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Mar 9, 2016 | 09:00 GMT

Russia's Evolving Role in the Caucasus

Russian President Vladimir Putin (R) and Armenian president Serzh Sarkisian (L) meet in Novo-Ogaryovo presidential residence outside Moscow, on September 3, 2013. Serzh Sargsyan is on a working visit to Moscow. AFP PHOTO / POOL / MAXIM SHIPENKOV (Photo credit should read MAXIM SHIPENKOV/AFP/Getty Images)
(MAXIM SHIPENKOV/AFP/Getty Images)
Summary

Recent developments in the Caucasus suggest that subtle but important shifts are occurring, especially when it comes to Russia's role in the region. A flurry of diplomatic activity has transpired over the past few weeks, with Russian officials participating in negotiations over a wide variety of issues, including natural gas exports to Georgia, weapons sales to Armenia, and broader political and security ties with Azerbaijan. This accelerated diplomatic bustle comes at a time when other players, such as Turkey and the West, have begun to more actively challenge Moscow's dominance in the region. Moreover, Russia's evolving position in the Caucasus will likely be an important indicator for the future of larger conflicts in Ukraine and Syria. 

The Caucasus region — a transcontinental zone between Europe and Asia — has long been an area of geopolitical friction. Surrounded by powerhouses such as Russia, Turkey and Iran, the Caucasus is bound by a complex, constantly changing web of relationships. To complicate matters, it is also of strategic interest to the West because of its location and energy resources. Broadly speaking in terms of allegiances, Georgia is oriented toward the West, Armenia is aligned with Russia, and Azerbaijan has strong ties with Turkey. In practice, each of these relationships is highly nuanced and subject to complex tactical shifts that can occur at any given moment.

For much of the post-Soviet period, Russia has been the strongest external power in the Caucasus. In defeating Georgia in the August 2008 war, Russia was able to build up its military presence in the breakaway territories of Abkhazia and South Ossetia. Moscow was also able to expose the West's unwillingness to intervene on behalf of an EU and NATO ally. Russia keeps an additional 5,000 troops in Armenia, and while there is no military presence in Azerbaijan, forces loyal to Moscow surround the country to the north and west, forcing Baku to keep Moscow's strategic interests in mind during any decision-making.

After EuroMaidan

Despite its seemingly dominant position, Russia's regional clout has been seriously damaged since Ukraine's EuroMaidan uprising in 2014. The rebellion in Kiev not only caused Moscow to devote substantial military resources to Crimea and eastern Ukraine, but it also led to significant political and economic pressure on Russia from the West. The powerful combination of low oil prices and sanctions levied by the United States and the European Union significantly weakened Russia's economy. At the same time, Moscow's involvement in conflicts in eastern Ukraine and Syria has strained its ability to project political and military power as it did before the Ukraine uprising.

In the Caucasus, the change in Russia's ability to project influence has been very clear. Georgia has substantially increased its integration with the West in the two years since the EuroMaidan uprising, signing an association and free trade agreement with the European Union in 2014 and opening a NATO training center in the country in August 2015. Additionally, Georgia purchased air defense systems from France, a notable sale because Tbilisi had been under a virtual arms embargo from the West since 2008. Though EU and NATO membership has remained elusive for Georgia, the West's support and commitment to the country has indisputably grown since the Ukrainian uprising.

Meanwhile, Azerbaijan's leverage in relation to Russia has grown, as Europe pursues the country as an alternative source of natural gas via the Southern Corridor route. Emboldened, Azerbaijan has taken a more aggressive stance in its conflict with Armenia over the breakaway Nagorno-Karabakh territory, over which the two countries fought a war from 1988-1994. Russia, traditionally a staunch Armenian ally and the most influential power broker in the Nagorno-Karabakh conflict, has become more engaged over the past year in mediating negotiations. Moreover, Moscow has signaled that it may be willing to oversee a change in the conflict's status quo that would favor Azerbaijan as a way to keep Baku from swinging too close to the West or Turkey.

Balancing Allies 

Several recent developments highlight Moscow's current position in the Caucasus as well as its evolving situation further down the line. Despite Georgia's westward drift, Moscow has maintained contact with Tbilisi. Under the Georgian Dream movement led by Bidzina Ivanishvili — a billionaire former tycoon who made his fortune in Russia — Georgia's government has shown a desire to re-establish ties with Russia. Trade between the two countries has grown in recent years. Last year, negotiations to increase Russian natural gas exports to Georgia were opened. However, Georgia also began similar talks with Azerbaijan, its main supplier, and Tbilisi reached a deal with Baku on March 4 to import an additional 500 million cubic meters of natural gas per year. Two days later, Georgia and Russia agreed to continue their natural gas contract at existing levels, which indicates that Tbilisi may never have intended to increase supplies from Russia and used the negotiations to extract concessions from Azerbaijan. Still, it is possible that commercial ties between Russia and Georgia could increase in the future. Indeed, a Georgia-Russia business forum will take place in the fall. But, ultimately, Moscow came away from the talks with Tbilisi in the same position as it was before.

On the other hand, Russia's relationship with Azerbaijan has grown more complicated. On March 3, Russian Deputy Prime Minister Dmitry Rogozin visited Baku to discuss military-technical cooperation with Azerbaijani President Ilham Aliyev. According to the Russian daily Kommersant, Rogozin's visit was tied to Azerbaijan's failure to pay for a Russian arms shipment in the wake of financial difficulties associated with low energy prices. The visit came just weeks after Azerbaijan sent Russia a note of protest, expressing dissatisfaction over the nature and terms, relative to its own contracts with Moscow, of a $200 million loan Russia made to Armenia for weapons purchases.

Though Russia has long prioritized its military alliance with Armenia over its more complex relationship with Azerbaijan, Moscow has used arms shipments to both countries to maintain its influence. But Russia's efforts to maneuver diplomatically between the two countries when it faces pressure from elsewhere in Eurasia could come at a cost. Armenia has become more suspicious of Russia's recent willingness to engage diplomatically with Azerbaijan over Nagorno-Karabakh, which could explain the preferential weapons deal Moscow reached with Yerevan. In the meantime, Russia's entrance into the Syrian conflict and standoff with Turkey have reverberated throughout the Caucasus, causing Ankara to look to the area for leverage against Moscow. Relieved from the burden of Western sanctions, Iran could also become more active in the Caucasus.

Undoubtedly, Russia's strategic position in the Caucasus faces vulnerabilities that the West, Turkey and others appear willing to exploit. Russia will remain the region's dominant military power for the near future, but its economic issues and security commitments in Ukraine and Syria could make sustaining influence in the Caucasus — and navigating the complex web of relationships there — increasingly difficult.

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