Armenia and Azerbaijan Sign Peace Declaration, Paving the Way for Regional Stability and Economic Growth

Strategic Insights -

On August 8, Armenia and Azerbaijan signed a peace declaration at the White House, committing to their mutual territorial integrity and a US-backed infrastructure initiative in the Zangezur Corridor. The accord aims to foster greater interdependence between the two nations, elevate the status of the US, Turkiye, and the EU, and sideline Russia. While the peace deal is not finalized and failure risks regional instability, positive momentum carries upside risks for deepened regional stability and growth.

Key Takeaways:

  • The peace declaration resolves many issues within the bilateral relationship, recognizing the territorial integrity of each country as it existed under the USSR and withdrawing disputes from international legal bodies.
  • The agreement is conditional upon Armenia amending its Constitution to remove reference to Nagorno-Karabakh and does not touch upon the governance of Nagorno-Karabakh or the right of return for ethnic Armenians displaced by Azerbaijan's takeover.
  • The development of the Zangezur Corridor, a 27-mile link through southern Armenian territory, is a core aspect of the agreement, with the US receiving a 99-year development lease for the route, nicknamed the Trump Route for International Peace and Prosperity (TRIPP).
  • TRIPP will create a new major trade route for Azerbaijan to transport its oil, gas, and manufactured goods to European markets through Turkiye, cutting costs and adding logistical capacity.
  • The declaration marks the first such bilateral agreement between Armenia and Azerbaijan and a major step toward normalization in relations, but remains vulnerable to challenges from within Armenia and opposition from Russia and Iran.
  • Armenia's Prime Minister Pashinyan faces backlash for concessions made to Azerbaijan, while a potential successor may run against his proposed referendum on changing constitutional references to Nagorno-Karabakh.
  • Russia may seek to sabotage the peace, but its attempts would likely be ineffective, offering an opportunity for the US to extend its influence in the South Caucasus.
  • The Zangezur Corridor and connectivity among Armenia and Azerbaijan may create opportunities to complexify the "Middle Corridor," a network of logistics routes connecting European markets with China, and displace Russia's influence in the region.

Statistics:

  • 30,000 deaths resulted from the Nagorno-Karabakh War (1991-1994)
  • 7,000 deaths occurred in the second Nagorno-Karabakh War (2020)
  • Approximately 100,000 ethnic Armenians left Nagorno-Karabakh in 2023
  • Armenia's trade flows with Russia account for over a third of its total exports
  • The EU imported 53 billion cubic meters of Russian gas in 2024
  • The EU aims to phase out Russian gas by 2027
  • Azerbaijan and the EU signed a strategic partnership in 2022 to aim for an annual import of 20 billion cubic meters of Azerbaijan's natural gas

Sources:

  • Steptoe & Johnson press release, "Armenia and Azerbaijan Sign Peace Declaration"
  • International Republican Institute poll, "Armenian Public Opinion: June 2024"
  • Various news articles and official documents referenced throughout the text