Getty Images/ Nick Donaldson
Getty Images/ Nick Donaldson
Getty Images/ Nick Donaldson
Getty Images/ Nick Donaldson


Armenia and Azerbaijan have taken a new route in their quest for peace


Benyamin Poghosyan
Lara Setrakian
  • English
  • Arabic

July 18, 2025

Political scientists and wider civil society from Armenia and Azerbaijan don’t often see eye to eye. After decades of war between the two countries their grievances run deep, with each side blaming the other for continued rounds of conflict.

But experts in Yerevan and Baku can now agree on one thing: the meeting held in Abu Dhabi on July 10 between their heads of government was a moment of respite for the South Caucasus. After months without a major meeting between the two sides (the leaders met briefly at the margins of the European Political Community summit in Tirana in May), Abu Dhabi was able to host their most comprehensive gathering in known history, attended by representatives who cover all key aspects of the Armenia-Azerbaijan peace process.

Still, expectations should be managed. The two sides may yet be very far from signing a peace agreement, though a draft was announced earlier this year. There are thorny issues, like border demarcation, that remain unresolved. And there are competing visions for how the future of transport links should evolve. Nonetheless, the Abu Dhabi meeting has revived the diplomatic track, giving new hope for peace and stability, while calming fears of an imminent outbreak of war.

The risk of military escalation has come down considerably; as recently as December, foreign diplomats in Yerevan predicted that a war between Armenia and Azerbaijan would likely take place by summer. But Abu Dhabi changed the atmospherics and the overall direction of talks.

The risk of military escalation has come down considerably

At a joint dialogue last weekend, Azerbaijani, Armenian and Turkish think-tank experts discussed the impact of the Abu Dhabi dialogue. “There is comfort with the UAE as a benign, trusted facilitator,” reflected one attendee, Ahmad Alili of the Caucasus Policy Analysis Centre in Baku. “It was quite a good start and creates a new precedent for bilateral talks.”

One notable shift was the idea that the road to peace now could run through the global south, rather than the traditional interlocutors in Russisa and the West. Starting in the 1990s, the peace process had been jointly managed by Washington, Moscow and Paris as co-chairs of the OSCE Minsk Group. The arrangement reflected an idealistic notion that gained popularity after the collapse of the USSR that Russia and the West could collaborate to solve problems in the former Soviet republics.

But a new era of intense competition between the US and Russia derailed such thinking. The animosity accompanying the war in Ukraine, in particular, has cast a shadow over the South Caucasus, too. Washington has worked to expand its influence in Armenia and push out Russian influence wherever it could. The US and Russia are hardly able to talk to each other; co-hosting diplomatic initiatives between Armenia and Azerbaijan appears to be out of the question.

Instead, the two superpowers have launched parallel and often contradictory negotiation tracks, jostling for the opportunity to broker a landmark deal that would invariably be shaped to their liking. For Russia, it would be a deal that gave Moscow privileged influence over new transit routes and border crossings between Armenia and Azerbaijan – if their currently sealed border were to re-open.

The US, in contrast, would want to shape a deal that minimises Russia’s role in the region across multiple spheres. That would include much less reliance in Armenia on the Russian troops patrolling its borders with Iran and Turkey, as well as the Russian military base that has been in the country since the 1940s to maintain peace and stability. Were it to oversee a peace deal between Armenia and Azerbaijan, which would also likely unfreeze relations between Armenia and Turkey, Washington would likely shape a new regional order in Russia’s backyard. That setup would seamlessly connect Europe and Turkey, a Nato ally, to Central Asia.

These are the stakes in an Armenia-Azerbaijan peace deal, and they illustrate the extent to which the South Caucasus could see a step change in any deal – even one brokered without superpower involvement. Stability begets development, and with a much-needed calm in the South Caucasus the peace dividend would be significant. Over time, trade routes that run from East-to-West and North-to-South could shorten transit times across key geographies. After the recent turbulence and conflict dynamics in Iran, this would provide the region with an undergirding of stability.

The talks in Abu Dhabi were also a remarkable first for direct diplomacy. It was the first major public meeting in which Azerbaijani President Ilham Aliyev and Armenian Prime Minister Nikol Pashinyan engaged in extended one-on-one talks, without Russians, Americans or any other third-country nationals in the room. This was a key demand for Azerbaijan, which has long wanted to deal with its neighbour on a bilateral basis. This may favour Baku given the imbalance of power between the two states – Baku has far greater military and energy resources to hand – but Armenia still benefits from the process. Yerevan is much better off with direct talks than with a complete break in the peace process, as it staves off the steep cost of armed conflict.

Short-term success in the Armenia-Azerbaijan peace process may be elusive. One of Azerbaijan’s preconditions for signing a deal has been a change in the text of Armenia’s constitution, eliminating references to the Armenian declaration of independence adopted in 1990. That would require a public referendum that could take place in June 2026, at the earliest, when a government panel is expected to submit a draft for a new constitution.

But there could be flexibility around even this sticking point. Having a revived process is already a major step forward, enabling parties to craft new solutions to their old concerns. During a press conference in Yerevan on Wednesday, Mr Pashinyan mentioned that the preliminary signing of a peace agreement was discussed in Abu Dhabi. This reinforces that the meeting has put the peace process on stronger footing.

Holding talks in the light of Abu Dhabi makes it more likely that Armenia and Azerbaijan will find their way forward, as it highlights the opportunity that lies ahead if they can prioritise the future over the past. Global powers interested in the development of the South Caucasus should continue to deliver a clear message: stability will bring prosperity to Armenia and Azerbaijan, and the time for military escalation is over. Armenia has shown its willingness to make steep concessions for the sake of peace. Azerbaijan should be satisfied by its victories in 2020 and 2023, pivot toward an orientation toward peace and use this unique opportunity to turn the page on the animosity in the South Caucasus.

Lara Setrakian is an award-winning journalist, social entrepreneur and co-founder of the Applied Policy Research Institute (Apri) of Armenia

Benyamin Poghosyan is a senior research fellow at Apri and former director of Armenia’s Ministry of Defence think tank

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Jordan cabinet changes

In

  • Raed Mozafar Abu Al Saoud, Minister of Water and Irrigation
  • Dr Bassam Samir Al Talhouni, Minister of Justice
  • Majd Mohamed Shoueikeh, State Minister of Development of Foundation Performance
  • Azmi Mahmud Mohafaza, Minister of Education and Minister of Higher Education and Scientific Research
  • Falah Abdalla Al Ammoush, Minister of Public Works and Housing
  • Basma Moussa Ishakat, Minister of Social Development
  • Dr Ghazi Monawar Al Zein, Minister of Health
  • Ibrahim Sobhi Alshahahede, Minister of Agriculture and Minister of Environment
  • Dr Mohamed Suleiman Aburamman, Minister of Culture and Minister of Youth

Out

  • Dr Adel Issa Al Tawissi, Minister of High Education and Scientific Research
  • Hala Noaman “Basiso Lattouf”, Minister of Social Development
  • Dr Mahmud Yassin Al Sheyab, Minister of Health
  • Yahya Moussa Kasbi, Minister of Public Works and Housing
  • Nayef Hamidi Al Fayez, Minister of Environment
  • Majd Mohamed Shoueika, Minister of Public Sector Development
  • Khalid Moussa Al Huneifat, Minister of Agriculture
  • Dr Awad Abu Jarad Al Mushakiba, Minister of Justice
  • Mounir Moussa Ouwais, Minister of Water and Agriculture
  • Dr Azmi Mahmud Mohafaza, Minister of Education
  • Mokarram Mustafa Al Kaysi, Minister of Youth
  • Basma Mohamed Al Nousour, Minister of Culture
PROFILE

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Terror attacks in Paris, November 13, 2015

- At 9.16pm, three suicide attackers killed one person outside the Atade de France during a foootball match between France and Germany- At 9.25pm, three attackers opened fire on restaurants and cafes over 20 minutes, killing 39 people- Shortly after 9.40pm, three other attackers launched a three-hour raid on the Bataclan, in which 1,500 people had gathered to watch a rock concert. In total, 90 people were killed- Salah Abdeslam, the only survivor of the terrorists, did not directly participate in the attacks, thought to be due to a technical glitch in his suicide vest- He fled to Belgium and was involved in attacks on Brussels in March 2016. He is serving a life sentence in France

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

Updated: July 20, 2025, 6:29 AM