The former war between Armenia and Azerbaijan in the South Caucasus caused a catastrophic effect in the region. After the first Karabakh war, Armenia occupied twenty percent of Azerbaijani territories, and the whole infrastructure was destroyed in the occupied regions. The war has also claimed thousands of lives and about one million Azerbaijani people became refugees and internally displaced persons (IDPs).

The second Karabakh war, named “Operation Iron Fist” has started on September 27 when Azerbaijan decided to launch counter-offensive military operations against separatists. The full-scale military operations were completely different from the first Karabakh war. Armenia and Azerbaijan used different military tactics on the battlefield. Despite the stories about strong Armenian forces and the famous “Ohanyan line”, military forces of Azerbaijan destroyed that myth and liberated the occupied regions. During the military operations, the Azerbaijani army used modern unmanned aerial vehicles (UAV)s such as the Israili Harop, the Turkish Bayraktar TB2 and Azerbaijani made “Zarba”. The tactics of the Azerbaijani army were so effective on the battlefield that the Armenian army suffered heavy losses in personnel and military equipment. As a result of the liberation of Shusha city on November 8, an agreement was signed between Armenia, Azerbaijan and Russian Federation to end the bloody war on November 10.

The scale of destruction of the Azerbaijani regions became clear after 44-day war. When officials from Azerbaijan visited the liberated territories, the scale of destruction was appalling. During his visit to Agdam President Ilham Aliyev underlined “There is not a single safe building here. Everything is destroyed. They have destroyed our houses and villages, they exploited our lands”. There was not even a single building to raise the Azerbaijani flag after liberation. Agdam city after destruction looked like Hiroshima in Japan after the nuclear attack.

Now when we analyze the scale of destruction by Armenia, it is worth noting that the socio-economic damage for Azerbaijan is huge.

Table 1: Destruction and Damages (1988-1993)

Source: http://anama.gov.az/en/nagorny-karabakh-conflict

As one can see from the table above, Azerbaijan suffered enormous socio-economic damage.  Apart from infrastructure damages, the occupied territories of Azerbaijan represent a large agricultural region and have large forest areas. Around 70 percent of the summer pastures of Azerbaijan belong to those regions. Those regions had strong progress in agricultural production and productivity growth. However, all those production facilities destroyed or devastated. Kalbajar and Lachin districts have the largest forest areas. Karabakh region had the largest number of industrial and construction enterprises. The Aghdam and Fizuli regions used to take second place in industry and construction. Today is very clear that the agricultural and tourism potential of these regions is very important, which will support the non-oil sector of Azerbaijan, and will have a positive effect on sustainable development.

The illegal economic activities carried out by Armenia and the third states in the occupied territories violated the core principles of international law. Companies from France, Canada and Switzerland carried out illegal mining activities in the occupied regions of Azerbaijan. It should be highlighted that Vartan Sirmakes, co-founder and CEO of the Franck Muller Group carried out illegal gold mining operations in the occupied territories. 

However, all the above mentioned economic damages do not show the whole picture, thus detailed calculation of the war damages caused by Armenia is highly important. Azerbaijan has the list of devastated and destroyed infrastructures, production facilities and cultural heritage in the occupied regions. In addition, the country is cooperating with international organizations and experts to calculate war damages, as well as is preparing a lawsuit for compensation from Armenia. 

In the end, the Armenian aggression caused both human suffering and economic losses for Azerbaijan. Today, during the post-war period, Azerbaijan started the reconstruction process of the liberated territories. The reconstruction process will take several years, and huge investments will be needed to re-build destructed towns and villages.  The government announced to allocate AZN 2.2 billion from 2021 years state budget for restoration and reconstruction works. It should be also noted that Azerbaijan will attract foreign companies for reconstruction works. As noted by President Ilham Aliyev “We will work on the liberated lands with companies from friendly countries”. It is obvious that the companies of the countries which supported the Azerbaijani position during the second Karabakh war will participate in this process. Azerbaijan has already signed contracts with Turkish and Italian companies. Italian company Ansaldo Energia will construct energy infrastructure in the liberated regions. This is important step for cooperation, and this process will continue with other friendly states.

Shahmar Hajiyev, Leading Advisor at the Baku-based Center of Analysis of International Relations (AIR Center), specially for News.Az