Nagorno-Karabakh Conflict and its Impact on the Economy

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Nagorno-Karabakh conflict

Military conflicts have a colossal impact on the economy of any country, especially when it comes to the economies of developing countries. Several former Soviet Union republics suffered heavy losses due to internal and external conflicts. Unfortunately, there are several frozen conflicts and one of them is the conflict in Nagorno-Karabakh.

Several days ago fighting erupted once more between Armenia and Azerbaijan. It is worth mentioning that, at the heart of the decades-old conflict is the Nagorno-Karabakh region. As a reminder, it is recognized as part of Azerbaijan. However, ethnic Armenians are controlling the region as well as most of the surrounding areas.

People should take into account that, the countries fought a bloody war over the region for several years from the late 1980s to the early 1990s. Importantly, they declared a ceasefire. However, Armenia and Azerbaijan have never managed to agree to a peace treaty. This fact once more underlines the severity of this conflict.

As mentioned earlier, Nagorno-Karabakh is part of Azerbaijan, but its local population is the majority Armenian. In the last century, more precisely in the late 1980s, the regional parliament voted to become part of Armenia. Interestingly, the region remains part of Azerbaijan, however, it is controlled by separatist ethnic Armenians backed by the Armenian government. To this day the self-declared republic is controlling the region along with parts of Azerbaijan outside of the Nagorno-Karabakh.

Economy and war

Tensions between Armenia and Azerbaijan

Armeria and Azerbaijan can’t afford another war, as both of them are developing countries, especially in the case of Armenia it would be hard to deal with costs. Moreover, both sides should understand that war is not a solution. Despite all challenges, it is possible to avoid another bloody conflict. In the 1980s and 1990s, thousands of people lost their lives due to conflict. The governments of both countries should keep in mind that violence is not the answer to this confrontation.

Importantly, as in the case of other former Soviet republics, Armenia’s economy suffers from the breakdown of former Soviet trading patterns. Notably, the economy relies heavily on investment and support from Armenians who live outside of the country.

The Caucasus is a strategically important mountainous region in south-east Europe. Interestingly, for centuries different powers in the region fought numerous wars as they wanted to control this strategically important region.

It is worth noting that, modern-day Armenia and Azerbaijan both became part of the Soviet Union when it was formed in the 1920s. Notably, the Soviets gave control over to Azerbaijan authorities. However, Nagorno-Karabakh was an ethnic-majority Armenian region.

Unfortunately, clashes continued throughout the past three decades, the last major incident dates back to 2016. Importantly, Turkey is the strategic partner of Azerbaijan. Moreover, Turkey was the first country to recognize Azerbaijan’s independence in 1991. Also, Turkey has no official relations with Armenia. The border between the countries remains closed for more than 25 years. Notably, Armenia has good relations with Russia. Furthermore, there is a Russian military base in Armenia. However, Russian President Vladimir Putin also has good relations with Azerbaijan.

Azerbaijan and Armenia should work together to avoid another war. Other countries should persuade leaders of Armenia and Azerbaijan to refrain from military actions.

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