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In this section, we publish the weekly analysis of the major events taking place in the Caucasus and beyond. The Caucasus Update is written by our Senior Editor Alexander Jackson. Click here to subscribe.

The latest round of talks over Nagorno-Karabakh, in Moscow on July 17, made no progress, unsurprisingly. Before the talks the co-chairs of the OSCE Minsk Group, tasked with resolving the conflict, were optimistic – a “breakthrough” in Moscow was anticipated (RFE/RL, July 8). In the event, there were no public indications of any achievements. Another meeting has been scheduled for the autumn

No reasons have been given for this lack of results. But for Armenia, domestic (and semi-domestic) concerns may have played a role in slowing down the talks. At home, the Armenian Revolutionary Federation (ARF) warned President Serzh Sargsyan on July 17 that if he signs an agreement with Azerbaijan’s President Aliyev on Karabakh, the ARF will call for his resignation. A few days earlier, the ARF demanded the sacking of Foreign Minister Edward Nalbandyan, also for his allegedly soft stance on peace talks. The Heritage party also warned the president not to sign documents based on the Madrid Principles, the framework for an agreement which was proposed to the parties in 2007 by the Minsk Group (ArmeniaNow, July 17).

The semi-domestic problems come from the separatist ‘Nagorno-Karabakh Republic’ (NKR), which insisted that the current negotiating format was “deficient” and that no deal could be signed without the active participation of the NKR (Reuters, July 10). To defuse the tension, Mr Nalbandyan travelled to the region to reassure the leadership, declaring that “Armenia cannot make any agreement without the approval of the people and leadership of Karabakh” (ArmeniaNow.com, July 17).

To blame the failure of the Moscow meeting on domestic considerations in Armenia alone would be simplistic, of course. Russia’s ambitions, and the staunch opposition of the Azerbaijani public to any compromise on the territorial integrity play also a significant role. The week’s events are a reminder that the South Caucasus is not just a geopolitical chessboard, and that constituencies at home are critical, particularly since the region’s democracies are so fragile.

Armenia is perhaps particularly sensitive to domestic concerns. In Armenia there is a real gulf over how to approach the Karabakh issue (and by extension, the Turkey issue).

In this regard, being in office tends to teach pragmatism; the wilderness of opposition encourages a harder, more nationalist line. And the issue is greatly complicated by the NKR and by the Armenian Diaspora, both of which exert a considerable influence on politics in Yerevan. The opposition parties, meanwhile, continue to be divided and unable to propose a viable candidate to take on the ruling Republican Party. Veteran opposition leader Levon Ter-Petrosian, defeated in the hotly disputed Yerevan mayoral election in May, has been unable to reconcile his differences with Heritage and the ARF. This continued division may work to the government’s advantage. An insightful editorial in ArmeniaNow notes that Sargsyan’s resignation would almost certainly propel Mr Ter-Petrosian to the presidency (ArmeniaNow, July 17). Given the bad blood between him and the ARF (as President in 1994 he banned the party, claiming it was behind a coup plot), this would leave the ARF out in the cold again.

However, the divided nature of the opposition does not mean it cannot influence over the government’s Karabakh policy. Mr Ter-Petrosian and the ARF, as well as other oppositionists, back a harder line than the government on Karabakh negotiations. And both oppose the Madrid Principles, which would see a withdrawal of Armenian forces from five of the seven occupied regions surrounding Nagorno-Karabakh and the introduction of an international monitoring force, arguing that this simply concedes what they view as Armenian territory for no real gain (RFE/RL, July 14).

The leadership in NKR, which seems to find itself at ease with the current status quo, is clearly unwilling to accept any deal which would see its ‘independence’ revoked or subject to international interference. To prevent this, the separatist “republic” has two cards with which to pressure its patron. Firstly, it has warned that sidelining Nagorno-Karabakh was “fraught with new escalation of the conflict” (NKR, July 15) implying most possibly a veiled threat to begin a new war against Azerbaijan which would automatically involve Yerevan’s re-intervention.

There is also the nationalist card. The legacy of the Karabakh war and the close ties between individuals living in both Armenia and Karabakh itself makes the claim of ‘sacrificing Nagorno-Karabakh” a political dynamite in Yerevan. In the event of a deal signed under the Madrid Principles, the NKR’s leader Bako Sahakyan could engineer an alliance with the Armenian opposition to stir up public opposition and paralyse the government through protests. The nationalist ARF would be the most likely ally: it holds a handful of seats in the NKR’s ‘parliament’ and backed the call for the NKR to have a more visible role in the peace process.

Gaining a seat at the negotiating table is impossible. Azerbaijan would clearly veto it; so would the Minsk Group, which would be uncomfortable with alienating Baku. It is not even clear that Armenia would support the inclusion of the NKR, since it would make President Sargsyan’s task of agreeing a reasonable solution even more taxing, and would toughen Azerbaijan’s attitude toward compromises.

Thus, besides other huge hurdles for the final resolution of the conflict the depicted Armenian domestic (and semi-domestic) problems will continue to complicate the settlement process.

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