Implications of the Russo-Ukrainian War on the South Caucasus Countries

The Russo-Ukrainian war that began in February 2022 has altered the dynamics of regional and international security, raising concerns about the potential loss of sovereignty and territorial integrity in the South Caucasus. This region, historically a crossroads for the interests of great powers, is undergoing rapid changes. The ongoing conflict, now entering its fourth year, has not only exacerbated existing tensions but has also impacted international perceptions and policies regarding the region, compelling the three South Caucasus countries—Georgia, Armenia, and Azerbaijan—to reconsider their foreign policy outlooks.

South Caucasus Countries’ Policies Towards the Russo-Ukrainian War

The geopolitical location of the South Caucasus, serving as a bridge between Europe and Asia, bordered by the towering Caucasus Mountains, is both a blessing and a curse. On one hand, South Caucasian nations can benefit from their role in facilitating trade flows; on the other, this strategic position has made the region a battleground for competition among regional powers, primarily Russia, Turkey, and Iran. Following the Russo-Ukrainian conflict, the regional situation has become increasingly fragile, introducing new risks to an already vulnerable security environment, which has affected the policies of South Caucasus nations towards the warring parties.

Notably, Georgia stood out as the only country among the three that condemned Russia directly. As the only South Caucasian nation with a clearly pro-Western foreign policy, aspiring for EU and NATO membership, it had previously engaged in war with Russia. However, it has tried to refrain from fully supporting Ukraine officially, despite significant public support for Kyiv, manifesting in mass demonstrations in the Georgian capital, Tbilisi, since the war began to condemn Moscow and back Ukraine.

In contrast, Azerbaijan adopted a more balanced approach towards the conflict. The support Russia provided to Armenia during the Karabakh conflict made Baku cautious about fully endorsing Moscow in the war. However, Azerbaijan’s public silence on Russia has not prevented it from offering indirect support to Ukraine through affirmations of its territorial integrity and sovereignty. Thus, neutrality proved to be Azerbaijan’s safest policy to maintain partnerships with both Moscow and Kyiv. Armenia, a close ally of Russia, adopted a more supportive posture towards Moscow without antagonizing Ukraine, given the nature of their strategic alliance. Yerevan relies heavily on Moscow, particularly in economic and security matters, which has limited its ability to maintain a close relationship with Ukraine post-war.

Impact of the Russo-Ukrainian War on the South Caucasus

Russia’s war on Ukraine in 2022 was a shock to the status quo the Caucasus had not experienced since the Soviet Union’s collapse, leading to numerous fluctuations for the Caucasus countries due to the developing, broad-scale conflict between Russia and the West over Ukraine. Positioned at a crossroads, these three nations are emerging as new buffer states in an increasingly fragmented world.

As a result, the economies of the Caucasus countries have faced challenges due to their heavy dependence on Russian trade and a sharp decline in remittances. However, with Western nations imposing sanctions and restrictions that significantly curtailed trade between Russia and the West, the Caucasus has emerged as a natural link for continued trade flows. Suddenly, the few main highways and railways connecting Russia through the region to the outside world have become more valuable to external powers.

The land route connecting Russia directly with Turkey through Georgia has turned into a massive freight corridor. The Georgian government views this as a golden opportunity, enhancing the country’s significance to both sides of the conflict, with a population of 3.6 million. Since Russia requires logistical routes, the West is concerned about the possibility of Georgia deviating from its pro-Western stance; hence, both sides have attempted to sway Georgia. Moscow offered incentives to ensure Georgia’s allegiance, lifting visa restrictions and bans on direct flights between Georgian and Russian cities. Conversely, the European Union upgraded Georgia’s status to an official candidate member, despite the country’s accession to the EU still being distant.

In light of these developments, and buoyed by a newfound economic influence, the Georgian government has begun to strengthen its regional trade relations. The country recently passed a controversial law aimed at curbing the influence of Western-funded non-commercial organizations. Despite public protests, the government successfully pushed the law through parliament. The day after the law’s enactment, the Georgian government awarded a contract to a Chinese firm to develop the first deep-sea port on the Black Sea, seen as a game-changer for trade in the region. However, Russia is likely to benefit as well from its position next to the separatist-controlled Abkhazia, where it is building a naval facility just 25 miles from the new port, allowing it to exercise influence over trade flows being processed there.

Similarly, the geopolitical scene in the South Caucasus, particularly concerning South Ossetia and Abkhazia, has witnessed significant transformations post the ongoing war in Ukraine. The conflict ignited discussions about territorial integrity and sovereignty and impacted regional alliances. The European Union has had to reconsider its relationship with Georgia, and as Russia faces international isolation, it has redirected its support toward the separatist regions of South Ossetia and Abkhazia in favor of the war efforts in Ukraine. Since this support encompasses military, economic, and political dimensions, Russia aims to maintain its influence in the region amid a changing global order.

Nevertheless, Moscow has reassessed the priority of support it should continue providing to existing separatist regimes; consequently, one of the main repercussions of the diminishing economic ties between Russia and South Ossetia could potentially weaken South Ossetia’s economic performance due to reduced support from its primary patron. Unlike Abkhazia, South Ossetia cannot diversify its economy. Even before the war, its only financial income stemmed from acting as an external channel through which Russia financed its operations in Donbas, providing an additional income from banking transactions without direct involvement in Russia’s military operations.

The new trade flow map emerging from the war in Ukraine has also impacted Azerbaijan’s calculations—a nation rich in oil along the Caspian Sea. Europe’s need for Azerbaijani gas, following its decision to cut most Russian supplies, led to increased trade between Central Asia and China via the so-called middle corridor running through Azerbaijan and Georgia, bypassing Russia. Meanwhile, Moscow needed Azerbaijan to develop an ambitious project linking Russia with Iran and then with India.

Azerbaijan’s position has become increasingly evident as it gained all economic leverage over both Russia and the western nations, allowing its leader, Ilham Aliyev, to decisively move to reclaim all of Karabakh. For decades, the internationally recognized region of Karabakh has been contested between Armenians and Azerbaijanis. In 2023, over 100,000 Armenians who had lived in the area for centuries were forced to flee their homes, fearing retribution. By 2024, Russian peacekeeping forces completed their withdrawal from the region. For the first time in its history, Azerbaijan fully controlled its sovereign territory.

The South Caucasus Between Russia and the United States

The future of the Russo-Ukrainian war poses new security risks for the three South Caucasus nations already burdened by a troubled security environment, escalating societal and political polarization. The countries in this region will need to mitigate the effects of Russian pressures and safeguard their national sovereignty, territorial integrity, and independence. This requires bolstering international laws and regulations related to the territorial integrity of the region.

If Ukraine’s territories change due to the war, it could have grave repercussions for the three nations, since the South Caucasus has a long history of conflicts and varying degrees of Russian domination. Such hostilities may deepen amid the protraction of the war. In the worst-case scenarios, the Russo-Ukrainian war could lead to further divisions among the South Caucasus countries as they seek to maintain good relations with Russia, avoid antagonizing it, and ensure maximum autonomy.

Alongside the violent security threats the region may face, the South Caucasus is under new economic pressures due to the ongoing war, especially if western nations continue to impose sanctions on Russia. The early signs of these economic strains, associated with the depreciation of the Russian ruble, as well as a decline in commercial and economic activity, are already manifesting in the region. However, the new geopolitical and economic reality favors the three countries, as Russia’s waning influence has made it just one of several players in the South Caucasus and unable to ignore the roles of China, the EU, Iran, Turkey, and the United States. Furthermore, the emerging geopolitical and geo-economic pluralism in the region has made Armenia, Azerbaijan, and Georgia bolder in engaging with all external powers. Azerbaijan is likely to seek partnerships with all powers to maintain its national security amid current developments, while Armenia faces a complex sense of insecurity influencing its current foreign policy outlook. Georgia, on the other hand, must maintain its multilateral stance.

The war in Ukraine has accelerated what began with the Karabakh War in 2020, as Moscow sided with Azerbaijan rather than its ally Armenia. Moscow’s decision to remain distant while Baku regained control of Karabakh is widely perceived as a betrayal of Yerevan, prompting Armenia to reassess its relations with Russia. Talks of withdrawing from the Russian-led security alliance, the Collective Security Treaty Organization, are circulating in Yerevan, as its membership failed to prevent its defeat in Karabakh and the occupation of several areas of Armenia itself by Azerbaijan. This is occurring within the context of Armenia seeking new partners instead of relying on Moscow, thus striving to strengthen ties with EU countries and the United States.

Conversely, this has surged the rapprochement between Moscow and Baku, as Azerbaijan leverages Moscow’s focus on Ukraine to fully realize its goals. Baku is prepared to move forward in solidifying its economic influence in the region. For instance, Azerbaijan, with Moscow’s support, attempts to control a crucial trade link that would connect its Nakhchivan exclave via a railway through Armenia, further extending to Turkey. This move may also lead to the establishment of a direct railway connection between Russia and Turkey.

In summary, one can argue that the ongoing war in Ukraine may bring about significant political and economic changes in the South Caucasus. Russia might seek to enhance its influence in the South Caucasus to compensate for its weaknesses in Eastern Europe. Meanwhile, the West will likely endeavor to capitalize on this circumstance, increasing its mechanisms of direct influence in the region. Western countries, particularly the United States, are attempting to exploit the favorable geopolitical situation to bolster their presence in the South Caucasus. However, it is worth noting that the South Caucasus states do not hold significant strategic importance for the U.S., which may lead it to exercise caution in engaging in this region, unlike European nations that view the area from a security perspective.

Ultimately, the South Caucasus constitutes a part of the European and Middle Eastern security sphere, playing a crucial role in both. Thus, as the Russo-Ukrainian war enters its fourth year, it will inevitably reflect on the nature of the relationships between the South Caucasus nations and regional and international powers, especially since the war in Ukraine has exposed Russia’s vulnerabilities in the region, affecting the three countries’ calculations in a territory where Moscow traditionally had the upper hand over competing local and external actors. Hence, one might say that the Russo-Ukrainian war marks the beginning of a realignment of the new strategic order in the South Caucasus.