US Strategic Interests in the South Caucasus and its Post-2020 War Policy towards Armenia

Policy Recommendation Series | January 2024

By Yeghia Tashjian, M.A., Benyamin Poghosyan, Ph.D., Michael Rubin, Ph.D.

In the wake of President Joe Biden’s affirmation of America’s renewed engagement on the global stage post-2020 elections, U.S. foreign policy faces a complex landscape in the post-Soviet space, underscored by the tension between democratic ideals and authoritarian forces. Historically, following the dissolution of the Soviet Union, the United States fostered warm relations with Russia and the nascent independent states, actively supporting nuclear disarmament and democratic transitions, albeit with varying degrees of involvement across regions. U.S. policy has traditionally been cautious in the South Caucasus, balancing support for democratization with strategic interests, as evidenced by its tempered stance on the Armenia-Azerbaijan dispute. However, the limited response to the second Artsakh (Nagorno-Karabakh) war and the subsequent Russian-dominated ceasefire have highlighted the constraints of U.S. influence and spurred a reevaluation of its role in regional dynamics.

Recent regional turmoil, from Russia’s aggression in Ukraine to the fraught tensions in Artsakh, has catalyzed a strategic pivot in U.S. policy towards the South Caucasus. The Biden administration’s approach signals a readiness to engage more assertively, advocating for humanitarian support, acknowledging indigenous rights and reinforcing self-determination for the people of Artsakh. The U.S. rejects external territorial ambitions over Armenia, emphasizing the inviolability of established borders and promoting a recalibration of regional power dynamics to curb Russian influence. This potential renaissance in American diplomacy, underscored by a commitment to Armenia’s security and regional stability, challenges the narrative of U.S. ineffectiveness and seeks to shape a future grounded in democratic values and peaceable state relations.

Introduction

After his November 2020 victory in the U.S. presidential elections, Joe Biden declared, “America is back.” The United States would once again take its involvement seriously in the world. President Biden’s vision of 21st-century geopolitics as a battle between democracy and authoritarianism implied more U.S. involvement in the post-Soviet space to deter and counter Russia and its like-minded allies. 

Upon the dissolution of the Soviet Union, the United States sought to establish warm relations with Russia and the newly independent Soviet states. President George H.W. Bush was solicitous of Russian concerns and coerced Ukraine, Kazakhstan and Belarus to forfeit their legacy Soviet nuclear arsenals. At the same time, the United States supported democratization and eventually European Union membership and NATO accession for the three Baltic States. 

Washington’s approach to the Caucasus was more restrained. It supported a diplomatic process to address the Azerbaijan-Armenia dispute and generally stated its support for democratization, albeit tempered by the desire to treat Azerbaijan as an energy resource, regardless of its governance. Successive U.S. administrations also sought to minimize Russia’s influence when opportunities presented themselves, such as with the November 2003 Rose Revolution in Georgia or the 2018 “Velvet Revolution” in Armenia.

U.S. inaction against the backdrop of the Second Artsakh (Nagorno-Karabakh) War highlighted the limits of U.S. influence. The ceasefire agreement imposed by Russian President Vladimir Putin sidelined the Organization for Security and Cooperation in Europe (OSCE) Minsk Group as an institution, as well as France and the United States that, alongside Russia, acted as its co-chairs.

Recent crises ranging from Russia’s invasion of Ukraine to Azerbaijan’s conquest of Artsakh and Azerbaijan’s military build-up along its borders with Armenia have refocused Washington’s attention on the region. The Biden administration has sought to facilitate a peace process between Baku and Yerevan as Russian influence declines due to Moscow’s inability or unwillingness to enforce the November 9, 2020 agreement.

 The United States believes that the normalization and economic cooperation between regional states will de-escalate tensions and decrease Russian influence in Armenia. Analysts are right to recognize that Armenia has less reason to tie itself to Russia militarily if it no longer faces existential threats from its neighbors. For the first time since the dissolution of the Soviet Union, there is an opportunity for a fundamentally new and more proactive American strategy to preserve and develop its interests in the South Caucasus.

Is the U.S. interested in regional stability and peace?

Ask any American diplomat if the U.S. is interested in regional stability and peace, and the answer would be, of course. There is little evidence, however, to suggest any serious commitment. The National Security Council has yet to publish any official strategy on the South Caucasus in the way it has with Africa or the Indo-Pacific region. The 2022 U.S. National Security Strategy mentioned the South Caucasus only once to report the U.S. would back diplomatic efforts to resolve the conflict between Armenia and Azerbaijan. Similarly, there were no mentions of Armenia, Azerbaijan, Georgia or the South Caucasus in the 2022 National Defense Strategy. The Director of National Intelligence’s Annual Threat Assessments argued that relations between Armenia and Azerbaijan were likely to remain tense and occasionally volatile in the absence of a peace treaty. Against the backdrop of renewed fighting, the intelligence community’s assessment reflected the continued downplaying and misanalysis of Azerbaijan and its anti-Armenia agenda. Anatol Lieven, director of the Eurasia program at the Quincy Institute, concurred that the United States had no clear and formal strategy for the South Caucasus. *

Since the 2022 Russian invasion of Ukraine, the United States has sought to contain and isolate Russia. Weakening Russian influence in the South Caucasus would conform to this strategy. Indeed, the United States continued to oppose the deployment of Russian peacekeepers in Artsakh, in the wake of Azerbaijan’s September 2023 invasion of Artsakh, or anywhere else in the region. While the United States does not call openly for the withdrawal of Russia’s approximately 3,000 troops stationed at a military base in Gyumri, Acting Assistant Secretary of State for European Affairs Yuri Kim stated on September 14, 2023, that Washington had a strategic opportunity to reduce the malign influence in the region from actors like Russia, China and Iran. She argued for a durable peace that would expand U.S. bilateral economic and security cooperation and provide greater energy security for European partners and allies.

The State Department hopes Armenia and Azerbaijan recognize each other’s territorial integrity. While the United States supports Armenia’s decision to recognize Artsakh as Azerbaijan’s sovereign territory, it also has long called for assuring the rights of Artsakh’s indigenous Armenian community. However, the September 19, 2023, Azerbaijani offensive and the forced displacement of Armenians from Artsakh did not elicit any tangible American response, except for the Armenian Protection Act of 2023, unanimously passed in the U.S. Senate. There were neither sanctions nor symbolic gestures to express U.S. frustration with Azerbaijan. U.S. Agency for International Development administrator Samantha Power and Kim visited Armenia after Artsakh’s collapse but offered humanitarian assistance equivalent to less than $100 per displaced person.

Does fear of Iran shape U.S. policy in the South Caucasus?

From Iran’s perspective, the countries’ shared Shiite faith and close cultural ties reinforce mutual bonds with Azerbaijan. The region became more important to Iran after the Second Artsakh War upset Iran’s decades-long cautious embrace of the status quo in which it could leverage influence over Armenia to preserve its northward trade routes. Additionally, Tehran had leverage over Baku, as it was the only way Azerbaijan could access its Nakhichevan exclave by land without passing through Armenia.

The war’s outcome upended the geopolitical landscape by allowing Turkish military and political penetration of the region. Baku, backed by Ankara, embraced a narrative of establishing an extraterritorial “Zangezur” corridor across southern Armenia from Azerbaijan proper to Nakhichevan, effectively cutting Armenia off from Iran. Aliyev even proposed populating southern Armenia with “Azerbaijani refugees who left Armenia in 1988.” 

While some American officials may believe isolating Iran and increasing Turkish influence in the region might serve U.S. interests in the short-term, Turkey’s tilt toward Russia and China and President Recep Tayyip Erdogan’s efforts to minimize Western influence suggest such a benefit to be illusionary. Nor does such an assessment accurately reflect the Turkish and Azerbaijani contradictions in the region. Azerbaijan’s trade with Iran is equivalent to Armenia’s, and Turkey’s trade with Iran is an order of magnitude higher. Furthermore, the growing economic relations between Moscow and Ankara jeopardize the U.S. interests in the Caspian region.

It is naïve to believe that, should Baku feel no threat from Yerevan, Azerbaijan would focus on countering Iran. Growing energy and trade relations between the two countries suggest that, rhetoric aside, both Aliyev and the Islamic Republic respect each other’s red lines. While Azerbaijan has cooperated with both Israel and the United States with regard to monitoring Iran, Azerbaijan lobbyists often exaggerate its role. Most Israeli operatives infiltrate Iran not through Azerbaijan but rather from Iraqi Kurdistan. Additionally, as Turkey turns on Israel and because Turkey looks at Azerbaijan as a subordinate partner, it is doubtful Erdogan would tolerate continued tight Azerbaijan-Israel ties.  

Does energy shape American strategy?

On September 20, 1994, then-Azerbaijani President Heydar Aliyev and oil executives from several international companies gathered in Baku for the ceremonial signing of what the Azerbaijani president called the “deal of the century.” A consortium of 11 foreign oil companies signed a contract with the State Oil Company of Azerbaijan Republic (SOCAR) to develop three major oil fields in the Caspian Sea. As a result, American companies – Amoco, Exxon, Unocal and Pennzoil – collectively took a 40 percent share, followed by BP (formerly British Petroleum) with 17 percent in developing Azerbaijan’s huge Caspian oil. 

To minimize Europe’s energy dependence on Russia, the Americans and the British initiated and financed the construction of the Baku-Tbilisi-Ceyhan pipeline, completed in 2005. The 1,768-kilometer [1,100 mile] pipeline traverses Azerbaijan and Georgia before ending at the port of Ceyhan in Turkey. Today, it can transport 1.2 million barrels per day, and in total it has transported more than 3.6 billion barrels of crude oil from the Caspian to the Mediterranean, bypassing Russia and Iran to decrease Europe’s energy dependence on either. In May 2006, Azerbaijan, Georgia and Turkey launched a further Baku-Tbilisi-Erzurum gas pipeline to bring Azerbaijani gas to northern Turkey. Beginning in December 2020, the Trans-Anatolian gas pipeline and Trans Adriatic Pipeline supplemented these to provide up to 10 billion cubic meters of Azeri gas annually to Greece, Italy and other European countries. 

The Ukraine war pushed the Europeans to reduce gas imports from Russia further. On July 18, 2022, the European Commission, backed by the Americans, signed a Memorandum of Understanding with Azerbaijan to double imports of Azerbaijani natural gas to at least 20 billion cubic meters a year by 2027. “The EU and Azerbaijan are opening a new chapter in energy cooperation. Azerbaijan is a key partner in the EU’s efforts to move away from Russian fossil fuels,” said European Commission president Ursula von der Leyen. Meanwhile, Azerbaijan’s President Ilham Aliyev stressed that “issues of energy security today are more important than ever.” Azerbaijan started increasing natural gas deliveries to the EU from 8.1 billion cubic meters in 2021 to around 12 billion cubic meters in 2022 via the Southern Gas Corridor. The Azerbaijani option is less than meets the eye, however. To meet Europe’s gas demands, Baku imports gas from Russia.

Does the U.S. support the “Zangezur” corridor?

The OSCE Minsk Group supported reopening trade links between Armenia and Azerbaijan during the two decades it led negotiations to resolve the Artsakh conflict. The subsequent November 2020 trilateral statement also called for the opening of economic and transport links to enable safe passage between Azerbaijan proper and its non-contiguous Nakhichevan Autonomous Republic. Russia’s Federal Security Service was to secure the corridor. The Kremlin would not support any revision that would eliminate its role in the region.

Almost immediately, Azerbaijan sought to redefine the “Zangezur” corridor. Baku argued it was not meant simply to be a transport route but insisted Armenia had agreed to provide an extraterritorial corridor via Syunik, the Armenian province that falls between Azerbaijan and Nakhichevan. Azerbaijan took further steps to include the “Zangezur” corridor into the “Middle Corridor” which envisages the establishment of the new land route between China and Europe via Kazakhstan, the Caspian Sea, South Caucasus, the Black Sea and Turkey. While the “Middle Corridor” can operate without passing through Armenia, Azerbaijan’s characterization of “Zangezur” distorts reality.  Nor does the establishment of railway and highway connections between Azerbaijan, Nakhichevan and Turkey via Armenia have any direct linkage with the “Middle Corridor.” 

The United States has always supported the idea of restoration of economic ties, including transport communications between Armenia and Azerbaijan, to encourage post-conflict stability and security. In the context of the establishment of railways and highways connecting Azerbaijan with Nakhichevan and Turkey via Armenia, the United States believes that these routes should not be under Russian control. This would require Armenia to change the modalities of Article 9 of the trilateral statement and reject Russian control over any transport communication. Armenia has grounds to reject Russian involvement given Moscow’s failure to uphold its commitments under the trilateral statement. Encouraging Turkey’s trade across Armenia absent Russian involvement could advance U.S. interests by denying space to Russia. Such an outcome, however, would require a fundamental change in Turkey’s attitude toward Armenia. Rather than demand Armenia accept an irredentist Turkey as is, the United States might better achieve its goals if it sought diplomatically to demand Turkey’s acceptance of Armenia’s rights and legitimacy. 

Is Armenia-Turkey normalization possible?

Turkey blockades Armenia in contravention of the 1921 Treaty of Kars and rejects diplomatic relations with Armenia in solidarity with Azerbaijan. The State Department has pushed for Armenia-Turkey normalization since the early 1990s. The idea behind this approach is simple: If Armenia established normal relations with Turkey, it would no longer need to rely on Russia as a guarantor for its sovereignty nor Iran as an economic lifeline. The United States supported the “Football Diplomacy” of 2008-2009 and expressed readiness to contribute to the normalization of Armenia-Turkey relations after the end of the 2020 Artsakh war.  

Recommendations 

Azerbaijan mocks the United States as ineffective and a paper tiger, unwanted and unneeded as a diplomatic intermediary. In this, Baku’s rhetoric is similar to Tehran’s and Moscow’s. Washington does have a role, though. Proactive engagement in diplomacy toward Armenia and the broader South Caucasus can have a tremendous impact on outcomes. As such, the United States should undertake the following actions:

  • First, the United States must address the immediate crisis. The State Department should increase humanitarian aid to Armenian refugees from Artsakh. 
  • Second, the United States immediately and openly should endorse the right of return for Armenian refugees from Artsakh. The State Department must acknowledge these refugees as the indigenous population of Artsakh. 
  • Third, the State Department should recognize that the indigenous population of Artsakh maintains its right of self-determination. This was the case legally under the Soviet Constitution – no action or statement by Armenian authorities in Yerevan strips Artsakh Armenians of their fundamental rights.  
  • Fourth, Artsakh was a democratic republic with regular one-person, one-vote elections to determine its representatives. In contrast, Azerbaijan is a dictatorship. The exercise of self-determination mandates Artsakh Armenians establish a government-in-exile to represent the interests of Artsakh Armenians in future negotiations.
  • Fifth, the United States should reject Azerbaijan’s conception of the “Zangezur” corridor outright. Rationalizing Baku’s position would only legitimize it and encourage Azerbaijan to take even more extreme positions. The United States, like France, should recognize the sanctity of Armenia’s 1991 borders and reject any Azerbaijani attempts to revise or redraw them.
  • Sixth, the United States is right to reduce Russian influence, but this requires ending the security threats Armenia faces from its neighbors. There are no shortcuts. The United States must first demand an end to Turkey’s illegal blockade of Armenia and demand that Azerbaijan recognize Armenia’s borders and allow unrestricted Armenian trade. 
  • Seventh, the United States should recognize Armenia’s legitimate security needs. Israel’s military exports to Azerbaijan shifted the balance of power and convinced Azerbaijan it could impose through military force what it could never achieve at the negotiating table. Security in the South Caucasus has suffered since. As such, the United States should seek to restore a regional balance of power to stabilize the region. The United States should enhance arms trade and military training with Armenia. The United States should also encourage like-minded countries like France and India to provide arms to Armenia while opposing sales of weaponry to Azerbaijan. 

*Interview was conducted by Benyamin Poghosyan on September 13, 2023.

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About the Authors

Yeghia Tashjian, M.A., is a regional analyst and researcher. He graduated from the American University of Beirut with a public policy and international affairs degree. He pursued his B.A. in political science at Haigazian University in 2013. In 2010, he founded the New Eastern Politics forum/blog. He was a research assistant at the Armenian Diaspora Research Center at Haigazian University. He has participated in international conferences and has presented various topics, from minority rights to regional security issues. His thesis topic was China’s geopolitical and energy security interests in Iran and the Persian Gulf. He is a contributor to various local and regional newspapers and a columnist for the Armenian Weekly. He is the International Affairs Cluster Coordinator at the Issam Fares Institute for Public Policy and International Affairs at the American University of Beirut and a part-time instructor in International Affairs at the American University of Science and Technology (Beirut Campus). 

Benyamin Poghosyan, Ph.D., is the chairman of the Center for Political and Economic Strategic Studies. He was head of the Institute for National Strategic Studies at the National Defense Research University in Armenia from August 2016 to February 2019. He joined the Institute for National Strategic Studies in March 2009 as a Research Fellow and was appointed INSS Deputy Director for research in November 2010. During his tenure at the only Armenian state think tank dealing with Armenian foreign policy and regional and international security, Dr. Poghosyan prepared and supervised the elaboration of more than 100 policy papers that were presented to the political-military leadership of Armenia. Since 2009, Dr. Poghosyan has participated in more than 150 international conferences and workshops as a regional and global security dynamics speaker. 

Michael Rubin, Ph.D., is a senior fellow at the American Enterprise Institute, specializing in Iran, Turkey and the broader Middle East. A former Pentagon official, Dr. Rubin has lived in post-revolution Iran, Yemen and pre- and post-war Iraq. He also spent time with the Taliban before 9/11. For over a decade, he taught classes at sea about the Horn of Africa and Middle East conflicts, culture and terrorism to deployed U.S. Navy and Marine units. Dr. Rubin is the author, coauthor and coeditor of several books exploring diplomacy, Iranian history, Arab culture, Kurdish studies and Shi’ite politics, including Seven Pillars: What Really Causes Instability in the Middle East? (AEI Press, 2019); Kurdistan Rising (AEI Press, 2016); Dancing with the Devil: The Perils of Engaging Rogue Regimes (Encounter Books, 2014); and Eternal Iran: Continuity and Chaos (Palgrave, 2005). Dr. Rubin has a Ph.D. and an MA in history from Yale University and obtained a BS in biology.

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About the Institute

The Aram Manoukian Institute for Strategic Planning has been formed to work with experts in various fields to develop plans for the future of the Armenian nation in Armenia, Artsakh and the Diaspora. The overarching vision of the Institute is to work towards the creation of a prosperous and just society in Armenia, Artsakh and the Armenian diaspora, where the rights and dignity of all individuals are respected and where peace, democracy and sustainable development are achieved.

The Institute will identify appropriate target audiences, including government officials, civil society organizations, academia, businesses and the public, to ensure its work reaches various stakeholders. It will also build a diverse team with expertise from various fields, including academics, practitioners, individuals from the Armenian diaspora and youth, to provide a holistic perspective in addressing the nation’s challenges. Additionally, it underscores the significance of developing partnerships and collaborations with government agencies, NGOs, research institutions, businesses, international organizations and diaspora organizations to leverage resources and knowledge effectively. The Institute’s agenda will focus on pressing issues such as national security, economic development, education, good governance, health care, diaspora engagement and environmental sustainability. By addressing these challenges through research-based insights and policy recommendations, the Institute will contribute toward the betterment of the Armenian nation.

About the Institute’s Namesake

Aram Manoukian, born in 1879 in Karakilisa, was a prominent Armenian revolutionary who played a pivotal role in the formation of the First Armenian Republic in 1918. His educational journey began in local Armenian schools, followed by studies at the St. Petersburg Polytechnic Institute in Russia.

While still a student in St. Petersburg, Manoukian became deeply involved in the Armenian national liberation movement. In 1902, he formally joined the Armenian Revolutionary Federation (ARF) and actively participated in various ARF activities, including armed struggles against oppressive regimes in the Caucasus and the Middle East, notably the Ottoman Empire. He successfully led the self-defense of Van, saving the lives of tens of thousands of Armenian civilians from deportation massacre by the Turkish government.

In 1917, after the Russian Revolution, Manoukian returned to Armenia and assumed a central role in establishing the First Armenian Republic in 1918. He served as the commander-in-chief of Armenian forces during intense battles against Ottoman forces in the Caucasus, ultimately securing Armenia’s independence.

Beyond his military leadership, Manoukian’s contributions extended to politics and economics in the nascent republic. As the prime minister, he championed social justice, equality and progressive policies, focusing on land reform, education and other measures to improve the lives of ordinary Armenians.

Today, Aram Manoukian’s legacy endures, serving as a timeless source of inspiration for Armenians, commemorating his unwavering dedication to his nation and his role as a patriotic statesman.

Aram Manoukian Institute for Strategic Planning
The Aram Manoukian Institute for Strategic Planning has been formed to work with experts in various fields to develop plans for the future of the Armenian nation in Armenia, Artsakh and the Diaspora. The overarching vision of the Institute is to work towards the creation of a prosperous and just society in Armenia, Artsakh and the Armenian diaspora, where the rights and dignity of all individuals are respected and where peace, democracy and sustainable development are achieved.
Aram Manoukian Institute for Strategic Planning

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4 Comments

  1. This is not a criticism. I am not qualified to criticize. But it is one of bewilderment.
    After a lengthy analysis I read a list of recommendations.
    1. 1. “The State Department should increase humanitarian aid to Armenia refugees from Artsakh.” Why should it?
    2. 2. “The U.S. immediately and openly should endorse the right of return for Armenia refugees from Artsakh.” What about if it does not endorse.
    3. 3. “The State Department should recognize that the indigenous population of Artsakh maintains its right of self-determination.” What about it does not recognize as it has not since the great exodus from Artsakh.
    4. 4. “Artsakh Armenians establish a government-in-exile to represent the interests of Artskah Armenians in future negotiations.” But with due respect, Artsakh Armenians had a government in Artsakh and no government recognized it.
    5. 5. There are “should do”s here as well.
    6. 6. There is a “U.S. must first demand” here.
    7. 7. There is a “U.S should recognize” here.
    Is this what strategic planning is all about?
    Is this how our strategy is laid down, by laying down what a superpower – U.S. – should or must do for our benefit? Maybe it is and I have remained ignorant.

    • Well written, the main article has a tone of entitlement to it. The point about Arktash government in exile is valid after all when it was a functional entity it had no international recognition as a government so expecting such credentials when it’s collapsed is extraordinary.

  2. More US/Western involvement in the south Caucasus = more disaster for the entire region. We are where we are because of the Western factor in the region. You people did enough damage to Armenia with your “commentary politics”. Please go back to your diasporan lives. Let the region’s powers sort things out.

  3. Turkish-Armenian normalization is not impossible, but it will not happen before Azerbaijan and Armenia sign a peace treaty. Azerbaijan is too important for Turkey to alienate over normalization with a country that does not serve any purpose geo-politically or economically. Armenia has no strategic value for Turkey’s geo-political vision when compared to what Azerbaijan brings to the table.
    Furthermore, the Second Karabakh demonstrated how beneficial a conflict can be in the region for Turkey. Not only did it increase Turkey’s presence in the Caucuses but also affected its image in Central Asia. Another advantage of the short war was it was the perfect test bed to demonstrate Turkish weapons in an interstate war. Exports of TB2 and other Turkish weapons systems blew up after the cease fire.
    So I cannot see how normalization can be possible without Azerbaijan or what benefits it will bring Turkey.

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