Summary

Nagorno-Karabakh is an ethnic Armenian enclave located within the internationally recognized borders of Azerbaijan. Although a longtime issue, Nagorno-Karabakh has been the subject of a fierce territorial dispute between Armenia and Azerbaijan since the Karabakh government began taking formal measures to assert its independence from Azerbaijan in the final years of the Soviet era. The dispute has been the most significant source of instability in the south Caucasus region has stymied efforts to create oil pipelines from the Caspian Sea and integrate the region economically with Europe. Since 1988, the conflict has caused 20,000 casualties and created upwards of a million internally displaced persons. Armenian-backed forces currently occupy twenty percent of Azerbaijani territory. The main cause of the conflict is the disagreement between the majority of Nagorno-Karabakh residents’ aspirations for self-determination and Azerbaijan’s insistence on maintaining its territorial integrity.  A Russian-mediated ceasefire has been in effect since 1994, though efforts under the auspices of the Organization for Security and Cooperation in Europe (OSCE) to resolve the conflict have not yet produced a final status agreement.

See "Update" below for recent developments.

Background/Context

The dispute began when the Caucus Bureau of the Communist Party defined the Soviet-era borders.  In 1921, the bureau declared the Nagorno-Karabakh part of the Azerbaijani Soviet Socialist Republic (SSR).  In 1923, the bureau established the Nagorno-Karabakh Autonomous Oblast (NKAO), which had broad autonomy within the Azerbaijani SSR.  However, Armenians repeatedly petitioned Moscow for Nagorno-Karabakh’s transfer to the Armenian SSR. Ethnic Armenians, who are Christian, and ethnic Azeris, who are Muslim, have a longstanding rivalry.

In 1988, the Nagorno-Karabakh Soviet passed a resolution again requesting such a transfer.  The Azerbaijani SSR rejected the resolution, while the Armenian SSR embraced it. In 1989, the Armenian SSR and the Nagorno-Karabakh regional council adopted a joint resolution on the “Reunification of Nagorno-Karabakh with Armenia.” Meanwhile, Moscow granted the Azerbaijani SSR greater authority in dealing with the increasing interethnic conflict in the region. Both sides accused one another of massacring civilians. Armenian protests against Azerbaijani rule evolved into a broader anticommunist movement for democracy and national sovereignty.  Soviet leaders attempted to undermine the movement by arresting its key leaders.  However, this merely provoked more anti-Soviet sentiment among Armenians in general.  Mikhail Gorbachev proposed a solution that would grant Nagorno-Karabakh greater autonomy within the Azerbaijani SSR, though neither side found this appealing. The Azerbaijani SSR subsequently instituted an economic blockade against Armenia, cutting it off from most of its fuel and supply lines. 

Azerbaijan declared its independence from the Soviet Union on August 30, 1991.  On September 2, the Nagorno-Karabakh Republic declared its independence. On November 26, Azerbaijan formally revoked Nagorno-Karabakh’s autonomous status.  However, the ethnic Armenians in Nagorno-Karabakh were not deterred and on December 10, organized a referendum in which 108, 615 people voted for independence.  However, ethnic Azeris living in the Nagorno-Karabakh region largely boycotted the referendum.  On January 6, 1992, Nagorno-Karabakh again reaffirmed its status as an independent state, however no other state recognized it as such, including Armenia. Nonetheless, the Armenian-backed Karabakh army, established full military control over Nagorno-Karabakh and about twenty percent of Azerbaijan, including the Lachin corridor, an area largely inhabited by Kurds that linked the Nagorno-Karabakh enclave to Armenia. Several hundred thousand ethnic Azeris fled or were expelled from Nagorno-Karabakh. Both sides of the conflict indiscriminately attacked civilian targets, which the United Nations (U.N.) Security Council condemned.

The Organization for Security and Cooperation in Europe (OSCE) became the main mediator for peace negotiations in 1992.  In 1994, the Armenian and Azerbaijan defense ministers along with Nagorno-Karabakh military leaders signed a Russian-mediated armistice. Peace negotiations have subsequently been facilitated by the Minsk Group under the auspices of the OSCE.  The Minsk Group is co-chaired by the United States (U.S.), France, and Russia. At the OSCE Budapest summit, the Minsk Group was given a mandate to promote the continuation of the ceasefire and to conduct negotiations for a political agreement on the cessation of armed conflict. In 1996, at an OSCE summit Lisbon, the Minsk Group recommended three principles as the basis of an agreement: that Armenian and Azerbaijani territorial integrity be respected, that Nagorno-Karabakh’s legal status should be given the highest degree of autonomy within Azerbaijan, and guaranteed security for all of Nagorno-Karabakh’s population. The principles were supported by 53 member states of the OSCE.  However, Armenia vetoed the recommendations. 

In 1997, the Armenian and Azerbaijani presidents agreed to a step-by-step peace plan.  However, widespread protests in both countries challenged the plan.  In 1998, a Minsk Group draft proposed the creation of “common state” in which Nagorno-Karabakh would become a loosely confederated part of Azerbaijan. Although none of the negotiating parties involved were particularly enthusiastic about the idea, the de facto president of Nagorno-Karabakh recently told the International Crisis Group that it remains a possibility.

In 2001, the presidents of both countries met for talks in Key West, Florida.  They also met with President Bush, whose administration showed initially showed interesting in mediating the conflict. In 2003, Armenian president Robert Kocharyan stated that his policy peace policy would rest on three pillars: a “horizontal” rather than hierarchal relationship between Nagorno-Karabakh and Azerbaijan, a secure land corridor between Nagorno-Karabakh and Armenia, and security guarantees for Nagorno-Karabakh’s populace.
 
In 2004, the Prague Process was initiated, which entailed direct bilateral negotiations between the Azerbaijani and Armenian foreign ministers.  The two sides met eleven total times, though little progress was made.   In February 2006, the Armenian and Azerbaijani presidents met near Paris for talks with French President Jacques Chirac. Neither side reached an agreement.

In June 2006, further talks were held between Armenia, Azerbaijan, and the Minsk Group in Bucharest, Romania. Matthew Bryza, the U.S. representative to the Minsk Group, proposed a peace plan in which Armenia would withdraw its forces from Azerbaijan.  Diplomatic and economic relations between Armenia and Azerbaijan would then be normalized while international peacekeepers were deployed to the area to organize a referendum on Nagorno-Karabakh’s final status. Armenia would maintain control of the Lachin corridor. According to initial reports, Azerbaijan agreed to allow Nagorno-Karabakh to hold a referendum after Armenia ended its occupation of Azerbaijani territory. Azerbaijani officials, however, claimed they had not agreed to a referendum and even if one were held, Azerbaijan would not allow its territorial integrity to be compromised.  The Azerbaijani government would instead offer the “highest degree of autonomy” to Nagorno-Karabakh.

The concept of holding a referendum to decide Nagorno-Karabakh has frequently been mentioned in negotiations as a possible solution.  Precedents for such an agreement have recently been set in southern Sudan and East Timor.  A referendum would likely entail an interim period in which Nagorno-Karabakh would continue to develop autonomous domestic political institutions while Armenian forces withdraw from Azerbaijan.  Although Armenia has responded positively to the idea, as long as it provides the option of independence, the Azerbaijani foreign ministry has had a more mixed reaction because it views a referendum as a risk to its territorial integrity. For a legitimate referendum solution to be implemented, Nagorno-Karabakh would ultimately have to allow the 500,000 displaced ethnic Azeris to return and participate.  It is generally assumed a referendum would ratify Nagorno-Karabakh’s de facto independence. Azerbaijan has insisted that a referendum in Nagorno-Karabakh would have to be held in conjunction with an Azerbaijan-wide referendum on maintaining its territorial integrity.

According to the International Crisis Group (ICG), both sides have been responsible for human rights violations throughout the armed conflict.  The ICG also believes that Armenian, Azerbaijani, and Nagorno-Karabakh authorities have stalled on accepting a final status agreement because they all believe it would be advantageous to do so in the context of domestic politics.

Current Initiative

Under the auspices of the Organization for Security and Cooperation in Europe (OSCE), the Minsk Group, consisting of France, Russia, and the U.S., have attempted to mediate a resolution to the conflict in Nagorno-Karabakh.  The most recent round of negotiations called the “Prague Process” has failed to produce a settlement largely because of disagreements over sequencing.  Azerbaijan refuses to negotiate a final status agreement until Armenia ends it occupation, while Armenia refuses to end its occupation until Nagorno-Karabakh’s future status is determined. The Minsk Group saw a limited window of opportunity in 2006 for negotiations because neither Armenia nor Azerbaijan had national elections scheduled that year. The most recent set of talks were held in Bucharest, Romania in June 2006.  Although some reports initially stated that Azerbaijan had agreed to allow Nagorno-Karabakh to hold a referendum after Armenia ended its occupation, the Azerbaijani foreign minister staunchly denied these claims.  Azerbaijan still insists that any agreement on the issue must not compromise its territorial integrity, though it has repeatedly offered Nagorno-Karabakh autonomy. 

See "Update" below for recent developments.

Foreign Policy Positions of Key Players

Azerbaijan

Azerbaijan believes the Nagorno-Karabakh conflict was started by Armenia, which was eager to seize land, and that it has a sovereign right to protect its territorial integrity. Many Azerbaijanis believed that Armenia was merely attempting to exploit the inability of the Azerbaijani government to protect its territory at the time. Azerbaijan does not believe that the ethnic Armenians’ aspiration for self-determination gives them the right to compromise Azerbaijan’s territorial integrity by unilaterally seceding, especially by force.  Furthermore, the Azerbaijani government has positioned itself as a protector of the rights of ethnic Azeris within Nagorno-Karabakh, who it claims were not adequately consulted about their own aspirations.  The Azerbaijani government rejects all claims that Nagorno-Karabakh’s secession was legal under Soviet and international law.  The Azerbaijani government has also accused Armenia of ethnically cleansing Azeri minorities in Armenia, Nagorno-Karabak, and the other Azerbaijani territories that Armenia occupies.  Azerbaijan does not think the de facto Nagorno-Karabakh leadership should be consulted in the peace process because the conflict is strictly between Armenia and Azerbaijan. Azerbaijani public opinion generally supports retaining Nagorno-Karabakh as part of Azerbaijan. 

Since coming to office in 2003, President Ilham Aliyev has maintained that before Nagorno-Karabakh’s final status can be determined, Armenia must withdraw its forces and a series of confidence building measures must be implemented. President Aliyev has promised Nagorno-Karabakh the “highest possible degree of autonomy that exists in the world.” Due to high oil prices, the Azerbaijani economy has boomed.  The Azerbaijani government has consequently had more revenue to devote to arms purchases, which has resulted in a greater willingness to defend Azerbaijan’s territorial integrity by force. The International Crisis Group has accused Azerbaijan of seeking to drag out negotiations in order to amass oil revenues and raise its geopolitical importance.  By continuing with regional economic projects like the Baku-Tbilsi-Ceyhan oil pipeline, the Azerbaijani government hopes to isolate Armenia from regional economic integration. In the past, however, Azerbaijan has offered to route an oil pipeline to Turkey through Armenia, which would give Armenia substantial transit revenues, in return for returning the territory it occupies.

Armenia

Armenia believes that Azerbaijan is responsible for the conflict and that its military intervention was necessary to protect ethnic Armenians, who had sought their right to exercise self-determination. Armenia maintains that the Azerbaijani government has attempted to ethnically cleanse Nagorno-Karabakh of Armenians. Armenians interpret the right of self-determination in a nationalist sense, arguing that a territorially concentrated ethnic group has the right to have its own state if it chooses. Armenia argues that Soviet law permitted Nagorno-Karabakh to declare its independence from Azerbaijan. Furthermore, Armenia believes that when Azerbaijan declared its independence, it claimed to be the successor of the Azerbaijan Democratic Republic of 1918-1920, which the League of Nations did not recognize as having sovereignty over Nagorno-Karabakh.

Armenia does not recognize the Republic of Nagorno-Karabakh, believing instead to be an integral part of Armenia and not independent. However, Armenia also asserts that no peace is sustainable without the support of Nagorno-Karabakh’s de facto leadership. The International Crisis Group has accused Armenian of seeking to drag out negotiations in order to further cement Nagorno-Karabakh’s status as an independent, functioning state. Throughout the negotiations, Armenia has insisted that any agreement provide land link between Nagorno-Karabakh and Armenia proper.  The Lachin corridor and the Kelbajar district have been at the center of Armenian demands. The conflict over Nagorno-Karabakh has had a negative impact on the Armenian economy.  Imports of food and fuel, three-quarters of which were transported through Azerbaijan, are much more expensive under the Azerbaijani embargo. Armenia has been excluded from regional economic projects like oil pipelines. The World Bank has also estimated that if trade relations were normalized between Armenia and Turkey, Armenia’s GDP would significantly increase.

Republic of Nagorno-Karabakh

Ethnic Armenian public opinion in Nagorno-Karabakh has increasingly supported independence rather than unification with Armenia.  Some have suggested that the international community might be more willing to accept Nagorno-Karabakh’s independence under the condition that it is never allowed to join Armenia.  Such an agreement would be similar Kosovo’s current status.

Turkey

Turkish-Armenian relations have remained tense for quite some time. Aside from lingering animosities concerning the Armenian genocide, tensions between the two countries were exacerbated by the Nagorno-Karabakh conflict. Turkey currently has an economic embargo in place against Armenia. 

Minsk Group

The Minsk Group, comprised of the U.S., Russia, and France has been facilitating negotiations on the issue under the auspices of the OCSE since 1994. It has been criticized for being reluctant to apply pressure.  Furthermore, criticisms have been lodged against it for not providing a more concrete set of incentives to reward a resolution to the conflict.  The negotiations do not affect U.S., Russian, or European Union (E.U.) aid programs in Armenia and Azerbaijan.

United States

Azerbaijan has accused the U.S. of pro-Armenia sympathies as a result of the lobbying influence of the Armenia diaspora in the U.S.  In response to Azerbajian’s economic blockade of Armenia, the U.S. Congress passed a law restricting U.S. government assistance until Azerbaijan takes “demonstrable steps to cease all blockades and other offensive uses of force against Armenia and Nagorno-Karabakh.” In 1998, the legislation was somewhat relaxed.  In recent years, however, the U.S. has sought to deepen its strategic ties to Azerbaijan largely for military and energy security reasons. The U.S. officially supports the preservation of Azerbaijani territorial integrity.  As co-chair of the Minsk Group, the U.S. continues to support diplomatic efforts to resolve the dispute and provides a broad array of humanitarian services to refugees and internally displaced persons affected by the conflict.

Russia

Relations between Azerbaijan and Russia have been strained since it was discovered that Russia has provided Armenia with $1 billion in arms from 1993 to 1995. Some observers claim to some degree Russia has an interest in seeing instability continue as a way to preserve its influence in the region. Russian peacekeepers may at some point in the future be sent to Nagorno-Karabakh to monitor an agreement.

United Nations

The United Nations (U.N.) Security Council has passed four resolutions calling on Armenia to end its occupation of parts of Azerbaijani and expressing support for the peace process.  U.N. Security Council resolutions on the dispute have all referred to Nagorno-Karabakh as Azerbaijani territory.


Update

In early 2006, the issue of Nagorno-Karabakh took center stage when Armenia and Azerbaijan participated in talks on the matter of the disputed territory.  The talk were hosted by France at Rambouillet chateau and were attended by Armenia's Robert Kocharian and Azerbaijan's Ilham Aliyev. France, along with the United States and Russia, functioned as mediators.

There were high hopes that these talks, attended by the top leaders of the two countries ensconced in the conflict, would yield results.  There were, however,  no clear agreements reached.  Such an end was somewhat predictable.  With both sides representing populations at home who have respectively  claimed strong cultural identification with the territory, the room for compromise was limited.  Still, there was some sense that a future "packaged and phased" concord might be forged.  Such a concord would  involve the removal of Armenian occuping forces from the Azeri terrain around Karabakh,  the deployment of an international force, and the holding of a self-determination referendum by the territory's people.  

December 2006 saw voters cast ballots in a referendum aimed at either approving of rejecting a proposed constitution for Nagorno-Karabakh.  The proposed constitution included a declaration of Nagorno-Karabakh as a sovereign and democratic republic.  The endorsement by more than 98 percent of the voters in the region of the constitution (via  the referendum) has, in the view of some, taken Nagorno-Karabakh further down the path toward independent statehood.   Turnout was said to be very high (over 80 percent), thusly indicating that the result of the referendum would be valid.  That said, Azerbaijan has strongly protested the referendum as illegal and a move aimed at damaging the peace process.

Regional relations took a dire turn in March 2008 when  a bloody conflict erupted in Nagorno-Karabakh. Azerbaijan and Armenia blamed each other for the clashes, which left a significant death toll.   Months later in November 2008, however, Armenia and Azerbaijan signed a joint agreement setting forth objectives to resolve their ongoing dispute over the contested territory of Nagorno-Karabakh.

Despite a prevailing ceasefire, fatalities due to armed conflicts between Armenian and Azerbaijani soldiers have continued to be an issue of concern to all arties involved.  To date,  the Minsk Group has been  mediating efforts to negotiate a full resolution to the conflict.