In March 1992, with the accession of Armenia and Azerbaijan, the Conference for Security and Cooperation in Europe (CSCE) adopted a ministerial decision to mediate the Nagorny Karabakh conflict. Mediation by the CSCE (renamed the organisation for Security and Cooperation in Europe (OSCE) in 1994) through its ‘Minsk Conference’ soon became the main avenue for continued negotiations. Yet although the negotiations have provided opportunities to test a series of formulas that might still be useful in achieving a solution, the OSCE mediation has failed to bring a solution. Even the ceasefire of 1994, achieved through two stages, was the result of unilateral Russian efforts and direct talks between the parties.

The Minsk Conference’s aim of convening an assembly where the status of Nagorny Karabakh would be negotiated was initially confounded by developments on the battlefield. The conference intended for summer 1992 never convened, and later in the year the Minsk Conference was reformulated as the Minsk Group and later the ‘Minsk Process’. Continued military operations constantly shifted the ground from under Minsk Group mediation: the Armenian occupation of successive districts throughout 1993 forced mediators to substitute proposals with “timetables” for dealing with the consequences of military hostilities. To increase efficiency, the Minsk Group started meeting without Armenia and Azerbaijan, whose veto power in the group would condemn any proposal before it was even formulated. Subsequently even that group of nine stopped meeting. The co-chairs assumed full responsibilities for proposals and often did not even inform the others of their actions. By the spring of 1999 the co-chairs (Russia, the US and France) took a step back and assumed a role supporting direct talks between the presidents of Armenia and Azerbaijan, more recently supported by talks between the foreign ministers.

It is not possible to give a full account of the OSCE process’s weaknesses here. They included, among other things: the ambivalence of Nagorny Karabakh towards a process in which its representatives participated only as an ‘interested party’ rather than full member; unstable leadership of the process in the early years; uneven levels of interest among key group members, whose attention often shifted to other international crises, and their own self-interested dividedness and inability to exert concerted pressure on the conflicting parties; and the cumbersome nature of the process, involving eleven countries plus Nagorny Karabakh representatives. In the absence of a determined effort, the Minsk Conference, conceived as arbitration, functioned for a while as a mediation process and ended up as a facilitation mechanism.

Ultimately, though, the parties to the conflict are responsible for any solution. A determined set of conciliatory policies by the parties could have overcome obstacles posed by the internationalisation of the conflict. Yet each side had ardently-held historical, moral and legal justifications for their actions. It appeared to both sides that any concession, minor or major, symbolic or real, would endanger their security, sense of identity and survival. These beliefs became part of the political and nationalist discourse that replaced the ‘brotherhood’ of Soviet republics. Sometimes blinded by these strong beliefs, or compromised by the fragile and fractured nature of the emerging political structures in their newly independent republics, the parties often miscalculated their military, economic, political and diplomatic resources, or exaggerated their ability to impose their will on the other. This was particularly true of Azerbaijan in the early years of the conflict and Armenia after 1997. Azerbaijan was sure it could win militarily and ideally expel Armenians from the Nagorny Karabakh Autonomous Region (NKAO), but lost. The Armenian side believed military victory would compel the Azerbaijanis to make concessions they were not ready to make, given the international community’s support for the principle of territorial integrity. On at least one critical occasion during the negotiations, each of the parties rejected proposals that would have satisfied their needs, hoping for more and calculating that time was on their side.

Moreover, all negotiations were confidential, if not secret. The OSCE and the parties preferred not to disclose details of formulas and proposals until there was agreement on a document. This approach left the public out of the process, casting a shadow of suspicion over all proposals, which became vulnerable to demagogic exploitation by opposition groups. The charge of ‘selling out’ was one not easily overcome by politically weak authorities. In an atmosphere filled with nationalistic rhetoric, authorities often failed to garner public support for reasonable solutions, and found themselves blaming their ‘peoples’ for their unreadiness for compromise.

Differences between the positions of the governments in Armenia and Nagorny Karabakh further complicated the process. Notwithstanding the fact that many mediators expected Armenia to determine policies in both capitals, and Azerbaijan’s portrayal of such differences as an Armenian ploy, Nagorny Karabakh’s development as a separate political entity produced a permanent tension between the authorities in Yerevan and Stepanakert. Having taken Armenia’s economic and military support for granted, Nagorny Karabakh could afford to be a single-issue government in its external relations, whereas Yerevan’s relations with its neighbours and the world were necessarily more multi-dimensional. Just as its position on the conflict determined the scope and character of its relations with the international community, so other dimensions limited its options with regard to resolving the conflict. Where Yerevan was ready for compromises, Stepanakert was able to resist and, more often than not, prevail, since Nagorny Karabakh’s struggle for extraction from Azerbaijani suzerainty held a universal appeal for Armenians everywhere as historical vindication for a victimised nation.

Once the ceasefire was established and held, relations between Yerevan and Stepanakert reflected the problems of the peace process revolving around two sets of issues: first, substantive positions with regard to the three main problems: status, security, and consequences of the conflict (including blockades, refugees and displaced persons); second, the methodology of a solution: should all three key issues be resolved in a ‘package deal’ or should the status problem, being the most difficult, be relegated to a second stage agreement?

Armenia’s President Levon Ter-Petrosian had revised his approach to the Karabakh problem since leading the Karabakh Committee in 1988, when he had been an advocate of reunification with Armenia. Under his presidency the Armenian government’s approach was to define the issue as the security of Nagorny Karabakh and its right to self-determination – not necessarily meaning the internationally unpopular goals of independence or reunification with Armenia. Ter-Petrosian sought a compromise where the Armenian side would concede that Nagorny Karabakh would be legally part of Azerbaijan; in return Azerbaijan would agree to a status above the nominal autonomy that the NKAO had enjoyed until 1988, but a notch below independence. Further, Azerbaijan would lift their blockades and provide strong security guarantees including Armenian control of the Lachin corridor and Armenia’s right to defend the status and people of the territory. It was also understood that as a result of any agreement on Karabakh, Turkey would agree to a normalisation of relations with Armenia. Thus, Ter-Petrosian refused to recognise the NKAO’s unilateral declaration of independence and hoped that Azerbaijan would revise its goal of attaining complete control of Karabakh through military victory and ethnic cleansing. Azerbaijan’s obstinacy on settling the status issue on its own terms was mirrored by a similar insistence by the Karabakh authorities. With agreement on status still distant, the failure to make progress on a ‘package deal’ was unacceptable for the Ter-Petrosian administration, which by 1993 pragmatically opted for the ‘step-by-step’ approach. The rationale for this was that while Armenia could survive the blockades, economic development would be difficult if not impossible for as long as relations with its neighbours were not normalised and renewed fighting remained on the agenda. The ‘no war, no peace’ situation required substantial state resources to be devoted to war preparedness, diverting them from other needs, such as economic or social reforms, or attracting much needed investment. The administration did not believe support from the diaspora sufficient to counterbalance Azerbaijan’s advantages: the support of the international community (including Armenia’s presumed friends Russia and Iran) for Azerbaijan’s territorial integrity, and oil as a financial resource and weapon of diplomacy.

Shying away from a policy that might imply territorial ambitions, Ter-Petrosian’s focus was the continued secure and free existence of the Karabakh Armenian population in their historic land. The basic formula for a negotiating strategy would be the return of territories for peace. Nagorny Karabakh, on the other hand, by and large opted for a ‘territories for status’ formula, arguing that the occupied territories were the strongest card it held to obtain its goal of a full “divorce” from Azerbaijan, if not in favour of a union with Armenia, at least independence from Azerbaijan. Baku, on the other hand, believed that time and the combination of oil diplomacy and outside support for the principle of territorial integrity would ultimately deliver Karabakh. Thus the step-by-step approach was in essence rejected by both Nagorny Karabakh and Azerbaijan, and the negotiations became exercises in futility.

Nonetheless both package and step-by-step approaches could have been fruitful and came close to success. Direct and confidential negotiations initiated by Armenia between the personal and plenipotentiary representatives of Presidents Aliyev and Ter-Petrosian between December 1995 and November 1996 made serious progress and could have culminated in resolving the status issue had Azerbaijan not decided that the concessions it made during the negotiations might not be warranted if it played its oil diplomacy card at the OSCE Lisbon Summit in December 1996. Aliyev believed that countries granted oil exploration concessions by Azerbaijan could be induced to force Armenia to accept Nagorny Karabakh as part of Azerbaijan in return for vague promises of autonomy and security. The manoeuvre at the summit, vetoed by Armenia, destroyed the chance that the only substantive negotiations on status until then might have reached a negotiated solution.

Some elements of the confidential negotiations were, nonetheless, incorporated in two successive Minsk Group ‘package deal’ proposals presented to the parties in May and July 1997. The leadership of Karabakh rejected them outright, Azerbaijan wavered, while Armenia accepted them with serious reservations as a basis for further negotiations.

The result was the Minsk Group proposal of September 1997, which adopted the step-by-step approach. It left the question of status and the Lachin district to be dealt with in the future but offered solutions to the questions of occupied territories, blockades and refugees and proposed a peace treaty and normalisation on that basis. Armenia and Azerbaijan accepted it with serious reservations, but the Karabakh authorities and a few powerful members of Ter-Petrosian’s administration rejected it, insisting on a package deal. This internal opposition led to Ter-Petrosian’s resignation, and the accession of the former president of Nagorny Karabakh, Robert Kocharian to the Armenian presidency in April 1998. In opposing the September 1997 proposal as a basis for negotiations, Kocharian and his allies believed that the Armenian side was in a position to insist on a package deal that could achieve independence or unity with Armenia. They did not share Ter-Petrosian’s urgency to resolve the conflict, ascribing less significance to the blockades’ effect on stalling economic development. Instead they blamed him for failing to fully utilise the diaspora or maximise the “spiritual” resources of the country, such as the general yearning for redress of historic grievances, appeals to a common sense of righteousness deriving from those grievances, and patriotic fervour transcending political differences.

Almost a year after the September 1997 offer, the Minsk Group offered another package deal document based on the ‘common state’ formula considered in other conflicts. The proposal reflected the principle of a ‘horizontal’ relationship between Nagorny Karabakh and Azerbaijan instead of the vertical one implied in the concept of autonomy. Armenia and Nagorny Karabakh accepted it with some serious reservations; Azerbaijan reportedly accepted early in the drafting of the document, but ultimately rejected it. Beginning in April 1999 the negotiations moved to the level of the presidents, turning the Minsk Group co-chairs mainly into spectators. By the summer of 1999 the basis of negotiations had moved to what can best be described as a land swap. Kocharian had demanded that Nagorny Karabakh be annexed to Armenia and, in principle, accepted Aliyev’s return demand for Azerbaijani control of the Meghri district of southern Armenia that separates the exclave of Nakhichevan from Azerbaijan. This unlikely and widely unpopular formula began to unravel as Kocharian changed his position. He then offered passageway rights to Azerbaijan through or over Meghri in return for full sovereignty over the disputed territory. Aliyev had had enough trouble selling the initial exchange and was not in a position to accept the revised formula. A final attempt by the US to make the formula work at a meeting of the two presidents in 2000 in Key West, Florida, failed to achieve any results.

Since 2003, negotiations have been conducted between the foreign ministers of Armenia and Azerbaijan, with occasional meetings between the two presidents. Azerbaijan has returned to a step-by-step approach, continuing to believe that time is on its side, especially with the completion of the Baku-Tbilisi-Ceyhan oil export pipeline. Armenia has reluctantly followed, although Yerevan would prefer that any first stage agreement make at least some reference to the way the status would be determined in the future. The Minsk co-chairs have not produced a proposal of their own since the Key West meeting and their participation seems to be perfunctory. Content with a situation of no renewed hostilities, Russia, the US and France have had a long list of more imminent issues to deal with, while Stepanakert has not participated in the bilateral discussions.

The passing of time has favoured none of the conflict parties. The more time passes, the more difficult it is to return occupied territories. Economic progress in Armenia, Azerbaijan and Nagorny Karabakh has not been reflected in improved living standards for most. Contrary to Armenia’s expectations the international community has not approved the status quo, yet Azerbaijan has also been disappointed with the same community’s refusal to compel Armenian withdrawal, despite its formal position and legal argument. Similarly, while the diaspora has continued its political and economic support of Armenia, it has not made much of an impact on the position of the major powers and has increasingly focused its attention on genocide recognition.

Ultimately, a negotiated solution depends on three factors: the degree of urgency felt by the parties to the conflict to reach a solution; sufficient political capital held by their leaders to sell a compromise solution to publics used to hard-line rhetoric; and the combined and determined support of regional and international players to support such a solution. The two alternatives to a negotiated solution – a renewal of hostilities or a solution imposed through forceful action by the major powers – cannot be attractive to either party.