Nagorno-Karabakh. Small war, big mess

A deep-frozen conflict continues to infect the region

ARRIVE in Stepanakert, capital of Nagorno-Karabakh, and nothing suggests it is a war zone. The streets are clean, public buildings refurbished, there is a good hospital, a television studio, casinos, hotels and even a fitness club. The road that links Karabakh to Armenia may be the best maintained in the Caucasus.

In the mind of Karabakh's Armenians, their bitter war to break free of Azerbaijan in the early 1990s, in which some 25,000 people were killed, is won. They have a president, a flag and a small army. “The issue is resolved,” says Gegham Baghdasarian, editor of Demo, a local newspaper. “The people made their statement, then defended it.” But for Azerbaijan, the war is not over. A ten-year ceasefire is holding, just, but thousands of Azerbaijani and Armenian troops face off across minefields. Not only Karabakh, but seven other Azerbaijani regions - 14% of Azerbaijan's area all told - are occupied by the Armenians.

Border blockades imposed by Azerbaijan and its ally Turkey have turned Armenia into a backwater dependent on Iran and Georgia for access to the outside world. Between the two former Soviet neighbours there are no air, road or rail links. Azerbaijan has made sure that a new oil pipeline from the Caspian to the Mediterranean bypasses Armenia. About a million people on both sides were ethnically cleansed from Armenia and Azerbaijan during the conflict. None has returned.

Nor, despite the prosperity in Stepanakert, is life easy for the Armenians running Karabakh. Their “republic” remains unrecognised. It is less an independent entity than an extension of Armenia. The army is deeply integrated with Armenia's, the currency is the Armenian dram, cars have Armenian number plates. Armenian “credits” and gifts from the Armenian diaspora account for Nagorno-Karabakh's good infrastructure.

Shusha, near Stepanakert, illustrates the problem. Once one of the most charming places in the Caucasus, it is now a ghost town of gutted buildings and overgrown graveyards. Its Azeri population is gone. Many inhabitants are Armenian refugees from Azerbaijan, living wretchedly in what remains of ransacked apartments. Filip Noubel, an analyst at the International Crisis Group, says that renewed war is unlikely. But, he adds, the stand-off is being manipulated by both governments, undermining democracy in both countries.