Black Garden : Armenia and Azerbaijan Through Peace and War

1994 – 2001 
No War, No  Peace 
ALIEV’S STABILITY 
In May 1994, both Armenia and Azerbaijan entered a state of frozen 
conflict, in which mass violence had ended but the political dispute was 
unresolved. Armenia spent the next few years in continuous political 
turbulence; Azerbaijan, unable to develop peacefully, was condemned 
to the suffocating order imposed by Heidar Aliev. 
President Aliev used the end of fighting to begin stamping his con­
trol on Azerbaijan. He gradually cleared the field of actual or would-be 
opponents, beginning with the army. In August 1994, a group of army 
commanders, including the former defense minister Rahim Gaziev and 
the Popular Front commander Arif Pashayev, were put on trial for al­
legedly having surrendered Shusha to the Armenians two years before. 
In October 1994, the president was in New York when he heard that 
assassins had killed the deputy speaker of parliament, Afiyettin Jalilov, 
and that elements of the paramilitary police force, the OPON (successor 
to the OMON), were in revolt. Aliev hurried back to Baku, where, with 
theatrical suddenness, he turned on Prime Minister Suret Husseinov 
and accused him of plotting to seize power. Husseinov fled to Russia to 
join Gaziev, who had mysteriously escaped from prison. In Moscow, the 
two men revealed where their deep loyalties lay by declaring support 
for the former president Mutalibov. Later both men were extradited to 
Azerbaijan and given long prison sentences. 
Having dealt with the pro-Russian opposition, Aliev turned on a 
different set of enemies. In March 1995, the OPON leader, Rovshan 
Javadov, who had been cleared of involvement in the previous coup at-
tempt, seized a barracks in Baku and refused calls to disarm. Aliev sent 
in government troops to quell the rebellion. Dozens of men were killed, 
including Javadov, who died of blood loss on his way to hospital. The 
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shadowy backers of this uprising were never identified but appear to 
have included rogue elements of the Turkish security establishment 
and members of the “Gray Wolves” Bozkurt movement. Among those 
arrested and jailed this time was the local Bozkurt leader and former in­
terior minister, Iskender Hamidov. 
By now Aliev had acquired a priceless strategic card to play in his 
drive to stabilize his country in Azerbaijan’s oil resources. In 1994, some 
experts began to predict another Baku oil boom. Some initial predic­
tions that the Caspian Sea could be a new Persian Gulf were wildly op­
timistic, but more sober assessments suggested that it could at least be-
come a second North Sea and eventually provide as much as 5 percent 
of world oil output. 
In 1993, shortly before he was overthrown, Azerbaijan’s then pres­
ident, Abulfaz Elchibey, had been negotiating contracts with Western 
companies to develop Caspian oil fields. The talks resumed under Aliev 
but were hampered by demands for bribes by Azerbaijani officials (one 
reportedly asked BP [British Petroleum] for a 360-million-dollar down 
payment in return for a signature on the contract). In the autumn of 
1994, the government eventually signed a contract to develop three oil 
fields with a consortium of companies that had joined together to form 
the Azerbaijan International Operating Company (AIOC). The deal was 
estimated to be worth eight billion dollars and was dubbed the “con-
tract of the century.” 
The Azerbaijani president worked on building a broad interna­
tional coalition of support for the new oil projects. Initially, Russia was 
central to his plans. He assumed that the oil would flow through Russ­
ian pipelines and the Russian oil company Lukoil was given a 10 per-
cent stake in the AIOC consortium. However the lion’s share of the 
consortium belonged to Western companies, especially BP and Amoco, 
who began to change Aliev’s political agenda. At American insistence, 
Aliev had to withdraw an offer of a 5 percent stake in the AIOC to the 
Iranians. 
The AIOC was a success. Perhaps the high point of Aliev’s presi­
dency came in November 1997, when, observed by guests from all over 
the world, the first “early oil” began to flow from the Chiraq field to the 
Georgian Black Sea port of Supsa. The ceremony, sending oil to Georgia 
rather than Russia, also marked Aliev’s full embrace of the West. Three 
months before, he had made a highly successful visit to Washington, 
where the Brezhnev-era veteran was feted by such former Cold War-

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riors as Zbigniew Brzezinski and Henry Kissinger. A new goal had been 
identified to cement this relationship: a main export pipeline running 
from Baku to the Turkish Mediterranean port of Ceyhan, to be com­
pleted in 2004. From 1997, the U.S. government began to give the Baku-
Ceyhan project strong political support, despite the misgivings of some 
oil companies that its commercial viability was not proven. The pipe-
line project became a symbol of Washington’s desire to link Azerbaijan 
and Georgia to the West via Turkey and to contain both Russia and Iran. 
By doing so, it polarized Armenia and Azerbaijan in a new way, pulling 
Azerbaijan closer into Washington’s orbit and pushing Armenia further 
into alliance with Russia and Iran. 
MEDIATING RIVALS 
Although the May 1994 cease-fire agreement in Nagorny Karabakh 
held, no international force was deployed to monitor the front line and 
no political agreement followed. The most the mediators could achieve 
was a renewed agreement by the military leaders of Armenia, Azerbai­
jan, and Karabakh on 26 July—putting their signatures to the same 
piece of paper for the first time—to uphold the cease-fire indefinitely. 
Both sides slowly fortified their defenses, turning the front line into 
one of the most inpregnable borders in the world. For the whole length 
of the front outside Nagorny Karabakh, there was not even a telephone 
line between the opposing commanders, mainly because the Azerbaija­
nis feared that even this level of contact would give legitimacy to a force 
occupying its lands. Several dozen soldiers a year continued to die on 
both sides, although they were as much the victims of mines or acci­
dents as of enemy fire. A gradual easing of tension was reported over 
time, however. In 2000, the Armenian defense minister Serzh Sarkisian 
reported that the number of Armenians killed by sniping across the line 
had fallen to eight that year, down from thirty-three in 1998. The figures 
were doubtless similar on the other side.
1 
Speaking six years after the cease-fire agreement, one of the veteran 
negotiators, Armenian Foreign Minister Vartan Oskanian, regretted 
that chances were missed in 1994: 
That momentum was not utilized. So once that was not utilized, with 
the passing of time, some of the realities on the ground suddenly 

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began to be liabilities. It was much easier to return the occupied terri­
tories two months after the cease-fire than it is today. It was much eas­
ier to lift the blockade for Azerbaijan right after the cease-fire than cer­
tainly it is today. And the same applies for all the other elements.
2 
A central reason the lack of progress was the fact that Azerbaijan 
feared the intentions of the leading negotiator, Russia. After the cease-
fire, Azerbaijan rejected Grachev’s proposed Russian-led peacekeeping 
force. With Azerbaijan’s support, the Western diplomats of the Minsk 
Group, none of whom were invited to Grachev’s May 1994 meeting in 
Moscow, argued that any peacekeeping force had to be multinational. 
The trouble was that the CSCE lacked the mechanisms to set up such a 
force. Moreover, the West was heavily preoccupied with Bosnia, and it 
was unlikely that Western countries would wish to commit troops to 
police an even more remote conflict zone. 
As a result, in 1994 relations between Russia and the Westerners 
in the Minsk Group, hit a new low. The Russians accused the Minsk 
Group of trying to sabotage the only serious peace initiative on offer; 
the Westerners accused the Russians of trying to wreck the formation of 
a broader-based alternative plan. 
Each side worked against the other. The Russian mediator, Vladi­
mir Kazimirov, says that before the cease-fire the Swedes twice sched­
uled meetings of the Minsk Group, in Paris and Prague, that clashed 
with CIS meetings in Moscow at which the Russians were intending to 
hold peace talks. He saw this as a direct attempt to undermine the Russ­
ian mediation track. The quarrel worsened. The Minsk Group media-
tors complained that the Russians had convened talks in Moscow for 8 
September without informing them. For their part, the Russians ob­
jected that the CSCE had deliberately put forward a Minsk Group meet­
ing in Vienna to 12 September, when they were planning more negotia­
tions in Moscow. The Russians did not send a representative to the Vi­
enna meeting.
3 
These disputes led the Armenian president, Levon 
Ter-Petrosian, to grumble that “the impression is created that the medi­
ating countries and international organizations are not interested so 
much in settling the conflict, as in settling their own accounts and rela­
tionships, which are unconnected with it.”
4 
The two sides struggled toward a compromise arrangement to be 
approved at the CSCE summit in Budapest in December 1994. The plan 
was to give the organization a mandate to create its first-ever interna-

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tional peacekeeping force, specifically for Nagorny Karabakh, in which 
the Russians would play a major, but not an exclusive, part. 
Azerbaijan seized this opportunity. The Russians had invited both 
presidents to come to Moscow before the Budapest meeting. The Azer­
baijanis sent their deputy foreign minister, Tofik Zulfugarov, ahead to 
elucidate what the agenda of the Moscow talks was to be. Zulfugarov 
says that he concluded the Russians were trying to undermine the 
coming agreement in Budapest. Aliev therefore pleaded illness and 
did not come to Moscow, causing Ter-Petrosian to stay away as well. 
According to Zulfugarov: “If they had flown to Budapest from [Mos­
cow], no decision on deploying an international force would have 
been worked out.”
5 
At the Budapest summit on 5–6 December 1994, the CSCE turned 
itself into the Organization for Security and Cooperation in Europe, the 
OSCE. Aside from Nagorny Karabakh, relations between Russia and 
the West were good, and Western leaders reaffirmed their support for 
President Yeltsin just as he was fatefully preparing to send his army into 
Chechnya. Over Karabakh, the OSCE acknowledged Russia’s special 
role in the dispute by promoting it to become one of two cochairs of the 
Minsk Group, alongside Sweden. The OSCE then secured a mandate for 
its new peacekeeping force. There would be three thousand men, with 
no single country providing more than 30 percent of the total, but the 
force would be deployed only with the UN’s approval and when a po­
litical settlement was reached.
6 
In fact, a political settlement looked as remote as ever. The two 
sides had fundamental disagreements on several key issues. The Ar­
menians were ready in principle to see the return of five regions they 
occupied outside Nagorny Karabakh—Aghdam, Fizuli, Jebrail, Kelba­
jar, Kubatly, and Zengelan—if they had satisfaction on other issues. 
But they said that their continued possession of Shusha, inside Na­
gorny Karabakh, and Lachin, giving them a land bridge to Armenia, 
was non-negotiable. For Azerbaijan, the loss of both regions was unac­
ceptable. Azerbaijan also still refused to hold direct talks with the 
Karabakh Armenians. 
The most vexing problem remained the future status of Nagorny 
Karabakh itself. A resolution of the issue had to reconcile the competing 
claims of Azerbaijan’s territorial integrity and Karabakh’s self-determi­
nation (or, in blunter language, de facto secession). In 1995, a second 
channel of negotiations was set up between the special advisers of the 

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Armenian and Azerbaijani presidents, Gerard Libaridian and Vafa Gu­
luzade. They began to meet informally every month to work on the sta­
tus question in particular and made substantial progress. 
In December 1996, the OSCE held another summit, in Lisbon, 
which strengthened the Azerbaijani position. The OSCE decided to set 
out three broad principles for the resolution of the dispute. One of them 
was an affirmation of the territorial integrity of Azerbaijan, including 
Nagorny Karabakh. Armenia objected that this predetermined the sta­
tus of Nagorny Karabakh. The Armenians ended up isolated and veto­
ing the inclusion of the principles in the summit’s final communiqué. 
The Lisbon summit effectively ended the Guluzade-Libaridian negoti­
ating track. 
A KARABAKHI TAKEOVER 
After the 1994 cease-fire agreement, Armenia proper and the de facto 
separatist statelet of Nagorny Karabakh began to knit themselves to­
gether. Construction work started on a sixty-four-kilometer road link­
ing the Armenian town of Goris with Stepanakert, replacing the old 
road, whose appalling condition had made travel between Nagorny 
Karabakh and Armenia almost impossible in Soviet times. The new 
highway, which took five years to build, cost ten million dollars, which 
was raised by the Armenian Diaspora. When the finished product— 
broad and asphalted, with white lines, road signs, and crash barriers— 
was completed in 1999, it was a defiant symbol of the marriage of Ar­
menia and Karabakh. The Diaspora also helped rebuild Karabakh’s 
shattered infrastructure and the semidestroyed town of Stepanakert. 
The reconstructed Armenian towns and villages were a striking con­
trast to what were known as Karabakh’s “green villages,” once inhab­
ited by Azerbaijanis but now pillaged and sliding into ruin. 
Nagorny Karabakh’s military success was hailed by Armenians as 
a rare and historic victory. This gave Karabakh and its leaders a heroic 
reputation and great influence in Armenia. Robert Kocharian, the head 
of the State Defense Committee, became Nagorny Karabakh’s first 
“president” in December 1994 after a vote in the local parliament. He 
was reelected, by popular vote, in November 1996. In May 1994, the 
Karabakhi military leader, Samvel Babayan, was made a major-general 
in the Armenian army and began to gather economic and political 

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power beyond Karabakh itself. He helped form a parliamentary party 
named “Right and Accord” to fight the 1999 parliamentary elections in 
Armenia. Babayan was heard to joke that if he did not like what the Ar­
menian government was up to, he would move his tanks on Yerevan. 
The army was now the most powerful institution in Armenia. Offi­
cially, it consumed 8 to 9 percent of the GDP; unofficially, it probably re­
ceived much more than that. It formed the backbone of the “Karabakh