The mass street protests across Armenia, which began in late March, forced the resignation, on April 23, of Serzh Sargsyan, who had recently taken over as prime minister (with strengthened constitutional powers) after ruling as president for the last decade. Shortly thereafter, on May 8, opposition politician and leader of the demonstrations, Nikol Pashinyan, was elected the new head of government (see EDM, April 23, May 10). Thus, the political history of this South Caucasus country now enters a qualitatively new phase because the leadership transition represents not simply a single change at the top, but also a broader upending of the political elite. For Azerbaijan, perhaps the most important issue to watch will be how this political change in Yerevan will affect prospects for the settlement of the Armenian-Azerbaijani conflict over Karabakh.

For the past 25 years, Armenia’s domestic politics were always closely linked to developments in the conflict settlement process. Arguably, the resignation of Armenia’s first president Levon Ter-Petrosyan; the transfer of power in Armenia to the Karabakh politicians Robert Kocharyan and later Serzh Sargsyan; the shooting in the Armenian parliament, in 1999, resulting in the deaths of the parliamentary speaker and prime minster; the July 2016 seizure of a police building by the revolutionary “Sasna Tsrer” armed group; and the resignation of Hovik Abrahamyan’s government in fall 2016 were all strongly influenced by events surrounding the Karabakh conflict (Vestnik Kavkaza, May 4).

While both international and local media coverage, not to mention the expert community, enthusiastically focused on the “democratic profile” of the recent protests in Armenia, many failed to highlight two important issues that will continue to have a significant impact on domestic politics, even despite the change in government: First, the so-called “Karabakh Clan”—composed largely of corrupt and often criminally linked generals who came to power in the 1990s, during or after the Nagorno-Karabakh War—remains entrenched in the Armenian economy and politics. Second, the country continues to be regionally isolated, with 83 percent of its border (with Turkey and Azerbaijan) closed as a result of Armenia’s occupation of Azerbaijani territory.

The new Armenian government hopes to be able to relaunch a “Turkish-Armenian normalization” process—i.e., steps to reopen the Turkish-Armenian border, which Ankara closed in 1993, in support of Azerbaijan’s territorial integrity. But such attempts had failed in the past, while the strategic nature of Turkish-Azerbaijani cooperation has continued to grow in relevance thanks to a number of joint regional energy-transport projects and other initiatives (see EDM, January 5, 2012; March 11, 2014; October 16, 2017; October 26, 2017). The government may also seek to attract more financial aid from the West with the assistance of the Armenian diaspora. Following Pashinyan’s election, the Armenian National Committee of America called on US Secretary of State Michael Pompeo to support Armenia by considering allocating a new Millennium Challenge Corporation (MCC) grant worth $140 million (Anca.org, May 8).

Meanwhile, the new prime minister’s populist statements proposing that the separatist Karabakh authorities participate directly in conflict negotiations as well as his declaration that “the Nagorno-Karabakh Republic should become an integral part of Armenia” (see EDM, May 10) tend to match the self-held beliefs of much of his domestic audience. As such, under Pashinyan’s government, the Armenian Armed Forces cannot be expected to voluntarily abandon their long-held positions in occupied Karabakh and the seven adjacent districts of Azerbaijan (A1plus.am, December 4, 2017; Mediamax.am, May 10, 2018; Rosbalt, May 13, 2018).

Azerbaijan’s President Ilham Aliyev recently declared that his country and its people will not allow for the creation of second Armenian state on Azerbaijani soil, emphasizing, “If someone thinks differently, I believe he vainly lives in illusion” (President.az, May 10). At the same time, Azerbaijani Deputy Foreign Minister Khalaf Khalafov underscored that “the format of the negotiations has already been approved within the framework of the OSCE [Organization for Security and Cooperation in Europe]. Armenia and Azerbaijan participate as negotiators… Such attempts [to allow Karabakh to be a party to the negotiations] were made earlier, but this is unrealistic, absurd and does not correspond with the negotiation process. Nagorno-Karabakh is an occupied territory of Azerbaijan, end of discussion” (Apa.az, May 10). Azerbaijani foreign ministry spokesperson Hikmet Hajiyev commented that Pashinyan’s narratives on the Karabakh conflict are regrettable and controversial, designed to stir political agitation. As Hajiyev stressed, “Armenia and Azerbaijan were recognized as two sides of the conflict [in compliance with a 1992 decision by the OSCE], and the Azerbaijani and Armenian communities of the region were accepted as the interested parties.” In addition, the United Nations Security Council resolutions “constitute the fundamental basis for a political settlement,” he added (Mfa.gov.az, May 10). Therefore, in Baku’s view, Pashinyan’s statements will hamper the peaceful resolution process and muddle the negotiating format originally established by the OSCE Minsk Group.

Based on Prime Minister Pashinyan’s early remarks, the new Armenian government could negatively affect the settlement process of the Karabakh conflict. In this context, the activity of the international mediators, the co-chairs of the OSCE Minsk Group—Russia, the United States and France—will be particularly important. The question is whether the co-chairs will continue pursuing a coordinated line, or whether regional and global tensions will also affect the workings of the Minsk Group format. Throughout the period of political crisis in Armenia, Azerbaijan hoped for the eventual formation of a government in Yerevan able to soberly to assess the regional security realities. But additionally, Baku was concerned that the Karabakh generals might exploit the political turmoil by heavily escalating the military situation on the frontline with Azerbaijan in order to arouse nationalist sentiment in Armenia. Provocations on the line of contact have repeatedly broken out since the Nagorno-Karabakh War ceasefire of 1994; however, in Armenia’s present political reality, such future armed skirmishes will likely be perceived more emotionally, potentially leading to unpredictable consequences. Thus, Pashinyan’s yet-to-be-formed vision regarding the Karabakh conflict could give rise to further frontline clashes to which Azerbaijan will likely respond forecefully, as it did in April 2016 (see EDM, April 6, 2016).