expense of national sovereignty.
Relationship with Russia
The emerging geopolitical changes cast their shadows on both countries' internal situations, bringing domestic repercussions with external dimensions. Armenian political analyst Armin Bailan believes Azerbaijan's military operation has negatively impacted Armenia's internal politics, increasing public discontent with the current government and hinting at shifts in political alliances at the next electoral crossroads.
Bailan explained that a growing sentiment supports closer alignment with Western systems, potentially at the expense of historic ties with Russia. This sentiment was strengthened by Moscow's restrained response during Azerbaijan's offensive, limited to a peacekeeping role and securing Armenian population displacement.
The political analyst points out that while there is a strong inclination toward Western integration, skepticism remains, with lessons drawn from the Ukrainian experience and fears of Western abandonment. Moreover, Russia's observer status in the Nagorno-Karabakh situation is rationalized by Yerevan's own acknowledgment of the region as Azerbaijani territory, making it unreasonable to expect Russia to be "more Armenian" than the authorities in Yerevan.
Diminished Victory
Despite the cessation of the Nagorno-Karabakh conflict and the successful reclaiming of territory by Azerbaijan in 2020, issues remain unresolved. These include matters related to "pockets" of Armenian-populated areas embedded in Azerbaijani territory during the Soviet era and Azerbaijani villages engulfed by Armenian land post-Soviet Union.
Expert in Caucasus affairs Tofiq Jibrilov explained that Baku's policy toward Nagorno-Karabakh has focused on swift resolution and closing the chapter on the region to start a new phase in the country's contemporary history. However, he noted that public sentiment for a complete victory would wane as these unresolved matters surface in normalization talks, which are progressing with considerable hesitation.
Until these issues are settled, Jibrilov predicts a prevailing sense of incomplete victory and the Azerbaijani discourse will be dominated by this sentiment in the coming years. President Ilham Aliyev must, at a minimum, complete the reintegration of the remaining territory before the Russian peacekeeping mission concludes in 2025.
Economically, Azerbaijan has also scored a victory by regaining the resource-rich Nagorno-Karabakh, replete with precious and semi-precious minerals like gold and copper. It is anticipated that mining and processing companies will become a primary fiscal resource, bolstering President Aliyev's popularity and influence.
