Second part of an exclusive interview of "Caucasus Watch" with Thomas de Waal, a senior fellow with Carnegie Europe, specializing in Eastern Europe and the Caucasus region. In this part of the interview, the expert comments on the current developments around Armenia and the Nagorny Karabakh conflict.

You say that the conflict over Nagorny Karabakh is one of the most damaging factors to the overall development of the Caucasus.

You also claim that prospects for peace are as bleak as ever. Yet, talks between both governments seem to be underway and in September both countries agreed to establish a direct line of communication to avoid violence and miscalculations at the line of contact.

So you expect the new government in Yerevan is still not going to make any kind of real concessions, despite the current rhetoric?

Let us just take a step back and look at this conflict, which dates back to the late 1980s. It is basically 30 years old, but you still have this long ceasefire line running through the Caucasus and armies of 20.000 men on either side, which are equipped with heavy weaponry, artillery and aircraft as well as very weak international mechanism in place. There is a small monitoring mission with six OSCE observers, as well as the very modest Minsk group under the co-chairmanship format that is trying to mediate the conflict. So basically everything comes down to the will and decision-making of the leaders on both sides. This is not a conflict where there is much international influence, so it is quite worrying that the two sides find it very difficult to talk. The foreign ministers talk occasionally and the presidents meet perhaps once a year but there are few channels of communication. Therefore, to be frank, it is amazing that there has been no hotline between the two sides given the danger of the situation. This is a minimum step that was needed to make the situation a little more manageable.

When it comes to the new Armenian government, I believe we are not going to see many changes, at least not soon. For Pashinyan, the priority is to reform the domestic economy, crack down on corruption and get rid of old monopolies. He is certainly not trying to upset the Karabakh-process. Being a leader from Yerevan he cannot afford to upset the Karabakh Armenians. He knows that the last leader who tried to upset the Karabakh Armenians was Levon Ter Petrosyan, who was actually deposed when he tried to do that in 1998. For all these reasons, he is going to just try to hold on to the status quo and this is probably not to the liking of Azerbaijan. Baku wants to see either a more active peace process or it wants to shake up the situation with some kind of military action. It does not want to see a quiet status quo, but a quiet status quo is unfortunately what I think the new Armenian leadership wants.

The new generation is more uncompromisingly nationalist. Do you think, a moderate Pashinyan regime could change this attitude over time or will the street rather drive the regime in its foreign policy?

I broadly think the change of regime in Armenia is positive, allowing in a new generation who really want to tackle Armenia’s problems. This generation is not corrupt and this leadership has a real legitimacy. I hope they will not squander that legitimacy. If that is the case, with time, they could use that legitimacy to try to pursue a real peace process with Azerbaijan and try to get the public interested in discussing the price of peace with Baku, but that will take time. Also, the compromises that Armenia will be prepared to make will almost certainly not be good enough for the Azerbaijanis. But I believe that this is a conflict where a „liberal peace“, meaning democratically legitimate government on both sides talking to one another, could in the long run, not immediately, but in many years ahead, be achieved.

US National Security Adviser Bolton recently visited the Caucasus. Especially in Armenia, he seemed to put pressure on the new government. Experts think he might want the Nagorny Karabakh conflict to be solved, so that Armenia’s borders with Turkey and Azerbaijan can be opened up. As a consequence, Armenia could close its border to Iran, which it now is dependent upon.

Do you think this is a realistic viewpoint and could the US become partner for Armenia?

I was quite amazed by Bolton’s comments. Up to now it has always been the US policy that it has problems with Iran but accepts other countries‘ approaches, especially those of its neighbors, and that applies to Armenia, which Iran is the only one of two open borders Armenia has. The idea that the Nagorny Karabakh problem could be magically resolved and the borders with Azerbaijan and Turkey would be opened up so that Armenia suddenly does not have to deal with Iran seems to be magical thinking with no basis in reality. This conflict is deeply intractable. it cannot be solved quickly and Armenia needs its southern border with Iran, so there is already a lot of pushback against Bolton’s comments. Azerbaijan actually has a few more options, but it also needs to keep its border with Iran open. The idea that they could close their border with Iran is a non-starter both for Armenia and for Azerbaijan.

In regards to the Velvet revolution, you say that the old elites are organized in a “conglomerate” and will likely resist longer than its head, Sarksyan. Do you think the new government under Pashinyan can channel the political momentum of the street into institutional power and reform the system?

This is absolutely the major question. How can you build institutions in a country, which has basically been governed by informal power? Do you build institutions through public consent from the bottom up or do you think Armenia already has a lot to work with by having a professional class in a civil service and public servants?

But there are definitely questions about Pashinyans style. He is a revolutionary rather than a statesman. Is he interested in building institutions or is he a “second Saakashvili”, who is only interested in PR and revolutionary actions? I really do not think we have the answers to this right now. These is the questions to watch and the answers will be a little clearer now that we have had elections. Now that he has won the elections, as we expected, and he has proper power in Armenia, he can look at governing rather than at winning power for the first time.

So should we stay skeptical about his motives? Right now he seems to be the seen as a kind of “savior figure”.

He seems to have a genuine desire to rid Armenia of corruption and he seems not to be corrupt, but he has a kind of revolutionary style. This will be a big transition to make, from being a revolutionary to becoming a statesman.

So far the Armenian Diaspora in the West has been occupied with the tensions between Turkey and Armenia. Do you think Armenians abroad will now start to be more active in promoting liberal political and economic ideas?

I see the year 2015 as a turning point to the Armenia Diaspora as the centenary of the Armenian genocide. They thought almost exclusively about Turkey and “Western Armenia” as they call it and about the genocide, but after that centenary has passed, we have seen a change of emphasis in the Diaspora organizations. We have also seen a younger generation that has a different set of attitudes and some Diaspora Armenians have actually come to Armenia to work in the IT-sector for example. I believe there is a better environment for the Armenia-Diaspora relations and there are a number of people in the Diaspora who want to do what they can for Armenia. Now many are thinking more about Armenia rather than about Turkey. Will the new government be able to use these resources? Again, it is a little bit early to tell but I hope the answer is yes, because they are a very useful resource.

You say that with the end of the Soviet Union, “the Caucasian baby was thrown out with the Communist bathwater”. Several organizations as well as institutions have failed and mostly did not include all political entities of the Caucasus. New geopolitical concepts also fall short in their description of the region (eg. New Great Game, Silk Road etc.) and you claim that all outside actors and Caucasus nations as well as non-state entities should have a say in regional integration.

Is there any existing initiative you think would have potential in this regard or could be a starting point? You mentioned the EU but also acknowledge the limits of EU integration.

It is so frustrating when looking at the region, because the Caucasus has such a great potential. One cliché that is true about the Caucasus is that it is a crossroads between the East, West, North and South. Therefore, it could be a great communications hub. Imagine if railways were finally opened up across the Caucasus, it really would be a crossroad between Europe, Asia the Middle East and Russia. Yet, obviously that has not happened. I do think the potential is still there and that the people of that region understand each other well on the people-to-people level despite the conflicts. Due to that, the potential is still there, but the question is what can be done to encourage this kind of cross-Caucasus cooperation? The EU can do a certain amount but I think most of it has to come from within the region as a cross border project. The most promising projects I see have to do with the environment. I mentioned the “Caucasus Nature Fund” in my final chapter, which is helping National Parks in the region. There is also the “Transcaucasian Trail”, which is a network of footpaths through the region and I think everything that links tourism and the environment is a good start. The politicians have fallen behind but hopefully ordinary people and some non-governmental people can start and the politicians can follow later.

You mentioned the potential to become a crossroad and some of our experts talked about a growing Chinese involvement in the region. Do you see this as well, and do you think a growing Chinese engagement can bring actors together or will that be a divisive factor?

China is definitely now an actor in the Caucasus. It is primarily an economic actor and it is building infrastructure. At the moment, I would say this is a positive influence, building roads and railroads and bringing investments to the Caucasus, but let us not be naïve. China has its own political agenda and China is not a democracy. It is useful for the region to have investments but it is something that also needs to be watched and questioned about whether there is a price tag attached to that later on. China is not the EU, which I think has generally a much more altruistic interest in the region.

Thomas de Waal is a senior fellow with Carnegie Europe, specializing in Eastern Europe and the Caucasus region.

He is the author of numerous publications about the region. His latest book is Great Catastrophe: Armenians and Turks in the Shadow of Genocide (Oxford University Press, 2015). He is also the author of the authoritative book on the Nagorny Karabakh conflict, Black Garden: Armenia and Azerbaijan Through Peace and War (NYU Press, second edition 2013), which has been translated into Armenian, Azeri, Russian, and Turkish, and of The Caucasus: An Introduction (Oxford University Press, 2010).

De Waal has worked extensively as a journalist and writer in the Caucasus and Black Sea region and in Russia. From 1993 to 1997, he worked in Moscow for the Moscow Times, the Times of London, and the Economist, specializing in Russian politics and the situation in Chechnya. He is the co-author (with Carlotta Gall) of the book Chechnya: Calamity in the Caucasus (NYU Press, 1997), for which the authors were awarded the James Cameron Prize for Distinguished Reporting.

He has also worked for the BBC and for the Institute for War and Peace Reporting, a London-based NGO.

Interviewed by Philip Roehrs-Weist