The Caucasus Calculus: Trade as a Lever for Geopolitical Realignments
THE ACTORS: Who is involved in this story? Turkey: President Recep Tayyip Erdoğan's government (AKP), leveraging historical grievances and Pan-Turkic ambitions to expand influence in the South Caucasus. Armenia: Prime Minister Nikol Pashinyan's administration, increasingly seeking to balance traditional Russian ties with Western overtures, driven by the perceived diminishing reliability of Moscow
as a security guarantor. United States: The Biden administration, spearheading the 'peace push' through officials like Assistant Secretary of State James O'Brien, aiming to decouple Armenia from Russia and integrate it into a Western-aligned sphere. Azerbaijan: A key ally of Turkey, whose recent military victories against Armenia (e.g., 2020 Nagorno-Karabakh War, 2023 offensive) directly paved the
way for these 'normalisation' talks, dictating terms from a position of strength. Georgia: The transit route for the initial 'direct' trade, highlighting its strategic value as a conduit between the Black Sea and the Caspian region, heavily influenced by Western and Turkish interests. THE FUNDING: Where does their money come from? US Assistance: The US State Department allocates significant
foreign aid to Armenia (~$120 million in FY2023), conditioning it on alignment with US foreign policy objectives and democratic reforms, implicitly reducing Russian dependency. In 2020, the US allocated $24.7 million for Armenia, alongside $118.8 million for Azerbaijan (USAID, 2020). Turkish Investment: Turkish state-backed and private enterprises eye direct trade routes and infrastructural