At the December 2007 Madrid summit of the OSCE, the co-chairs of the Minsk group presented a new document on resolving the Mountainous Karabakh conflict. This was the first such initiative by the co-chairs since 1998. It may reflect the wish of the great powers to secure guarantees that the progress reached so far in the negotiation process is not lost, and that the conflicting parties will not abort the negotiation process under the aegis of the OSCE Minsk group following presidential elections to be held in both countries this year.

BACKGROUND: The document, termed “Basic Principles for the Peaceful Settlement of the Nagorno-Karabakh Conflict,” was presented to the foreign ministers of Armenia and Azerbaijan at the sidelines of the OSCE Madrid ministerial meeting on November 29. It is to pursue two goals. First, it is to address the questions on which the parties have already reached agreement, including the fundamental issue of seeking resolution by peaceful means only. More important, however, is the second component, in which “compromises” were put forward by the co-chairs, evidently, on issues on which no agreement has been reached. To stress the importance of the event, the document was presented not by mid-level diplomats serving as co-chairmen, but by top-level ones, namely, U.S. Undersecretary of State Nicholas Burns, Russian Foreign Minister Sergei Lavrov, and French Foreign Minister Bernard Kouchner. The official reaction of Azerbaijan and Armenia to the new proposal of the Minsk Group co-chairs is expected no earlier than mid-January 2008.

The current stage of the Karabakh negotiations began in August 2004 in Prague, and is termed the “Prague process.” During numerous meetings, the leaders of the two countries have reached common ground around most of the ca. ten points of the future settlement process. In particular, as Azerbaijani foreign minister Elmar Mamedyarov told reporters in Madrid, “one or two points have remained to reach agreement upon.”

Both the Madrid document and the details of previous agreements reached in the framework of the “Prague process” have not been published. The following is known about the results so far. The main agreed items are the following. First, Armenian troops are to be withdrawn from five out of seven Azerbaijani regions surrounding Mountainous Karabakh. Second, the Azerbaijani population displaced during the war in 1993-1994 is to return to these regions. Third, Kelbajar, the sixth of the above-mentioned seven regions, will be freed at a later stage, with subsequent return of the Azerbaijani population. This step is conditioned by the progress of the process of determining the future status of Mountainous Karabakh. Fourth, the Lachin region (the seventh occupied territory to the west of Mountainous Karabakh) or part of it will serve as a corridor to secure a permanent land communication between Armenia and Mountainous Karabakh. Fifth, some international peacekeeping forces will be involved to keep stability along the border of the territories and preventing renewed conflict.

The non-agreed items are mostly those directly affecting the core of the conflict, namely, the status of Mountainous Karabakh. According to a report disseminated by the co-chairs in June 2006, the status should be determined by a referendum or plebiscite held in the enclave. The Armenian side seeks the procedure to result in the realization of the “right of self-determination” of the people of Mountainous Karabakh, which are seeking recognition of the enclave as an independent state. The Azerbaijani side, which claims Karabakh to be inseparable from Azerbaijan, resist such a prospect. Hence numerous issue arise, beginning with the legal power of the proposed referendum, to the participation of ethnic Azerbaijanis who previously lived in Nagorno Karabakh. Disagreement on this key issue has blocked the entire process, not only of conflict settlement but also all forms of reconciliation and confidence building.

The apparent deadlock surrounding these principal items have continued for over two years, and has increased concerns on the possibility of a collapse of the entire negotiation process, going so far as fears of a resumed war, as the sides continue increasing their military budgets. In addition, the lack of a formally agreed document would allow the parties not only presenting contradicting interpretations (a frequent event seen so far) but also to move back from previously agreed positions.

IMPLICATIONS: The co-chairs appear to see a number of threats to the peace process, especially in the context of upcoming presidential elections in both Armenia and Azerbaijan. First, the sides might, under pressure from domestic politics, retreat from the negotiation process, which would enhance tensions in the region and increase the danger of resumption of violence. Second, the great powers could lose control over the policies of the ruling elites regarding the conflict. Third, the three superpowers appear to try to secure the continuity of the peace process after new presidents are elected first in Armenia (on February 19), and then in Azerbaijan (October).

Whereas the re-election of Ilham Aliyev is almost certain in Azerbaijan, the situation in Armenia is more complex. Although the candidate of the current ruling elite, the Prime Minister Serge Sarkisian, appears the strongest among those nominated, he has a very strong competitor in the person of former President Levon Ter-Petrossian. The Karabakh issue is one of the trumps of Ter-Petrossian’s election campaign, and his criticism of the authorities may provoke public attention and force the authorities to adapt their policies, even if Ter-Petrossian himself loses the vote. In fact, it is difficult to predict what the actual outcome of this factor may be. Ter-Petrossian is known as an adherent of a flexible approach, which would likely enable a rapid improvement of Armenian-Azerbaijani relations. On the other hand, the “step-by-step” version he favored back in 1997 (and which became the cause of his resignation), envisaged also addressing the problem of the Shaumian region to the north of Mountainous Karabakh, which the NKR claims, while current negotiations largely ignore this issue. Incidentally, this is not the only problem that could arise if the current de facto authorities of Mountainous Karabakh take part in the negotiations, which may be inevitable at a later stage.

Unless the details of the compromises are made public, it is impossible to predict what the outcome of the Madrid document may be. In particular, its influence on the subsequent political processes will remain unclear. The statements regarding the Madrid document primarily stress the fixation of the common ground reached so far by the parties, which indicates that the co-chairs may try to persuade the parties to undertake some agreed steps before a final agreement on the settlement principles is reached. In other words, they may seek to impose the principle of a so-called “step-by-step” resolution process, which in theory provides opportunities to build a gradual process and ensure possibilities to build mutual trust. However, the paradox of the situation is that the current status of a “frozen” conflict, though itself unsatisfactory, could become even more dangerous if it is “unfrozen” in the wrong way.

CONCLUSIONS: The current stage of the Mountainous Karabakh peace process appears headed for a deadlock. In parallel, the danger of destabilization increases given the rise in military expenditures in Azerbaijan and Armenia, and the coming presidential elections in both countries. This is the context in which the U.S., Russia and France advanced the Madrid document in order to signal to the elites of the conflicting parties that the three great powers involved are interested in the stability in the region and in the continuity of the current peace process.

AUTHOR’S BIO: Haroutiun Khachatrian is an analyst on political and economic issues based in Yerevan.