DIALOGUE RESUMES

In early November the OSCE mediating mission paid another visit to the region. On November 4, Azerbaijani President Ilham Aliyev hosted OSCE Minsk Group [MG] co-chairs Igor Popov of Russia, James Warlick of the U.S. and Jacques Faure of France, as well as Personal Representative of the OSCE Chairman-in-Office, Andrzej Kas-przyk.

They held meetings on the same day with Azerbaijani Foreign Minister Elmar Mammadyarov and the newly appointed Defense Minister, Col.-Gen. Zakir Hasanov.

The Minsk Group co-chairs further left for Yerevan where they met and held talks with Armenian President Serzh Sargsyan and other officials.

The main outcome of the MG co-chairs' visit to the region was announcing the consent of the Azerbaijani and Armenian presidents to resume dialog with a view to seeking a solution to the stalemate in negotiations, which has again locked the process of the peaceful settlement of the Nagornyy Karabakh conflict.

A statement issued upon the results of the co-chairs' visit says the Azerbaijani and Armenian presidents confirmed their intention to hold a meeting in November to clarify their positions regarding the Nagornyy Karabakh conflict settlement and discuss how to advance further on this issue. The parties to the conflict were called upon to "exercise restraint on the ground, as well as in their public statements". The statement also notes that "military action, especially at this point, could be considered only as an attempt to damage the peace process".

During their meetings with media representatives the MG co-chairs shared some of their views and expectations. Thus, Russia's Igor Popov said that in the past two years it has been possible to arrange talks only at the level of the foreign ministers of the conflict parties. However, in his opinion, it is time to continue negotiating at the top level in order to outline the schedule and clarify the positions.

James Warlick, the U.S. Minsk Group co-chair, said in an interview with the Azerbaijani news agency Trend that "a window of opportunity" has opened up in the settlement of the Nagornyy Karabakh conflict, which has not been the case lately, and that the U.S. believes progress could be reached in the peace process.

Warlick said further, "We are currently working on the basic principles. Our job is to facilitate the comprehensive negotiations."

Asked about ways of increasing the effectiveness of the OSCE Minsk Group, whose efforts have produced no tangible result in the past two decades, Warlick said the issue is not about the Minsk Group, a format accepted by all sides involved.

"The main point is finding a way to move forward, in particular, to hold comprehensive negotiations," he said.

The persistence of the Minsk Group in resuming the dialog between the Azerbaijani and Armenian presidents to bring dynamics to the negotiations is understandable. The two-year break in such top-level meetings has taken a toll on the entire process of the peaceful conflict resolution, which is essentially deadlocked. This, in turn, posed the risk of losing everything positive that had been achieved in the course of the many-year-long negotiating round on the basis of the so-called Madrid Principles.

Both in Azerbaijan and Armenia, the election cycles have come to an end and the governments should look back less at the election-related situation. Taking into consideration that Baku will host the inaugural European Games in 2015, Azerbaijan is unlikely to be inclined to use force to free its occupied territories ahead of this important international event. The Armenians, in turn, ahead of the 100th anniversary of the so-called "1915 genocide" intend to step up efforts aimed at its international recognition and condemnation. Therefore, the year 2014 is seen by the OSCE Minsk Group co-chairs as "a window of opportunity" to achieve at least significant progress -if not a breakthrough - in the peaceful Nagornyy Karabakh settlement.

The important issue is what "baggage" the parties to the conflict are taking to the resuming talks. In the past two years Azerbaijan has grown more powerful economically and militarily, and has greatly strengthened its foreign political positions. The launch of major gas transportation projects -  such as TANAP and TAP - is expanding and boosting Azerbaijan's energy cooperation with the European Union. For the United States, the importance of its partnership with Azerbaijan is maintained in the context of ensuring the Afghanistan transit and the developments regarding Iran and the Middle East.

Baku has also benefitted from its two-year membership in the UN Security Council, the holding of major international events, successfully conducting the campaign aimed at denouncing the genocide perpetrated by the Armenians in Khojali, and the expanding support for Azerbaijan's fair calls for ending the occupation of its territories in line with the UN Security Council resolutions.

Among the latest such examples we could cite the official statements by the foreign ministers of Romania and Albania, Titus Corlatean and Ditmir Bushati, which were made in September and October, respectively; the statements concerned the support for a peaceful settlement of the Nagornyy Karabakh conflict in accordance with international law and the territorial integrity of Azerbaijan, and there was also a call upon Armenia to immediately pull out of the occupied territories. Whereas such a principled stance was previously taken chiefly by the member states of the OIC, GUAM and some countries that have acceded to the Non-Aligned Movement, it is now beginning to be openly stated by the Europeans.

Thus, in the 16th clause of a recently passed resolution on the European Neighborhood Policy the European Parliament reminded that the occupation by a country participating in the Eastern Partnership program of the territory of another member state amounts to a violation of the fundamental principles and goals of the Eastern Partnership.

The importance of resolving the Nagornyy Karabakh conflict based on the four UNSC resolutions passed in 1993 and the Basic Principles of the OSCE Minsk Group, which were outlined in the L'Aquila joint statement issued by the US, Russian and French presidents on July 10, 2009, was particularly emphasized.

A completely different picture is seen with regard to Armenia. Even five years after the economic and financial crisis hit hard -- since 2008 -- Armenia has yet to recover from the 15 percent decline in GDP. The number of the population living below the poverty line is growing and unemployment is rising. Notwithstanding the trumped-up ratings citing conducive business environment, all sectors of this country's economy have long been divided and monopolized by criminal-oligarchic groups. Witnessing the deplorable situation, the Armenians are leaving their home country in large numbers to seek a better life abroad. As a result, not only the economic but also demographic indicators of Armenia -- such as population numbers and the birth-rate -- are deteriorating year-on-year.

After Serzh Sargsyan, having undermined the two-year hard work on drafting the Association Agreement with the European Union, announced Yerevan's intention to accede to the Customs Union and the Kremlin-planned Eurasian Union, the confidence in Sargsyan and Western partners' interest in the Armenians considerably diminished. Sargsyan explains this decision by the benefits from the supply of inexpensive energy resources and financial assistance pledges from Russia, as well as reliance on Moscow for the security issue in the context of the Nagornyy Karabakh conflict.

However, all these arguments raise serious doubts and produce the impression of a "smoke-screen", which targets disguising simpler reasons for Sargsyan's unexpected decision to unquestionably obey the will of Russian President Vladimir Putin.

As it turns out now, any hefty investment by Russia in the development of railway communications in Armenia or the construction of a new block at a nuclear power plant there is out of the question. There is no clarity even in the issue of a beneficial gas price yet. Armenian Energy and Natural Resources Minister Armen Movsisyan has told parliament that Armenia and Russia will continue negotiating over the difference in the gas fee.

"Earlier we were inclined toward an option according to which the Russian side would subside a part of the tariff. But now we are leaning toward a different option, which we will report later," the minister said.

Russia is reluctant to undertake a financial burden worth 5-6bn dollars required for the construction of a new block at the Armenian nuclear power plant. At this point, the disbursal of a loan (worth about 160m) is considered in order to implement a program seeking to extend until 2026 the life-span of the operating 2nd power-generating block at the nuclear power plant.

Previously, 2016 had been set as a deadline for this energy block. The Armenian government even received financial aid from the European Union to halt its operation. But, as it happens, the money was squandered away, while the Armenians are backtracking from the assumed obligations, citing lack of other available energy resources.

Yerevan does not wait concessional loans from Moscow. Moreover, the Armenian government has announced its intention to repay ahead of time the Russian loan worth 500m dollars, which was allocated back in 2009 as support amid the world economic and financial crisis.

For this purpose, most of the funds leveraged from Armenia's issue of Eurobonds totaling 700m dollars are planned to be used, with the debt clearance term of seven years and 6 percent annual interest rate.

Experts were astonished by this decision. The usual practice envisions replacing an expensive loan with a cheaper one and short-term credits with long-term ones, while the Armenian government is doing to the contrary, considering that the Russian loan had been provided for a longer term and was cheaper (15 years with 4 percent interest rate).

Either the Armenian economy is unable to effectively use and ensure repayment of even such small amounts of lent funds or the decision to pay off the Russian loan ahead of time is linked to the apparent aspiration to "cut the ends" due to the emerging facts regarding their mismanagement, or, more precisely, squandering by Serzh Sargsyan and those around him.

The actual reason for the surprising submission of the Armenian president in Moscow could well be a dossier containing facts and the threat of their going public, instead of the Nagornyy Karabakh factor, which was allegedly used by President Putin to put pressure on him.

But for the broad public, which remains astounded as to why the Armenian government's depriving itself of the European prospects in the absence of an apparent financial and economic gain from accession to the Customs Union, "the Karabakh card" continues to be used. Also, there was a statement by Andrey Ruzinskiy, the commander of the 102nd military base of the Southern Military District of Russia's Armed Forces, about potential interference of his troops if hostilities in Karabakh resume, which exceeded his powers.

Roman Khudyakov, a Russian State Duma member from the flamboyant LDPR party, followed up by publicly announcing: "Armenia together with Russia should think how to also include Karabakh in the Customs Union. If the Nagornyy Karabakh republic accedes to the Russian Federation, all the other countries will approach the problem in a new way. Azerbaijan, in turn, will finally realize that it's all over for it and that it should leave the NKR population alone so that it would live in peace." It would be meaningless to comment on such irresponsible statements, given that Khudyakov himself and the entire LDPR faction does not make a difference in Russian politics, but is merely used to communicate the signals which the official authorities and sane politicians cannot afford to do.

Perhaps, someone is thus trying to show to the Armenians the benefit of their accession to the Customs Union and Eurasian Union, and, at the same time, communicate a latent threat to Azerbaijan, pressing on it to move in the same direction. But it's all in vain. It's been long since tricks like that stopped working.

It will be impossible to intimidate Azerbaijan, especially considering that it is not alone and not isolated in the face of various foreign challenges. In this regard, it is notable that Turkish Foreign Minister Ahmet Davutoglu confirmed at the recent parliamentary hearings that the position of his government on the opening of the border with Armenia will not change. According to the minister, this can happen only with Baku's consent and after the beginning of the withdrawal of Armenian forces from the occupied Azerbaijani territories.

The meeting of Presidents Ilham Aliyev and Serzh Sargsyan will mostly likely be timed to the Vilnius summit on the Eastern Partnership program due in late November. Breakthrough decisions should not be expected from that meeting, and if the parties manage to agree upon invigorating the negotiating process in conclusion of the talks, this, in itself, could be considered as success. 

Azerbaijan offers not to confine to endless discussions of the basic conflict settlement principles, but to move forward. The general consent provided by the presidents at the OSCE summit in Astana last year is enough to begin working on the text of a peace accord, and this does not require at all the prior signing of a framework agreement. After all, it is the peace accord itself, not the framework deal, which will have to be enforced. So, that's what it is necessary to start working on.