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War in Nagorno-Karabakh: What’s next for the people of Azerbaijan?

Aykhan Allahveranv

This article was developed in partnership with the UCL Law Society


The recent Azerbaijani ground offensive in the disputed territory of Nagorno-Karabakh has delivered a decisive victory, yet it has also shaken the intricate balance of the region. Over 100,000 Armenians have fled, creating a significant humanitarian strain on Armenia. Meanwhile, the domestic situation in Azerbaijan warrants careful consideration, as it will impact the overall stability of the region. The international response to these events is influenced by the broader political dynamics at play. This article will explore the geopolitical context and provide a brief analysis of the implications for political stability within Azerbaijan.

A Brief History

To understand the current situation, we must rewind 30 years to the fall of the Soviet Union and the First Nagorno-Karabakh War (1988-1994). The aftermath was devastating for Azerbaijan, with the Nagorno-Karabakh Republic gaining control over 20% of its territory. This loss became a defining narrative for the ruling party, deeply woven into the fabric of society. Over the subsequent three decades, attempts to reclaim these lands, including the Second Nagorno-Karabakh War in 2020, proved unsuccessful.

Hostilities resumed on September 19, 2023, when Azerbaijan launched a military offensive against Nagorno-Karabakh, achieving victory in just over 24 hours. Following this, the local government accepted a ceasefire proposed by Russian peacekeepers. This outcome raises critical questions about Azerbaijan’s stability: How will the government justify declining living standards without the Nagorno-Karabakh mission? Does this victory signal the onset of instability, potentially undermining the effectiveness of its autocratic governance? If public anger cannot be contained, will the ruling family face a loss of legitimacy among the Azerbaijani population?

With the conflict for Nagorno-Karabakh seemingly resolved, the government will face the challenge of justifying the poverty and deprivation affecting millions of Azeris. A significant factor contributing to this poverty is the exponential growth in military spending, which surged during the second oil boom from 2005 to 2013. From 1994 to 2012, Azerbaijan’s military expenditure relative to total spending increased by 95%, and the defense budget now accounts for about 5% of the GDP and 18% of total state expenditure. This trend has diverted millions of petrodollars away from investments in human capital, reflected in Azerbaijan's Human Capital Index of just 0.58, particularly striking given its reported oil revenue of $138.3 billion in 2019.

The crackdown on opposition in Azerbaijan highlights growing public disillusionment with the regime. The country currently holds over 500 prisoners of conscience, and recent arrests, such as that of scholar Qubad Ibadoglu, may further exacerbate responses to entrenched poverty. Major cities lack basic infrastructure, while rural areas struggle with inadequate road access, water supply, and sewage systems. Despite exporting gas to Europe, domestic gas provision in Azerbaijan is often subpar, leading many Azeris to seek employment abroad, with an estimated 30% living outside the country.

The regime’s ability to maintain power has largely relied on appeasing economic elites, facilitated by the influx of oil and gas revenue. However, the long-term outlook for oil production appears bleak, with little effort directed toward developing non-petroleum industries. This dependency on oil makes Azerbaijan vulnerable to fluctuations in oil prices, as noted by Azerbaijani historian Alec Rasizade’s decline theory. Such fluctuations can jeopardize a nation reliant on a single resource, adversely affecting the populace while offshore schemes divert revenues from the ruling elite.

Consequently, the government must devise innovative strategies to preempt political stability issues. It will become increasingly difficult to justify the ruling party’s control as its ability to manufacture crises to extend its power diminishes.

The Wild East

In this complex web of elite support, intra-ruling class relations play a crucial role. The absence of checks and balances fosters power struggles among government factions. Despite the chaos, President Aliyev remains untouchable, enforcing a neo-feudal system where he allocates lucrative sectors of the economy in exchange for loyalty and profit-sharing. Foreign observers suggest that this system has become self-reinforcing, potentially beyond the control of any one individual, including the President himself. As long as the regime's coffers are filled with oil and gas profits, the structure remains resilient against upheaval.

This resilience is bolstered by propaganda permeating schools, government offices, and homes, limiting public exposure to alternative political ideas. With the ruling party in power since 1994, the political landscape lacks viable alternatives, perpetuating public apathy in Azerbaijan.

While discontent simmers, its transformation into organized political expression is obstructed by fear. Access to jobs, education, and security is often contingent upon perceived loyalty to the regime. This control mechanism prevents potential challengers—such as media, religious communities, or political forces—from gaining significant traction. The government has manipulated the constitution to its advantage, notably in 2010 when it reduced the election period to just 60 days, allowing a campaign window of only 23 days. Consequently, elections have become mere formalities, with media manipulation diverting attention from mainstream opposition through the ‘cloning’ of parties and candidates, placing them in a dilemma: legitimizing the electoral process by participating or risking marginalization by abstaining.

Azerbaijan’s traditional system, which promised rising living standards in exchange for political disengagement, appears increasingly fragile. Nonetheless, the government’s investment in lobbying—over $150 billion in oil revenue—has helped suppress dissenting voices both domestically and internationally.

The Role of the International Community in Azerbaijan

Images of mass displacement have prompted the West to reconsider its ties with Azerbaijan. Despite existing economic relationships with Europe, President Aliyev’s military offensive has drawn condemnation from the EU and the US. At the UN, German Foreign Minister Baerbock accused Baku of violating commitments, and French President Macron criticized Azerbaijani authorities. In response to the offensive, President Biden proposed accountability measures, including cutting off all US military aid to Azerbaijan. However, meaningful change within Azerbaijan due to Western pressures seems unlikely, given the solid international standing of the regime.

In his September 2023 UN speech, President Erdogan encouraged Armenia to seize a “historic opportunity” for peace amidst Azerbaijan’s military operation. Given Erdogan’s close ties with Aliyev, Turkey stands to benefit from both the outcome in Nagorno-Karabakh and the status quo in Azerbaijan. Aliyev has exhibited strategic ambivalence, allowing both Russia and Turkey to exert military influence in the southern Caucasus, with Turkey providing weapons and intelligence while Russia deploys peacekeeping troops, creating a delicate balance in the region.

Russia aims to maintain its dominance in the Caucasus as a counter to Western influence. Despite international efforts, the Putin regime appears to perpetuate tensions to preserve its military presence. The 2020 Tripartite Treaty replaced Armenian forces with Russian peacekeepers in Nagorno-Karabakh, establishing a new status quo in the region. Both the Azerbaijani and Russian Presidents have a vested interest in preserving this situation. Amid these negotiations, a fundamental question remains unanswered: what lies ahead for the people of Azerbaijan?

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