Azerbaijan: what happened in 2021 and what may happen in 2022

Azerbaijan: what happened in 2021 and what may happen in 2022


2021 was the first year for Azerbaijan after the triumph in the 44-day war. Of course, it came with tremendous promises of the start of an epic “Big Return” project, arguably the largest enterprise in the independent history of Azerbaijan, and also of a return to normal after the year of exhausting lockdowns which had put social life to a standstill.

The year witnessed a lot of twists and turns around Nagorno-Karabakh and the painful process of normalisation with Armenia which promises to be a long affair. While the start of 2021 was unexpectedly quiet, later on several armed escalations happened around the undemarcated border in the regions of Kalbajar and Lachin; the most remarkable ones claiming several lives on the both sides, were in May and November. The gist of the conflict at the current stage is the border dispute; since Azerbaijan and Armenia had been already at war when they secured independence from the Soviet Union, there has never been a chance to conduct the much-needed delimitation process. Yerevan has long resisted Baku’s demands to start this process, beware that officially accepting the borders would automatically make irredentist claims invalid. However, after the November events Armenia had to give in and the parties, after the meeting of the heads of states Aliyev and Pashinyan in Brussels, finally decided to start this process. Baku’s important victory was the successful promotion of the idea that “the Karabakh conflict, as well as the status of Nagorno-Karabakh is over”- the statements of Western countries and international organisations, including the ICJ’s decision on the mutual claims of the two countries against each other, bear witness to this as the focus has been shifting from “resolving to the conflict” to preparations for a post-conflict future. 

At the same time, the Brussels meeting spearheaded the process of normalisation between Armenia and Turkey: the parties finally appointed special representatives for the negotiation process and claim to pursue the ultimate goal of establishing diplomatic relations. Unlike 2009, this time Baku is very supportive of this development, hoping it will be a significant guarantee against Armenian revanchism.

Overall, President Aliyev has successfully continued the strategy of navigating between various powerhouses and shifting his rhetoric depending on the situation and in order to maximize Azerbaijan’s benefits in the complex post-war dynamics. This was particularly evident in Aliyev’s rhetoric towards Russia. While describing Azerbaijani-Russian relations and the service of Russian peacekeepers in Karabakh positively in general, he always makes Baku’s red lines and anxieties clear. For example, he didn’t hesitate to make public the sale of the not-for-export variety of the Iskander missile found near Shusha, to Armenia. Azerbaijan has also, despite numerous allegations to the contrary and clear signals coming from Moscow, has abstained from serious discussions about joining the Russian-led Eurasian Union or CSTO. Relationship with Turkey, which came to a new level with the 44-day war and military parade in December 2020 in Baku visited by President Erdogan, consolidated throughout 2021 as the two leaders paid several visits to each other and in June signed the declaration on allied relations in the liberated city of Shusha, sealing the de-facto Turkey-Azerbaijan alliance. Another important landmark in this direction was the decision to turn the Turkic Council into the Organisation of Turkish states taken during the November 2021 summit, and it is clear that the Central Asian states’ interest in this integration has risen considerably thanks to the success of the Ankara-Baku partnership; accepting Turkmenistan, still as an observer, is particularly important for Azerbaijan as this country plays a vital role in Baku’s energy and logistics strategy. At the same time, the prospect of Turkic integration offers Baku the unique way of spreading its soft power in the wider region.

Baku’s tensions with Iran were another hallmark event in 2021. In the period between August and October, the two capitals engaged in an unprecedented exchange of mutual allegations, media hysteria and disguised threats. While the dispute formally started with Baku’s irritation with Iranian truck drivers frequenting Nagorno Karabakh, it soon deteriorated, Azerbaijan challenging Iranian soft power tools within the country and Tehran invoking Baku’s allegedly threatening partnership with the “Zionist regime”. The abrupt end of the tensions and return to the friendly rhetoric was even more unexpected, as well as high-level plans on establishing a transport corridor from Iran through Azerbaijan and Georgia to the West soon announced. So, it seems that Azerbaijan managed to convince Iran that any large regional project must involve Baku, which should be estimated as a major diplomatic victory for Aliyev.

Finally, a big achievement for Azerbaijan in 2021 was the completion of the first major infrastructure project in the liberated lands- Fizuli International Airport, already inaugurated with the participation of Turkish President Erdogan. It drew considerable attention and must serve as a showcase for Baku’s capacity to deliver on its promises and turn the ambitious plans of the “Big return” into reality.



The year 2022 started with the distressing news from Kazakhstan, a country which in many respects resembles Azerbaijan. The activisation of the CSTO, the steady rise of tensions in the post-Soviet space with the situation in Ukraine threatening to escalate into a full-scale interstate war, and particularly the realisation that places considered anchors of stability and development might spontaneously plunge into chaos, must have been hurting. Hence, a year of pro-active diplomacy and accelerated policy reforms is to be expected. President Aliyev’s visit to Ukraine demonstrated that official Baku is reading these signals. Being an active member of the Non-Aligned Movement and keeping friendly relations with both Russia and Ukraine, Azerbaijan wants to try to be a mediator and bring about detente in the post-Soviet space: any large conflict here would exert multiple negative influences on Azerbaijan’s political and economic security. This raises the significance of achieving tangible progress in negotiations with Armenia: Baku understands that revanchists in Yerevan may get an upper hand if a major destabilisation in the region happens and particularly if Azerbaijan isn’t able to preserve a working relationship with Moscow. So, we should expect the start of the border delimitation process and probably more frequent meetings between the heads of states; details on the configuration of the future Zangezur route should be agreed upon.

On the other hand, Baku will do its best to seal the outcomes of the victory with accelerating the rebuilding of Karabakh and expects to start the resettlement process in Shusha and several “smart villages”, now being completed. Each new inhabited settlement and cultivated piece of land would legitimise and buttress the new status quo an inch further, while also strengthening the domestic legitimacy of the government in the people’s eyes.

This brings us to another trend which we expect to dominate the political agenda in Azerbaijan unless a major regional conflict forces Baku to switch priorities: intensification of the domestic reform process. Voices criticizing the monopolistic and inefficient practices of the state-owned companies are becoming louder in the public sphere, and the recently created Azerbaijan Investment Holding (AIH) is tasked with modernising these large, mostly non-transparent behemoths and preparing them for a partial privatisation. The events in Kazakhstan must have raised the urgency of these changes in the mind of the ruling elite. At the same time, a window of opportunity provided by the relatively high oil prices provides a chance to take vital economic measures without hurting too much the vested interests of the wealthy class- the common problem that hinders economic reforms in most cases.