The Issue of Unlocking Economic and Transport Links in the South Caucasus Region
Background
The armed conflict in Nagorno-Karabakh in 2020 ended with the signing of a Trilateral Statement by the leaders of the Russian Federation (RF), the Republic of Armenia (RA), and the Republic of Azerbaijan (AR) on November 9, 2020. One of the key points of the statement focused on unlocking all economic and transport connections in the region. This topic was further addressed in a second Trilateral Statement signed by the leaders of the three countries in January 2021. However, the negotiation process since 2020 has revealed deep disagreements between the parties. The lack of trust among the main participants, the involvement of third-party interests, parallel negotiation platforms, and reluctance to address communication issues in isolation from other concerns have also negatively impacted the process. This issue continues to present both prospects for mutually beneficial cooperation and peaceful coexistence as well as a source of regional tension.
During the Soviet era, the region was connected by a complex network of railways. The Nagorno-Karabakh conflict led to the cessation of railway connections between Armenia and Azerbaijan and the unilateral closure of Armenia’s border with Turkey in 1993. The new phase of negotiations after 2020 revived discussions on restoring railway and road links and the mutual use of territories by Armenia and Azerbaijan for access to third countries.
The foundation for communication-related negotiations is Point 9 of the Trilateral Statement from November 9, 2020, which states that “all economic and transport links in the region will be unblocked. The Republic of Armenia guarantees the security of transport links between the western regions of the Republic of Azerbaijan and the Nakhichevan Autonomous Republic (NAR) to ensure the unimpeded movement of citizens, vehicles, and goods in both directions. Control over the transport links will be carried out by the Border Guard Service of the Russian FSB.”
In January 2021, the presidents of Azerbaijan and Russia and the Prime Minister of Armenia signed a new Trilateral Statement establishing a working group co-chaired by the Deputy Prime Ministers of Azerbaijan Shahin Mustafayev, Armenia Mher Grigoryan, and Russia Alexey Overchuk.
The Issue of Interpretations
Disagreements between Armenia and Azerbaijan emerged early in the negotiations. Leveraging the vague wording of the November 9, 2020, statement, each side focused on interpretations that suited their respective interests.
Regarding Point 9 of the Statement, Armenia emphasized that “all economic and transport links in the region will be unblocked” (i.e., those that existed during the Soviet era). This interpretation would enable Armenia to have three routes:
- Northern route: To connect with Azerbaijan and further with Russia.
- Southern route: To gain railway access to Iran through the territory of Nakhchivan Autonomous Republic (NAR).
- Western route: To restore the connection with Turkey via the Gyumri-Kars section, which was operational until 1993.
Azerbaijan, however, focused on the clause stating that “Armenia guarantees the safety of transport links between its western regions and NAR to ensure the unimpeded movement…” It insisted that this specific section be the first to open. In this context, Azerbaijani President Ilham Aliyev later introduced the term “Zangezur Corridor,” which Armenia immediately perceived as a territorial claim. Baku actively promoted the “Zangezur Corridor” project at various international and regional platforms, solidifying the concept in official documents.
In 2021, Azerbaijan and Turkey signed a declaration on allied relations that also addressed the “Zangezur Corridor.” The declaration stated that “opening the corridor connecting the western regions of the Republic of Azerbaijan and NAR (the ‘Zangezur Corridor’) and subsequently constructing the Nakhchivan-Kars railway will significantly contribute to the intensification of transport and communication links between the two countries.”
The Armenian side, referencing the trilateral statements, categorically rejected the corridor-based logic for transport communication between Azerbaijan’s western regions and NAR, insisting that unblocked communications must remain under the sovereignty of the countries they traverse. Armenian officials repeatedly stated that corridor logic implies the extraterritoriality of communications, which represents a red line for the current Armenian government. Azerbaijan, on the other hand, assured that the “Zangezur Corridor” does not imply territorial claims and that the term “corridor” is an international term that does not infringe on any country’s sovereignty.
The issue of simultaneously launching both railway and road links under Point 9 of the Trilateral Statement also revealed disagreements. Azerbaijan insisted that along with the railway connection to NAR, a road connection should also be established. Furthermore, both routes should follow the shortest path, i.e., the same “Zangezur Corridor.”
Armenia viewed this differently. Although the sides managed to agree on a railway route during negotiations, Armenia proposed opening three checkpoints on the border with Azerbaijan to connect to NAR, but along routes that did not meet Azerbaijan’s expectations. The text of the trilateral statements does not explicitly mention road communications; this issue became the subject of discussions within the trilateral working group.
Over time, Armenia shifted its focus to the issue of control, emphasizing that the signed documents (i.e., the trilateral statements) do not specify that any third party should exercise control over any part of its territory in the context of unblocking communications. Armenian Prime Minister Nikol Pashinyan stressed that Armenia is fully capable of independently ensuring the safety of the passage of vehicles and people across its territory.
On October 21, 2024, Armenian Deputy Prime Minister Mher Grigoryan stated in an interview with Armenian media that the trilateral working group is currently inactive due to fundamental issues that need to be resolved before discussing details.
Key Stages of the Negotiation Process
After the end of hostilities in Nagorno-Karabakh in 2020, a small part of the former Nagorno-Karabakh Autonomous Oblast (NKAO) remained under the control of the Russian peacekeeping contingent (RPC) deployed there with the consent of the parties. Discussions on communications were linked to other points of the Trilateral Statement of November 9, 2020, including the future status of the remaining RPC-controlled part of Nagorno-Karabakh. Azerbaijan believed that the issue of the status of all territories was resolved by the outcome of the 2020 war. In contrast, Yerevan and Moscow considered the status to be a subject of future negotiations.
The RPC-controlled part of Nagorno-Karabakh remained populated by Armenians after 2020. According to the Trilateral Statement of November 9, 2020, the “Lachin Corridor” was organized to connect this territory with Armenia.
The battle over interpretations of the trilateral statements’ wording and the lack of visible practical results in negotiations led Azerbaijan to pursue unilateral actions to change the situation “on the ground.”
In April 2021, Azerbaijani President Ilham Aliyev stated in an interview with AzTV: “We will implement the ‘Zangezur Corridor,’ whether Armenia wants it or not. If it wants, we will solve this issue more easily; if not, we will solve it by force.” This strategy was largely justified by the Azerbaijani side’s belief that Armenia was deliberately delaying the negotiation process to avoid concrete practical solutions.
From May 2021, armed clashes occurred between the parties in both Nagorno-Karabakh and along the state border between Armenia and Azerbaijan, with the most significant clash occurring in September 2022.
In August 2021, amid military tensions in Nagorno-Karabakh, Azerbaijan managed to prematurely reroute the “Lachin Corridor” connecting Armenia to Nagorno-Karabakh. This was done in accordance with Point 6 of the Trilateral Statement of November 9-10, 2020. The sides predictably engaged in a battle of interpretations over Point 6. However, Azerbaijan’s use of force tilted the situation in its favor: the route of the “Lachin Corridor” was altered after Armenian residents abandoned several villages along the route.
On December 15, 2021, at a joint press conference in Brussels following a meeting with NATO Secretary-General Jens Stoltenberg, Ilham Aliyev stated that “the legal regime of the ‘Zangezur Corridor’ must be the same as that of the ‘Lachin Corridor.’” This was based on the logic of the Trilateral Statement: Armenia uses the “Lachin Corridor” under the control of Russian peacekeepers for communication with Nagorno-Karabakh, while Azerbaijan would use a road through Armenia to connect with NAR, with the control of transport communication carried out by the Russian FSB Border Guard Service under Point 9.
On October 6, 2022, in Prague, Armenia and Azerbaijan reaffirmed their commitment to the UN Charter and the Alma-Ata Declaration of 1991, through which both sides recognized each other’s territorial integrity and sovereignty. This statement was disseminated following a quadrilateral meeting involving Ilham Aliyev, Nikol Pashinyan, Emmanuel Macron, and Charles Michel. According to experts, this declaration marked a major diplomatic victory for Baku, as Azerbaijan achieved Armenia’s recognition of Nagorno-Karabakh as part of Azerbaijan’s territory.
On December 12, 2022, a situation unfolded in the “Lachin Corridor,” which Azerbaijan described as an environmental activists’ protest against environmental pollution caused by mining operations controlled by the Karabakh side. In Armenia and Nagorno-Karabakh, this protest was described as an illegal blockade of the only corridor, threatening a humanitarian catastrophe for the residents of Nagorno-Karabakh. Activists claimed that mines were being transported into the RPC-controlled territory via the “Lachin Corridor.” Armenian Foreign Minister Ararat Mirzoyan responded by stating that Azerbaijan had acquired the mines from territories in Armenia it accessed as a result of military escalations in 2021-2022.
On February 18, 2023, following a meeting with Nikol Pashinyan mediated by U.S. Secretary of State Antony Blinken in Munich, Ilham Aliyev told Azerbaijani media that Azerbaijan had proposed establishing border checkpoints at the state border, essentially in both the Lachin and Zangezur Corridors, equating the operational regimes of the two routes. However, on February 22, 2023, Armenia, through its Foreign Minister, rejected the proposal, citing that regulations regarding the Lachin Corridor were outlined and signed in the Trilateral Statement of November 9, 2020. Any new arrangements, especially those imposed through threats of force, were deemed unacceptable for Armenia.
At the end of April 2023, Azerbaijan established checkpoints in the Lachin Corridor at the border between the two countries, where passport and border control procedures were carried out for those traveling from Armenia to the RPC-controlled territory and back. In Armenia, these actions were described as violations of the Trilateral Statements, highlighting the RPC’s inability to regain control over the Lachin Corridor and ensure unrestricted communication through it.
During another round of negotiations of the Trilateral Working Group on unblocking communications held in June 2023 in Moscow, the sides agreed to prioritize the launch of communications. According to Alexey Overchuk, the negotiations resulted in the development of a comprehensive document stating that the unblocking of transport links in the region would begin with the restoration of the railway route along “Yeraskh-Julfa-Meghri-Horadiz.” This route corresponds to what Azerbaijan refers to as the “Zangezur Corridor.”
Against this backdrop, secret negotiations took place regarding the status of the RPC-controlled part of Nagorno-Karabakh, leading to a split within the leadership of the unrecognized republic. In August 2023, the president of the unrecognized Nagorno-Karabakh Republic, Arayik Harutyunyan, resigned, triggering a series of political events that caused a backlash in Azerbaijan.
In September 2023, Azerbaijan launched a military operation in the RPC-controlled part of Nagorno-Karabakh, resulting in Baku gaining full control over the territory. The RPC, by agreement with Russia, was withdrawn from the region ahead of schedule. The local Armenian population of Nagorno-Karabakh left the territory following the use of force. In Yerevan, this process was described as ethnic cleansing, while Baku emphasized that the civilian population had left voluntarily.
As a result, discussions began in Armenia about the feasibility of fulfilling Yerevan’s obligations under Point 9 of the Trilateral Statement of November 9, 2020, given the violations or non-implementation of the preceding eight points. Nevertheless, Armenia has not withdrawn its signature from this statement.
On October 5, 2023, a quadrilateral meeting was held in Granada involving Nikol Pashinyan, Emmanuel Macron, Olaf Scholz, and Charles Michel. Following the meeting, a statement was issued in which Charles Michel, Emmanuel Macron, and Olaf Scholz emphasized their support for Armenia’s territorial integrity and the inviolability of its borders. Their statement also “called for enhanced regional cooperation and the opening of all borders, including the border between Armenia and Turkey, as well as the opening of regional communications based on full respect for the sovereignty and jurisdiction of the countries, as well as on the principles of equality and reciprocity.” Ilham Aliyev declined to participate in this meeting.
On October 26, 2023, Armenian Prime Minister Nikol Pashinyan presented the “Crossroads of Peace” project at the Silk Road Forum in Tbilisi (formerly called the “Armenian Crossroads”). The project aims to illustrate Armenia’s vision for unblocking regional transport and economic communications in light of recent events. Its new name also hints at conditions for its implementation.
According to Prime Minister Pashinyan, the project involves Armenia’s readiness and interest in organizing transit of vehicles, goods, passengers, pipelines, and cable routes through its territory. The “Crossroads of Peace,” as described by Pashinyan, represents the shortest route between the Black Sea and the Persian Gulf through the territories of Iran, Armenia, and Georgia (North-South direction), as well as the shortest route between the Caspian and Marmara Seas through the territories of Azerbaijan, Armenia, and Turkey (East-West direction). This route, he noted, could also be used for transport and communication links between Azerbaijan and NAR.
In January 2024, regarding the “Zangezur Corridor,” Ilham Aliyev emphasized in an interview with local media that “people and goods traveling from Azerbaijan to Azerbaijan must pass without any checks, and if the ‘Zangezur Corridor’ is not opened, Armenia will remain a transport dead-end.” The Kaliningrad model of communication was cited as an example. It became known that Yerevan and Baku discussed the possibility of entrusting security arrangements for transport communications to an international private company.
At the same time, in parallel with negotiations with Armenia and against the backdrop of a lack of progress in those talks, Azerbaijan has been conducting similar negotiations with Iran. These discussions pertain to the “Aras Corridor,” which will be addressed below.
At various levels, the parties have held several negotiations on this issue. On October 23, 2024, Rovshan Rustamov, Chairman of Azerbaijan Railways CJSC, told the media that the purpose of the Azerbaijani railway delegation’s visit to Iran was to discuss and agree on the railway route between Agbend (Azerbaijan) and Salam Malik (Iran)—a route that essentially replicates the “Zangezur Corridor” but passes through Iranian territory.
The next day, on October 24, 2024, at the BRICS summit in Moscow, Nikol Pashinyan stated that as part of the “Crossroads of Peace” project, Armenia had proposed simplified mechanisms for border and customs control procedures and additional security measures to Azerbaijan, ensuring full respect for the sovereignty and jurisdiction of both countries.
Attitudes and Interests of External Actors
After the 2020 war, the process of normalizing relations between Armenia and Azerbaijan initially took place in a trilateral format with the participation of Russia. Later, Western mediators became active, facilitating meetings in Washington, Brussels, Prague, and other European cities. At the current stage, Yerevan and Baku are working on a final document in a bilateral format.
Negotiations held on Russian platforms were based on four high-level trilateral statements. According to official statements, the parties discussed the modalities of crossing the border between Armenia and Azerbaijan. This included not only the main transport routes to be unblocked but also their types (rail and road), operating frameworks, and customs and border control procedures. The Working Group last convened on June 2, 2023. As a result, the parties agreed on specific steps to restore and organize railway connections along the “Yeraskh-Julfa-Meghri-Horadiz” route. However, the working group is currently inactive: previously reached agreements have not been implemented, and no new meetings are on the agenda.
Russia’s position is that communications in the region should be unblocked based on Point 9 of the Trilateral Statement of November 9, 2020. In this context, the main problems lie in interpretation:
- If the unblocking of all communications is being discussed, why are the main negotiations centered only around the southern route?
- How can Armenia guarantee the security of transport routes if its presence along those routes is not stipulated?
- Does “unimpeded access” mean the absence of any border or customs procedures?
- What kind of control will Russia exercise—visual, border, customs, or other?
Baku interprets the clauses such that Armenia cannot have full control over the communications. In other words, this involves a “corridor” (i.e., extraterritorial access). At the same time, Russia has repeatedly stated that it does not discuss unblocking communications in a “corridor-based” framework. Later, at the level of the deputy foreign minister, it was clarified that Russia does not use the term “Zangezur Corridor.” Therefore, the preferred term for the Russian side is the “Meghri Route.” Furthermore, at the deputy prime minister level, it was announced that Russia actively supports the “Crossroads of Peace” project, participating in the construction of transport links within Armenia.
In reality, Moscow appears open to any scenario for unblocking communications that considers two key components:
- No Western presence. For over a year after the last Working Group meeting, Moscow did not initiate new efforts to activate the process. However, when it became known that Yerevan and Baku were discussing the possibility of involving an international private company, Moscow suddenly intensified its actions. It is likely that Russia views this issue as a “zero-sum game”: if there is no Russian presence, Western influence will inevitably grow.
- Avoiding the “corridor logic.” The corridor framework promoted by Baku is not a priority resolution for Moscow. Russia likely understands that a lack of oversight by Moscow or Yerevan would turn the route into a land corridor under Turkey’s control, establishing Ankara as the main hub between Central Asia and Europe.
Iran’s position is rooted in the need to maintain a fragile regional balance. After Azerbaijan’s victory in the 2020 war, the regional configuration began to shift against Iran’s interests, excluding it from the new status quo. This balance could be further disrupted by the implementation of the so-called “Zangezur Corridor.”
According to the Iranian side, this project reflects the expansionist policies of Turkey and the West to expand their influence. Iran refers to this corridor as the “NATO-Turan Corridor.”
- Through Turkey’s NATO membership, the alliance would gain direct access to the Caspian Sea and Central Asia.
- Ankara’s pan-Turkic strategy could incite separatist sentiments in Iran’s northern provinces, which would be surrounded by a “Turkish Belt.”
The implementation of the “Zangezur Corridor” would result in Armenia losing control over part of its territory bordering Iran. Consequently, Iran’s provinces of West Azerbaijan, East Azerbaijan, and Ardabil would be encompassed within a “Turkish Belt” linking Turkey, Nakhchivan, southern Armenia, and Azerbaijan. Iran would then become entirely dependent on Ankara for land-based transport routes to Europe and Russia. Therefore, Tehran considers this project a national security threat, which Iranian officials have recently begun to openly declare.
In this context, Armenia is seen as the weakest link, as it has not yet recovered from the 2020 war and the 2022 escalation. Thus, Baku and Ankara continue to exert military and political pressure on Yerevan. Their main argument lies in the need for direct land communication between Azerbaijan and its exclave, Nakhichevan. To counter this pressure, Tehran proposed granting Azerbaijan land access to Nakhichevan via Iranian territory—the “Aras Corridor.” This route is analogous to the one proposed through Armenia, running along the Aras River but on Iranian soil.
Iran considers three basic scenarios:
- Positive: Communications through Armenian territory remain closed.
- Neutral: Communications are unblocked but remain fully under the sovereignty and control of the transit country.
- Negative: Some control over security, customs, or border operations is transferred to a third party.
One of the key problematic components in the implementation of the project is the absence of a peace treaty between Yerevan and Baku. The lack of such a document, in the context of unblocking communications, would create a situation where Armenia fulfills all of Azerbaijan’s demands without guarantees of security or a peace treaty that it could use as an argument for opening its border with Turkey. Therefore, the West’s current primary efforts are focused on achieving some form of interim agreement between Armenia and Azerbaijan that would help move the process forward.
“Zangezur Corridor” vs. “Crossroads of Peace”
This question is often raised during expert discussions: what is the difference between Azerbaijan’s “Zangezur Corridor” project and Armenia’s “Crossroads of Peace” project? In fact, it is not entirely accurate to compare the two projects: the former represents just a single communication route, while the latter is a broader concept aimed at unblocking all communications in the region. Two universal obstacles can be identified that prevent the unblocking of communications in the region.
- Armenia’s attempt to link the issue of opening communications to a peace treaty, and, conversely, Azerbaijan’s efforts to separate these two agendas.
- Azerbaijan’s unilateral position, focusing on the need to open only one route, which contrasts with Armenia’s stance advocating for the unblocking of all communications based on uniform principles.
In the first case, Yerevan requires legal guarantees that not only secure the agreements on the operation of routes but also enable a significant step forward—signing a peace treaty and establishing diplomatic relations with Baku. From the perspective of Armenian leadership, this would reduce the likelihood of military escalation by Azerbaijan and open opportunities for economic development.
Meanwhile, Baku aims to secure gains without making concessions, as has been the case in recent years. For instance, Armenia recognized Azerbaijan’s territorial integrity, including Nagorno-Karabakh. However, Baku later stated that it had no basis for recognizing Armenia’s territorial integrity.
The second obstacle lies in Azerbaijan’s efforts to capitalize on its 2020 war victory and maintain the existing imbalance of power in its favor. In this context, Baku focuses solely on opening one communication route that primarily serves its interests. Additionally, it continues to claim “exclusivity” for this route compared to others, which are effectively not even on the agenda.
Currently, the parties are concentrating on discussing a draft agreement on the normalization of relations. In August 2024, both sides announced that, by mutual agreement, the issue of unblocking regional transport communications had been excluded from the draft text and postponed to a later stage.
Given the complex history of relations between Armenia and Azerbaijan, the issue of unblocking transport and economic communications cannot be considered in isolation from the broader context of bilateral problems. The Trilateral Statements, which served as the basis for negotiations between the parties after 2020, essentially provided only a legal framework for the cessation of hostilities in 2020. At the same time, the ambiguous wording of the November 9, 2020, statement not only failed to bring the parties closer to agreement on unblocking communications but also did not prevent sporadic episodes of military escalation.
Bilateral negotiations between Armenia and Azerbaijan could, in the long term, help both parties focus on their own benefits from potential economic projects without being influenced by the interests of third countries. At the same time, economic and transport links in the South Caucasus (SC) region could be more beneficial for Armenia and Azerbaijan if they were integrated into a network of interregional connections. In this context, the attractiveness of transport projects in the SC region would increase under conditions of normalized relations between Armenia and Azerbaijan, enhanced mutual trust, and overall regional stability.
Sergey Melkonyan, researcher at the Applied Policy Research Institute of Armenia (APRI Armenia)
