The territorial conflict between Armenia and Azerbaijan over the occupied territories of the latter has impeded the rapid economic development of the two warring parties and stood in the way of the regional economic and political integration of the South Caucasus. The region lost a great deal of opportunities in the thirty years that have followed the restoration of the sovereignty of its respective countries in the early 1990s. The Armenia-Azerbaijan conflict undermined peace and stability in the region, incurred non-necessary extra costs for most regional economic initiatives, posed challenges to the transformation of the South Caucasus as a whole into a transportation hub for the wider region, and discouraged the inflow of investments. Thus, the South Caucasus has fallen short of its real potential in terms of economic development and connectivity projects over the past thirty years.
The resolution of the Armenia-Azerbaijan conflict in late 2020 through the Second Karabakh War (September 27 – November 10) opened a new chapter for the South Caucasus. The trilateral statement of the Armenian, Azerbaijani, and Russian leaders signed on November 10 was not a mere ceasefire deal; more than that, it outlined the contours for the post-war development of the region. The 9th article of the statement dealt specifically with the opening of regional transportation and communication links which had been blocked in the wake of the First Karabakh War in the early 1990s. According to this article, all links shall be restored, and a transportation passage shall be provided to Azerbaijan for the “unhindered movement” between Azerbaijan and its Nakhchivan exclave through the Syunik region of Armenia. Azerbaijanis regularly refer to this transit route as the “Zangezur corridor,” in reference to the historical name of the southern territories of Armenia.
The two countries have traversed an important and mostly constructive road since the end of the Second Karabakh War towards the re-opening of transportation routes and the signing of a more comprehensive peace settlement. The January 11, 2021 summit between the Armenian, Azerbaijani, and Russian leaders in Moscow reaffirmed the desire of the sides to proceed on this path and established an intergovernmental working group to lead this process. The group headed by the deputy prime ministers of the three countries was tasked with presenting action plans (including implementation schedules) to their governments regarding regional railroad and highway projects. The group met at least ten times before the next summit of the country leaders, in Sochi, a Russian resort town on the Black Sea, on November 26.
At the Sochi summit, the leaders came to an agreement on the re-opening of regional transportation links, which include a transit passage for Armenia to connect with Iran (via Nakhchivan) and Russia (via Azerbaijan) along with the establishment of the Zangazur corridor. Some major results of this summit were made public by Armenian Prime Minister Nikol Pashinyan following his meeting with Azerbaijani President Ilham Aliyev, which was mediated by the European Union in Brussels on December 14.
According to him, the sides reached an agreement on a relaunch of the railways, based on internationally accepted border and customs regulations, on a reciprocal principle, under the sovereignty and authority of the respective countries. In early February, at a Cabinet meeting, Pashinyan said the sides are “very close to the first practical results” of the Armenia-Azerbaijan-Russia working group’s efforts. According to the current agreement, the railway will pass along the Yeraskh-Julfa-Ordubad-Meghri-Horadiz route starting in northern Armenia stretching to Horadiz, a town in the Fuzuli district of Azerbaijan, passing through Nakhchivan and southern Armenia.
Meanwhile, Azerbaijan already started building its section of the railroad, from Horadiz to Agbend (the southwesternmost town in the main part of Azerbaijan), as early as in February 2021. On January 25, 2022, Azerbaijan declared that 23 kilometres of railway had already been laid in this segment, which measures 110.4 kilometres in total, from Horadiz to the Armenian border in Agbend. Armenia has also started work on the construction of its part of the railway lines.
However, the Zangazur corridor does not include only a railway link, but also a highway between the two parts of Azerbaijan. This is one area on which the sides have yet to reach an agreement. The snag in the negotiations is disagreement over the status of this road link. The Armenian side insists that similar conditions should be applied to the highway connection, as well. “The Armenian side will not agree to provide a road to Azerbaijan without customs control and duties,” Pashinyan stresses.
For Azerbaijan, Armenia’s insistence on a border and customs regime along the motorway section of the Zangezur corridor is unacceptable and contradicts the trilateral statement of November 10, 2020. On December 14, a few hours prior to his meeting with Prime Minister Pashinyan in Brussels, President Aliyev declared that such restrictive regulations could only be applied to the trans-Zangezur highway if they are also applied to the Lachin corridor, which physically connects Armenia with Azerbaijan’s Karabakh region and remains under the temporary control of a Russian peacekeeping mission. “In [the] Trilateral Statement it clearly says that Azerbaijan provides security and unimpeded access for [the] connection between Karabakh and Armenia, and Armenia should provide the same unimpeded access and security for connections between Azerbaijan and [the] Nakhchivan Autonomous Republic,” he underscored.
The positive dynamics in the negotiations suggest that an agreement on this dispute may be reachable in the near future. One major reason for this optimism is related to the fact that the complete re-opening of regional transportation routes is in the interest of both Armenia and Azerbaijan, as well as of their extra-regional potential users, particularly Russia, Turkey, Iran, the European Union and China.
For Azerbaijan, the Zangazur corridor is a shorter route to connect with the Nakhchivan exclave and Turkey. During the Soviet period, Azerbaijan used to use this route, which featured both railway and highway acc. The breakout of the First Karabakh War of the early 1990s put a stop to the Zangazur land route connection with Nakhchivan and, among others, isolated the Azerbaijan’s exclave. Since then, Baku could physically reach Nakhchivan only by air or by circumventing Armenia to the south, via Iranian territory. The latter route came with myriads of security and geopolitical challenges for Azerbaijan, in addition to notable economic consequences. The re-opening of the trans-Zangazur route, is, therefore, of great importance for Azerbaijan.
This transit passage will also boost the potential of Middle Corridor, a multimodal transportation route connecting Europe with China via the Caspian Sea and the countries of Central Asia and the South Caucasus, which promises to be profitable for the economies of Armenia and Azerbaijan. For example, Armenian Economy Minister Vahan Kerobyan anticipates that unblocking the transport and economic connections will increase Armenia’s GDP by 30 percent over the course of two years. As opposed to some controversial estimates, the Armenian economy is expected to benefit not only from the transit fees for the use of the Zangazur corridor by Azerbaijan to connect with Nakhchivan but also from its use for cargo transportation by many other states, including Russia, Iran, Turkey, Central Asian, China, etc. Thanks to the new situation, Armenia will also overcome its relative isolation) in the situation in this region and become part of the Middle Corridor.
Russia and Turkey are poised to become amongst the winners in the post-war regional cooperation projects. The re-opening of the Zangazur corridor will provide Russia with a more stable transportation route to Armenia as well as a stable overland link with Turkey. It is important to note that this corridor will be beneficial for Russia both economically and geostrategicallly. The Zangazur corridor will not only connect the economies of its primary users but also will pave way for their political rapprochement. From this perspective, the corridor also constitutes the core of the 3+3 (Armenia, Azerbaijan, Georgia plus Russia, Iran, and Turkey) regional cooperation platform proposed by Turkey and Azerbaijan in the aftermath of the Second Karabakh War.
The realisation of these economic and political projects would bring peace and stability to the South Caucasus after the troublesome years of the Armenia-Azerbaijan conflict. This process is, however, not free of challenges and threats. The future of the region and the fate of the regional projects proposed after the Karabakh War is inextricably linked with the success of the Armenia-Azerbaijan peace process and the complete implementation of the November 10, 2020 trilateral statement. The withdrawal of illegal detachments of Armenian Armed Forces from the Karabakh region, the launch of the border delimitation and demarcation process, and the mutual recognition by Armenia and Azerbaijan of each other’s territorial integrit are prerequisites for sustainable peace and security in the region and for the successful implementation of the projects like the Zangazur corridor and the 3+3 regional cooperation platform.
