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Economic Integration of the South Caucasus

Position Paper June 2002


The FY 1998 House Conference report calls for "restoring transportation, telecommunications, and other infrastructure that promote regional and economic integration" in the South Caucasus. The government of the Nagorno Karabakh Republic (NKR) shares the vision of the U.S. Congress, and is committed to participating in joint infrastructure development projects that promote prosperity for all the peoples of the region. Moreover, we believe that economic cooperation between the NKR and Azerbaijan can serve as an effective confidence building measure, helping to create interdependence and bringing lasting peace to the region.

Unfortunately, Azerbaijan disagrees with the U.S. Congress and Turkey unequivocally supports Azerbaijan. By continuing their illegal dual blockade of Armenia and the NKR, now in its twelfth year, they deny the region a chance for peaceful, stable co-existence. Moreover, Turkey and Azerbaijan are attempting to exclude Armenia and Nagorno Karabakh from regional infrastructure and communication projects. The obvious intent is to isolate and weaken Armenia and the NKR.

This position is most apparent in the Baku-Ceyhan pipeline project. Azerbaijan insisted on bypassing the cost effective NKR and Armenia route in favor of the commercially more expensive and longer Baku-Tbilisi-Ceyhan route. This politically driven route selection has the potential of fostering greater regional instability and dividing the nations of the region into polarized east-west and north-south rivals.

The government of the Nagorno Karabakh Republic believes that well-designed economic integration of the South Caucasus will lead to peace and economic viability for all countries of the region. We are optimistic that the precedent of peace and cooperation such as that established in Europe following the World War II, can be applied to the parties of the Nagorno Karabakh conflict with similar results.


Natural resources and traditional transportation routes in the Caucasus should be harnessed to promote peace. An economically integrated South Caucasus will bring stability and economic

prosperity for all the people in the region. Economic cooperation between the NKR and Azerbaijan, an excellent confidence building measure, can also promote the resolution of the Nagorno Karabakh conflict. The government of the NKR welcomes initiatives within the U.S. Congress to urge and encourage Azerbaijan to build economic ties with the NKR rather than excluding the NKR and Armenia from regional development and integration projects.


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