A thousand miles from Russia’s crumbling front line in Donbass, their military and political influence over another distant part of their former empire may be strengthening.
Running low on men, kit, and will, the Kremlin’s ambitions are being thwarted by American, British, and European arms and financing in the trenches of Ukraine. Yet policymakers should not convince themselves this retrenchment is replicated across the other 13 post-Soviet states. Particularly in the Caucasus, where a potential peace deal between bitter opponents Armenia and Azerbaijan is being actively impeded by the Kremlin’s recent moves, Russia appears to be regaining its leverage.
Moscow’s opportunity comes from their role in administering a ceasefire between the two countries, negotiated after a war in 2020 that saw Azerbaijan win back on the battlefield most of its territory occupied by neighbouring Armenia since the 1990s. The Putin-brokered deal installed Russian peacekeepers to control the Lachin corridor—the only land route connecting Armenia and a remaining ethnic Armenian exclave within Azerbaijan.
Crucially for the Kremlin, power had been maintained by re-freezing the conflict, a policy deployed along with Russian troops repeatedly in other hot zones of the post-Soviet world. In each, Moscow’s policy has been to dig in through a military presence, becoming the indispensable broker of—and immovable barrier to—peace.
Ukraine changed that dynamic. Checked in Donbass, fear of Russia’s power has dissolved in the Caucasus. Armenia, held back geopolitically through a mistaken decision to join Russia’s customs union and military alliance that it now regrets, has found new flexibility. After Russia’s Ukraine invasion, Azerbaijan cancelled rouble-denominated trading and even supplied Ukrainian emergency services with free fuel. Both came to the negotiating table under European mandated peace talks. Parallel Russian efforts—only 12 months previously, effectively the only game in town—gained the look and smell of afterthought.
By autumn 2022, six months after the Ukraine invasion, talks had been agreed between Azerbaijan and the ethnic Armenians of Karabakh. Through an EU-led format, Azerbaijan and Armenia had gone so far as to recognise each other’s borders and sovereign integrity—something thirty years of talks with Russia at the table had failed to come close to achieving.
Putin’s response is called Ruben Vardanyan. An Armenian-born but Russian-manufactured oligarch who made his riches in Moscow through what are today amongst Russia’s most western-sanctioned companies, Vardanyan suddenly emerged as de facto prime minister of the ethnic Armenian-held exclave in Karabakh. He had shown scant interest in the place before, where he was not born and had hardly visited before his appointment. Perhaps to divert from that fact, he ostentatiously renounced his Russian citizenship to “return home”.
Russian oligarchs like Vardanyan do not operate without the express permission of the Kremlin. The Ukrainian government recognised this fact when it recently imposed sanctions against him. He is Moscow’s man, regardless of his passport status, and his role since November has been to scupper the peace process. This he has done with aplomb: publicly criticising the Armenian government’s stance in the talks; reopening two long-dormant gold mines in ethnic-Armenian held Karabakh, and transporting its harvest via Lachin, a land corridor connecting the territory to Armenia that is patrolled by Kremlin peacekeepers. Accusations of drug-dealing and people trafficking have also emerged. Whether true or not that Vardanyan is profiteering from human desperation, he is certainly jeopardising prospects for peace.
Seemingly weeks away from an historic peace, Moscow has derailed the process—strengthening its hand—without a shot being fired. They are close to putting this conflict back into the deep freeze.
They may not have Russia’s military presence on the ground, but Western nations are not without options to help. Young Azerbaijanis and Armenians do not see their future with Russia but with America, Britain, and Europe. Armenia’s political class—long held captive by Russian control over key national industries and defence—wants out. Azerbaijan, fortunate in oil and gas reserves, tilted away from Moscow economically two decades ago.
In the longer term, the West can help by making both countries big and bold offers: greater integration, and special status with the EU; and closer relations with NATO.
But immediately they could finally follow Ukraine’s lead and sanction Ruben Vardanyan, something 21 European parliamentarians called for four years ago, but on which the European Commission failed to act. Whether he believes he is working for himself or Moscow, he is certainly an asset for the Kremlin. There is little prospect for peace with him in Karabakh as the conduit through which Russia’s hold on the Caucasus is again strengthening.
Losing its grip in Ukraine, Russia’s hold is strengthening in the Caucasus
A thousand miles from Russia’s crumbling front line in Donbass, their military and political influence over another distant part of their former empire may be strengthening.
Running low on men, kit, and will, the Kremlin’s ambitions are being thwarted by American, British, and European arms and financing in the trenches of Ukraine. Yet policymakers should not convince themselves this retrenchment is replicated across the other 13 post-Soviet states. Particularly in the Caucasus, where a potential peace deal between bitter opponents Armenia and Azerbaijan is being actively impeded by the Kremlin’s recent moves, Russia appears to be regaining its leverage.
Moscow’s opportunity comes from their role in administering a ceasefire between the two countries, negotiated after a war in 2020 that saw Azerbaijan win back on the battlefield most of its territory occupied by neighbouring Armenia since the 1990s. The Putin-brokered deal installed Russian peacekeepers to control the Lachin corridor—the only land route connecting Armenia and a remaining ethnic Armenian exclave within Azerbaijan.
Crucially for the Kremlin, power had been maintained by re-freezing the conflict, a policy deployed along with Russian troops repeatedly in other hot zones of the post-Soviet world. In each, Moscow’s policy has been to dig in through a military presence, becoming the indispensable broker of—and immovable barrier to—peace.
Ukraine changed that dynamic. Checked in Donbass, fear of Russia’s power has dissolved in the Caucasus. Armenia, held back geopolitically through a mistaken decision to join Russia’s customs union and military alliance that it now regrets, has found new flexibility. After Russia’s Ukraine invasion, Azerbaijan cancelled rouble-denominated trading and even supplied Ukrainian emergency services with free fuel. Both came to the negotiating table under European mandated peace talks. Parallel Russian efforts—only 12 months previously, effectively the only game in town—gained the look and smell of afterthought.
By autumn 2022, six months after the Ukraine invasion, talks had been agreed between Azerbaijan and the ethnic Armenians of Karabakh. Through an EU-led format, Azerbaijan and Armenia had gone so far as to recognise each other’s borders and sovereign integrity—something thirty years of talks with Russia at the table had failed to come close to achieving.
Putin’s response is called Ruben Vardanyan. An Armenian-born but Russian-manufactured oligarch who made his riches in Moscow through what are today amongst Russia’s most western-sanctioned companies, Vardanyan suddenly emerged as de facto prime minister of the ethnic Armenian-held exclave in Karabakh. He had shown scant interest in the place before, where he was not born and had hardly visited before his appointment. Perhaps to divert from that fact, he ostentatiously renounced his Russian citizenship to “return home”.
Russian oligarchs like Vardanyan do not operate without the express permission of the Kremlin. The Ukrainian government recognised this fact when it recently imposed sanctions against him. He is Moscow’s man, regardless of his passport status, and his role since November has been to scupper the peace process. This he has done with aplomb: publicly criticising the Armenian government’s stance in the talks; reopening two long-dormant gold mines in ethnic-Armenian held Karabakh, and transporting its harvest via Lachin, a land corridor connecting the territory to Armenia that is patrolled by Kremlin peacekeepers. Accusations of drug-dealing and people trafficking have also emerged. Whether true or not that Vardanyan is profiteering from human desperation, he is certainly jeopardising prospects for peace.
Seemingly weeks away from an historic peace, Moscow has derailed the process—strengthening its hand—without a shot being fired. They are close to putting this conflict back into the deep freeze.
They may not have Russia’s military presence on the ground, but Western nations are not without options to help. Young Azerbaijanis and Armenians do not see their future with Russia but with America, Britain, and Europe. Armenia’s political class—long held captive by Russian control over key national industries and defence—wants out. Azerbaijan, fortunate in oil and gas reserves, tilted away from Moscow economically two decades ago.
In the longer term, the West can help by making both countries big and bold offers: greater integration, and special status with the EU; and closer relations with NATO.
But immediately they could finally follow Ukraine’s lead and sanction Ruben Vardanyan, something 21 European parliamentarians called for four years ago, but on which the European Commission failed to act. Whether he believes he is working for himself or Moscow, he is certainly an asset for the Kremlin. There is little prospect for peace with him in Karabakh as the conduit through which Russia’s hold on the Caucasus is again strengthening.
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