Bordered by the Black and Caspian Seas and the Greater Caucasus mountain range, the three countries of the South Caucasus, Azerbaijan, Georgia, and Armenia, still suffer from political tensions with one another and with their larger neighbors. The region, which has historically functioned as an important economic and transport corridor, is grappling with the challenges of post-Soviet independence and unresolved conflicts in the three breakaway territories of Nagorno-Karabakh, Abkhazia, and South Ossetia.

In an event to mark the launch of his new book, The Caucasus, An Introduction, Thomas de Waal discussed the South Caucasus and the misperceptions surrounding it, calling for better understanding of the South Caucasus as a single region. Susan Glasser from Foreign Policy moderated.

Ongoing Problems

With the collapse of the Soviet Union and the conflicts that accompanied it, the South Caucasus was thrown into a complicated and fractured condition, de Waal said. The borders between Armenia and Azerbaijan and between Georgia and Russia are entirely or partially shut, the result of tensions between neighboring countries. Along those borders that remain nominally open, bureaucratic barriers impede free trade. Poverty and unemployment remain high across the region, as do the numbers of refugees and displaced persons.

A Single Region

The South Caucasus is a single region and would benefit from being perceived as such, de Waal emphasized. Georgia, Armenia, and Azerbaijan are united by geography, shared culture and traditions, similar political cultures and a shared history of Russian rule. There is significant human potential across the South Caucasus that remains unrealized due to the tensions and bureaucracy that prevent the countries in this region from working together in a unified fashion. But the region still has the potential to function as a shared economic space and communications corridor.

Three Mirages

De Waal outlined three “mirages,” or misperceptions, which have informed the general wisdom on the South Caucasus but have helped to exacerbate the economic, political, and social situation in the region.

  • The “Great Chessboard” mirage. One inaccurate perception of the region is that outsiders manipulate the countries of the South Caucasus in order to further their own strategic interests, de Waal said. In fact, the local players are more powerful than they look and the region has remained strong enough to resist assimilation for centuries. If this misconception were true, de Waal pointed out, Azerbaijan, Armenia, and Georgia would not be independent countries today. The region is more accurately described as a castle of dominos—an unstable construction in which dislodging one piece can topple the others. 
  • The “Russian bear” mirage. While Russia remains the most powerful outside actor in the region, its capacity to affect events in the South Caucasus is exaggerated, de Waal explained.

    • Russian influence has been limited in part by geographic barriers, de Waal argued. The Greater Caucasus mountain range has limited Russian military presence south of the mountains, as well as Russian migration.
    • Russia has never had absolute control over the South Caucasus. Russia always relied on local rulers, both in tsarist and Soviet times, to control the region.
    • Despite the examples of the 2008 war between Russia and Georgia and Russia’s recent extension of its military alliance with Armenia, Moscow is shifting toward using economic tools, rather military power, to maintain its influence in the region.
  • The mirage of great strategic importance. The South Caucasus’ strategic importance for the West as an energy route and security zone is also exaggerated.

    • Energy. The South Caucasus is indeed an important transport corridor for Caspian oil and gas. The Baku-Tbilisi-Ceyhan (BTC) pipeline is a significant source of revenue for Azerbaijan and gas from the Caspian Sea has decreased the region’s reliance on Russian gas. However, de Waal pointed out, many of the claims made in the 1990s made about the energy reserves of the Caspian turned out to be exaggerated. Western energy investment in the region has also failed to deliver broader prosperity, as resource extraction largely benefits elites and creates few jobs.
    • NATO expansion. It is now clear that the push for NATO membership for Georgia benefited neither NATO nor Georgia. The attempt to join NATO did not boost Georgia’s security, and antagonized Abkhazia, South Ossetia and Russia. After the August war Georgia ended up with neither a NATO Membership Action Plan nor Abkhazia and South Ossetia.

Looking Forward

  • An end to bilateralism. The most significant problems facing the South Caucasus are interconnected and cannot be addressed in isolation, de Waal stated. A successful approach to security issues and the economic development of the South Caucasus would favor a regional policy over bilateralism.
  • Call off the “Great Game.” Security in the South Caucasus would benefit from a “truce” between Russia, the West, and, to a lesser degree, Turkey and Iran, to stop providing weapons to the region and to work together to address the conflicts in Karabakh, South Ossetia, and Abkhazia.
  • Nagorny Karabakh. The ceasefire in Karabakh is fragile; if war were to break out, it would have serious implications ranging beyond Armenia and Azerbaijan. But, in contrast to Georgia, this is a conflict where Russia and Western countries are coordinating their approach well.
  • Engaging Russia. In the long run, it is also possible to engage Russia on the issue of the break-away regions of Abkhazia and South Ossetia, especially now that NATO membership for Georgia is no longer an option. A deal over the two breakaway regions is in Moscow’s long-term interest, chiefly because Russia cannot stabilize the North Caucasus without help from its neighbors.
  • Engaging Turkey. If Turkey wants to be a regional player in the South Caucasus, it must engage all three countries, not just Azerbaijan and Georgia. De Waal suggested that the argument should have been made more forcefully to Azerbaijan that normalization of relations between Armenia and Turkey was in Azerbaijan’s long-term best interests. 
  • Agents of change. Small businessmen and tradesmen are promising agents of change in the South Caucasus, but currently receive little support. De Waal cited the example of two markets that developed informally and spontaneously, the first in Ergneti between Georgians and Ossetians and the second in Sadakhlo in Georgia between Armenians and Azerbaijanis. These two markets effectively disproved the myth of “ancient hatreds” that are said to plague the South Caucasus. They were a real demonstration of how pragmatic economic interests can overcome ethnic tensions and build connections across conflict divides.