Armenia in the Changing South Caucasus: New Opportunities and Risks

On November 7, Armenia, Azerbaijan, and the United States confirmed the establishment of technical planning groups for transport and electricity connections. The decision moves the discussion of regional routes into a more practical stage, although the most difficult political questions are not yet resolved. For Armenia, it raises a wider problem: how can the country use the changes in the South Caucasus to improve its position, without accepting new risks for its security and sovereignty?

The opportunities are real, but their value should not be taken for granted.

Armenia has spent much of the post-Soviet period with closed borders, difficult relations with two neighbours, Turkey and Azerbaijan, and a security policy that depended heavily on Russia. All three conditions are now changing, though not in the same direction or at the same speed. The opening of communications may bring economic advantages, while the more active involvement of the United States and European Union gives Yerevan additional diplomatic possibilities. At the same time, Armenia must deal with the consequences of the war of 2020 between Armenia and Azerbaijan, the military advantage of Azerbaijan, and the continuing competition among larger regional powers. A new road or railway cannot be considered apart from these political circumstances.

A Regional Balance Still in Transition

The war of 2020 showed serious weaknesses in the security arrangements on which Armenia had relied for many years. In September 2023, Azerbaijan established control over Nagorno-Karabakh, and the great majority of its Armenian population forcefully left the region. The withdrawal of Russian peacekeepers in 2024 completed an important change in the postwar situation, but it did not create a stable new system of security.

Russia remains an important factor. Its military base in the Armenian city of Gyumri, strong economic links with Armenia, and political contacts across the South Caucasus continue to affect the calculations of the regional states. In my 2021 study of Armenia in Turkey’s South Caucasus strategy, I examined the difficulties which arise when the interests of more powerful states meet in a small and divided region. That general problem remains, but the balance among these powers has changed considerably. It would be wrong to treat Russia as if it still possessed its former predominance; it would be just as wrong to proceed on the assumption that Moscow has lost all ability to influence events. Armenian policy needs a careful assessment of both tendencies, rather than a choice between these two extreme views.

The change has also widened the field of Armenian diplomacy. The United States took a direct part in the Washington discussions of August 2025, where Armenia and Azerbaijan agreed on a joint declaration. In December 2025, the European Union adopted a new strategic agenda with Armenia, covering several areas of cooperation. These developments can assist the country in investment, state institutions, and international contacts, especially when they lead to practical projects rather than declarations alone. But wider diplomatic contacts should not be confused with security guarantees. Armenia still needs defence capacities of its own, and it must avoid replacing its former dependence on one partner with a new dependence on another.

The reason is not simply that Armenia can choose among a larger number of partners. Different relationships can serve different needs: one may provide access to markets, another technical assistance, and a third a channel for political dialogue. But this approach works only if Armenia can define its own priorities and if cooperation in one direction does not close opportunities in another. Diversification without such a policy may increase external pressure rather than reduce it.

Transport Routes and the Question of Control

There are serious economic reasons for Armenia to support the opening of regional communications. It is a landlocked state, and the long closure of its borders with Turkey and Azerbaijan has limited trade and transport choices. New road and railway connections could reduce costs, help businesses in the Armenian regions, and provide access to markets that are difficult to reach today. Normal trade may also create an interest in maintaining peace, though economic relations alone cannot prevent political conflict.

Still, the construction of a route is not the same as an economic benefit for the country through which it passes.

In a 2025 interview with Armenpress, I explained that Armenia should seek an active place in the new regional communications, not simply provide territory for goods moving between other countries. This distinction is important for the whole economic meaning of the projects. Transit may produce some income, but much greater value could come from links with Armenian producers, transport services, existing roads, and future industrial activities. We should also consider the regions directly affected by new infrastructure. In Syunik, the expectations and concerns of local communities are part of the problem, not a secondary issue to be discussed after the principal political decisions have been made. The route must serve the Armenian economy and society as well as international trade.

The proposed Trump Route for International Peace and Prosperity, or TRIPP, gives this question particular importance. The Armenia–United States framework agreement, published in May 2026 and signed in June, envisages a development company in which the proposed American and Armenian ownership shares are 74 and 26 percent. It also provides an initial 49-year period for certain rights connected with land use and infrastructure development, while recognizing Armenia’s sovereignty and jurisdiction. These provisions refer to different legal questions. The right to develop or operate infrastructure does not in itself mean a transfer of territory or sovereign power, but the future arrangements for management, customs and border procedures, revenues, and dispute settlement will decide how Armenia exercises its authority in practice. Such details matter greatly when rights are granted for several decades, and they deserve the same attention as the general political declaration of support for the project.

The economic result must also be measured carefully. Transit revenues alone would offer a narrow benefit, particularly if most services were provided outside Armenia. A stronger result would include contracts for Armenian companies, improved connections for local producers, and reliable access to the route for Armenian trade. These effects cannot be assumed in advance; they depend on the final operating rules and on investment inside Armenia.

The technical groups announced on November 7 may help to clarify part of this work. They cannot, by themselves, remove disagreements over political conditions or the future operation of the route.

Local opinion is another element that should not be ignored. Research based on interviews with residents of Syunik has recorded both expectations of economic improvement and fears connected with security and the proposed route. The interviews do not speak for every resident, but they show why a project which looks useful on a regional map can be judged differently by people living close to it. If local interests are not considered from the beginning, infrastructure may be completed without acquiring broad public support. That would also weaken its long-term economic value.

Peace with Azerbaijan and Relations with Turkey

For Armenia, a stable peace with Azerbaijan would create opportunities that go beyond any transport project. It could reduce the danger of another war and allow normal relations to develop between two neighbouring states. Nevertheless, the changed military balance makes the practical implementation of agreements especially important. A declaration or a period without fighting should not be treated as proof that all security problems have been resolved. Recognized borders, clear obligations, and the effective exclusion of force are essential if peace is to become lasting.

A useful way to assess the peace process is to separate political agreement from the conditions that make it sustainable. The first can be announced by the governments. The second requires working border arrangements, predictable treatment of incidents, and a reduction in the use of military pressure. Without these elements, even a signed document may leave Armenia facing serious uncertainty.

Relations with Turkey present a related, but different, problem. Opening the land border could give Armenian businesses new possibilities and benefit communities that have lived for decades near a closed frontier. Armenian and Turkish officials met in April 2026 to discuss the Kars–Gyumri railway, which is a useful practical step. Yet railway planning cannot replace the political decisions needed for normal interstate relations. The Turkish-Azerbaijani alliance remains a central factor in this process, and Armenia must consider it without assuming that Ankara and Baku have identical interests in every question.

In an October 2026 interview, I discussed Azerbaijan’s stronger position and its growing wish to act independently in regional affairs, including differences that may arise with Turkey. Such disagreements do not mean that their alliance is breaking down. They remind us, however, that two closely cooperating states continue to make decisions according to their own interests. Armenia should therefore assess its relations with each neighbour separately, while maintaining a clear position on territorial control and security.

Why Iran and Russia Still Matter

Iran provides Armenia with a direct connection to the south, and this connection becomes particularly important when other borders are closed. Serious instability in Iran could affect transport, trade, and security in the Syunik region. The consequences would not remain within Armenian-Iranian relations; they could also influence the plans for opening East–West communications across the South Caucasus.

In a March 2026 interview, I warned that a weakening of Iran might create additional risks for Armenia. A wider conflict could interrupt existing routes, discourage investment, and increase the pressure on the border region, precisely at a time when new economic projects are being discussed. These concerns do not require Armenia to refuse cooperation with the United States or Europe. They require it to maintain useful relations with different partners, even when these partners disagree among themselves. The same general approach is needed toward Russia, though its role and interests are not identical to those of Iran. Moscow has lost part of its former influence, but it has not disappeared from regional politics; a realistic Armenian policy should begin with that fact.

What Would Count as Success for Armenia?

The real test of the present changes will be their effect on Armenia, not the number of meetings or agreements announced. I would put three questions at the centre of the assessment. Will the risk of another war be reduced in practice? Will new transport connections operate under Armenian jurisdiction and bring benefits beyond transit fees? And will Armenia retain enough freedom to work with different partners when their interests do not coincide? Each question concerns a different aspect of the same task: to strengthen the country’s position without creating another form of dependence.

There is also much to be done inside Armenia. National defence, competent state institutions, and an economic policy directed toward long-term development cannot be supplied by external agreements. A country that lacks these foundations may receive new opportunities and still fail to use them.

The weakening of Russia’s predominant position in the South Caucasus has opened the way for a more complex regional configuration, in which Turkey’s growing influence is only one of several important factors. Azerbaijan is acting with greater confidence, Iran continues to defend its interests, the United States has become more directly involved, and Georgia follows its own course. Armenia has to make decisions amid these different interests, without expecting them always to work in its favour. The main opportunity is therefore larger than the opening of one transport route: it is the possibility of improving Armenia’s security, economy, and regional position. The risks remain substantial, and much will depend on the choices made by the Armenian state itself. 

Ruben Safrastyan is a professor and Full Member of the National Academy of Sciences of the Republic of Armenia. His research focuses on Turkey, the South Caucasus, and regional security.

The views and opinions expressed in this article are those of the authors alone and do not represent those of Geopoliticalmonitor.com.

https://www.geopoliticalmonitor.com/armenia-in-the-changing-south-caucasus-new-opportunities-and-risks/