U.S. Interests and Priorities in the South Caucasus

Carnegie Endowment for International Peace
U.S. Interests and Priorities in the South Caucasus

Given all the changes that have taken place in the South Caucasus and its neighborhood over the past twenty-five years, it is worth taking stock of what Washington has at stake in the region. The United States has important security and economic interests in the South Caucasus. However, none of them is vital. It is stated in a survey by Carnegie Endowment for International Peace titled U.S. Policy Toward the South Caucasus: Take Three Vestnik Kavkaza presents the most interesting parts of the analysis. See Part 1, Part 2 and Part 3

The United States has made a long-term commitment and invested a great deal in the region over the past quarter century. It has pledged its support for the independence and sovereignty of the three South Caucasus states. It remains a co-chair of the Minsk Group that has helped to manage — even if it has not been successful at resolving — the dispute over Nagorno-Karabakh. It has pledged support for the three states’ pursuit of integration into Euro-Atlantic institutions. The United States also has significant cultural connections to at least two countries in the South Caucasus: The Armenian-American community has extensive ties to the region, while cultural, education, and political ties between the United States and Georgia continue to expand.

U.S. regional interests even extend beyond the immediate borders of the South Caucasus. Notwithstanding recent frictions with Washington, nearby Turkey remains a NATO ally. Renewed conflicts in the South Caucasus could threaten Turkey and other NATO allies in the Black Sea region. Conflict and general destabilization of the South Caucasus could turn it into a conduit for fighters transiting to or from the Middle East to join the conflicts in Syria or Iraq, or those returning to Central Asia or Russia’s North Caucasus. Ultimately, though, U.S. interests in the region can be summarized as Armenia, Azerbaijan, and Georgia being at peace with themselves and their neighbors, while pursuing economic development, effective governance, and integration in international structures of their choice. To achieve this, several conditions need to be present.

Avert Resumption of Regional Conflicts: Preventing any one of the region’s frozen conflicts from escalating into hostilities should remain the top priority for U.S. policy in the South Caucasus. The brief resumption of hostilities last year between Azerbaijan and Armenia highlighted the danger these conflicts pose to regional security and U.S. interests, and therefore this objective should be at the top of the list for U.S. diplomacy in the region. Renewed hostilities would endanger the lives of many civilians, put at risk important infrastructure, possibly result in serious environmental damage, and affect not only the two warring parties but also Georgia, whose fortunes are closely tied to those of its neighbors.

Active U.S. diplomacy to prevent the resumption of the Nagorno-Karabakh conflict through the Minsk process and bilaterally with each of the parties is essential. If fighting were to break out again, Russia and Turkey would be involved indirectly, and quite possibly directly, due to their respective ties to Armenia and Azerbaijan. Depending on the course of the conflict, Iran too could become involved. The conflict could conceivably become a secondary theater to the conflict in Syria, where Iran and Russia are pursing different objectives than Turkey.

The region’s other two frozen conflicts—between South Ossetia and Georgia, and between Abkhazia and Georgia—appear to be less precarious. The disparity in the military capabilities between Georgia and these two Russian protectorates makes resumption of hostilities between them highly unlikely. Nonetheless, U.S. diplomatic efforts intended to sustain channels of communications and manage issues that arise across the ceasefire lines should be continued. 

Energy Development

U.S. energy diplomacy has played an important role in the South Caucasus. It has accomplished a great deal in terms of new markets and new export opportunities for Caspian energy, an important revenue stream for Georgia. However, the significance of Caspian energy resources for the region and their impact on it have at times been exaggerated and led to unrealistic expectations. It is important to avoid this in the future. Furthermore, although energy diplomacy has played a big role in the fortunes of the South Caucasus and U.S. engagement with the region in the past, it is unlikely to do so in the future, due to limited U.S. interests at stake and broader trends in global energy markets.

Energy diplomacy was a valuable tool of U.S. engagement in the South Caucasus more than a decade ago. At the time, the United States also had an interest in diversifying the global energy supply, and Caspian energy development served that important end. However, much has changed in global energy markets in the past decade, and the contribution of Caspian energy resources to global markets has been eclipsed by other developments in the energy sector. The shale revolution, the expansion of liquefied natural gas, and the development of new deep-water resources all have emerged as more important contributors to global energy supply than the Caspian Sea.

One of the most ambitious claims associated with Caspian energy is that it can reduce Europe’s dependence on Russian energy imports. This claim has been made for a long time but, despite its obvious attractiveness, it has been met with little interest in Europe or elsewhere. It has not attracted much commercial interest or any state sponsors willing to commit adequate resources to realize it. Europe is so heavily dependent on Russia for its energy—amounting to 34 percent of EU gas consumption in 2016 — that it would take a major shift in its energy supply to make a meaningful difference. The Caspian region does not have the resources to drive such a big shift. The ongoing construction of and plans for new pipelines between Russia and Europe — in the Baltic and Black Sea regions — is indicative of Russia’s commitment to preserve its access to the European energy market. And while the transport corridor from Azerbaijan to Georgia and Turkey does not cross Russian territory, its proximity to Russia means that it will continue to operate only as long as Moscow tolerates it.

Combat Illicit Transnational Activities

The South Caucasus’s proximity to conflict zones and relatively open borders have put it at risk as a conduit for all manner of illicit trafficking—from weapons and drug smuggling to radiological material to militants trying to join the fighting elsewhere in the Middle East. Eurasian organized criminal groups’ long-standing presence in and ties to the region are a source of additional concern. They have connections to organizations in the Middle East, Europe, and the Americas. While progress has been made in this area—with U.S. assistance—the United States has a strong interest in combatting illicit smuggling and transnational crime, and it should remain a priority for U.S diplomacy and assistance efforts in the region.

Democracy, Human Rights, and Good Governance

The United States also has an interest in promoting democratic practices and respect for human rights throughout the region. U.S. commitment to and interest in democracy promotion is long-standing. Respect for international human rights would promote human security, mitigate the risks of domestic instability, and carry many other additional benefits. Given these benefits, U.S. support for democratic change in the South Caucasus should be continued. However, the differences among the three South Caucasus states are such that a single regional approach is unlikely to be effective and could even be counterproductive. These differences call for tailored, country-specific approaches to the task of promoting democracy in Armenia, Azerbaijan, and Georgia.

Progress within each country toward democracy and rule of law has been and will continue to be driven by organic domestic developments. U.S. investment in democratic change in Georgia, for instance, has produced important results for the people of Georgia and for the United States, and this should continue. As for Armenia, while the country has struggled with democratic change, its civil society remains remarkably vibrant. Armenia’s alliance with Russia and the ever-present threat of war with Azerbaijan, however, limit its ability to modernize its political and economic system. The United States should continue to offer Armenia help with economic and political modernization. However, the scale and scope of U.S. assistance should be guided by Armenia’s ability to absorb it and its calibrated balancing act between Russia and the West. The United States has few, if any options for promoting democratic change inside Azerbaijan, and efforts to do so could even be counterproductive and endanger U.S. interlocutors inside the country.


Over the past quarter century, U.S. involvement in the South Caucasus—including peacemaking, as well as support for democracy, good governance, and economic development—has played a very important role in its progress at critical times. However, some major ambitious initiatives the United States has championed have not had the transformative effect that was expected and advertised. Those initiatives lacked adequate resources, including material support as well as a clear vision of U.S. interests in the region embraced by senior policymakers. In addition, obstacles to progress in all three states have proved to be more formidable and enduring than could be overcome with the help of pipelines or, in the case of Georgia, as a result of revolutionary change. In each of the three countries and across the region, legacies of the past have been too stubborn to be addressed in a—historically—relatively short period of time.

In the future, U.S. policy toward the South Caucasus has to take this reality into account. Armenia, Azerbaijan, and Georgia share a legacy of conflict, economic underdevelopment, and a very challenging geopolitical environment. U.S. policy toward the South Caucasus has been and should continue to be aimed at helping these states overcome these difficulties. But resources available to this task are limited and may decline further, change will continue to be incremental, and reverses are possible due to circumstances beyond the scope of U.S. policy. Another limiting factor is that Russia is committed to sustaining its influence in the South Caucasus and will actively oppose U.S. engagement with the region. Because of its combination of military capabilities, geographic advantage, and will to exploit them, Russia will remain the most consequential external actor in the South Caucasus that all other external powers vying for influence there will have to contend with.

This is not to suggest that the United States should retreat from the South Caucasus—U.S. interests in the region and commitments made over the past quarter century preclude such an approach. Successive U.S. administrations have repeatedly and firmly rejected that claim since the very outset of the region’s independence, and that rejection has been one of the core principles guiding U.S. policy there.

After all, the experience of the past quarter century suggest that no single power, not even Russia, is capable of achieving hegemony over the region. Russia has cast a long shadow over each of the three South Caucasus states, but it has not been able to dominate any one of them. The United States has important interests in the South Caucasus and opportunities to pursue them. Success will depend on a careful balancing of U.S. interests and resources, a realistic assessment of the situation in and around the region, and a good deal of patience and acceptance that change will be evolutionary rather than revolutionary.

First, the U.S. approach to the South Caucasus should recognize that U.S. interests may coincide with those of other powers’ engaged in the region. Expanding the South Caucasus states’ broad international engagement is one area that would help reinforce the U.S. policy of support for their independence and economic development. For example, China’s pursuit of economic opportunities in the South Caucasus could prove beneficial to the region in expanding its web of international commercial and political ties. That could help balance Russia’s ambitions and enhance U.S. support for the South Caucasus states’ international integration. Similarly, greater engagement with Iran could unlock new commercial opportunities for the South Caucasus states in the Persian Gulf. Moreover, in some narrow circumstances, Russian and U.S. interests may even align. For instance, should Russia attempt to bring about a mutually acceptable resolution to one or more of the frozen conflicts in the South Caucasus and succeed in this endeavor, the United States should be supportive and join that effort to the maximum degree possible. This would be important for two reasons: resolving frozen conflicts would serve the interests of the South Caucasus, and U.S. engagement in this process would ensure that it would not be used by Russia to justify its claim to an exclusive sphere of influence.

Second, support for the independence and sovereignty of the three South Caucasus states has always been at the heart of U.S. policy in the region and should remain so. This objective can be pursued by multiple means. The record of the first quarter century of independence of the three states suggests that obstacles to their progress are as much internal as they are external. The United States is unlikely to be able to change the external environment for the South Caucasus states. But it can focus its efforts and assistance on improving their ability to cope with and overcome internal challenges and boost their resilience to external challenges.

Third, this approach calls for a good deal of differentiation on the part of U.S. policy. The AA and Deep and Comprehensive Free Trade Area (DCFTA) agreement that Georgia has signed with the EU both call for far-reaching internal reforms in the country’s economy, domestic politics, legal structures, and trade practices so as to make it compatible with EU norms and practices. Many of these measures are certain to be politically difficult for they require painful adjustments to long-standing arrangements and entrenched interests. But the importance and value of these agreements is in their beneficial impact on Georgia’s resilience. U.S. assistance to Georgia should be coordinated with the EU and the Georgian government to achieve maximum impact in supporting Tbilisi’s efforts to implement the AA and DCFTA agreement.

Arguably, the most challenging element of U.S. policy in the South Caucasus is its security relationship with Georgia and stated commitment to support its aspirations for NATO membership. The United States has championed Georgian membership in NATO and repeatedly led the alliance in assuring Georgia that NATO’s door remains open. Neither NATO as a whole nor a subset of its members will risk war with Russia to get Georgia into NATO. This does not mean that the United States and its NATO allies should abandon Georgia. To the contrary, robust U.S. bilateral and multilateral engagement with Georgia should be sustained and expanded as appropriate to assist in its effort to reform its armed forces, as well as to improve its defensive and deterrent capabilities. However, a policy of active pursuit by the United States of NATO membership for Georgia is likely to be futile and even counterproductive, as it would introduce new discord and divisions in the alliance. The purpose of NATO expansion, as described in the text of the North Atlantic Treaty of 1949 and the NATO enlargement study of 1995 is to “strengthen the Alliance’s effectiveness and cohesion; and preserve the Alliance’s political and military capability to perform its core functions of common defence. . .” Unlike Georgia, Armenia has not signed its AA and DCFTA agreement with the EU as a result of Russian pressure. However, the government of Armenia has made it clear that it is interested in pursuing closer relations with the EU in other ways. As in the case with Georgia, U.S. assistance and engagement with Armenia should be aimed at implementing key provisions of those agreements as the blueprint for enhancing its domestic resilience, economic prospects, and Euro-Atlantic ties. This too should be coordinated with EU assistance efforts.

Azerbaijan represents a more difficult partner for U.S. policy in the region. With access to Azerbaijan limited, direct U.S. assistance to civil society inside the country appears unlikely; it could even be counterproductive since it could endanger U.S. contacts there. Instead, resources earmarked for it could be reallocated to regional programming for which Azerbaijanis from inside the country and those in exile should be welcome to participate.


The United States should stay actively engaged with the three South Caucasus states, supporting their internal transformation and integration with the international community. All three face considerable challenges at home and abroad, and, in all three cases, change will be incremental rather than revolutionary. Past U.S. efforts to effect transformational change in the region fell short of expectations and face little prospect of success in the future should attempts be made to replicate them. Slow and steady promises continue to be the better approach to meeting the requirements of the South Caucasus states and U.S. interests in the region.