James Sharp is a retired United Kingdom diplomat who served as Ambassador to Azerbaijan, Kazakhstan, and Kyrgyzstan.

The South Caucasus has long been a complex, changeable region. But recent trends and events are once again raising questions about the direction of travel. Both Georgia and Armenia are wracked by anti-government protests, carrying risks of a setback to Western interests, and even of a renewed outbreak of conflict. 

In Georgia, long the darling of the West thanks to its Euro-Atlantic orientation and reform agenda, the Georgian Dream government had already raised concerns by its somewhat ambiguous approach to Russia following the invasion of Ukraine, for example by not applying sanctions and allowing an increase in flights between the two countries.  

But it was the re-introduction of what was termed an illiberal “foreign agents law” - designed to clamp down on overseas funding of NGOs, and withdrawn after protests last year - which sparked the latest disruption, with constant street protests throughout the passage of the now-passed legislation. Not only has the law itself - described as being modelled on a similar Russian law - dismayed a large sector of Georgian society and indeed the Georgian President, but so too has the almost certainly negative impact it will have on Georgia’s bid to be accepted as a candidate country for EU membership, with a perception of a drift back into Russia’s orbit.

In Armenia, meanwhile, Prime Minister Pashinyan has been trying to achieve two major shifts in foreign policy at the same time: peace with Azerbaijan, and a re-orientation away from Russia towards the West. Talk of withdrawal from the Russian-led Collective Security Treaty Organization (CSTO) has been accompanied by Armenian requests for the removal of Russian border guards from Yerevan airport and several parts of Armenia’s external borders. This is happening in parallel with an increase in the size of the EU border observation mission and Armenian purchases of French military equipment.

While the perceived support of the EU for Armenia vis-a-vis Azerbaijan has been widely regarded as a positive, both the move away from Russia and progress on peace with Azerbaijan have reinforced divisions in society. The spark for protests was an agreement that involved the return to Azerbaijan of four villages, the first stage in a process of border delimitation and demarcation. Local protests, with a bishop at the head, morphed into a “March on Yerevan” and protests in the capital calling for the resignation of the Prime Minister, effectively a copy of Pashinyan’s own rise to power in 2018.

While on the face of things these protests are not about Russia, it is the background presence of former political figures with close ties to Russia that have muddied the waters and raised considerable suspicion about the motives of the protestors.

And it is always tempting to see Russia’s hand behind events in the Caucasus. Certainly, Russia has no love for Pashinyan, and Russian officials have criticized his remarks about a perceived lack of Russian support. Perhaps perversely, economic links between Armenia and Russia have strengthened at a time the political links have weakened, partly driven by sanctions evasion.  As for Georgia, Russia has welcomed the law; and its occupation of Abkhazia and South Ossetia has always given Russia considerable influence. Meanwhile, rumors abound about the links that Georgian Dream leader Ivanishvili has with the Kremlin.

For their part, Western governments have reacted with dismay and frustration to the Georgian law. EU politicians have been visible in Tbilisi in support of the protestors (giving an impression at times of a Maidan Mark II), while sanctions have been threatened by parliamentarians and the U.S. government.  In the case of Armenia, Western countries have remained quiet, other than - in an implicit rebuke to the protestors - to applaud the start of the demarcation of the border and to encourage continuing negotiations with Azerbaijan on a peace agreement and further border delimitation.

And so, what now for Georgia and Armenia, as the two countries trade geopolitical places, the former seemingly moving towards Russia and the latter attempting to move away? Much remains unclear, including whether the protests will fizzle out or governments will fall, whether the threat of sanctions will be effective or counter-productive, and whether the Armenia-Azerbaijan peace process will stall or be reinvigorated. Certainly, Georgian elections in October are taking on increased importance.

Interestingly, it is Azerbaijan that appears to have played its cards the best, securing Russian acquiescence on troop withdrawal without visibly offering concessions, while maintaining a relationship - albeit frosty at times - with the West, focused on energy ties and increasingly its chairmanship of COP29, the climate-change summit being held in Baku in November. But the leadership are watching events in Armenia closely, and are likely to react quickly, if Armenia abandons the peace process.

But Azerbaijan, too, will not be immune to shifts in relationships. While COP29 is seen as an excellent opportunity to show Azerbaijan to the world, it carries risks. There has been criticism that another oil and gas producer is chairing the process, as did the United Arab Emirates in 2023. Diaspora Armenians in particular continue to push for sanctions against Azerbaijan for the events of last September when Azerbaijan retook the rest of Armenian-occupied Karabakh, leading to the departure of nearly all the ethnic Armenians and the arrest of some of their leadership. Western media will undoubtedly focus on the arrest and continuing imprisonment of independent journalists and academics. Any of these could upset the apparent stability in Azerbaijan’s relationships with the West.

And so, the West needs to remain engaged in the region, but seek to do so in a respectful way that encourages movement in the right direction, rather than replicating the language of threats more usually heard from other parties. The United States and, in particular, the EU have many cards at their disposal; how they play them could be crucial.

All views, positions, and conclusions in this publication should be understood to be solely those of the author.