Nagorno-Karabakh

On 27 September, 2020, the conflict between Azerbaijan and the self-proclaimed republic of Artsakh (supported by Armenia) escalated to a full-blown war in the disputed region of Nagorno-Karabakh.

While the Karabakh region is internationally regarded as part of Azerbaijan, Armenian forces had been the de facto controllers of the region since the the dissolution of the Soviet Union (1988-1991).

And making the matter more complicated is the fact that since the Soviet period, the region has been mainly inhabited by ethnic Armenians.

A few third-party countries were dragged into the conflict; Turkey, which has a strategic alliance with Azerbaijan due to cultural, religious, and linguistic similarities, offered Baku diplomatic support and provided Azerbaijan with military equipment, including unmanned aerial vehicles (UAVs).

Russia, meanwhile, tried to assume the role of a mediator, and finally it was in Moscow that a ceasefire treaty was signed by President Ilham Aliyev of Azerbaijan and the Armenian Prime Minister Nikol Pashinyan in the presence of Vladimir Putin, who also inked the treaty.

As per the ceasefire treaty, Russia also dispatched 2,000 peacekeeping troops to the region.

Iran, another country which borders both Azerbaijan and Armenia, and which has a sizeable Azeri population as well as an Armenian minority, remained neutral throughout the hostilities, though their were claims that Iran was offering some help to both sides.

Many believe that Azerbaijan was the clear winner of the Nagorno-Karabakh war of 2020, as Azerbaijan took control of several towns and cities, including Zangilan, Gubadli, Jabrayil, Fuzuli, and—above all—the strategic city of Shusha, which in addition to being of cultural importance to both sides, had been used as a supply route by Armenian fighters.

Further districts including Agdam, Kalbajar, and Lachin were also evacuated by Armenian forces between 20 November and 1 December. However, Azerbaijan’s victory was celebrated well before the handover of the lands on November 10, 2020, in Baku.

For weeks, Azeri and—quite often Turkish—flags were waved by crowds attending the celebrations.

Now that the war is over and Azerbaijan has taken control of Shusha and its surrounding territories, the region’s reconstruction is of utmost importance to Baku, especially as much of the Karabakh region had come to resemble ghost towns and ruins long before this latest conflict.

Not surprisingly, several weeks of trench warfare and the exchange of fire by artillery has had a devastating effect on Karabakh’s already poor infrastructure.

It is estimated that up to 6,000 private properties, 950 civilian infrastructure units, and over 120 residential complexes were destroyed or damaged beyond repair during the hostilities.

Quite probably, the newly gained territories are going to see a construction boom in the coming years, mainly because rapid development in Karabakh will have symbolic significance for Baku.

Azerbaijan and Armenia have markedly different economies: Azerbaijan enjoys a per capita GDP of USD17,000-20,000, whereas the figure for Armenia is hovering around USD4,000. As such, Karabakh will probably see substantial economic development under Azerbaijani governance.

Chances are that Turkish companies will play a role in the reconstruction of Karabakh. Turkey is home to over a dozen construction giants, which emerged during the country’s construction boom in the 2000s. There are some 44 Turkish construction firms among the world’s top 250 international contractors, according to the Engineering News-Record (ENR).

With the cooling down of the construction boom in their home country, Turkish contractors have been on the lookout for businesses opportunities abroad. Companies such as Ronesans, Limak, Tekfen, TAV, Yapi Merkezi, Ant Yapi, and Enka have already ventured abroad, bidding for ambitious projects from Qatar to Malaysia. Some of these companies will likely be eager to also take up the reconstruction of Karabakh in their oil-rich ally and neighbor, Azerbaijan.