© Koninklijke Brill NV, Leiden, 2010 DOI: 10.1163/157180610X488164

International Negotiation 15 (2010) 7–31 brill.nl/iner

Mountainous Karabakh: New Paradigms for Peace and Development

in the 21st Century

Tabib Huseynov*Baku, Azerbaijan

(E-mail: tabibhus@gmail.com)

Received 5 August 2008; accepted 20 October 2009

AbstractThis article analyzes the Karabakh conflict’s peace process and suggests a set of approaches to guide future progress. Proceeding from an interest-based framework, the research examines ways to reconcile the power, rights and interests of the conflicting parties. It is argued that a serious shift in the approaches and policies of both the conflicting parties and also the mediators is needed to achieve a breakthrough in the talks. In broader and long-term perspective, stable and sustainable conflict resolution requires the establishment of a power-sharing arrangement that would be based on equal and horizontal relation-ships between Armenians and Azeris at both sub-national (Mountainous Karabakh), and national (Azer-baijan) levels, and combines this power-sharing arrangement with regional integration.

KeywordsAzerbaijan; Armenia; conflict; conflict resolution; negotiation; Karabakh; territorial integrity; self-determination; status determination

The Armenian and Azerbaijani people have entered the 21st century with a heavy heritage of unsolved ethnic and territorial conflict over Mountainous Karabakh.1 The conflict has already reached its second decade, but the two nations have

*) Tabib Huseynov is an analyst with the International Crisis Group, a global conflict resolution think tank. His areas of expertise include conflict and security issues in Azerbaijan and the Caucasus region. He holds an MA in international relations and European studies from the Central European University in Budapest. The views expressed in the article are those of the author and do not represent the official position of the organization he is affiliated with.1) Mountainous Karabakh is a region within Azerbaijan covering an area of roughly 4,400 sq km (1,700 sq miles). According to the last pre-war census conducted in 1989, the region had a population of 189,085, including 145,500 ethnic Armenians (76.9%) and 40,700 ethnic Azeris (21.5%). The conflict between Armenians and Azeris that started with an inter-communal strife turned into a full-scale war in 1992–1994 and resulted in occupation of Mountainous Karabakh and considerable adjacent Azerbaijani territory by Armenian forces. The Karabakh Armenian authorities now claim the territory has a popula-tion of some 145,000, virtually all ethnic Armenians, as the Azeri population has fled during the war. For details, see, International Crisis Group, Nagorno-Karabakh: Viewing Conflict from the Ground, Brus-sels, September 2005.

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failed to bridge the divide and remain as intransigent to each other as ever. The vicious cycle of conflict seriously impedes the development of both Armenia and Azerbaijan and also has the dangerous potential to spillover to the region, which poses a threat to the international peace and security.

This article seeks to analyze the Karabakh conflict’s peace process and sug-gests a set of approaches to achieve progress. Proceeding from the theoretical framework of interest-based conflict resolution, the research examines ways to reconcile the power, rights and interests of the conflict parties, which could com-prise the parameters of a future solution. Stable and sustainable conflict resolu-tion requires a fundamental shift in the strategies pursued not only by the conflicting parties, but by the mediators as well, particularly in terms of address-ing the underlying uncertainties associated with their proposals.

Conflict and Interest-Based Conflict Resolution

Conflict, which is defined as “the pursuit of incompatible goals by different groups” is an intrinsic and inevitable aspect of human life. “[Conflict] is an expression of heterogeneity of interests, values and beliefs that arise as new for-mations generated by social change come up against inherited constraints” (Miall, Ramsbotham and Woodhouse 1991). Thus, it is useful to look at conflict as a process of constant social change, which does not have to be always destruc-tive, but can be channeled creatively to serve human development.

In the 1970s, Thomas and Kilmann (1974) developed a model of five conflict and conflict resolution behaviors (the so-called Thomas-Kilmann Conflict Mode Instrument) described along two dimensions: assertiveness (stressing concern for self ) and cooperativeness (stressing concern for others) (Fig. 1).

Contending behavior, which is characterized by a high degree of assertiveness and a low degree of cooperation, is always power-oriented and occurs when con-flict is perceived as a zero-sum game, that is, parties try to win over another (Ward 2007). Continuous contending produces win-lose or lose-lose outcomes. Accommodation (or Yielding) is the opposite of competing and is characterized by a high degree of self-sacrifice in order to satisfy (appease) the other. It also pro-duces win-lose outcomes. Avoidance (or Withdrawal ) is characterized by low cooperation and assertiveness, in which the underlying causes of the conflict are not addressed, conflicting parties can avoid direct communication and conflict resolution is delayed. Continuous avoidance can produce only lose-lose out-comes. Compromising is characterized by moderate assertiveness as well as mod-erate cooperation, which involves a certain degree of self-sacrifice and which is based on a solution that partially satisfies all parties. It is the first and the mini-malist mode to produce win-win outcomes. However, in strict terms, compro-mising assumes that win-win is not possible; everyone wins something and everyone

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loses something. And finally, Problem-solving (or Collaborating) is characterized both by high care for self and high concern for the other, and aims at bringing (or integrating) the interests of the conflicting parties to a maximum convergence. It is the primary mode to achieve win-win outcomes.

Each mode of behavior can be useful at different stages of conflict depending on the behavior of the opposing party. For example, non-cooperative modes can be a more appropriate response if the parties are involved in a vicious cycle of fighting (contending) or in situations of ‘neither peace, nor war’ (avoiding). In these situations, behavior such as yielding can be understood as a sign of weak-ness and may have disadvantageous effects on the conceding party.

In late 1980s, Ury et al. (1988) suggested three major and interrelated approaches to conflict resolution: power-based, rights-based and interest-based. This approach was based on the simple insight that all conflicts take place in a framework consisting of a struggle for power, the assertion of rights and the pur-suit of interests, which in turn shape attitudes, determine behavior and create contradictions.

Power-based conflict resolution is based on the principle that “might makes right” and its use depends on “the ability to coerce someone to do something he would not otherwise do” (Ury et al. 1988). The focus in power-based conflict resolution is on the differences between or among parties. Thus, a power-based approach aims to eventually compel the other party to give in and produces

Figure 1. The so-called Thomas-Kilmann Conflict Mode Instrument.

Contending• Power-oriented • Trying to win

100 / 0

Collaborating• Opposite of avoiding • An attempt to find a solution b y

consensus

100 / 100

Avoiding• Will not address conflict • Withdraw

0 / 0

Accommodating • Opposite of competing • Sacrifice own viewpoint in

order to satisfy that of another

0 / 100

Compromising Finds a mutually acceptable solution that partially satisfiesall parties

50 / 50

HI

HILO

Source: “Key Steps in Collaborative Problem-Solving,” http://www.excellence2.com/

teamwork/Key_Steps_in_Collaborative_Problem_Solving.shtml; author added numbers.

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win-lose outcomes. Two types of power procedures are distinguished: power-based negotiation, typified by an exchange of threats, and power contests, in which the parties take actions to determine who will prevail.

Rights-based conflict resolution is based on “some independent standard with perceived legitimacy or fairness to determine who is right” (Ury et al. 1988). Some rights are formalized in laws or contracts, others are socially accepted standards of behavior, such as reciprocity, precedent, equality and seniority. The focus of the rights-based conflict resolution is on the legal and/or moral grounds of the parties’ claims. “Rights are rarely clear. There are often different – and sometimes contradictory – standards that apply” (Ury et al. 1988). This approach often necessitates the existence of a powerful third party that can make a deci-sion on who has what rights based on independent standards and can enforce this decision, since it may be against the wishes of one or both parties. The best outcome that can be achieved through rights-based conflict resolution is com-promise, in which both parties would win and lose something. A “prototypical rights procedure” adjudication is a technique in which disputants present evi-dence and arguments to a neutral third party who has the power to make a bind-ing decision.

Interest-based conflict resolution is based on the concerns, fears, needs and wishes of the people, all of the underlying issues behind the positions which par-ties desire to satisfy. The focus of interest-based conflict resolution is on the rec-onciliation or integration of interests. Thus, an interest-based approach aims at achieving maximum benefits for all parties to the conflict. Ury et al. endorse the assumptions of the Thomas-Kilmann model by identifying problem-solving negotiation and mediation as forms of interest-based procedures, which, as has been elaborated above, are the most beneficial conflict resolution behaviors.

Based on these classifications, Ury et al. have devised a normative conflict res-olution theory and have argued that interest-based solutions can solve conflicts more effectively than rights-based, which in turn are more effective than power-based conflict resolutions. They show that interest-based conflict resolution tends to produce four interrelated outcomes: higher satisfaction, better relation-ships, less recurrence of conflict and lower transaction costs both for the parties in the dispute and the intervening party.

However, Ury et al. argue that, despite general advantages of the interest-based approach “not all disputes can be – or should be – resolved by reconciling interests.” In the absence of structurally defined power and rights relationships, stable, sustainable and just conflict resolution is impossible because there is no room for the convergence of interests. According to the authors:

In some instances, interest-based negotiation cannot occur unless rights or power procedures are first employed to bring a recalcitrant party to the negotiating table . . . In other disputes, the parties cannot reach agreement on the basis of interests because their perceptions of who is right or who is

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more powerful are so different that they cannot establish a range in which to negotiate. A rights procedure may be needed to clarify the rights boundary within which a negotiated resolution can be sought (Ury et al. 1988: 16).

Based on this discussion, we can conclude that in deadlocked conflicts, one of the major challenges is reconciling the power, rights and interests of the parties involved, which could yield parameters of a future solution. Similarly, the behav-iors of the actors are largely determined by the degree of this convergence, mean-ing that they may resort to various power-, rights- and interest-based procedures, depending on whether power and rights relationships between them are clear. The costs involved in the process of conflict resolution vary in descending order from power- to interest-based procedures. The costs of conflict resolution are obviously much higher if the process starts from clarifying power relationships through power contests (high levels of conflict) than from peaceful negotiations where power and rights relationships are relatively clear and stable (low level of conflict).

This allows us to conclude that in deadlocked ethno-territorial conflicts, when parties cannot achieve convergence between their power, rights and interests, three options remain:

1) Engage in open combat, with the aim of clarifying power and rights boundaries within which the parties could reach a settlement. This conflict behav-ior, as mentioned above, can produce win-lose or lose-lose outcomes. This is the most costly and unpredictable conflict situation. The victorious party imposing its will over the defeated party without consideration of the latter’s underlying needs and interests does not guarantee a sustainable peace. On the contrary, it often leads to a feeling of victimization and thus provides fertile ground for future conflict.

2) An avoidance strategy occurs as a continuation of a status quo, during which the parties avoid full-scale hostilities, while also failing to agree on the principles which would provide the framework for a solution. As mentioned above, a con-tinuous conflict avoidance strategy can produce only lose-lose outcomes, as it does not eliminate the conflict itself. Furthermore, avoidance strategies are rarely sustainable, because in real-life situations, avoidance is often combined with par-allel competition strategies, aimed at achieving power over the adversary. Thus, in the absence of any progress, conflicting parties usually use avoidance strategies to buy time for themselves, which usually leads to increased militarization, polar-ization and eventually, the eruption of a new conflict.

3) Imposition of power and rights procedures by a powerful third party is dif-ficult to implement for a variety of reasons, ranging from the lack of a common strategy among external actors due to differing foreign policy interests to their reluctance to get involved actively and serve as an arbiter in the conflict. Coercive action by a powerful third party (or parties) usually takes place when a conflict

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threatens regional or international security and/or is accompanied by a humani-tarian catastrophe. It rarely takes place in situations of deadlocked low intensity conflicts, in which the parties have effectively adopted conflict avoidance strate-gies. However, powerful external actors in the international community can play an important role in conflict settlement by eliminating uncertainty associated with the outcomes of resolution and by clarifying and endorsing power and rights-based procedures and relationships, which could allow an interest-based conflict resolution to develop.

Mountainous Karabakh Conflict and Negotiation Processes

The Armenian-Azerbaijani conflict over Mountainous Karabakh,2 also called the Karabakh conflict, is the longest running ethno-territorial conflict in the post-communist area. The Karabakh conflict represents an interesting case to students of conflict and conflict resolution due to the complexities of its history, ethnic identities and nationalism. Questions range from the controversies between self-determination and sovereignty, secession and territorial integrity, partition and coexistence, democratic methods of conflict resolution and management based on respect for individual and group rights, and the modes of international involve-ment in ethno-territorial conflicts.

Background of the Conflict

The Karabakh conflict has existed since World War I. Following the collapse of the Russian Empire, the formation of nation-states in the South Caucasus pre-sented the issue of carving up the borders in this ethnically diverse region, which in turn caused conflicts between Armenians and Azeris. In April 1920, the Red Army invaded Azerbaijan, meeting little resistance as Azerbaijan’s major forces were already heavily involved in a military conflict with neighboring Armenia over the Mountainous Karabakh and Zangezur areas in southeastern Azerbaijan.

The Soviets sought to pacify the conflicts while ensuring that they retained political leverage over the newly established Soviet republics. During 1920–1921, the Soviets allocated the disputed area of Zangezur, which separates Azerbaijan from its Nakhichevan exclave, to Armenia, while retaining Mountainous Kara-bakh and Nakhichevan disputed by Armenia, within Azerbaijan. At the same time, as part of their divide-and-rule policy, the Soviets established the Mountainous Karabakh Autonomous Region within Azerbaijan in 1923, carving up the bor-

2) This article uses the term “Mountainous Karabakh,” as opposed to the more widespread “Nagorno-Karabakh,” used in English, which derives from the Russian name for the region (“Nagorno” means “mountainous” in Russian).

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ders of the newly established autonomy in a manner that ensured an Armenian majority in a territory surrounded completely by Azeri populated areas.

For much of the Soviet period, Armenians and Azeris coexisted peacefully in Mountainous Karabakh. In late 1980s, the liberalization of politics during Gor-bachev’s perestroika, combined with growing economic hardships unleashed the unresolved problems of the past. Civil unrest and ethnic strife grew rapidly throughout the Soviet Union and one of the first ethnic conflicts to emerge was the Armenian-Azerbaijani conflict over Mountainous Karabakh.

The conflict started in early 1988 when Armenia petitioned the Soviet gov-ernment to transfer Mountainous Karabakh to Armenia. Whereas Azerbaijan strongly rejected this demand, Armenia and the Armenian majority of Mountain-ous Karabakh’s local administration adopted a decision to unify Mountainous Karabakh and Armenia. The crisis quickly spiraled as sporadic inter-communal fighting broke out in and around Mountainous Karabakh, and Armenians and Azeris fled the violence. The Armenian authorities in Mountainous Karabakh organized a referendum in late 1991, held among the region’s Armenian popula-tion and boycotted by Azeri population, which resulted in a self-proclamation of independence. It was never recognized internationally, even by Armenia. In early 1992, the conflict escalated into a full-scale war between the Armenians and Azeris. It resulted in the occupation of Mountainous Karabakh by Armenian and Karabakh Armenian forces and large swaths of adjacent territory, which comprise 16% of Azerbaijan’s territory (CIA World Factbook 2008). The United Nations Security Council adopted four resolutions in 1993 demanding withdrawal from the occupied areas of Azerbaijan, which still remains unresolved.3

The active phase of the conflict effectively ended in 1994 with the signing of the ceasefire agreement which cemented Armenian military gains. Despite some sporadic violations resulting in low level military casualties, the parties have maintained the ceasefire, but have failed to reach an agreement. The con-flict left an estimated 30,000 dead and 50,000 wounded from both sides. Between 1988, when the conflict started, and the1994 ceasefire which still holds today, an estimated 300,000 Armenians and 185,000 Azeris fled Azerbai-jan and Armenia respectively and over 620,000 Azeris fled Mountainous Kara-bakh and adjacent occupied territories.4 Furthermore, some 30,000 Armenian IDPs from other parts of Azerbaijan settled in Mountainous Karabakh, after liv-ing in Armenia and other countries (ICG 2005: 6). According to Armenian sources, up to 70,000 pre-war Armenian residents are now said to be in third

3) These Resolutions are 822 (1993) of 30 April 1993, 853 (1993) of 29 July 1993, 874 (1993) of 14 October 1993 and 884 (1993) of 12 November 1993. For the texts of all four resolutions see: http://www.un.int/azerbaijan/sec_con_res.htm. 4) Statistics from the United Nations High Commissioner for Refugees, REFWORLD, Centre for Docu-mentation and Research, Background paper on Refugees and Asylum Seekers from Azerbaijan, Geneva, October 1999, p. 2, http://www.unhcr.org/refworld/publisher,UNHCR,,AZE,3ae6a6504,0.html.

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countries (ICG 2005: 4). Coupled with the number of expelled ethnic Azeris of the region, this means that about two-thirds of Mountainous Karabakh’s pre-war population of Armenians and Azeris is no longer in Mountainous Karabakh.

Today Mountainous Karabakh remains the longest running and most intrac-table conflict in the region. It is the only conflict in the South Caucasus that involves two states and is the biggest obstacle to region-wide cooperation and integration initiatives, effectively excluding Armenia from any projects involving Azerbaijan and Turkey. Armenia controls Mountainous Karabakh militarily and economically: Armenian citizens are believed to make up at least half of Kara-bakh Armenian forces, and Yerevan covers about 50% of the Mountainous Kara-bakh budget, which uses the Armenian currency, the dram (ICG 2005: 9, 12). The politics of Armenia and Mountainous Karabakh are so intermingled that the last two presidents of Armenia, the current president Serzh Sarkissian, and his predecessor Robert Kocharian, came to power in Armenia after holding high level positions, Defense Minister and President, in the de facto Armenian admin-istration in Mountainous Karabakh.

Overview of the Negotiation Process

The OSCE Minsk Group, co-chaired by the US, Russia and France, has spear-headed the mediation efforts since 1992. At its Lisbon Summit in 1996, the OSCE called for a resolution based on the territorial integrity of Azerbaijan, the highest degree of self-rule for the part of Mountainous Karabakh within Azer-baijan and guaranteed security for Mountainous Karabakh and its whole popu-lation. These principles have been accepted by all OSCE members, but were vetoed by Armenia.5

In May and September 1997, the Minsk Group set forth two proposals, a package deal and a step-by-step proposal. The package deal suggested the parties reach a comprehensive agreement on all issues of dispute, including the status of Mountainous Karabakh, which would formally remain part of Azerbaijan, while retaining its internal sovereignty. The proposal was rejected by Karabakh Arme-nian authorities, but accepted with serious reservations as a basis for negotiations by Armenia and Azerbaijan. The step-by-step proposal that the mediators pre-sented shortly afterwards adopted a different approach, calling for an Armenian withdrawal from the occupied Azeri territories outside Mountainous Karabakh (except for Lachin province, which links Mountainous Karabakh with Armenia), the return of the displaced population to their homes, lifting economic embar-goes and proceeding with final discussions on the status of Mountainous Kara-bakh only after these measures have been implemented. Azerbaijan, and after

5) The statement on this matter was an annex to the Lisbon Summit Declaration. For the text of this resolution see, Annex 1 to the Lisbon Summit Declaration, “Statement of the OSCE Chairman-in-Of-fice,” http://www.osce.org/documents/html/pdftohtml/4049_en.pdf-15.html.

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some hesitation, Armenia both conditionally accepted the plan, but Karabakh Armenian authorities again rejected it out of hand, demanding that their inde-pendence be guaranteed before any talks start. Domestic opposition in Armenia also forced the Armenian president Levon Ter-Petrosyan to resign, allowing a hardliner Robert Kocharian, previously the de facto president of Mountainous Karabakh, to come to power.

In 1998, the Minsk Group set forth the common state proposal, which envis-aged non-hierarchical relations between Azerbaijan and the Armenian authori-ties of Mountainous Karabakh and de facto, but not de jure, independence for Mountainous Karabakh, which would not have the right to secession. The plan was conditionally accepted by Armenia and Karabakh Armenian authorities, but rejected by Azerbaijan as “defeatist.” In the words of the then Azerbaijani presi-dent, Heydar Aliyev, the common state was unacceptable for the Azerbaijani side because it “implied that the [Mountainous] Karabakh is an independent state and territorial entity, and grants it, equal with Azerbaijan, the status of the sub-ject of the common state” (US State Department 2001).

A series of bilateral talks that followed between the then Azerbaijani presi-dent Aliyev and his Armenian counterpart, Robert Kocharian, were said to have brought the two close to an agreement based on a renamed and modified version of 1998 proposals. Assassinations in the Armenian parliament in October 1999 effectively halted these talks.6

The Armenian and Azerbaijani presidents conducted talks in March-April 2001 in Paris and Key West, Florida. The sides have presented contradictory ver-sions of the talks, but the parties are reported to have discussed a possible land swap or an exchange of corridors linking Mountainous Karabakh to Armenia (via the Lachin corridor) and Azerbaijan to its Nakhichevan exclave (via the Meghri corridor) (PACE 2004). However, under strong domestic criticism, the leaders of both Armenia and Azer baijan denied that they had agreed to such a land swap. The failure of the Key West talks brought a pause in the negotiations, prolonged by the process of power change in Azerbaijan. These talks also dem-onstrated that a land swap option was unrealistic and unacceptable for both Armenians and Azeris.

In April 2004, a series of meetings between Armenian and Azerbaijani foreign ministers were initiated in Prague and hence dubbed the Prague process. In August 2005, the OSCE Minsk Group presented the Armenian and Azerbaijani

6) The exact circumstances of these assassinations, which entirely changed Armenia’s political landscape, are unknown. On 27 October 1999 a group of ultranationalist gunmen entered the parliament and killed the country’s influential prime minister, parliamentary speaker and six other officials. Most observ-ers assumed the gang was not acting alone. One line of speculation was that the gunmen acted to derail a possible Karabakh peace deal, pointing fingers to Russian intelligence. Others claimed President Kocharian masterminded the attack to get rid of his political opponents. However, there is no support-ing evidence to verify any of these claims. See Ruzanna Stepanian, “Armenian officials deny Russian role in 1999 parliament carnage,” ArmeniaLiberty.org, 4 May 2005.

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presidents, meeting on the sidelines of the CIS summit in Kazan, the first draft of basic principles, outlining the contours of a comprehensive settlement. The proposals were kept in secret until June 2006, when in an unprecedented move, the Minsk Group co-chairmen partially revealed the basic principles for settle-ment in an effort to pressure the parties to agree to these principles and launch a public debate about them.

These principles can be summarized as follows: renunciation of the use of force; gradual withdrawal of Armenian forces from the occupied districts adja-cent to Mountainous Karabakh; demilitarization of these territories and the deployment of international peacekeepers; restoration of communications between Armenia and Azerbaijan and the return of the displaced people to their homes; mutual commitment to a vote on Mountainous Karabakh’s final status after the return of displaced Azeris; and an interim status for Mountainous Kara-bakh, with substantial international aid and guarantees before this vote takes place.7

In November 2007, during the OSCE ministerial council in Madrid, the Minsk Group co-chairs formally presented Armenia and Azerbaijan a document called “Basic Principles for the Peaceful Settlement of the Nagorno-Karabakh Conflict,” which primarily reaffirmed the aforementioned principles as a basis for settlement. This document was considered to be a significant development, as this was no longer a non-paper but an official proposal deposited with the Chairman-in-office of the OSCE which would serve as a basis for the future negotiations (PACE 2008).

The basic principles, or Madrid proposals, as they became known, had an obvious advantage over the preceding proposals in that they avoided a false dilemma of having to choose between the step-by-step methodology preferred by Azerbaijan and the package methodology favored by Armenia. Fundamen-tally, what both Armenia and Azerbaijan agreed while discussing the Madrid proposals was that the final status would be determined at the last stage after all other confidence building measures had been put in place (an element of a stage-by-stage approach), but these measures themselves would be realized only after some agreement on the mechanism for the determination of that status had been reached (an element of a package approach). In the words of former Armenian foreign minister, Vardan Oskanian, “only after full agreement on all these basic principles will the parties begin work elaborating an agreement on the settle-ment of the conflict” (Fuller 2006).

However, the parties remain at odds over the concrete modalities of these principles. Fundamental differences remain as to who would vote on what, when and how, as both sides believe these questions will determine the outcome of the peace talks. The Armenian party demands that the plebiscite be held exclusively

7) For details see, International Crisis Group, Nagorno-Karabakh: Risking War, Brussels, November 2007; and also, Nagorno-Karabakh: A Plan for Peace, Brussels, October 2005.

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in Mountainous Karabakh and the decision be made based on a majority vote. Armenia also wants the status determination to take place before Azeris return to Mountainous Karabakh proper, treating this return as a modality of the talks. Azerbaijan, on the other hand, wants the referendum to be held throughout Azerbaijan, arguing that its constitution does not allow for such a referendum in only a part of its territory. It also asserts that Karabakh Azeris should return to their homes and participate on an equal basis with Karabakh Armenians to determine the future status for Mountainous Karabakh.

Major Challenge: Lack of Negotiation Range

This overview of the Karabakh negotiation process demonstrates that the con-flicting parties are essentially locked in a power-based zero-sum game. The struc-ture of the negotiations is characterized by disregard for the needs and interests of the opposite side.

The parties are generally unable to agree on their respective power- and rights-based relationships. Armenia, which emerged victorious from the 1992–1994 war, expects Azerbaijan to accept the realities on the ground and give up its claim to Mountainous Karabakh. Azerbaijan, on the other hand, rejects such treatment as a defeated party, because it considers itself to be a stronger power with more resources and greater economic potential.

The parties cannot agree on their respective rights-based relationships either: Armenians’ constant appeals to the right to self-determination are confronted by Azerbaijanis’ demand for the territorial integrity and inviolability of internation-ally recognized borders. As a result, Armenians and Azerbaijanis have so far been unable to establish a negotiation range, or Zone of Possible Agreement (ZOPA), limits within which they could reconcile their power- and rights-based relation-ships, which, as discussed above, is a precondition for subsequent interest-based conflict resolution. Instead, they operate within mutually exclusive negotiation frameworks: Armenians demand either independence or the unification of Mountainous Karabakh and Armenia, whereas Azerbaijanis reject any compro-mise on its territorial integrity. Until recently, when there was some progress on a basic principles document, Armenia preferred to agree on all contentious issues in one package, which maximizes its negotiation power, as this allows it to use the occupied territories adjacent to Mountainous Karabakh as a bargaining chip to get more concessions from Azerbaijan on the status of Mountainous Kara-bakh. Azerbaijan demands Armenia’s withdrawal first, leaving the status issue unresolved, which is similarly a hard sell for Armenians who are afraid of losing their stra tegic advantage and being forced to accept a solution against their will in later stages of the conflict.

Because of their failure to establish a negotiation range, both Armenians and Azerbaijanis find themselves in a cul-de-sac. Unable to achieve progress in the

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talks, both the Armenian and Azerbaijani leaderships have adopted a mixture of avoidance and competition conflict behaviors, which is often referred to as the “buying time” strategy (ICG 2007). As part of this conflict behavior, the parties avoid major conflict, largely preserving the status quo. However, they use this status quo as a time-out for themselves to achieve a power- or rights-based advan-tage over the adversary.

As Azerbaijan receives more oil revenues, it grows more confident of its strength over Armenia and its ability to dictate Armenia’s future. After experiencing a huge oil money windfall and a tenfold increase in its budget within the last four to five years, Azerbaijan increased its military spending almost fifteen times, from US$135 million in 2003 to US$1.85 billion in 2008 (Bargarar 2005, Reu-ters 2008).8 At the same time, Armenia and the Karabakh Armenian leadership are also playing for time, looking at Kosovo as a precedent for Karabakh and hoping that both Azerbaijan and the international community will be compelled to recognize de jure their de facto gains ( fait accompli position).

Consequently, both sides are using the status quo for getting more of some-thing that they lack: Azerbaijan uses time to gain more military power to offset the Armenian fait accompli position, and Armenia uses time to gain more legiti-macy for its demands. Neither of the sides has been seriously thinking about peace. This naturally raises skepticism in both Armenian and Azerbaijani societ-ies regarding the prospects for a peaceful solution and many people feel frus-trated with what they deem an imitation of the peace process. Thus, protraction of the status quo entrenches the dominant win-lose approach in each society, further complicates the peace process and increases the likelihood of resuming hostilities in the future.

The Basic Principles: Addressing Uncertainty and Insecurity

The so-called basic principles reflect an attempt, perhaps the most successful one so far, to establish concrete parameters for a future resolution, a negotiation range within which the parties could come to an agreement. No other previous proposal by mediators has drawn so much attention and discussion from either side. As mentioned above, the advantage of the basic principles over previous proposals is that it combines the package and step-by-step methodologies pre-ferred respectively by Armenia and Azerbaijan, and attempts to draw a frame-work for the exercise of rights and powers rather than a comprehensive detailed agreement. Thus, the basic principles could clearly be characterized as an attempt by the mediators to work out mutually acceptable parameters of a solution,

8) In absolute terms, this is 4.5 times more in comparison with Armenian military spending, though Azerbaijan spends only 2.6% of its GDP on the military, as opposed to 6.5% by Armenia. For more details, see International Crisis Group, Azerbaijan: Defense Sector Management and Reform, Brussels, October 2008.

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which would clarify the power- and rights-based procedures and relationships. However, the basic principles lack an important aspect needed for a future solu-tion: they fail to address the underlying uncertainties and insecurities of the con-flict parties.

On the most important and contentious issue of Mountainous Karabakh’s status, the basic principles envisage an open-ended process, which gives both parties ample area for maneuvering. This formula certainly has its merits, as it is highly unlikely that Armenians and Azerbaijanis would agree on any definite status for Mountainous Karabakh beforehand. But, while providing for an open-ended process, the proposed principles do not provide sufficient guarantees for the parties that they would not be forced to accept a particular decision against their will in later stages of the conflict settlement.

What the OSCE Minsk Group mediators tend to overlook in their approach is that any procedure that would predetermine the final status of the Mountain-ous Karabakh is by definition unacceptable to both of the conflict parties. A sep-arate plebiscite in Mountainous Karabakh, in which a decision would be based on majority vote, is by definition unacceptable to Azerbaijan because it would legitimize Mountainous Karabakh’s secession against Azerbaijan’s will. The argu-ment suggesting that Azerbaijan would have an opportunity to lure Karabakh Armenians back using an existing process does not convince Azerbaijanis, as it does not address their fear of eventually being forced to comply with a solution against their will. This fear has been further crystallized by Kosovo’s unilateral self-declaration of independence, and its recognition by a number of states, despite Serbia’s opposition. Similarly, a national referendum in Azerbaijan, also based on a majority vote is unacceptable for Armenians because the outcome of such a vote is clear beforehand. Thus, the parties will fail to reach an agreement as long as the proposals base the final status of Mountainous Karabakh on a decision adopted by a majority vote.

The majority-based voting option is not feasible and is also detrimental to the peace process because its endorsement gives both sides reason to further ins-trumentalize the issue of refugees and internally displaced persons (IDPs). It prompts the Armenian side to prevent, limit or at least discourage the return of Azeris to Mountainous Karabakh, while giving the Azerbaijani side an incentive to resettle as many Azeris as possible, whether those displaced during the war or their heirs. This naturally would lead to additional tensions and disputes over who is eligible to return or vote in the future plebiscite that would determine the region’s status.9

9) It should be noted as well that throughout the negotiations, the Armenian side, while not explicitly denying Karabakh Azeris’ right to return, tried to link this issue with the return of Armenian refugees to other parts of Azerbaijan outside of Mountainous Karabakh. The Azerbaijani side dismissed this as a pretext for preventing the Azeris return to Mountainous Karabakh, arguing the issue of repatriation of Armenian refugees from parts of Azerbaijan outside of the disputed region should be dealt with in

20 T. Huseynov / International Negotiation 15 (2010) 7–31

Thus, the threats of having to comply with a decision against its will and insuf-ficient guarantees for the safe and dignified return of the Azeris to Mountainous Karabakh constitute the two most important deficiencies of the current negotia-tion framework under the Madrid proposals. These deficiencies serve as a built-in source of conflict because even if the parties sign a formal peace agreement, they would allow (and actually, provide an incentive for) either one of the parties to manipulate the process to get the outcome they want. In the run up to the pleb-iscite or referendum on the final status, the parties would be preoccupied not with reconciliation, but with creating favorable conditions for themselves, par-ticularly through attempts to manipulate the region’s demographics by either bringing in more people representing a particular ethnic group (Azerbaijan, Armenia) or hindering IDPs’ return (Armenia and Karabakh Armenian adminis-tration), which would allow them to ensure the outcome they want, against the will of their opponents.

As both Armenian and Azerbaijani diplomats have often mentioned, the peculiarity of the Prague process is that in the absence of an agreement on the outcome, technical procedures which at first seem of secondary importance may lead to a particular outcome against the will of the opposite party. In such a situ-ation, both Armenians and Azerbaijanis fear they will be deceived and out-smarted. This leads to inflexibility in their positions, reflected in a jointly endorsed statement by both Armenian and Azerbaijani negotiators that indi-cated “nothing is agreed until everything is agreed” (ICG 2007).

To alleviate the distrust and insecurity embedded in the Prague process nego-tiations, the parties need to know that the peace process is not structured in a way that will eventually force them into an agreement against their will. If the parties feel more confident, they will be more flexible and willing to consider dif-ferent options. If either one or both parties does not feel confident about the peace process, agreement is unlikely.

It is quite obvious that the parties will not be able to come to an agreement on the basic principles as long as they require majority-based voting. A shift in public discussions away from a vote by which a majority (however that would be defined) would decide the final status of Mountainous Karabakh is essential for the Madrid proposals to be properly understood and to bring tangible progress. The parties should contemplate alternative voting possibilities, for example, one in which Armenians and Azeris would approve a political settlement achieved by their leaders through separate popular referenda, followed by a final decision based upon a consensus between the communities. This vote could first be held among Armenians and Azeris from Mountainous Karabakh and then among the Armenian and Azerbaijani public in general.

parallel with the recognition of a similar right for Azeri refugees from Armenia. See, Tabib Huseynov, “A Karabakh Azeri Perspective,” in The Limits of Leadership: Elites and Societies in the Nagorny Karabakh Peace Process, Accord, 17 December 2005, pp. 25–27.

T. Huseynov / International Negotiation 15 (2010) 7–31 21

It is quite possible that Armenians and Azeris would vote in totally opposite directions in such popular referenda. This would cause the interim status to per-sist. According to the Minsk Group’s proposals, an interim status would provide the population of Mountainous Karabakh a temporary legal framework “to pro-tect and control their political and economic viability and security . . . to demo-cratically elect officials . . . to [enjoy] observer status at the OSCE . . . to [receive] aid from foreign countries and international donor organisations [and] . . . to direct foreign investment and [have] access to international markets” (ICG 2007: 3).

This interim status would essentially semi-legitimize Mountainous Karabakh’s de facto Armenian administration, while ensuring the return of Azeri displaced to the territory and deployment of international peacekeeping force to guard the returnees’ safety. The Armenian and Azeri communities of Mountainous Kara-bakh, and Armenian and Azerbaijani societies in general, would be allowed to hold votes as many times as they wish (for example, every five years after the first vote). Eventually, even if they disagree at the ballot box, the non-violent envi-ronment in which Armenians and Azeris re-learn to co-exist peacefully has a chance to soften their positions and bring a just and lasting peace to the region.

Moving Forward: Building an Interest-based Resolution for Mountainous Karabakh

The analysis above demonstrates that a serious shift in the approaches and poli-cies of both the conflicting parties and the mediators is needed to move forward. Armenians and Azeris should abandon their buying time (avoidance) and win-lose (contending) strategies and realize that they cannot provide for their secu-rity at the expense of the other side. Similarly, the international community and particularly, the mediators, should go beyond the traditional concept of compro-mises and initiate a creative search based on the parties’ common needs and interests.

In order for this process to start, several steps need to be taken by both the political leadership and civil societies of the conflict parties, as well as the media-tors and the international community in large.

1. Engaging the public in a genuine debate about the conflict, the existing options on the negotiation table and their implications, and increasing people-to-people contacts between Armenians and Azeris

The Minsk Group co-chairmen said in their June 2006 joint statement, in which they publicly disclosed the basic principles for the first time, that any popular vote on Mountainous Karabakh’s final status should take place in “a non-coer-cive environment in which well informed citizens have ample opportunity to consider their positions after a vigorous debate in the public arena” (Statement

22 T. Huseynov / International Negotiation 15 (2010) 7–31

by the Minsk Group Co-Chairs 2006). This statement was the recognition of a simple truth that coercion cannot produce a lasting peace and that even if Armenian and Azerbaijani leadership would sign a formal peace deal, it would be doomed to failure if not understood and supported by people. Hence, lasting and sustainable peace is possible only if people, through their conscious and informed decision, give their consent to a peace agreement signed by their leadership.

Greater public awareness on issues, options and their implications can dimin-ish the insecurity connected to a fear of being deceived and outsmarted, which in turn leads to inflexibility in the talks. However, a debate on the conflict lim-ited to its internal audience will always produce limited results, because it will focus on each conflict party’s own arguments and positions. The best way for Armenians and Azeris to educate each other about the conflict is to interact with each other and not to refrain from discussing the most sensitive topics. Such open dialogue is the most efficient way to get exposed to the competing frame-works for understanding and analyzing the conflict and learning about each others’ grievances, needs and interests.

Greater public involvement in the peace process, public discussions on highly sensitive issues, and contacts between Armenians and Azeris, may seem to be counterproductive. Faced with competing discourses and frameworks and failing to reconcile them, participants in the people-to-people dialogue may feel increas-ingly frustrated and may lose their faith in this kind of popular contact. Increased frustration and criticism may also prompt the political elites and the mediators to pursue more secrecy in their talks. However, this would be a self-defeating strategy, because by avoiding discussions on sensitive topics, either between themselves or within their own societies, the conflicting parties would essentially adopt a conflict avoidance strategy, which as discussed above, cannot resolve the conflict and may only produce lose-lose outcomes.

From this perspective, it is important that both the political leadership and the mediators constantly inform, educate and counsel their people about possi-ble solutions. And it is equally important that Armenians and Azeris constantly meet with each other and not refrain from engaging in an open, genuine debate about their grievances, needs and interests. With time, these discussions will produce better informed citizens, who will be able to better understand the con-flict, will be less prone to populist manipulations, and as a result, will make bet-ter decisions for themselves.

2. Involving Karabakh Armenian and Karabakh Azeri representatives in the peace talks

A peculiarity of the Karabakh conflict, which also reveals its complexity, is that there are significant disagreements over the question of who the parties are. The

T. Huseynov / International Negotiation 15 (2010) 7–31 23

competing frameworks and interpretations have created confusion among the international community and they are the major reason why the conflict still has not been given a clear political and legal assessment by any international institution.

Armenia tries to distance itself from the negotiations and essentially describes the conflict as being between the Azerbaijani government and the Karabakh Armenians, qualifying it as an intra-state conflict. Azerbaijan on the other hand, is reluctant to negotiate with two Armenian parties simultaneously and views the conflict as an inter-state conflict between itself and Armenia, also fearing that bilateral talks with the Karabakh Armenians may allow Armenia to retreat from the negotiations while still backing up the separatist authorities. Therefore, the Azerbaijani government downplayed the role of the Karabakh Armenians in the military phase of the conflict and rejected bilateral talks with Karabakh Armenian authorities insisting on direct negotiations only with Armenia.

In a very similar manner, the Armenian side refuses to recognize the Karabakh Azeris as a distinct stakeholder in the peace process. This refusal is motivated by the Armenians’ reluctance to share power with the Karabakh Azeris in the future and stems from the fear that Karabakh Azeris may become a ‘fifth col-umn’ of Azerbaijan within the future self-governing entity. Guided by these considerations, Armenian negotiators have been trying to draw parallels between the fate of the Karabakh Azeris and the Armenian refugees from Azerbaijan, which inevitably led Azerbaijan to demand that the issue of Armenian refugees from Azerbaijan be considered in parallel with the issue of Azeri refugees from Armenia. As a result, both sides instrumentalized the fate of the refugees and IDPs to gain political dividends in their zero-sum disputes. This mutual policy of non-recognition of a party to the conflict has long impeded the dialogue on substantial issues, prompting the parties to fight over secondary matters instead, such as terminology and procedural issues.

If we define conflict parties as parties which (semi-)independently may use violence to further their aims, then currently the Karabakh conflict is a three-party conflict, in which Armenia, Azerbaijan and the Karabakh Armenians play key roles. This power-based approach leaves the Karabakh Azeris out, because, unlike their Karabakh Armenian counterparts, they do not have their own insti-tutions, are marginalized and completely dependent on the Azerbaijani govern-ment. However, although the Karabakh Azeris currently do not represent an organized force, they possess the potential to become a powerful destabilizing factor in Azerbaijan tomorrow if their interests are ignored today.

If we define conflict parties as the groups that are the key stakeholders in the Karabakh conflict and whose buy-in is necessary for lasting and sustainable peace, then we should look at the conflict as three-dimensional: one, inter-state, as between Armenia and Azerbaijan; two intra-state, as between Azerbaijan and Karabakh Armenians; and three, inter-communal, as between Karabakh

24 T. Huseynov / International Negotiation 15 (2010) 7–31

Armenians and Karabakh Azeris. Successful breakthrough in the peace process requires engaging in talks and addressing issues along all three dimensions.

Greater involvement of the Karabakh Armenians and Azeris in the negotia-tions, particularly when it comes to the discussion of issues of common concern, such as status, return of IDPs or peaceful co-existence in Mountainous Kara-bakh, is vital for reaching a negotiated solution. Similarly to the initial effects of greater public involvement in the peace process, bringing new actors to the negotiation table may be viewed as counterproductive and complicating the negotiation process. However, the inclusion of the Karabakh Armenian and Azeri representatives would serve to diminish their fear of a decision being imposed against their will and would ensure that the process is not undermined by these excluded groups. Moreover, their inclusion could help to secure their buy-in to the eventual peace deal.

To make this recommendation workable, particular attention should be given to the development of civil society institutions among the Karabakh Armenians and, even more so, among the Karabakh Azeris, the weakest and most marginal-ized party in the conflict. Their weakness is the weakness of the whole negotia-tion process, because, as discussed above, weakness breeds insecurity and unreceptive attitudes toward new ideas and proposals, which in turn undermines the whole peace process. Interest-based conflict resolution requires strong and confident parties, an all-inclusive process, and genuine and straightforward dialogue.

3. Developing a common vision based on shared values and aspirations

Mental frameworks used to describe and analyze a conflict and the positions taken by parties can be referred to as discourses. As a particular discourse becomes internalized by a group, it forms that group’s (mis-)perceptions and attitudes. As discussed above, the discourse used by Armenians and Azeris over the Karabakh conflict is largely confrontational, revolving around win-lose categories.

Progress towards peace requires reframing the existing conflict and the exclu-sivist, mutually antagonizing discourse over it.10 For this purpose, Armenians and Azeris need a common vision based on shared values and shared aspirations. This vision would create a common discourse cultivating a genuine belief that a mutually acceptable and beneficial solution is possible. Such an approach requires a new look at the traditional perceptions underlying the Karabakh con-flict, such as those regarding sovereignty, ethnic self-determination, majority-minority relationships, and national and ethnic territories. This should eventually lead to contemplating new forms of governance in the region. In this regard, the European Union’s experience in accommodating ethnic claims through multi-

10) For an excellent analysis on the concept of “reframing” in conflict resolution process, see, Clem McCartney, Reframing: A Strategy for Conflict Transformation, Conciliation Resources, London, 2007.

T. Huseynov / International Negotiation 15 (2010) 7–31 25

layered governance systems and political and economic integration could serve as a useful model to consider.

Federalism: A Framework for Promoting Mutual Interests in Mountainous Karabakh?

Ury et al.’s argument (1988) that an interest-based resolution entails the recon-ciliation between rights and power relationships provides a starting point. The underlying power and rights positions of Armenia can be summarized as follows: there should be no subordination of Mountainous Karabakh to the central Azer-baijani government; Mountainous Karabakh should have a permanent land cor-ridor with Armenia, which presupposes Armenian control over Lachin; and there should be international security guarantees for the population of Moun-tainous Karabakh. These principles were formulated back in 2001 by the Arme-nian parliament and have been reiterated continuously since then.11

Azerbaijani negotiating principles can be summarized as follows: Mountain-ous Karabakh’s status should be determined within the framework of territorial integrity of Azerbaijan; status determination should take place only after return of the Azeri population to the Mountainous Karabakh under safe, dignified con-ditions; and the Lachin corridor should be under equal and common use (Day.az May 2008). It should be noted that the position on the issue of the Lachin corridor was stated in June 2008 by the Azerbaijani Deputy Foreign Minister, Araz Azimov, represents a significant compromise because previously the Azer-baijani side only talked publicly about the right to free passage for the Arme-nians through the Lachin corridor, but the offer fell short of proposing equal and common use.

The Armenian side demands a solution that would exclude Mountainous Karabakh’s direct subordination to the central government. At the root of this claim lies the Karabakh Armenians’ reasonable aspiration to be the masters of their own fate, provide for their own security and have a final say on decisions directly affecting them. Because of the widespread distrust and insecurity sur-rounding the conflicts, the Karabakh Armenians overwhelmingly believe that their underlying needs could be met only through secession. As a result, people in the breakaway region do not contemplate other possible options that would provide them with essentially the same level of security and independence in conducting their affairs, without doing it at the expense of the underlying needs and interests of the other party.

11) Most recently (June 2008), these negotiation principles have been reiterated by the Armenian foreign Minister Eduard Nalbandian. See, Day.az news website, 23 June 2008, http://www.day.az/news/armenia/122102.html.

26 T. Huseynov / International Negotiation 15 (2010) 7–31

On the other hand, the public and elites in Azerbaijan demand the restora-tion of the country’s territorial integrity. This demand is based on the legitimate concern that the nation may disintegrate if it fails to restore its territorial integ-rity. Similarly, because of the widespread distrust between and within the societ-ies in conflict, the elites and public in Azerbaijan have so far articulated their positions mostly from the prism of restoring sovereignty and territorial integrity of the state, often failing to draw the line between these two very different con-cepts and failing to realize that sovereignty does not always have to be indivisi-ble, but can also be shared.

If the two conflicting parties put aside the maximalist positions and instead focus on the underlying needs, it is possible to reconcile the Armenian demand for Mountainous Karabakh to independently govern itself and the Azerbaijani demand for preservation of its territorial unity. This is possible through various forms of power-sharing, especially in its territorially-based federal form, which would exclude the possibility of subordination while still preserving interna-tional borders.

In Azerbaijan and Armenia, which traditionally have perceived themselves as unitary states, there is a significant lack of knowledge on federalism, which encompasses constitutional, institutional and procedural arrangements. In gen-eral, under federalism the public authority is constitutionally divided between national and constituent regional units, which have exclusive and shared compe-tencies.12 In the context of the Karabakh conflict, applying federalism to state governance would imply the creation of a system in which sovereignty would be constitutionally divided and shared between national and constituent political units, each of which would have exclusive competence on issues directly affect-ing them and shared competence on issues of common concern. This governance would allow for the maximum level of self-rule for Mountainous Karabakh, while still preserving the territorial integrity of Azerbaijan.

However, federalism can serve as a conflict resolution tool only if it provides effective channels of communication and incentives to communicate by binding the interests of the former foes and transforming them into allies. Keeping this in mind, it is very important not to repeat the mistakes of federalism attempts in Cyprus (1960–1963) and Bosnia-Herzegovina (post 1995). The common nega-tive feature of these power-sharing arrangements was that they did not provide enough incentives for the conflicting ethnic groups to cooperate in common governing structures. The political elites could isolate themselves from common structures, the competencies and decision-making of which were very narrow, and instead, focused on decision-making in their respective entities, in which

12) Although Azerbaijan is declared a unitary state according to its Constitution, it interestingly has some elements of federalism embedded in state governance: the Nakhichevan Autonomous Republic has its own constitutionally-provided set of competencies.

T. Huseynov / International Negotiation 15 (2010) 7–31 27

they had self-rule. As a result, these power-sharing arrangements quickly became ineffective, dysfunctional and could even cease to exist.13

If the power-sharing in Mountainous Karabakh is constructed on a bilateral level between the Karabakh Armenians and the Azerbaijani government, there would be no incentive for the Karabakh Armenians to move forward from the original, rigid consociational model towards a more balanced mix of self rule and shared rule. Furthermore, such an arrangement would leave the Karabakh Azeris’ concerns unaddressed and would seriously impede their prospects of return to Mountainous Karabakh, thus ignoring a serious source of conflict.

Despite the generally shaky situation of federalism in present-day Bosnia, the Bosnian experience actually provides useful insights on how to solve this prob-lem. Territories with a mixed population are divided into mostly homogenous municipalities, which may have varying degrees of self-rule, depending on the overall pattern of power-sharing. This means that the advantages of self-gover-nance are extended to the territorial community without disintegrating the pol-ity (which is commonly a state, but also may be a particular region).

Applied to the Karabakh case, this would imply that the Karabakh Azeris, most of whom originate from the Shusha province, would have the right to return to their homes and their relations with the Karabakh Armenians would similarly be based on power-sharing arrangements. In this case, power-sharing needs built-in flexibility and necessitates establishing an analogous power-sharing between the Armenian and Azeri communities of Mountainous Karabakh like the one that would exist between the Karabakh Armenian authorities and the Azerbaijani government. Thus, both parties’ aspirations to greater influence in Mountainous Karabakh would find a middle ground: the Karabakh Armenians would not be interested in retaining extreme consociationalism on the verge of partition, because it would mean the retaliatory partition of Azeri populated territories. Similarly, the Azerbaijani government would not be interested in extremely integrative arrangements verging on majoritarian rule, because in doing so, it would endanger the position of the Karabakh Azeri minority in Mountain-ous Karabakh. The result of such institutional design would be a balanced mix of consociational and integrative elements in power-sharing.

However, there are several shortcomings in federalism, which if not dealt with properly in the context of the Karabakh conflict, may actually lead to fur-ther instability rather than peace. Since the resolution of the region’s conflicts would also imply the restoration of the conflict areas’ multiethnic composition, ethnic federalism will inevitably lead to disputes over ethnic territories. Moun-tainous Karabakh is situated inside of Azerbaijan and was completely surrounded by ethnic Azeri-populated areas. Considering this, the restoration of pre-war

13) See, for example, Marcus Cox, State Building and Post-Conflict Reconstruction: Lessons from Bosnia, Geneva, 2001, http://www.casin.ch/pdf/cox.pdf.

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ethnic demographics, while important for peace, also constitutes a major secu-rity dilemma. Such a power-sharing solution presumes that the Azeri popula-tion would be concentrated in the strategic Shusha and Lachin districts, where Azeris formed an overwhelming majority before the war, whereas the Azeris liv-ing in other parts of Mountainous Karabakh (relatively few in number) would not be able to return to their homes, at least during the initial phases. This may be acceptable for the Azeris, especially considering that most of them would probably not prefer to live in Armenian-dominated areas, at least during the immediate aftermath of the conflict. However, this kind of solution falls short of eliminating the security dilemma for the Karabakh Armenians because of the specificity of geography and ethnic settlement patterns in Mountainous Karabakh.

Integration: An Essential Component

To achieve a stable, sustainable and just solution, intra-state measures such as decentralization and power-sharing could be complemented by inter-state and supra-state measures. More specifically such arrangements could include regional integration, which would establish a comprehensive regional security and coop-eration framework and would exclude the possibility of violent conflict in the future.

In theory, the European Union (EU) represents an interesting model which transforms the underlying causes of the traditional ethno-territorial conflicts, namely disputes over sovereignty, territory and identity. The national boundaries in the EU’s integrative model lose their previous meaning and turn into mere administrative divisions, allowing for free movement of people, goods and ser-vices. Sovereignty increasingly slips away from the national level and concen-trates at sub-national and supra-national levels. The EU model also fosters a sense of multiple identities reflected in the emergence of several complementary, instead of competing, national, sub-national and pan-European identities.

In addition, the process of European integration can be regarded as a long-term conflict resolution effort. Before accession, all candidate countries must fulfill the acquis, which includes, among other principles, compliance with dem-ocratic principles, rule of law, a stable market economy, as well as minority pro-tection and devolution of governance. These large-scale reforms serve as important tools for conflict prevention and resolution. As a report by the Brus-sels-based International Crisis Group writes, “The entire enlargement enterprise could, therefore, be considered as a major long-term structural conflict preven-tion project” (ICG 2001).

Certainly the EU is not free of secession problems, as the lingering but largely non-violent conflicts in Northern Ireland, the Basque country and Cyprus dem-

T. Huseynov / International Negotiation 15 (2010) 7–31 29

onstrate. However, problems notwithstanding, the EU is able to transform the attitudes and behaviors of conflicting parties due to its soft powers and institu-tional framework, which allow for interests to converge in the sub-state, state and inter-state levels.

By applying a similar formula and economic and political integration prac-tices adopted previously by the EU, the nations of the South Caucasus can potentially bind together their interests to such a degree that neither the elites nor public would be interested in further conflict. However, history has shown that regional integration is not possible if not supported and complemented by the parallel process of wider European integration. The region is ridden with too many deep conflicts and rivalries, which disallow any meaningful locally driven integration processes. In this regard, the failure of the short-lived independent Transcaucasus Confederation (1918) and Transcaucasian Soviet Federal Socialist Republic (1922–1936) should serve as examples for policy makers inside and outside the region.

Furthermore, the South Caucasus is a mini-region in a tough area surrounded by major regional players, including Russia which still views the region in its sphere of influence. It is a highly fragmented region which has three secessionist entities (Abkhazia, South Ossetia and Mountainous Karabakh) and two out of three regional states, Armenia and Azerbaijan, are in a state of undeclared war with each other. Unable to independently provide for their own security, both Armenia and Azerbaijan seek to forge alliances with external powers and pit their interests against each other, contributing to the tensions among these external powers. Armenia is part of the Russian-led Collective Security Treaty Organiza-tion (CSTO), which is essentially a military and security structure to counter NATO. Azerbaijan, on the other hand, is closely allied with Turkey, a NATO member. For future sustainable peace and development, it is vitally important that Armenia and Azerbaijan (as well as Georgia) belong to the same security, political and economic alliances to jointly provide for their interests and reduce the possibility of external manipulations.

Conclusion

Even the best ideas corresponding to the underlying needs and interests of the conflict parties will fall onto deaf ears if the conflicting parties fail to find a nego-tiation range, because their perceptions of who is right or who is more powerful are so different. Unfortunately today, Armenians and Azeris find themselves at this dead end, which they cannot escape peacefully unless the international com-munity helps them establish clear rights boundaries to negotiate a solution.

At the same time, the international community cannot force a decision on either Armenians or Azeris nor would that provide for a lasting peace. Ongoing

30 T. Huseynov / International Negotiation 15 (2010) 7–31

negotiations revolving around the basic principles represent the best chance yet to achieve a settlement. However, for them to succeed, both Armenians and Azeris should know that they will not be forced to accept a decision at the end of this process, particularly on the issue of voting to determine Mountainous Karabakh’s status. That final status determination can and should take place in a non-coercive environment and be voted upon by well informed citizens, as stated by the mediators.

Moving the peace process out of deadlock requires a serious shift in the approaches and policies concerning the conflict. It is necessary to change the win-lose attitudes dominant in the region by articulating a common vision, which would lead to common discourse based on common values, needs and aspirations.

Both the conflict parties and the mediators need to understand that the cur-rent status quo over the Karabakh conflict is not sustainable and its further pro-traction only serves to complicate the situation further, thus diminishing chances for a peaceful resolution. The August 2008 crisis in Georgia demonstrated how fragile the status quo can be in a situation of simmering ethno-territorial con-flict. Resumption of hostilities over Mountainous Karabakh represents an even greater security challenge for regional and European security than the one posed by the 2008 war in Georgia.

For a genuine peace process to commence, there is an urgent need to engage elites and the general public in both Armenia and Azerbaijan in an open debate on various sensitive issues, including substantial reforms in their state gover-nance. The road to peace and development lies only in the conscious and informed decision of the people. Civil society, including scholars, and political elites should assume a leadership role that informs and educates people on these issues, so that they can make better decisions for themselves.

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—— “1993 UN Security Council Resolutions on Nagorno-Karabakh.” http://www.un.int/azerbaijan/sec_con_res.htm.

Ward, Brian (2007) “Key Steps in Collaborative Problem-Solving,” http://www.excellence2.com/teamwork/Key_Steps_in_Collaborative_Problem_Solving.shtml