At their first official summit on 29 March, Azerbaijan’s President Ilham Aliyev and Armenia’s Prime Minister Nikol Pashinyan exchanged views on several key issues relating to the settlement process and ‘ideas of substance’. They committed themselves to maintaining the ceasefire, developing humanitarian measures and the continuation of direct dialogue. This follows on from the surprising announcement by the OSCE Minsk Group in January that Armenian and Azerbaijani foreign ministers Zohrab Mnatsakanyan and Elmar Mammadyarov had agreed on the necessity of preparing their peoples for peace.

These outcomes sustain a positive outlook for the long-stagnant peace talks. Leadership rapport is of course crucial. But without a deeper institutionalization of the peace process, progress is unlikely.

Negotiating agendas in play

The current moment in the Armenian-Azerbaijani peace process can be understood in terms of three negotiating agendas.

'Low-cost' confidence building

This includes re-establishing a hotline across the Line of Contact between Armenian and Azerbaijani forces, the resumption of cross-border visits, and most obviously the reduction in Line of Contact violence since 2017. While these measures are all welcome, they can be reversed overnight. Structural confidence building measures

The ‘Vienna-St Petersburg-Geneva’ agenda discussed after April 2016’s major escalation along the Line of Contact. It envisages allocating increased resources to existing ceasefire monitoring structures or the mandating of new ones. This implies both the commitment of some political capital by Armenian and Azerbaijani leaders and the narrowing of their future strategies. Substantive political issues

Encapsulated by the Basic (‘Madrid’) Principles, these involve major moves towards a ‘big bang’ peace agreement: the withdrawal of Armenian forces from occupied territories, the deployment of a peacekeeping operation, the enablement of return for displaced persons, the holding of a vote on the territory’s final status and, until then, an interim status for the de facto authorities in Nagorny Karabakh.

Dilemmas of engagement

For many years the talks have been effectively locked down at the second agenda: Yerevan insisted on security measures as a pre-condition for any move to more substantive talks. For Armenia, to move to the third agenda would be to expose Nikol Pashinyan’s reform project, as the idea of territorial concessions in the current climate is still political poison. But to block the talks risks being cast in the role of the spoiler, and a return to Line of Contact violence that would likewise imperil domestic reforms.

After initial uncertainty, Baku has emphasised its patience as Armenia’s new leadership beds down. Alongside the reduction of Line of Contact violence, Azerbaijani policymakers also articulated for the first time in many years a forward-looking vision. This has created pressure to move rapidly to the third agenda. This, crucially, is understood in Azerbaijan in terms of releasing territories currently under Armenian occupation before resolving the issue of status.

Yet Baku also faces a dilemma, between positive-sum and zero-sum strategies. The former assumes that Pashinyan can deliver something tangible (and Baku has set the bar high as to what counts). But it also risks the possibility that domestic reforms succeed in strengthening Armenian statehood and its resistance to compromise.

Conversely, a zero-sum strategy would lead Baku to undermine Armenia whoever is in charge. This may succeed in shifting the spoiler image to Yerevan, but if insecurity contributes to the failure of Pashinyan’s project, Baku would likely confront a more conservative, Eurasian and militarist successor. Apart from anything else, this would complicate Azerbaijan’s efforts to contain Russia’s leverage.

Little room for manoeuvre

While the basic parameters of Armenia’s foreign policy remain unchanged, Nikol Pashinyan’s Karabakh policy is subject domestically to a tense dynamic between three major actors.

First, his own government is for now highly legitimate but not strongly institutionalized. Pashinyan’s ‘My Step’ alliance is a broad coalition, he came to power without a disciplined party machine and he has no external patron.

Second, the former Republican Party of Armenia is re-grouping as a new opposition, expanding into public space with new media and civil society institutions. The former political elite increasingly frames itself as the guardian of national-patriotic values against Pashinyan’s liberal politics, auguring a vicious ‘culture war’.

The third actor is the de facto Nagorno-Karabakh Republic (NKR). The Yerevan-Stepanakert relationship has been complicated by the fact that Pashinyan represents the constitutional state of Armenia, bound by its recognized borders and seeking the image of a ‘normal’ state on the international stage. He has argued that he has no mandate to negotiate for Karabakh Armenians, and hence they should participate directly in the talks.

While this is framed as a new approach, it is also selective with regard to the Basic Principles, highlighting ‘Armenian issues’ of status and mandate. Fearing tacit recognition of the de facto NKR, however, Baku rejects any change to the format of the talks.

Where is the entry point for peacebuilding?

With all sides picking selectively from the third agenda, where is there space for progress? None of the parties is ready to move towards a ‘big bang’ peace agreement, while low-cost confidence building alone is insufficient to build trust.

Yet it is important that, for now, violence has receded. This is in and of itself an opportunity not to be wasted. In this situation, the real peacebuilding space lies in incremental measures, new patterns or issue areas of cooperation that necessitate a political investment by the parties and introduce some routine and predictability in their interactions.

External actors can help by building out a broader peacebuilding infrastructure as a new space for intermediate agreements, new kinds of regularized interaction or specific ‘win-win’ transactions that contribute to a web of interactions beneath and beyond the Minsk Process. With a networked infrastructure within which the principle of inclusion can be managed and implemented, the entire process would be less hostage to volatility when leaders come and go.