As you know, Turkey and Armenia have signed a protocol on the development of bilateral relations and a protocol on the establishment of diplomatic ties in Zurich. Will the signing of these documents and the opening of the Armenian-Turkish border have any impact on the situation in the South Caucasus, considering the unresolved conflict over Nagorno-Karabakh?

According to what Turkey has told Azerbaijan, Ankara will not open its border with Armenia until the Nagorno-Karabakh issue between Armenia and Azerbaijan is resolved or has made substantial progress.

However, the protocols signed between Armenia and Turkey have yet to be ratified by both country's parliaments and could still face potential deadlock, particularly in Armenia. That said, the signing of the protocols was significant, if only symbolically, but may serve to further ignite tensions in the South Caucasus rather than resolve them.

There is still much concern from Baku that Ankara could go forward with Yerevan without waiting for the issue of Nagorno-Karabakh to be decided. If this does occur, Baku will feel not only betrayed by Ankara, but will look for some ways in which to cut many of its ties to Turkey, including energy links.

You also know that the signing ceremony almost collapsed at the last moment, as the foreign ministers of Armenia and Turkey were not able to agree on the final statements. But the intervention of Russian Foreign Minister Sergey Lavrov, who openly pushed his Armenian counterpart to sign the protocol, saved the day. What interests is Moscow pursuing in the normalization of Armenian-Turkish relations?

Moscow is ultimately pursuing only one set of interests: its own. While Russia is not fundamentally opposed to an agreement between Turkey and Armenia, it will only support the process as long as its interests in the region, including widespread influence in Armenia and maintaining a defensive flank around Georgia, remain intact.

In fact, it has served Moscow's interests that Azerbaijan has been threatened by a potential deal between Turkey and Armenia without the Karabakh issue being resolved, in that is has brought Baku closer to Moscow. This can be seen in the natural gas deal recently signed between the two countries.

Overall, Russia is interested in keeping its hold on Armenia, deepening its relationship with Azerbaijan and then increasing the pressure on Georgia.

The signing of the protocols has significantly cooled the relations of strategic partnership between Turkey and Azerbaijan. And the first result was that Azerbaijani President Ilham Aliyev said Baku had failed to agree with Ankara on the transit of Azerbaijani gas. And now Azerbaijan is viewing Russia as one of the alternative routes for its gas transit. Thus, the Nabucco pipeline project is losing its significance and South Stream, initiated by Moscow, is, on the contrary, gaining ground. Don't you think that the Kremlin is interested in the cooling of relations between Turkey and Azerbaijan in order to put an end to Nabucco and encourage Europe to implement South Stream?

Both South Stream and Nabucco share similar characteristics in that they are extremely ambitious projects that are both technologically difficult and very expensive.

Of course Moscow would like to see South Stream being pursued by Azerbaijan, Turkey, and others over the Nabucco project which in its very purpose is designed to bypass Russia. But these projects, for the moment, are more about political alignments rather than reaching concrete deals, and Moscow is certainly interested in relations cooling between Turkey and Azerbaijan to that extent.

Commenting on the signing of the protocols, the president of Azerbaijan said the opening of the Armenian-Turkish border might change the Nagorno-Karabakh status quo. Do you think Azerbaijan and Armenia may resume hostilities? If yes, which of the said countries has the greater chance of winning?

The problem with the concept of resumed hostilities between Armenia and Azezrbaijan is that neither state feels they are prepared for war. Both understand that they have fundamental issues with their militaries in which war would be a challenge - especially one in the tough terrain of Nagorno-Karabakh.

That said, should hostilities resume anyway, Azerbaijan's military has been building up now with a state annual budget of over $1 billion a year versus Armenia's $250 million. Azerbaijan has been purchasing new arms and equipment.

But the problem is that Azerbaijan has not spent the money on training - the greatest hindrance for the Azerbaijani military at this moment.

So, for the time being, both sides will try to prevent the resumption of hostilities or war, but both would be willing to test said challenges should the other side provoke the situation.

Is resolution of the Karabakh conflict realistic? Which countries benefit from the "frozen conflict"? And why is the status quo profitable for the superpowers?

There is actually a pretty viable solution on the table for the resolution of Nagorno-Karabakh in which Armenia would withdraw its military and political support for the region, Azerbaijan in turn would grant Nagorno-Karabakh special autonomous status and a corridor between the two states would be opened for Armenians and Nagorno-Karabakh citizens could freely move between the two states.

However, Baku, Yerevan and those inside of Nagorno-Karbakh have yet to sign on to such an agreement.

 There are two scenarios for countries that benefit from this:

1) As long as Turkey holds to the agreement with Azerbaijan not to normalize relations with Armenia until the Nagorno-Karabakh situation is resolved, then Baku benefits because it prevents Armenia from leaving the negotiation table.

2) Russia benefits from most scenarios in this situation, but should things remain frozen, Moscow will always have a role as mediator between all these states.

B.A.
News.Az
http://www.stratfor.com/