by Thomas Wash | PDF

After a six-week war, Armenia regretfully conceded some of the disputed region of Nagorno-Karabakh to its longtime rival Azerbaijan. Making matters worse, Armenian President Armen Sarkisyan admitted that he wasn’t even involved in discussions regarding his country’s surrender. As of today, ethnic Armenians have evacuated the conceded regions, while Russian peacekeepers have moved in to ensure a smooth transition. Although the peace treaty appears to be holding, it isn’t clear that this conflict is fully resolved. However, the Nagorno-Karabakh conflict does appear to have caused a seismic shift in the power dynamics within the Caucasus.

The Caucasus has long been dominated by the Russia, but regional conflicts appear to be undermining its standing. The most recent standoff between Armenia and Azerbaijan has not only allowed Turkey, a NATO member, to encroach on traditionally Russian territory, but it has also given Turkey a stage on which to demonstrate its improved military capabilities. Even though this is the third conflict in which Turkey and Russia have taken opposing sides, the others being Syria and Libya, it doesn’t appear the two countries are on course for direct conflict. That being said, as the West continues to withdraw from the region, it is likely that Turkey will look to fill the void.

In Part II of this report, we will focus on the significance of the Nagorno-Karabakh conflict in understanding the global shift in geopolitical dynamics. We will begin with a broad overview of frozen conflicts, particularly after the collapse of the Soviet Union. Afterwards, we will discuss the West’s influence and its subsequent decline in mediating conflicts outside of its borders. We will then discuss the rising prominence of regional powers in resolving these issues and what it could mean for the West going forward. As usual, we conclude this report by discussing possible market ramifications.

Read the full report