ContentsGeneral ideas...............................................................................................................................................1

Migration.....................................................................................................................................................2

North Caucasus............................................................................................................................................5

Russian-Georgian WAR................................................................................................................................5

Chechen Wars I & II.....................................................................................................................................7

The Second Chechen War,...........................................................................................................................8

Caucasus security perspective.....................................................................................................................9

Borders......................................................................................................................................................10

Safe heaven...............................................................................................................................................11

Current views and reputations of each military........................................................................................14

Fog of war..................................................................................................................................................16

Nagorno-Karabakh....................................................................................................................................17

Global powers...........................................................................................................................................21

General ideas

The South Caucasus region comprising Georgia, Armenia and Azerbaijan represents the most problematic sub-region within the post-Soviet area in terms of regional security concerns. This fact has been highlighted in August last year during 5 day Russia-Georgia war which broke out after Georgian used military force in an attempt to bring its break-away republic of South Ossetia under Tbilisi control. Russia’s recognition of Abkhazia and South Ossetia as independent states – while the rest of the international community with exception of Nicaragua and Venezuela continue to recognize them as part of Georgia – only entrenched the unresolved status of the Georgian-South Ossetia and Georgian-Abkhaz conflict addition a layer of Georgian-Russian conflict on top of them. Moreover, the South Caucasus region also features the only unresolved inter-state conflict in the post-Soviet Eurasia – the conflict between Armenia and Azerbaijan over the status of Nagorno-Karabakh.

Almost two decades of development of and experimentation with foreign and security policies by Armenia, Azerbaijan and Georgia should indicate that ultimately their security will depend on their ability to resolve the problems between themselves and with their immediate neighbors. The initial impulse and lingering tendency to rely on outside forces did not stop a war involving Armenia and Azerbaijan, military conflicts in Abkhazia and South Ossetia at the start of this period, and a war

between Georgia and Russia more recently. The first three episodes were directly related to local conflicts, while the last was occasioned by them.

If it is really dawning on the Georgians that Abkhazia and South Ossetia are definitely lost, the process of this realization is extremely slow. Very few Georgians dare to accept today’s reality as a finality. All Georgia is deeply frustrated with the military defeat; President Saakashvili, once a darling of the Western media, experiences a certain fall from grace: not only are there fewer red carpets for him abroad, but even his phone calls sometimes go unanswered; the Georgian opposition feels impotent vis-à-vis the President; and both the president and the opposition fear, irrationally, a U.S.-Russian collusion at the expense of Georgia. Furthermore, the new activism of Turkey and its rapprochement with Armenia undermine Georgia’s once privileged position as the vital connecting link between the Caspian basin and the European energy market. Tbilisi looks confused, unsure of what to do on any of these fronts.

Azerbaijan and Armenia, of course, stayed out of the Russo-Georgian conflict. Yet, the break in relations between Moscow and Tbilisi resulted in a substantial deterioration in Armenia’s geopolitical situation. Against this background, Turkey’s willingness to normalize relations with Armenia and to lift the blockade is salvation for Yerevan.

Baku felt upstaged by Ankara’s activism, and also by the Turkish ambition to become the energy hub of the region. It realized that Turkey will follow its national interest, and could no longer be relied upon to automatically protect Azerbaijan’s in all cases. With regard to the international efforts toward an interim solution to the Karabakh conflict, the Azerbaijanis’ concern is that such a settlement would defuse the issue, deprioritize it in the eyes of the international community and threaten to turn the interim state into a permanent one, thus depriving Azerbaijan of Karabakh forever. For now and the near future, the prospects for a settlement on Nagorno-Karabakh are not particularly bright, all the mediation/facilitation activities of the third parties notwithstanding. Security cooperation in the region will be patchy and constrained.

Migration

The fall of the Soviet Union in 1991 occurred following a wave of nationalist and democratic movements. The breaking of the Berlin Wall in 1989 and the fall of the communist regime of the German Democratic Republic (GDR), as well as those of Hungary, Poland, Bulgaria, and Romania, among others, were a prelude to the end of regimes in the “communist world.” The regimes came down as dominos, and the implosion of the USSR led to the creation of a new world order. The demise of one empire gave the birth to 15 independent countries.

Because of its ethnic structure Caucasus has taken care of researchers for centuries and it has taken an urgent place in the world map. In spite of its small geographical area there are variety languages speaking people from different origins. Due to the several reasons: wars, inter-ethnic conflicts, economic crisis and many others, at least two big states of the South Caucasus - Georgia and Armenia lost considerable part of their national minorities.

Azerbaijanis and Armenians in Georgia could be seen as “spill-over” populations from their respective neighboring sovereign homelands. Many returned to Azerbaijan and Armenia during the periods of “trouble” in Georgia. Other large minority groups, such as the Avars in north-eastern Georgia were somewhat exchanged under an agreement with Daghestan, for Georgians living in that Russian autonomous region (An agreement was signed in 19927 between Makhachkala and Tbilisi on the transfer and resettlement of the Avars from the Kvareli rayon in Georgia to Yuzhno-Sukhokumysk in the north of Dagestan west of Kizlyar. The Georgian government was to cover the practical costs of resettlement. But the program for the resettlement of the Avars is not being realized due to the absence of finance from the side of Moscow. Not one Avar has been resettled in Dagestan within the framework of this program, however [some] Georgian Dagestanis have resettled themselves in their own homeland and fitted themselves out independently. The authorities in Makhachkala have accorded them the status of refugees and have paid out pensions and social assistance). Nevertheless, the Avars want their own homeland, considering that in Georgia they lack any prospects for developing their language, culture and ownership of their own Avar villages. An additional factor which can only increase unease amongst the Avars living in Georgia is that border troops detain people moving across the border from Russia to Georgia and vice versa and direct them to go round through the Derbent control point ( through Azerbaijan). As a result of the actions of border troops, Azerbaijan received a good amount of resettles in its North Region (also inhabitant by Avars and other minorities).

The Abkhaz and Ossetians, however, had no such option of “return.” Their historical geographic homeland was entirely within Georgia.

During 90th a big number of Armenians (from Azerbaijan and Georgia) came into Armenia and, later, emigrated and received asylum in a West. Ethnic homogeneity in Caucasus states wasn't raised as a political aim. It was rather unexpected, though the appropriate result of the collapse of the former Soviet Union and the creation and development of the independent state system. The global tendency of creation new national states in the Caucasus was reflected in the processes of the possible monoethnization of these states. For example, in Armenia, which always differs by the historically established big predominance of Armenian population, these processes reach their apogee. Today 97% of the population is Armenians. This is unique country by its ethnic structure also by the fact that twice more number of ethnic Armenian is living out of the country then in Armenia itself. The monoethnization in some cases became the reason of migration flows in the South Caucasus, for example, ''Ahıska Turks'' who lived at the Ahıska Pasha Land of Ottoman Empire and gained their identity from the name of that land, as some Georgian researchers has called that area as ''Mesthetiya'' the alternative name as Mesheti Turks was circulating during the Soviet time. Shortly before, during and immediately after World War II, Stalin conducted a series of deportations on a huge scale which profoundly affected the ethnic map of the Soviet Union. In May 1989 a pogrom of Meskhetian Turks occurred in the crowded and poor Fergana Valley, Uzbekistan as a result of growing ethnic tensions. This triggered an evacuation of Meskhetian Turks from Uzbekistan. In the last years of the Soviet Union, pogroms in Uzbekistan brought the wave of Meskhetian Turks to Azerbaijan from 1989 onward, which settled mostly in the districts near the Georgian border. The Azerbaijani government, facing problems with its own 1 million internally displaced and external Azeri refugees from its break-

away region of Nagorno-Karabakh and Armenia, tried to facilitate large numbers and the further settlement of Meskhetian Turks to Azerbaijan (60 000 or so).

To the middle of the 90th years about three million people left South Caucasus (would be good to have some good number and source). The main reason, caused such big flow of migration was the sharp decreasing of working places, economic crisis and slump of the standard of living in Armenia, Azerbaijan, Georgia, and armed conflicts in Abkhazia, South Ossetia, and Nagorno-Karabakh.

Interestingly enough, as such migration was cased by pure economic conditions, the economic “renaissance” in Azerbaijan and, subsequently, in Georgia caused another wave of workers migration – Chinese and Vietnamese (we could use East Asia, to be politically correct).

Also political – many Russians, Jewish, Ukrainians, Germans, Greeks, and representatives of other nations returned to Azerbaijan.

Official quote: Armenia supports ethnic Armenian secessionists in Nagorno-Karabakh and since the early 1990s has militarily occupied 16% of Azerbaijan; over 800,000 mostly ethnic Azerbaijanis were driven from the occupied lands and Armenia; about 230,000 ethnic Armenians were driven from their homes in Azerbaijan into Armenia and Nagorno-Karabakh;‖ Source: CIA World Factbook 2010: Azerbaijan, ISSN 1553-8133, https://www.cia.gov/library/publications/the-world-factbook/geos/aj.html

Official quote: Furthermore, the occupation of 20% of the Azerbaijani territories by Armenian military forces that resulted in 132 km of the state border with Iran not being controlled by the Government of Azerbaijan, constitutes a major impediment for achieving progress in the fight against trafficking not only in Azerbaijan but also in the entire region, since this border area, the so-called ―criminal black hole, is used as an attractive trafficking channel.‖ Source: 11th OSCE Economic Forum on Trafficking in Human Beings, Drugs, Small Arms and Light Weapons: National and international economic impact. Country Report: Azerbaijan.

Official quote: There were credible reports that Armenian immigrants from the Middle East and elsewhere, had settled in parts of Nagorno-Karabakh and possibly other Azerbaijani territories occupied by Armenian forces (Source: U.S. Department of State, Country Reports on Human Rights Practices, Azerbaijan, 25 February 2004 and Department of State, 31 March 2003, sect. 2d – URLs: http://www.state.gov/g/drl/rls/hrrpt/2003/27826.htm and http://www.state.gov/g/drl/rls/hrrpt/2002/18353.htm)

Official quote: "On Oct. 5, the "NKR Prime Minister", A.Daniyelyan outlined details of a programme to double the population from 150,000 to 300,000. He said that the issue was of demographic, economic and strategic importance. "The programme will be implemented in all districts and in border districts in the first place and is being financed from the budget of the NKR with additional contributions from various organizations." Source: Report on the Activities of the Personal Representative of the OSCE Chairman-in-Office on the Conflict Dealt with by the OSCE Minsk Conference, 1 September - 31 October 2004, para. 48, p. 48.

The Kurdish issue, specifically the matter of establishing a homeland for Kurds, has complicated efforts to stabilize Iraq. Now, there is growing concern among international experts that the Kurdish question could become a source of tension, and possibly conflict in the South Caucasus.

Media outlets in Turkey and Azerbaijan have reported that militant Kurds, in particular fighters affiliated with the Kurdistan Workers Party, have been settling in Nagorno-Karabakh and in portions of Armenian-occupied Azerbaijan, with the tacit support of the Armenian government in Yerevan. Many of the Kurds are reputed to have resettled in the strategically important Lachin Corridor, a strip of territory now occupied by Armenia that was formerly part of Azerbaijan proper. Control of Lachin is one of the main obstacles in the search for a Karabakh settlement. Before the outbreak of the Karabakh conflict, Lachin had a high number of Kurdish residents, and during the 1920s, it was part of a Kurdish Autonomous Area within the Soviet Union. Much of the Kurdish population fled the region during the Karabakh war. But the fact remains that there is a historical precedent for a Kurdish presence in Lachin. Even so, their resettlement today -- especially if reports about PKK militants being among the migrants are accurate -- is fraught with peril for regional security.

North Caucasus

The Ingush in many ways have tended to be overshadowed by the more warlike characteristics of their Chechen cousins. Whilst supportive of the Chechens, the Ingush have tended to avoid armed confrontation and to use the voice of moderation. To some extent this can be explained by the different strands of religious worship within the Ingush population, Muslim, Christian and pagan. The different characteristics of the Ingush and the Chechen can be noted on the example of the President Aushev of Ingushetia and President Dudayev of Chechnya. The latter announced independence from Moscow in 1991. Aushev decided to separate from Chechnya, remaining a subject within the Russian Federation, believing that this would make a successful outcome of the Prigorodniy rayon dispute with North Ossetia more likely. Remaining within the Federation ensured that Ingushetia did not suffer the armed retribution which led to the devastation and destruction of infrastructure of Chechnya, although the Ingush have been sorely pressed by the arrival of over 200,000 Chechen refugees.

Russian-Georgian WAR

The August war has effectively transformed the Georgian-Abkhazian and Georgian-South Ossetian conflicts into one Russian-Georgian conflict. This new inter-state character of the conflict which is also combined with unresolved inter-ethnic dimension of the two historic conflicts, makes the conflict resolution process more complicated and less likely to produce any progress in the short to medium term perspective.

Initially, Georgia's attack on the capital of the self-proclaimed Republic of South Ossetia on August 8, 2008, seemed like it would lead to yet another bloody, drawn out Caucasus war. However, the quick, energetic, and sustained intervention of Russia (the guarantor of peace in

South Ossetia since 1992) escalated by August 11 into a powerful blitzkrieg against Georgia proper.

Upon his seizure of power in the “Rose Revolution” of 2003, Mikhail Saakashvili devoted exceptional efforts to the creation of a fighting armed force that could return the separatist autonomous republics of Abkhazia and South Ossetia to the Georgian fold. Saakashvili also wagered on the broadest possible alliance with the United States and NATO, and on the formation of the Georgian Army according to Western models, with significant US military assistance. Significant funding went into force generation: during Saakashvili's rule, Georgia broke world records for defense spending (need data!!!) In the end, Geaorgians seems to have become convinced that the new Georgian military machine was sufficiently effective, capable, and powerful to impose a final solution on the rebellious autonomous regions.

Georgian forces were engaged in positional battles in Tskhinvali and its environs, but with the entry of Russian forces they stood no chance of success. Nonetheless, the slow passage of Russian forces toward Tskhinvali through the narrow Roki tunnel and along the narrow mountain roads, as well as the difficulties of quickly concentrating a significant quantity of Russian troops from various regions of the North Caucasus, created the impression of slow Russian deployment and the clumsiness of the Russian command.

By the evening of August 10, Russia had seven full regimental tactical groups (135th, 429th, and 503rd and 693rd Motorized Rifle Regiments of the 19th Motorized Rifle Division from North Ossetia, the 70th and 71th Motorized Rifle Regiments of the 42nd Motorized Rifle Division from Chechnya, and one regiment of the 76th Pskov Air Assault Division), units of the 45th Reconnaissance Paratroop Regiment and the 10th and 22nd Special Forces Brigades, as well as significant artillery and air-defense forces. Two Chechen companies from the Zapad and Vostok battalions and regimental tactical groups of the 98th Ivanovo Airborne Division, deployed to the battle zone too. The total number of Russian forces in South Ossetia reached about 10,000 men and 150 tanks.

At the same time, Russia opened a “second front” in Abkhazia, deploying up to 9,000 men from the 7th Novorossiysk and 76th Pskov Air Assault Aivisions, the elements of the 20th Motorized Rifle Division and two batallions of the Black Sea Fleet Marines. With their support, Abkhaz forces began to dislodge the Georgian forces from the Kodori Gorge.

Georgian defenses and the entire army soon began to collapse. From the morning of August 12 onward, the Georgian army began to retreat toward Gori, a retreat which soon grew into a panicked flight from Gori, almost all the way to Tbilisi. Along the way, the Georgians abandoned a significant quantity of ammunition and military equipment, especially the artillery brigade.

On August 11, Russian forces entered Georgia proper from Abkhazia virtually unopposed. Having taken the city of Zugdidi, Russian units (paratroops from the 7th Division) spread across almost all of Western Georgia on raids aimed at destroying heavy weapons at Georgian military bases in Senaki and Poti.

Georgia has entirely lost its air and naval forces and air-defense systems. Reportedly, Russian forces captured and destroyed a significant portion of the Georgian army's arsenals. The Russians seized up to 150 units of Georgian heavy weaponry, including 65 T-72 tanks (including 44 in operational condition), 15 BMP armoured infantry fighting vehicles, a few dozen armored perconnel carriers, vehicles, guns and SAM systems. Russia seized a large quantity of automobiles and small arms, including American M4A3 carbines. Several Georgian tanks, armored vehicles, and guns were completely destroyed in battle.

The confrontation with Georgia's air-defense system proved to be a serious trial for Russia's military aviation, especially since it seems that its capabilities were initially underestimated. Meanwhile, Georgia's air defenses reportedly relied on data received from the Kolchuga-M passive electronic monitoring radar systems, minimizing the use of active radar, while the Georgian Buk-M1 and Osa-AK/AKM self-propelled SAM systems used ambush tactics. This made it more difficult to defeat the Georgian air-defense systems. According to unofficial reports, the Georgian Buk-M1 SAM systems shot down four Russian aircraft on the first day of battle on August 8: three Su-25 Frogfoot attack planes and one Tu-22M3 Backfire long-range bomber/recon plane.

Chechen Wars I & II

The First Chechen War, 1994-1996

After the initial campaign of 1994–1995 when Russian forces entered Chechnya to "restore constitutional order," culminating in the devastating Battle of Grozny, Russian federal forces attempted to seize control of the mountainous area of Chechnya but were set back by Chechen guerrilla warfare and raids on the flatlands in spite of Russia's overwhelming manpower, weaponry, and air support. The resulting widespread demoralization of federal forces, and the almost universal opposition of the Russian public to the conflict, led Boris Yeltsin's government to declare a ceasefire in 1996 and sign a peace treaty a year later.

The Russia military/security apparatus manifested a near systemic dysfunction during the first Chechen war - the pervasive brutality, incompetence, and depression. With responsibility for the operation in the hands of military leaders, the generals ignored rudimentary principles. Units sent to Chechnya did not know each other, had never trained or operated jointly, were cobbled together from different ministries and did not have interoperable communications or similar doctrines. Even low-level combined arms actions proved beyond Russian capabilities. Some military formations emerged from an arbitrary amalgamation of troops from police, military units, the Federal Counter-intelligence Service, and the Interior Ministry, across all of Russia. This potluck approach to military formations could have just as easily resulted in an incapacitated military unit. Such a formation usually requires time to establish camaraderie and familiarity necessary for unit cohesion.

Chechnya's Chief Mufti Akhmad Kadyrov's declaration that the ChRI was waging a Jihad (struggle) against Russia raised the specter that Jihadis from other regions and even outside Russia would enter the war. By one estimate, up to 5,000 non-Chechens served as foreign

volunteers, motivated by religious and//or nationalistic reasons. Limited fighting occurred in the neighbouring small Russian republic of Ingushetia , mostly when Russian commanders sent troops over the border in pursuit of Chechen fighters, while as many as 200,000 refugees (from Chechnya and the conflict in North Ossetia) strained Ingushetia's already weak economy. On several occasions, Ingush President Ruslan Aushev protested incursions by Russian soldiers and even threatened to sue the Russian Ministry of Defence for damages inflicted, recalling how the federal forces previously assisted in the expulsion of Ingush population from North Ossetia. Undisciplined Russian soldiers were also reported to be committing crimes and looting in Ingushetia.

The Second Chechen War,

The Invasion of Dagestan was the trigger for the Second Chechen War. In August and September 1999, Shamil Basayev (in association with the Saudi-born Ibn al-Khattab, Commander of the Mujahedeen) led two armies of up to 2,000 Chechen, Dagestani, Arab and international mujahideen and Wahhabist militants from Chechnya into the neighboring Republic of Dagestan. The federal military response to the invasion was slow, and the efforts to mobilize and counterattack were initially fumbling and disorganized. As resistance stiffened, Russian government forces intervened, launching air and artillery strikes against the invaders. The Russian Air Force also started bombing targets inside Chechnya. In early October Russian troops invaded Chechnya. While some considered this a civil war, large numbers of international non-state actors became involved in the conflict. Chechen separatists were under siege in the Chechen capital Grozny during the winter of 1999 until February 2000, pinned down by Russian forces. The Russian military operated more effectively at the tactical and operational levels during the second war. The Russian military learned to use brute force in the second Chechen war because it did not have a military that was capable of conducting a modern “bloodless” war. Russian soldiers learned to apply their superior firepower on the battlefield more effectively, while simultaneously increasing their own chance of survival. Then Russian forces moved into the southern mountainous portion of Chechnya, the armed forces had to relearn counterinsurgency tactics developed during the Afghanistan campaign. Conceivably, the Russians could have considerably boosted military efficacy by integrating Special Forces with aircraft modernized for precision strike.

May of 2000 brought direct Russian rule to Chechnya, but not an end to the violence. Resistance forces continued to cause heavy casualties to Russian forces all through the North Caucasus region. The conflict escalated and drew scrutiny from the international community. Human rights violations, terrorist attacks on civilians and wide spread chaos caused the international community to condemn the actions of both sides in the conflict. The heavy fighting took place from 1999 to 2000. The insurgency lasted well beyond that, from June 2000 to April 2009, insurgent forces tried to overthrow the government. Instability in the region has killed thousands and made even more refugees. Since then, Dagestan has been a site of an ongoing, low-level insurgency, which became part of the new Chechen War. This conflict between the government and the armed Islamist underground in Dagestan (in particular the Shariat Jamaat group) was aided by the Chechen guerrillas.

There are also some other potential points of friction in the Caucasus. For example, there are a large number of refugees or internally displaced people dispersed across the region, and both the number of foreign migrants and the diaspora pool are growing. As a part of the notorious “Eurasian Conflict Rim,” which encompasses Iraq, Iran, Afghanistan, Central Asia, and the Middle East, the Caucasus provides the geographic link between those turbulent zones and Russia, other former Soviet states, and Western Europe. Finally, since the early 1990s, the Caucasus has emerged as the staging ground for a variety of internally- and externally-based violent non-state actors.

Caucasus security perspective

Over a decade ago, Azerbaijan suffered significantly from Armenian terrorist attacks on its territory during the war in Nagorno-Karabakh. Azerbaijan is currently fighting to suppress radical Islamist cells, which have emerged since the end of 1990s. For its part, Armenia remains in the shadow of a national liberation ideology, which resulted in the wave of terrorist attacks carried out worldwide during the 1970s and 1980s by the Armenian Secret Army of Liberation of Armenia (ASALA). More recently, there was a major terrorist conspiracy surrounding the ASALA, which ended with a murder in the Armenian Parliament in 1999. In fact, the ideas are still alive and former ASALA members welcomed as a national heroes (Asthig Karapetyan and Gohar Poghosyan, “Vow to Ararat,” Abovyan City.com (27 October 2005); available at http://www.abovyan.com/index.php?option=com_content&task=view&id=318&Itemid=2 ).

Georgia continues to suffer from low-level conflict in the separatist regions of Abkhazia and South Ossetia, fighting against groups that it identifies as “terrorist entities.” Tensions in the ethnically Armenian district of Javakheti and in related ethnic districts have led to the use of terrorist-like tactics and the manifestation of internal political struggles on the local level.

Russia continues to fight (with a visible degree of success) against a Chechen insurgency that has been responsible for a number of major acts of terrorism in the recent years.8 At the same time, Russia faces the spillover of terrorism from Chechnya into neighboring Dagestan and the mushrooming of urban, underground, radical Islamist cells across the North Caucasus.

In addition to the groups operating at the national level in the Caucasus, underground “out-of-area” terrorist networks such as Al Qaeda, the Kurdistan Workers Party (PKK, or Kongra-Gel), and Mujahedeen-e-Khalk (MEK); even the Sri Lanka-based Liberation Tigers of Tamil Eelam (LTTE) are operating in the region, mostly for purposes of fundraising and money laundering. Last but not least, the activity of some ethnically oriented criminal communities from the Caucasian countries (including Armenian, Georgian, and Chechen organized crime groups) extends far beyond the geographic limits of the region, especially with respect to ethnic Diasporas that have settled in Russia, Ukraine, and other places in Europe.

Borders

Ethnic kinship remains a relevant factor; many ethnic groups, clans, and families straddle the borders of neighboring countries. The level and intensity of covert cross-border movement, including illegal smuggling and trafficking, depends on the season due to the mountainous environment; crossings tend to increase in the summertime.

Illegal cross-border movement related to petty crime is common among these populations. Smugglers, hunters, poachers, and pathfinders are all armed for their business. The natural protection offered by the mountainous and forest-covered terrain also supports illegal trafficking activity. Corruption among authorities (such as border guards, customs officials, and law enforcement officials) only contributes to border security breaches. The situation is further complicated by factors like ineffective border control and management due to a lack of both, professionalism and proper instruments, as well as relatively weak structures.

Azerbaijan-Iran and Azerbaijan-Turkey

The major portion of border security support infrastructure along Azerbaijan’s borders, including fortifications and technical installations with Iran, suffered from the severe upheavals in the early 1990s and was twice partially destroyed: first in 1990 during a popular uprising against the communist government, and then in 1993 during the Armenian- Azerbaijani war over Karabakh. More than 110 kilometers of today’s Azeri-Iranian border is under the control of the so-called Nagorno-Karabakh Republic. Efforts to restore the damaged infrastructure and build additional capabilities required time; however, today Azerbaijani borders (excluding the occupied part) is firmly controlled.

Azerbaijan-Armenia

The Azerbaijan-Armenia border is heavily protected by combat troops on both sides. In fact, it represents an extension of the frontline of the Nagorno-Karabakh conflict, and is virtually inaccessible for any movements besides military ones.

Armenia-Turkey and Armenia-Iran

These two borders, officially regarded as outer borders of the Community of Independent States, are protected by the Russian Federal Border Service troops (under the Operational Group Armenia). The difference between the Armenian-Turkish border and the Armenian-Iranian border, however, is that the Armenian border with Turkey remains officially closed for political reasons, while the border with Iran is extensively exploited since this country has emerged as Armenia’s second-largest trade partner and regional ally.

Georgia-Turkey

The level of security at this border has significantly decreased since the collapse of the Soviet Union and Georgia’s subsequent independence. The level of border protection is relatively low. The Sarpi border crossing on the Black Sea is characterized by a high volume of people and

cargo movement, and it is regarded as one of the primary hubs for migrant smuggling and human trafficking.

Georgia-Armenia and Georgia-Azerbaijan

These two borders were drawn along arbitrary administrative lines of the former Soviet republics, and thus still require definition and agreement by the states involved. These borders are transparent, which means that they are protected only by infrequent patrolling.

There are many unofficial crossings, paths, and tracks that bypass official border-crossing points and are quite accessible to all kinds of actors. Another important factor is the presence of Azerbaijani and Armenian trans-border populations, who live in Georgia on the borders with Azerbaijan and Armenia.

Russia-Georgia and Russia-Azerbaijan

This border environment is not as fluid as some of those discussed above. While Russia has normalized relations with Azerbaijan, its relations with Georgia are politically complicated and uneasy.

The situation on the Russian-Azerbaijani border is much better. There are a number of points of active conflict nearby—including Chechnya, Dagestan, the Pankisi Gorge, South Ossetia, and Abkhazia, which negatively influence the border areas, leaving them exposed to illegal smuggling, trafficking, and even terrorist operations.

Safe heaven

one can see that most “safe havens” are associated with some degree of conflict, either as a precursor or as an outcome. For a long time, experts in international relations have warned that non-recognized territories could become a source of terrorism and criminal activities. These territories are de facto independent but not bound by any international treaties. They have their own “armies,” “law enforcement” and political institutions, but a lack of financial viability may force them to earn money through weapon sales, drug-trafficking and hosting insurgent/terrorist training camps.

Accordingly, the government of Azerbaijan, on numerous occasions, has pointed to the existence of this new model of state-sponsored safe haven in the form of Nagorno-Karabakh and the adjacent territories (safe haven) that were occupied by Armenia in the early 1990s (sponsoring state). The occupied territories are presently out of national and international jurisdiction.

As there is no law without state and that there is no state without law, one can note that the social contract between the state and its citizen (thanks to the consequences of military occupation and ethnic cleansing by Armenia) has been replaced by a criminal bargain: Illicit activity becomes separatist-sponsored, and in return the sponsors are protected and enriched by the regime. As a result the rule of law is replaced by the bullet and the bribe.

Taking all of the above mentioned into account, one can summarize that whether profiting from “ungoverned spaces” or hollowing out the state from within, transnational criminal groups – plugged into global networks – can gain control of key resources and/or trafficking routes that give them a profitable market share (for example, the existing “Nagorno-Karabakh – Iran – Azerbaijan,” as well as the “Afghanistan – Iran – Nagorno-Karabakh and occupied territories of Azerbaijan – Armenia – Georgia –Western Europe” narco-traffic routes, according to the U.S. State Department’s 2006 International Narcotics Control Strategy Annual Report).The richer and more powerful the transnational criminal groups become, the greater the threat they pose to national, regional and global security as well as to undermining development and the rule of law.

One can argue that the evolution of international relations has gifted this “safe haven” phenomenon with a new role as a growing threat across the globe, assessing more concretely its impact on the political structures, institutions, actors and processes common to democratic regimes. Such growing challenge has typically been countered by governments at a domestic level, but once the political interests of the “modern empires” or “superpowers” misalign with the vision of the “host state,” prospects for much-needed intergovernmental cooperation against such transnational threats become less and less realistic.

One can summarize all of the abovementioned as follows: Letting a “safe haven” fester can manifest itself in a terrorist attack, in international crime or the drug trade, while eliminating safe havens can be a costly policy which can bog countries down in a sticky situation of military operations.

Quasi-states are the remaining destabilizing factor in the Caucasus. These separatist regions emerged in the aftermath of the dissolution of the Soviet Union and are not recognized internationally or legally. While they claim to be “democratic,” these quasi-states are not democratic regimes, and are instead non-transparent, authoritarian separatist enclaves. Driven by motivations to survive, supported by their own military and security forces, the separatist regimes have instituted de facto martial law. They have survived by drawing upon a “besieged fortress” mentality, the financial and lobbying capabilities of ethnic Diasporas, and the selfish geopolitical ambitions of regional powers.

These separatist regions are supported by hidden sources and, presumably, by criminal and illegal activities as well. The conduct of illegal smuggling and trafficking networks is particularly present in these quasi-states. Due to limited space, this article will focus on the example of the so-called Nagorno-Karabakh Republic, an area dominated by ethnic Armenians that has proclaimed itself independent from Azerbaijan.

Although located on Azerbaijani territory, the Nagorno-Karabakh Republic regards Azerbaijan as an enemy, and instead has cultivated direct links to Armenia and Iran. For its part, Armenia maintains a strong political, military, and security alliance with Nargono-Karabakh, heightening the complexities in this intriguing situation.

The quasi-state of Nagorno-Karabakh controls over 132 kilometers of what is (officially recognized) the border between Azerbaijan and Iran and which coincides with the Araz (Araks) River. Transportation between Iran and the Nagorno-Karabakh territory involves small boats and

several pontoon bridges, which are patrolled by the separatist region’s army. Smuggled materials presumably consist mostly of drugs, but may also include weapons or individuals. After the smuggled items are delivered to the separatist region, smugglers may encounter a number of further opportunities. The portion of the Armenian-Azerbaijani border claimed by Nagorno-Karabakh is not protected by border guards, customs officials, or the police; it is instead completely controlled by the armies and security services of both Nagorno-Karabakh and Armenia. This means that there is not only a lack of formal control, but also an opportunity to bypass the official Iranian-Armenian border (the Megri Corridor) while remaining protected by the Russians. Smuggled materials are easily transferred from Nagorno-Karabakh to southern Armenia along two axes. The major one is Lachin-Kafan, also known as the notorious Lachin Corridor, and the auxiliary route is Goradiz-Megri, otherwise known as Route A-81. In Armenia, these two routes merge into the Megri-Kafan route, which originates in Iran. From this vantage point, smuggled goods (or people) can move out of Armenia via the only two available routes: either the Megri-Goris-Yerevan-Tbilisi route (Route E-117) or the Megri-Yerevan-

Ashtarak-Kutaisi route (Route A-82). Georgia thus serves as a “distribution center” to the outside world, providing a link to Turkey, Russia, Ukraine, and Western Europe.

Three of the four countries in the Caucasus are facing insurgencies on their territories. These countries—Azerbaijan, Georgia, and Russia - often accuse the insurgents of terrorist activities. In the case of Azerbaijan and Russia, these accusations seem to be true. Factions from Nagorno-Karabakh, Chechnya, and most recently Dagestan have at different times conducted terrorist attacks against Azerbaijan and Russia. Similar situations exist in the separatist regions of Abkhazia and South Ossetia in Georgia. If it is commonly accepted that the separatist regions are responsible for terrorist attacks, then the conclusion is obvious: there is a nexus between terrorism and trafficking. An example of this is the so-called Chechen Republic of Ichkeria, created within Russian territory by ethnic separatists in the early 1990s operating beyond the control of the Russian government. Before being militarily suppressed in 2000, the separatist regime was deeply engaged in criminal activities to finance its existence, including arms and drugs trafficking. Some of this trafficking activity passed through Russian borders. Russian authorities have pinned responsibility for these activities (although somewhat vaguely) on some Islamic countries and organizations. Today, Nagorno-Karabakh is employing the same modus operandi and is presumably sustaining itself, at least in part, through illegal trafficking.

Iran could emerge as a major spoiler with respect to illegal smuggling and trafficking in the context of the current standoff with the West over its nuclear program.

Regional cooperation to combat illegal smuggling and trafficking remains complicated, restrained, or even blocked by inter-state and intrastate conflicts and tensions. For example, the Armenian-Azeri and the Georgian-Russian partnerships remain strained

Future illegal trafficking and smuggling routes in the Caucasus will likely be determined by developments relating to two emerging geopolitical conflicts, those between the U.S. and Iran and between Russia and Georgia. In addition, an underground movement of Wahhabi/ Salafist terrorism, which is spreading across the North Caucasus, should be regarded as another factor in

increasing illegal trafficking and smuggling. Finally, the renewal of the rivalry between the U.S. and Russia could redefine the issue once again.

Iranian Threats on the Drugs Issue (from http://www.asianews.it/index.php?l=en&art=6362 )

Quote 1: if “Western states continue their pressures on Iran over its nuclear program, Iran can allow the transit of drugs and narcotics through its waters and other areas”- Dori Hajafabadi, Former Head of Iran’s intelligence under President Khatami, now Attorney General

Quote 2: if “Iran wanted to, it could end its barriers to the drug traffic and thus allow it to flood the West” - Fada Hossein-Maleki, Chair of Iran’s Drugs Control Agency

Current views and reputations of each military

Georgia –

SF forces are quite respectable, but the rest of the force is performed not so good during Russian-Georgia War. Best parts took part in peacekeeping mission (in Iraq, Georgia was 3rd by the size, after US and British). Not a significant Air force (underwent massive reorganization and restructuring). The virtual image of a modern “Western Army” is created, as Georgia became a kind of “window display” for military reform in the Western style. From a technical point of view, the focus on acquiring heavy, self-propelled artillery, multiple-launch rocket systems and air-defense systems proved to be entirely justified, and it was precisely these weapons that inflicted the greatest damage on the Ossetian and the Russian forces. The acquisition of UAVs was similarly justified, along with night vision, modern communications, radio-technical reconnaissance and electronic warfare equipment. In these categories, the Georgian Army was perhaps even better equipped than Russian Army. The emphasis placed by Western military instructors on the individual training of soldiers also seems to have paid off. But, on the whole, the Georgian Army needed more time to ripen (in regards of 2008).

Armenia –

Low morale, corruption, the armed forces do not have a high state of battle readiness and are ill-prepared for wide scale combat operations. The majority of senior military figures does not have democratic views, and will not change them in a short period of time. A few of them have moral and psychological difficulties in coming to terms with modern standards and putting them into practice. A number of moral and psychological problems remain unattended, such as: rights of a person (human rights), requirement by servicemen to observe the rights of others, and creation of

equal rights for career development. Young officers do not serve with enthusiasm in army field formations. Little attention is devoted to solving questions such as officers’ social problems, essential increases in pay, the guarantee of living accommodation. The Armenian MOD, commanders and officers down the chain of command should be displaying concern for the welfare of their men, but there appears to be considerable anecdotal evidence to the contrary. Armenians believe that, although fewer in number than their Azerbaijani counterparts, Armenian and so-calle “NK armed forces” combined are superior in combat capability, especially in mobility, efficiency and the quality of officers with combat experience. The weakness of “NK armed forces” is the lack of army aviation – a restraining factor in the conduct of combat operations. There can be no doubt that Armenia would support NK militarily if serious fighting broke out once more.

Armenia and Russia have the closest relationship in the South Caucasus. After the withdrawal of the two remaining Russian bases from Georgia, Armenia remains the only state with a Russian group of forces in the South Caucasus.

The main strength of the Armenian Army is concentrated around the border with Azerbaijan. Several battalions are deployed directly in the Karabakh zone on occupied Azerbaijani territory. Veterans from the Karabakh war are capable of operating with small subunits independently in mountainous terrain. The instilling of loyalty and dedication in its enlisted personnel and junior officers that would sustain them on the battlefield under a range of combat conditions. Within the civilian population there is a palpable disconnect between the small ruling elite/upper class and the remainder of society.

Azerbaijan –

Azerbaijan’s parliament on October 22 approved a military budget of 2.5 billion manats, or about $3.12 billion. That figure is higher than the entire state budget of Baku’s neighbor and longtime foe, Armenia.

Experts in Baku believe the spending surge is designed to send a message to both Armenia and the international community: if efforts to reach a peace deal on the Nagorno-Karabakh territory remain stalled, Azerbaijan could again resort to force in an attempt to settle the conflict. Experts in Baku are quick to emphasize, however, that despite the massive increase, there are no concrete signs that suggest Azerbaijani leaders are actively planning for a resumption of warfare.

Azerbaijan cooperates with about 60 countries in the military-technical sphere and has an agreement on military-technical cooperation with more than 30 countries, firepower capabilities have grown significantly with the increase of defense budget. Interesting fact - NATO armed forces personnel nominations, such as matters of promotion, appointments and postings, are carried out on a competitive basis. Annually with the aim of acquiring skills relating to NATO standards, hundreds of Azerbaijani officers are sent to military training establishments belonging to countries of the alliance. Combined seminars and courses take place.

Azerbaijan’s combat readiness is determined by combat capabilities of troops: by an accurate understanding of the missions by commanders, staffs and political organs; by the completeness

of organizational cadres; by the completeness of supplies, by the operability of weapons and equipment, by the timely preparation for the impending operation; and anticipation of the changes likely to happen in a situation. Judging by these standards the Azerbaijani army has some little way to go to be considered capable of carrying out wide-scale combat operations. Traditionally good aspects of the Azerbaijani armed forces, such as night operations, reconnaissance, communications, and rear support - there is no doubt that these issues will be examined and expanded as a first priority. It is obvious that the Azerbaijani Air Force must devote greater attention to the suppression of enemy air defenses (SEAD), including the renewal of tactics, electronic weapons and increased military training in the mountainous area. Azerbaijan need to practice of aggressive usage of their armor, artillery and mechanized infantry. Also, to practice of an effective command structure that has been rigorously “tested” by appropriate field exercises.

Azerbaijan has been investing heavily in military hardware, with a defense budget greater than the whole of Armenia's public spending.

The Azerbaijani military maintained that the ceasefire violation by the Armenians was the consequence of internal tension following the Armenian presidential elections on 19 February 2008.

However, the danger is that if fighting will shift on Armenian territory proper that could widen the scope of the conflict. Other powers would then be more likely to actively take sides. It should not be forgotten that there are a number of mutual arrangements which form a network surrounding the possible war zone. Armenia has a Treaty of “Friendship, Cooperation and Mutual Assistance” with Russia dated 29 August 1997; moreover Armenia also has a number of arrangements and projects with Iran. Azerbaijan, whilst it would almost certainly have the backing of Turkey, also has a web of agreements with Iran, which also assists in giving Azerbaijan access to its Nakhichevan exclave. There is also an agreement between Azerbaijan and Iran that their territory cannot be used for an attack on the other party. But, again, if Azerbaijani armed forces will conduct their operation within internationally recognized borders of Azerbaijan, Armenia will not be able to benefit from any of the treaty aimed to protect Armenia’s territory.

Fog of war

Increasingly, for some time from Azerbaijani representatives one has heard the following logic and argument: if war is wrong, how is it that ethnic Armenians have taken and continue to retain Azerbaijani territory through war and yet Azerbaijan is denied the right to recover its own territory by forceful means, even as a last resort?

As well as being blessed with significant offshore hydrocarbon deposits, Azerbaijan is ideally placed to act as an energy pipeline hub not only for the transfer of its own oil and gas to western markets but also to Kazakhstan and Turkmenistan, offering a route which bypasses Russia through the transit states of Georgia and Turkey via the Baku-Tbilisi-Ceyhan oil pipeline and the more recent South Caucasus gas pipeline Baku-Tbilisi-Erzerum. If the Trans-Caspian Gas

Pipeline comes to fruition it will also further enhance Azerbaijan's status as both a producer and transit hub. Furthermore, Azerbaijan has the potential to act as a major entrepot for other kinds of trade, with its capital and major port of Baku as the main eastern outlet of the trunk Transport Corridor Europe-Caucasus-Asia, and with a future alternative route for passengers and freight to/from Europe via the Kars-Akhalkalaki-Tbilisi-Baku railway: Baku is providing a substantial portion of the funding for building this railway.

Since 2001 the Azerbaijani authorities have begun to relocate large numbers of displaced people from emergency relief centers to newly constructed settlements around the country.

It should be noted that there is an important precedent in the United States in denying entrance and prosecuting perpetrators of crimes against humanity in Azerbaijan by Armenian armed forces. According to the U.S. Immigration and Customs Enforcement (ICE), this government agency has deported a former lieutenant in the Armenian militia, Mr Vigen Patatanyan, who admitted recruiting soldiers and providing arms to assist in the ―persecution of the Azeri people‖. Patatanyan’s removal was part of ICE’s ongoing effort to identify, apprehend, prosecute, and remove human rights violators. (Inside ICE, Volume 2, Issue 21, October 17, 2005, http://www.ilw.com/weekly/editorial/2005,1024-ice.pdf). Attempts by Mr Patatanyan to contest his deportation in court were also unsuccessful, and he had to drop his frivolous lawsuit (see: Patatanyan v. Ashcroft, U.S. District Court, Los Angeles, California, 2004).

Nagorno-Karabakh

The Armenia-Azerbaijan conflict, is one of the bloodiest and long-lasting armed conflicts in the territory of the former Soviet Union, has resulted in the occupation of roughly one-fifth of the territory of Azerbaijan and made approximately one out of every eight persons in Azerbaijan an internally displaced person or refugee. No final resolution has ever been reached yet, but the conflict on the top position on the agenda of the Government of Azerbaijan with the main priorities as the liberation of all occupied territories, the return of forcibly displaced persons to their places of origin, and, as a result, the establishment of long-lasting peace and stability in the Nagorno-Karabakh region of the Republic of Azerbaijan, which will promote in term the peace in the entire South Caucasus.

Unlike conflicts in Abkhazia and South Ossetia, NK conflict resolution process has witnessed pragmatic cooperation between all three co-chairs of the Minsk Group. However, no progress in securing the agreement has been achieved. As the negotiations continue to drag on – with many experts believing that the parties only simulate the peace process and have no intention to actually make the concessions required to advance it – there are growing signs that other options are being considered by hardliners of both sides. In Azerbaijan the President and other officials have repeatedly threaten to use force if negotiations fail to produce a peaceful agreement reaffirming its territorial integrity and reversing Armenia’s occupation. In Armenia political leaders are under intense pressure not to make any compromises, including a history of violence against supporters of a peace process. Armenia and Azerbaijan are locked in the arms race which is threatening regional stability. Azerbaijani defence budget grew at fastest rate in the world in the recent years as the country begins to receive large

revenues from oil and gas exports. In Armenia Diaspora is funding resettlement programs to occupied territories making it harder for Armenia’s leaders to offer a compromise which would require dismantling some of these settlements.

Further continuation of such kind of protracted conflicts is a major security threat in the region of South Caucasus, as one can see on the example of Five-Day war in Georgia (August 2008) that it can easily can turn into a flash fire.

The Armenian-occupied and disputed territory of Nagorno-Karabakh is potential flashpoint in the South Caucasus (if one would agree on dead-end conflicts in S.Ossetia and Abkhazia) that could threaten U.S. interests. Azerbaijan and Armenia are still technically at war over Nagorno-Karabakh, but a ceasefire has kept the region in de facto control of Armenia since 1994. In the short-term, the threat of the conflict resuming is low, but the patience is not so popular in Baku this days.

Much like a second Georgian war, a resumed conflict between Azerbaijan and Armenia would cast doubt on the ability of the U.S. to protect its friends and on the security of U.S. and E.U.-backed energy projects in the South Caucasus. Should the Nagorno-Karabakh conflict erupt into all-out war between Azerbaijan and Armenia, Azerbaijan’s energy exports (its source of hard cash reserves) would become a strategic target for Armenia.

Controlling the spread of Islamic terrorism in the South Caucasus is another important foreign policy concern of the U.S. To date, there has been limited evidence of international terrorist groups operating in the South Caucasus. Azerbaijan is the only country in the region with a majority Islamic population, but its traditionally secular government and elites make it less prone to radicalism, as authorities evenly distance themselves from all types of confessional groups and religious organizations. The principal commitment to the secular model of statehood suggests the realization of the freedom of faith taking into account the diversity of religious forms and ensures favorable conditions for positive and un-confrontational development of religious life in the country and a fostering of stability in the society.

Following the occupation of Azerbaijani territories in 1993, the UN Security Council adopted four resolutions: 822 (April, 30), 853 (July, 29), 874 (October, 14) and 884 (November, 11). The above-mentioned resolutions reaffirmed the sovereignty and territorial integrity of the Republic of Azerbaijan and of all other states in the region, the inviolability of the international borders and inadmissibility of the use of force as a means for the acquisition of territories. The resolutions demanded an immediate cessation of all hostile acts and an immediate, complete and unconditional withdrawal of occupying forces from all occupied territories of the Republic of Azerbaijan, and called for the restoration of the economic, transport and energy links in the region, the return of the refugees and displaced persons to the places of their permanent residence. The resolutions approved of the efforts of the OSCE Minsk Group aimed at the peaceful settlement of the conflict and called for the search of the ways for a settlement of the conflict in the framework of the OSCE Minsk process.      On May 12, 1994 the cease-fire has been established.      On December 5-6, 1994 at the CSCE Summit in Budapest the Heads of State and

Government of the OSCE participating states took a decision in accordance to which they established the institute of the Co-Chairmanship of the OSCE Minsk Conference for the coordination of all mediation efforts within the CSCE framework. The Budapest Summit tasked the Chairman-in-Office to conduct negotiations aimed at the conclusion of the political agreement on the cessation of the armed conflict, implementation of which will eliminate the consequences of the conflict and will permit convening of the Minsk Conference. The Summit also adopted a decision on the deployment of the CSCE multinational peacekeeping forces after the achievement of the agreement between the Parties on the cessation of the armed conflict, and the establishment of the High Level Planning Group (HLPG) aimed at the preparation of the peacekeeping operation.      The Lisbon Summit of the Heads of States and Governments of OSCE participants (since January 1, 1995 the CSCE was transformed into the Organization for Security and Cooperation in Europe), held on December 2-3, 1996, the Co-Chairmen of the OSCE Minsk Group and the OSCE Chairman-in-Office recommended the principles, which should have been the basis for the settlement of the Nagorno-Karabakh conflict. But Armenia did not accept them and therefore it was the only one out of 54 OSCE participating states not to support them.      Then the OSCE Chairman-in-Office made a statement with the inclusion of those principles. They are as follows:

territorial integrity of the Republic of Armenia and the Azerbaijan Republic; legal status of Nagorno-Karabakh defined in an agreement based on self-determination

which confers on Nagorno-Karabakh the highest degree of self-rule within Azerbaijan; guaranteed security for Nagorno-Karabakh and its whole population, including mutual

obligations to ensure compliance by all the Parties with the provisions of the settlement.

     After the Lisbon Summit the institute of the triple Co-Chairmanship, including Russia, France and the USA, was established in 1997. Since April 1997 the negotiations were suspended and substituted by the visits of the Co-Chairmen to the region. On June 1, 1997 the Co-Chairmen presented the draft of a comprehensive agreement on the settlement of the Nagorno-Karabakh conflict, which consisted of the Agreement on the cessation of the armed conflict and the Agreement on the status of Nagorno-Karabakh. Despite the readiness of Azerbaijan to start constructive consultations on the essence of the mentioned documents, the Republic of Armenia categorically rejected the "package" approach.      On September 19-23, 1997, during their visit to the region, the Co-Chairmen presented new proposals based on the "stage-by-stage" approach to the settlement, according to which it was planned at the first stage to liberate 6 regions, to deploy the OSCE peacekeeping operation, to return the displaced persons to the liberated territories and to normalize main communications in the conflict zone. At the second stage the problems of Lachin and Shusha were to be solved and the main principles of the NK status were to be adopted. As a result the OSCE Minsk Conference ought to be convened. On October 10, 1997 the Presidents of Azerbaijan and Armenia confirmed in their joint Statement in Strasbourg, that "the recent proposals of the Co-Chairmen were a hopeful basis for the resumption of negotiations within the framework of the Minsk Group".      But after the resignation of the President of Armenia Levon Ter-Petrossian in February of 1998 and with coming to power in March 1998 of Robert Kocharian, the next visit of the Co-Chairmen to the region took place, when Armenia officially withdrew the consent of the ex-

president of Armenia Levon Ter-Petrossian to the proposals on the "stage-by-stage" settlement of the conflict.      On November 9, 1998, the Co-Chairmen put forward the proposals based on the concept of a "common state". According to this concept, Nagorno-Karabakh would have the status of a state and a territorial unit in the form of a republic, which, together with Azerbaijan would constitute the common state within internationally recognized borders of Azerbaijan. Azerbaijan rejected those proposals, since they violated its sovereignty and contradicted the Lisbon principles. Since then no new proposals were made and the Minsk process practically reached a deadlock.      On November 18-19, 1999 the Final Document of the OSCE Istanbul Summit stressed that the Minsk Group was the most suitable framework for the settlement of the Karabakh problem, welcomed the dialogue of the two Presidents as giving an impetus to the Minsk process, and expressed hope for the resumption, as soon as possible, of the negotiations on the conflict settlement.      In order to give an additional impetus to the negotiations, since April 1999 direct talks between Presidents of Azerbaijan and Armenia on the achievement of conflict settlement began. However, due to Armenia's destructive position these meetings have not yet led to any agreement

Azerbaijan have received occasional reports of transfers from Armenia potentially related to proliferation of weapons of mass destruction technology or equipment, which were carefully reviewed and pursued in light of the global war on terror and efforts on Iraq/other states that sponsor terrorism and legal obligations under the various nonproliferation sanctions laws. Based on U.S. diplomatic efforts in 2002, Armenia worked cooperatively with the United States Government to stop and detain a shipment of dual-use equipment originating in Armenia that was destined for Iran. On May 9, 2002, the U.S. imposed sanctions on two Armenian entities – Lizin Open Joint Stock Company and Armenian national Armen Sargasian – pursuant to the Iran Nonproliferation Act for the transfer of Australia Group-controlled items to Iran in the second half of 2001. The Armenian Government also worked with the USG to ensure transparency regarding this matter. Armenia approved a WMD-related export control system in December 2003 and has worked with the United States and other countries toward this goal

Azerbaijan is more cautious in its public comments on NATO membership, emphasizing that the process of reaching the standards for it is the main goal. Unlike Georgia it tries to balance the Western vector in its foreign and security policy with a conflict avoiding policy towards Russia and Iran, two neighbours with an outspoken dislike for NATO-enlargement into the region. NATO and the US have been engaged in Azerbaijan’s energy policy, supporting the construction and the security of the BTC oil pipeline that opened up an “energy honeymoon” in Azerbaijan. Like Georgia it is pressing ahead with plans to overhaul its armed forces in order to bring them up to Western standards. And like Georgia Azerbaijan is aware of unresolved regional conflicts being the main hindrance for the entrance of South Caucasian states into Euro-Atlantic structures. In this case it is the Nagorno-Karabakh conflict and Azerbaijan’s un-peaceful relationship with Armenia. Like Georgia Azerbaijan has multiplied its military budget within the last five years. Like Georgia it legitimated this military build up with modernizing its army and with its adaption to Western military standards, but it also signalled the message of its increased military capacity to its adversaries in the conflict on Nagorno-Karabakh.

In Armenia the integration with NATO is a tricky question. The country holds the most tense security partnership with Russia in the region. It is party to the Collective Security Treaty Organization (CSTO). These ties impose certain limitations on Armenia’s integration with NATO. While Georgia perceives Russia as the threatening power, Armenia regards it as a protector. Traditionally Armenia had perceived NATO as an organization that strengthened its external enemy Turkey. But in the post-Soviet development it softened this historical aversion and demonstrated interest in security cooperation with the alliance. It has changed its foreign policy from an exclusive orientation towards Russia to a policy of complementarism with different vectors to ensure its national interests.

Global powers

The Russo-Georgian war of August 2008 was brief, it did not change the world, as some feared, but it has ushered in a new phase in the post-imperial – i.e. post-Soviet - evolution of the Caucasus. The principal features of this phase include: a palpable decrease in Washington’s interest in the South Caucasus; an even more marked rise in Turkey’s regional activism, exemplified by Ankara’s contacts with Armenia; the European Union’s growing institutional proximity to the countries in its eastern neighborhood, moderated, however, by the EU’s uncertainty as to what its role ought actually to be; Russia’s somewhat disjointed approach to the South Caucasus, against the background of growing instability in its own North Caucasus borderlands; Abkhazia’s subtly modified independence agenda – now, increasingly, vis-à-vis Russia; South Ossetia’s utter failure at nation-building; Georgia’s growing frustration, both domestic and international; and a fresh attempt by outsiders at promoting a provisional settlement for Nagorno-Karabakh, which so far has left the parties to conflict confused.

It appeared in the aftermath of the Georgia war that Russia had greatly strengthened its position in the region through a swift, decisive and relatively bloodless victory in its neighborhood, but that at the same time Russia had sustained irreparable damage to its relations with the West, particularly the United States. By the early 2010, the situation looks exactly the opposite. Relations with the U.S. have been famously “reset”, with both the U.S. President and the NATO Secretary General traveling to Moscow in the second half of 2009. By contrast, the situation in the Caucasus is now less comfortable for Moscow than in 2008. Above all, the Russian leadership has been troubled by the worsening instability in the North Caucasus. The Russian republics of Ingushetia and Dagestan have become scenes of virtually daily bombings, assassination attempts, and unrest. Ruled by its iron-fisted strongman, Chechnya has also experienced a spate of terrorist activity. Other republics have not become safe havens either. The Kremlin has been able to modify the law “On Defense” to ease the President’s decisions to send forces abroad, but Moscow’s successes on the diplomatic front have been few.

One can hardly assess regional security in the Southern Caucasus without taking into consideration the developments in the Northern Caucasus. Though both half’s of the region are separated by physically clear-cut borders running along a high mountain range, south-and north Caucasian conflict dynamics are linked. That brings Russia into play which holds in the Caucasus a position different from that in Central Asia or other parts of the post-Soviet space: Russia is part of this region. It has in the North Caucasus it’s own “internal abroad” with highly unstable entities like Daghestan, Chechnya, Ingushetia or Kabardino-

Balkaria, and in the South Caucasus the most tensed relationship to a “near abroad”, that is to Georgia. And it feels itself geopolitically challenged in this region by a “far abroad”, the United States. Before the 2008 “August War” some Russian Caucasus-analysts believed that Russia is “trapped” by its own strategy concerning the conflicts with Abkhazia and South Ossetia, noting that while Moscow has been supporting the separatist governments for over a decade, any move to formally recognize the territories as well as any move to abandon the support to them will have far reaching implications for Russia’s southern periphery in the North Caucasus

Despite the Obama administration’s attempt to “reset” frayed U.S.-Russian relations, the security interests of the two powers are likely to continue to clash in the South Caucasus. Russia, observing the lack of a forceful U.S. response in the wake of the Georgia conflict, will be emboldened to again exercise its muscle in a part of the world that it considers its backyard. Future U.S.-Russian flash points in the South Caucasus may include a repeat performance over Georgia’s breakaway republics and the independent status of Nagorno-Karabakh, which is officially part of Azerbaijan but under de facto occupation of Armenia. The U.S., preoccupied with Afghanistan, Pakistan, Iran, and Iraq, as well as the global war on terrorism, has neither the attention span nor resources to deploy sufficient diplomatic power and foreign assistance to counter aggressive moves by Moscow in the South Caucasus or to avert proxy conflicts. Instead, the Obama administration will employ diplomacy and seek help from European allies and Turkey to resolve future conflicts. Strategists in the Kremlin, who view geopolitics as a zero-sum game, will perceive a tepid U.S. response to Russian encroachment and aggression as a sign of weakness and will push harder to expand its power in the post-Soviet space.

A second security concern of the United States in the South Caucasus involves Iran. For decades, Iran vied for power in the Middle East against Saddam Hussein’s tyrannical regime in Iraq. In the 1980s, Tehran sought Moscow’s support against U.S.-allied Iraq, while in the 1990s; Iran’s priority in dealing with Russia was technical assistance for its missile and nuclear sectors, as well as arms deals, which involved modern fighter aircraft and anti-aircraft missile systems. It was not interested in upsetting the apple cart and meddling in either Central Asia or the Caucasus against Russian interests – even when Muslim Chechens were slaughtered in hundreds of thousands.

The U.S. can help contain Iran by promoting peace in the disputed territory of Nagorno-Karabakh. Officially, Iran holds a neutral position on the Nagorno-Karabakh conflict that divides Armenia and Azerbaijan, its two Caucasian neighbors to the north. Unofficially, however, Iran desires that Azerbaijan remain embroiled in the dispute, thus making the nation less attractive to Iran’s Azerbaijani minority and diverting resources from a campaign for South Azerbaijan’s autonomy or even independence, which could cause the Azeri-populated territory in northwest Iran to demand independence. By helping Azerbaijan and Armenia obtain peace in Nagorno-Karabakh, the U.S. could help both Azerbaijan and Armenia, and weaken the anti-American regime in Tehran.

A final security consideration for the United States in the South Caucasus is the threat of Islamist terrorism. Since the attacks of September 11, 2001, the U.S. has prioritized disrupting the activities of terrorist groups that could endanger the United States and its allies. The threat of Islamic radicals gaining a foothold in the South Caucasus is less acute than in the North Caucasus, where jama’ats are active throughout the region, especially in Dagestan and Ingushetia, or in Central Asia. The only predominantly Muslim nation among the South

Caucasus is Azerbaijan, and the country’s traditionally tolerant population for now makes it an unlikely breeding ground for Islamic radicalism. Nonetheless, some Muslim activists in the Sunni north of Azerbaijan belong to the Salafi (also known as Wahhabi) sect of Islam, one of the strictest forms of the faith, whose adherents include Osama Bin Laden and the 9/11 attackers. Iranian-controlled Shia groups in southern Azerbaijan are also a growing concern. Russia shares the terrorist concern with the United States, and the Global War on Terror (or “Overseas Contingency Operations” as the Obama administration has renamed it) can provide a platform through which U.S. and Russian interests coincide and where cooperation between the two powers in the South Caucasus is possible.