Possible Developments in Karabakh

According to Oxford Analytic that conducts international research, the conflict in Karabakh, which is a serious obstacle to safety and stability in the South Caucasus, could move into a conflict that would be very bloody and dangerous, if any of the countries like, Russia, Iran, or Turkey were to get involved. It could be much more devastating than the Russian-Georgian August war in 2008. There will be a direct threat to the Baku-Tbilisi-Ceyhan pipeline, as well as other oil or gas pipelines. The possible military developments might impose serious threat to the air corridor of US and NATO operations in Afghanistan, in which supplies of military cargo pass through Azerbaijani airspace. Georgia will be definitely touched by the conflict; possible military developments will hinder further democratic reforms in Armenia and Azerbaijan.

Oxford Analytic suggests that Baku is frustrated with peaceful negotiations, as the confrontation on the bordering regions sometimes takes on a bloody character and there are casualties. The Russian brokered meeting in Kazan between the presidents of Azerbaijan and Armenia brought no results there is more and more speculation in Azerbaijan about the possibility of military solution of the conflict. Azerbaijan spends more and more money on its military budget. In 2004, Baku spent for defense reasons only USD 175 million, while in 2011, the amount spent for these means reached USD 3.3 billion. This is about twenty percent of the entire budget. The research of Oxford Analytic suggests however that Azerbaijani military expenditure is not enough and the level of the Azerbaijani armed forces is not commensurate with the money spent.