South Caucasus Countries Research Articles

Enhancing Tourism in the South Caucasus through Coopetition

This article explores the concept of “coopetition” as a strategic approach for enhancing tourism development in the South Caucasus region, comprising Armenia, Azerbaijan, and Georgia. The region holds significant tourism potential but faces infrastructure gaps, limited awareness, safety standards, and accessibility. Additionally, political instability, including the Armenia-Azerbaijan conflict and the ongoing occupation of Georgian territories by Russia, has hindered growth. Fortunately, recent peace efforts between Azerbaijan and Armenia offer opportunities for collaborative tourism initiatives, potentially boosting economic stability. Through an assessment of tourism intelligence, competitiveness, and regional dynamics, the study identifies key areas where these countries can both compete and cooperate to attract high-value tourists. Coopetition offers a strategy for enhancing the region’s competitiveness through joint marketing, shared tourist routes, and improved cross-border infrastructure while also allowing each country to utilize its unique strengths in niche tourism products. At the same time, coopetition also poses risks, such as unequal benefit distribution and coordination challenges in aligning policies, among other issues. The analysis concludes that by balancing competition with strategic cooperation, the South Caucasus countries can boost regional tourism, attract high-value visitor segments, strengthen their global market position, and contribute to lasting peace in the region.

How Important Are Labor-Market Gender Gaps in the South Caucasus?

In this paper, we use survey data from the South Caucasus countries (Armenia, Azerbaijan, and Georgia) to document the presence of gender gaps in the labor market and examine its consequences. To do the analysis, we use a numerical general-equilibrium occupational choice model with heterogeneous agents in entrepreneurial ability. We then introduce the observed gender gaps in labor-force participants, employers, and self-employed. We find that entrepreneurship gender gaps cause an average GDP loss of 6.2%, while gender gaps in labor-force participation cause an average GDP loss of 9%. Armenia (2007) displays the largest total loss and Georgia (2007, 2014) the smallest ones. We also decompose the gender gaps and their associated costs by households with different education levels and with and without dependents at home. Our results indicate that most of the income losses are driven by households with high education and those with dependents, especially those with both children and elderly at home.

Russia in the politics of South Caucasus countries after 2022

The research question is how national governments and civil societies reflect Russian involvement in the decision-making process of South Caucasus countries in 2022–2024? The structure of the research includes two sections: 1) Strategic interests of the countries of the South Caucasus and Russia in 2022–2024; 2) Changing the role of Russia in the South Caucasus in 2022–2024. In result of the research it was revealed that opting for a policy of normalization Georgia cannot renounce its territory (Abkhazia and South Ossetia). Azerbaijan has been the most consistent among the Caucasian countries in challenging Russian hegemony in the region. This trend intensified after the beginning of Russia's full-scale invasion of Ukraine: Azerbaijan increased humanitarian aid to Ukraine; pro-Ukrainian sympathies in Azerbaijani society were expressed through a number of leading media outlets that openly supported Kyiv. Baku unilaterally reviewed the ceasefire agreement - 2020, mediated by Russia. Amid the international isolation of the Kremlin, Azerbaijan began to play a much larger role for Russia. Baku is important link in the chain of diplomatic and economic ties of Putin's regime. Russia tries to maintain productive relations with Baku, even at the expense of its long-time ally Armenia. Yerevan revises its foreign policy, favouring a pro-Western vector. In Yerevan, the pro-Russian opposition organized rallies against the current government. Moscow and Baku both gained mutual benefits: Russia destabilized the situation in Armenia, and Azerbaijan restored its territorial integrity. However, these actions of Moscow struck at its influence in the region, marginalizing Russia and its "guarantees." The Caucasus provides a clear example of Russia's inability to continue playing the role of a major power: it simply lacks the strength and means.

R&D expenditure and its macroeconomic effects: A comparative study of Israel and South Caucasus countries

The impact of research and development (R&D) expenditure is crucial for understanding contemporary economic development strategies. This study investigates the relationship between R&D spending as a percentage of GDP and economic growth, focusing on the South Caucasus countries (Azerbaijan, Georgia, and Armenia) and Israel, which is notable for its substantial R&D expenditure (5.71% of GDP in 2020). The objective is to evaluate the impact of R&D expenditure on economic development through the application of rigorous empirical methods. By employing a quantitative approach, this study aims to offer a detailed analysis of the impact of R&D investment on economic growth across various countries. Ordinary least squares (OLS) regression analyzes the association between R&D expenditure and GDP levels. Granger causality tests are utilized to investigate the causal relationships. The results demonstrate a significant positive relationship between R&D expenditure and GDP across all studied countries. Furthermore, the analysis reveals that GDP growth stimulates increased R&D investments in Azerbaijan and Armenia, as evidenced by Granger causality tests. To sum up, this paper underscores the critical role of R&D spending in driving economic development and highlights the necessity for policy initiatives focused on strengthening R&D frameworks.

How causality impacts the renewable energy, carbon emissions, and economic growth nexus in the South Caucasus Countries?

Renewable energy is essential for boosting economic expansion and lowering carbon dioxide emission (CO2) to achieve carbon neutrality. This study's objective is to investigate the relationship between the use of renewable energy, economic growth, and CO2 for South Caucasus Countries. For analysis purposes, time series methods were applied on the panel data. Second-generation unit root and cointegration tests were used to test the cross-sectional dependence. Afterward, panel causality and panel VAR techniques were performed to examine the relationship between the variables. Based on feedback hypothesis, results of our causality analysis revealed a bidirectional causality relationship between growth and renewable energy consumption. Moreover, we revealed unidirectional causality from CO2 to renewable energy and from growth to CO2 emission. We also found that the effect of a shock in renewable energy on growth is increasing, and on CO2, it is decreasing implying that renewable energy consumption will trigger growth and have a reducing effect on CO2 emissions. We portrayed significant workable implications for policymakers, regulation bodies, companies, stakeholders, and managers. Results from this study should be extrapolated with caution since their applicability is limited to the South Caucasus Countries. In addition, the research heavily depends on summaries, which may obscure regional differences. In the future, researchers may want to dig deeper into the data and examine the subtle effect of renewable energy policy nationally. Moreover, including socio-economic aspects and technical improvements in the research might give a more thorough picture of the dynamics at play.

Dynamics of Friendliness of Communication Regimes in the South Caucasus Countries

The article presents a Rating of the friendliness of the communication regimes of post-Soviet countries for 2023. The author focuses on the countries of the South Caucasus, shows the trends in the development of communication regimes, the degree of their friendliness towards Russia. The communication regime is defined as a system of rules, norms, conditions and opportunities for communication between state and non-state actors. To determine friendliness, the legal, political, and socio-cultural conditions for the development of 12 types of cross-country communications are analyzed. The strengthening of the formation of a common communication space with Russia in South Ossetia and Abkhazia is argued. In Azerbaijan and Georgia, the strengthening of a pragmatic approach to the development of communications with Russia and the strengthening of the role of the economic factor are being recorded. The example of Armenia shows how the political elite strengthen the movement towards unfriendliness in conditions when there is no deep anti-Russian position in the consciousness of the Armenian society. The author has compiled profiles of the friendliness of communication regimes for each country and reveals their features. The article uses the materials of the annual monitoring of the communication regimes of post-Soviet countries. Monitoring is provided by the National Research Institute for the Communications Development (Moscow) under the guidance of the author of this article.

Challenges of green startups in the post-soviet economies

This article delves into the difficulties faced by environmentally conscious startups in the post-Soviet economies. The breakup of the USSR gave rise to a period characterized by economic restructuring and a shift towards market-based economies, but green startups encounter numerous obstacles arising from a lack of entrepreneurial expertise, insufficient funding, and complex regulations. In Russia, the dominance of the oil and gas industry hampers the drive for alternative energy ventures, while Ukraine, Belarus, and Moldova grapple with funding gaps and infrastructure deficiencies. The South Caucasus countries face issues related to oil dependency, burdensome regulations, and limited access to funding, while the Baltic states prioritize swift innovation and adeptly navigating regulations. Central Asian nations, blessed with abundant natural resources, face challenges including regulatory restrictions and geopolitical complexities that impede the transition to green practices. Collaborative efforts are vital in overcoming these hurdles, enabling regulatory reform, strengthening sustainable initiatives, and fostering innovation to promote the growth of green startups in these economies.

The belt and road initiative: a spatial empirical analysis of economic performance in Central Asia and the South Caucasus

This article focuses on China’s FDIs and mutual trade with five Central Asian countries, three South Caucasus countries and Iran within the framework of the Belt and Road Initiative (BRI). The study examines how the interaction of mutual foreign trade and China’s FDIs affects longitudinal income changes in these countries and to what extent the empirical evidence can demonstrate the significance of China’s investments and trade on their economic growth. Employing panel-spatial econometric models, the study assesses whether a discernible increase in total income occurred before and after 2013, exploring potential spillover effects from the spatial neighborhoods. The findings from the panel regression model reveal that the labor stock and the amount of foreign direct investments from China do not exhibit a statistically significant effect on the economic growth of these countries. However, the BRI positively impacted these economies, primarily through enhanced trade with China rather than FDIs from China.

The Attitudes of the South Caucasus Countries Towards the Full-Scale Russian Aggression Against Ukraine

This article not only seeks to answer the question of how the South Caucasus countries reacted to Russia’s aggression against Ukraine, but also to outline how international relations in the South Caucasus are currently evolving and identify the main foreign policy objectives of Armenia, Azerbaijan and Georgia. A research hypothesis was developed for the purpose of this article, which assumes that none of the South Caucasus countries are currently viable allies of the United States and the European Union in the region anymore, because following the Russian Federation’s aggression against Ukraine, neither Armenia, Azerbaijan nor Georgia have decided to take measures that would strike directly at Russian interests and also align with Western policy. In verifying the research hypothesis that was put forward in the Introduction to this text, it should be concluded that it is true. Looking at the actions of all the three South Caucasus countries, none of them has openly supported Ukraine on the political or military level. Nor have any of them joined the sanctions imposed on the aggressor by the West. The article mainly uses the decision-making method, the comparative method and one of the general logical methods, namely analysis.

Comparative Assessment of Energy Security Level: The Case of the South Caucasus Countries

The paper compares the energy security of three South Caucasus countries - Azerbaijan, Georgia, and Armenia. These countries differ from each other due to the use of different energy sources. The investigation used 28 indicators classified into six groups based on World Bank data to assess energy security. Indicators for each group were assessed as “stimulating” or “not stimulating” energy security. According to the results, Georgian’s energy security is less risky because of it uses renewable energy sources. Ensuring long-term energy security in Azerbaijan requires greater use of renewable energy sources. Armenia’s energy security is at higher risk due to its higher dependence on imports and poor use of renewable resources.

The Assessment of Impacts of COVID-19 in the South Caucasian Countries

The Assessment of Impacts of COVID-19 in the South Caucasian Countries

Violation of territorial integrity as a tool for waging long-term hybrid warfare (against the backdrop of power games in the South Caucasus region)

This paper seeks to examine the violation of territorial integrity as a stage of hybrid warfare. Grounded in the theoretical framework of neoclassical realism, this study analyses nations’ foreign policy strategies considering both global and domestic factors. Employing primarily qualitative research, this study concentrates on a case study of the South Caucasus region. Against the backdrop of the war which broke out in the early 2022 between Russia and Ukraine, the preservation of territorial integrity emerges as an imperative aspect of national security policy. Despite the longstanding recognition of territorial integrity as a fundamental tenet of international law over the centuries, this war has galvanised all nations with regard to the violation of territorial integrity. The paper delineates the principles of territorial integrity vis-à-vis the national security of the South Caucasus countries, substantiating the assertion that violation of the territorial integrity of the particular countries in this region serves the interests of external actors, either directly or indirectly, and is employed as a strategic tool in the pursuit of protracted hybrid warfare.

Assessing participation of Central Asia and the South Caucasus countries in global and regional value chains

Assessing participation of Central Asia and the South Caucasus countries in global and regional value chains

The influence of foreign direct investments on the economic development of South Caucasus countries

A nation's pace of economic growth in the South Caucasus region is directly influenced by the volume of foreign direct investment (FDI) it gets. This research project examines the effects of foreign direct investment (FDI) on economic growth and stability, with a focus on the three nations of Armenia, Azerbaijan, and Georgia. This research seeks to understand three important aspects: the trends in FDI influx; the industries that draw the highest concentrations of FDI; and the societal consequences of FDI. Examining these three crucial facets of the whole is the aim of this study. The goal of this study is to look at the trends in foreign direct investment (FDI), with an emphasis on the South Caucasus region's growing prominence as a desirable destination for financial investments. To achieve the objectives of this study, we will. Numerous various elements, such as its advantageous geographic position, an abundance of natural resources, and the formation of prospective markets, may be ascribed to its preeminence. The industries with the largest amounts of foreign direct investment (FDI) are also examined in this research, with an emphasis on the manufacturing, infrastructure, and energy sectors' critical roles in promoting economic growth. In this last section of the study, the socioeconomic effects of foreign direct investment (FDI) are examined. The creation of new job possibilities, the diffusion of recently produced technology, and the diversification of exports are some of these outcomes. One of the main topics of this conversation is how these effects contribute to raising the local quality of life and lowering the incidence of poverty. The aim of this research is to examine the many aspects of foreign direct investment (FDI) and how it affects the economic development of countries in the South Caucasus area of the globe. The purpose of this project is to provide useful information on the opportunities and challenges these nations face in their efforts to draw in and use foreign investments in order to achieve sustainable growth and prosperity. The data that will be offered will come from a range of sources, such as focus groups, questionnaires, and interviews.

From Conflict to Peace? Stateness Assessment of the South Caucasus countries at the crossroads of political processes from 2017 to 2022

The article reflects on the sustainability and security perspectives of the South Caucasus region. While discovering the different approaches to the notion of “stateness” and its assessment methodologies, the article brings up the problems of insufficient clarification of the concept, the need for further work on its conceptual and functional formulations. As the assessment also covers the non-recognized states, the peculiarities, difficulties and possibilities of stateness assessment of non-recognized states are revealed. The article proposes a definition of stateness and an integral model for stateness assessment, which would make it possible to carry out the stateness assessment of both recognized and non-recognized states within the framework of one model. With the help of the developed ‘Peace Index’, the article comprehensively assesses the levels of stateness of the three recognized: Armenia, Georgia and Azerbaijan; and the three non-recognized states of the South Caucasus: Nagorno-Karabakh, Abkhazia and South Ossetia through all four fields of stateness – political, economic, social and security for the years of 2017 to 2022. On the basis of the carried-out assessment, the article articulates policy recommendations for the South Caucasus countries and the region as a whole - guiding how to handle the current delicate situation in this strategically and geopolitically important region. The article suggests a) an immediate regional integration, b) economic cooperation as a key for conflict resolution, c) change of peace mediation format, d) support to the reconsideration of government-civil society relations format, making the civil societies of the South Caucasus states the inner constant peace-demanders and development-forcers - as the package-wise steps to transfer the South Caucasus region from conflict to peace.

Türkiye'nin Girişimci ve İnsani Dış Politika Anlayışının Azerbaycan, Gürcistan ve Ermenistan'daki Yansımaları

The concept of Entreprising and Humanitarian Foreign Policy, which includes hard and soft power elements, emphasizes the assertive, active and strong nature of Turkish foreign policy. At the same time, this Concept introduces Türkiye as a humanitarian state and draws attention to the cooperation, peace and development ties of her foreign policy. This study aims to explain Türkiye's South Caucasus policy with the concept of "Enterprising and Humanitarian Foreign Policy" adopted in 2018. With the disintegration of the Soviet Union in December 1991, Türkiye has played a leading role in recognizing the independence of the South Caucasus countries, providing economic and humanitarian aid, resolving conflict problems and mediating. Due to the new territorial alteration as Azerbaijan liberated the Karabakh region in 2020, Türkiye’s role has increased as she has strengthened her existing strategic relations and established new one. Therefore, the study is going to first elucidate the concept and the scope of this new policy and then look for an answer to the question: What has Türkiye done in the South Caucaus in line with the the concept of "Enterprising and Humanitarian Foreing Policy?"

Analysis of the Relationship between Service Export and Economic Growth in the Framework of South Caucasus Countries

In this context, the current article examines the impact of the service sector on the economic growth of Azerbaijan, Armenia, and Georgia. In the study in which three separate causality analyses were made, the results of the Toda-Yamamoto causality test in Azerbaijan and Armenia showed no causality between service exports and economic growth, while for Georgia, there was a unidirectional causality from economic growth to service exports. This study, handled with a different perspective due to the inadequacy of studies on service exports in South Caucasian countries, contributes to filling the gap in the literature on the subject.

Economic integration of South Caucasus countries: Current potential and main directions

The South Caucasus region, comprising Armenia, Azerbaijan, and Georgia, has witnessed significant political and economic developments in recent years. This article explores the current potential and main directions for economic integration among these countries. First, the article examines the economic landscape of the South Caucasus, highlighting the unique strengths and challenges faced by each country. It analyzes key sectors such as energy, agriculture, tourism, and manufacturing, and explores the potential for cross-border collaboration and trade. The article then delves into the existing frameworks for economic integration in the region, including the Eurasian Economic Union, the Commonwealth of Independent States, and bilateral trade agreements. It evaluates the benefits and limitations of these frameworks and discusses the potential for deeper integration among South Caucasus countries. Next, the article explores the main drivers of economic integration in the region. It discusses the role of infrastructure development, including transportation and energy networks, in facilitating trade and connectivity. It also examines the importance of institutional reforms, harmonization of regulations, and investment promotion to foster economic cooperation. Finally, the article identifies key recommendations for policymakers and stakeholders to realize the potential of economic integration in the South Caucasus. Overall, this article provides a comprehensive overview of the current potential and main directions for economic integration among South Caucasus countries. It highlights the importance of regional cooperation and outlines strategies to harness the economic opportunities that integration can bring.

Հարավային Կովկասի երկրների պարենային անվտանգության համեմատական վերլուծություն / Comparative Analysis of Food Security in the Countries of the South Caucasus

For countries worldwide, ensuring population nutrition and food security is one of the highest economic policy priorities. However, the situation varies from one nation to another, determining the nature of social security and agrarian policy of the country, the strategy and practical steps to overcome internal and external threats. In all respects, considering the development of the agricultural sector from the point of view of food security makes it possible to focus on the most important need for human nutrition and strive for its fullest and most effective satisfaction. The purpose of this paper is to address food security issues in the South Caucasus countries ̶ Armenia, Georgia and Azerbaijan ̶ in the context of the world food market evolution over the past decade and the increasing internationalization of the economies. It aims to highlight both external and internal threats while outlining the key measures to mitigate and regulate them. The paper also pays attention to the methodology for assessing food safety, offers practical recommendations, and explores mechanisms for their implementation.

The Europeanisation of the Local Self-Government in the South Caucasus

The following paper employs a normative approach and focuses on the problem of the current state of the local self-government in the South Caucasus countries: Georgia, Armenia, and Azerbaijan. Since all these countries are members of the Council of Europe, a reference point for decentralisation is the European Charter of Local Self-Government. The paper's main thesis is that despite showing some similarities, the countries have introduced different models of decentralisation that do not fully meet the Council of Europe’s criteria. Such variation is in line with the different political systems of these states and their level of democratisation. The more democratic the state is, the stronger the decentralisation it has adopted. Thus, decentralisation in Georgia follows the European model of public policy, while Azerbaijan is preserving the former Soviet model of weak self-government, with central authorities playing the leading role in public services. The current changes in Armenia’s model resemble the Georgian track of reforms. The findings of this paper may be applicable both in further theoretical research and in implementing reforms of local self-government in various post-Soviet states.