The Impact of Mountainous Karabagh Conflict on Nakhichevan Autonomous Republic of Azerbaijan

Key Words: Autonomous Republic of Nakhichevan, Azerbaijan, Armenia, Karabagh Question.

Öz: Azerbaycan s?n?rlar?n?n s???nda bulunan Nahç?van Muhtar Cumhuriyeti Türkiye, ?ran ve Ermenistan topraklar? ile çevrilmi?tir. Nahç?van'a 1990'lar?n ba??ndan beri Ermenistan taraf?ndan elektrik gaz ve ula??m ambargosu uygulanmaktad?r. Ermenistan ile ya?anan çat??malar Nahç?van Muhtar Cumhuriyeti'nin ekonomisini ve halk?n? olumsuz olarak etkilemektedir. Gaz, elektrik ve ticarete getirilen bu k?s?tlamalar Nahç?van'da ekonomik ve sosyal s?k?nt?lar?n do?mas?na yol açm??t?r. Bunun yan? s?ra i?gal veya müdahale tehdidi de sürmektedir. Karki köyü d???nda Nahç?van Ermenistan taraf?ndan büyük çapl? bir i?gali maruz kalmam??t?r, ayr?ca Nahç?van'da mülteci veya iç göçmen statüsünde göreceli olarak az say?da insan ya?amaktad?r. Ancak yine de ambargo nedeniyle durum kötüye gitmektedir ve Azerbaycan'?n bat? ve güney-bat? s?n?rlar? Ermeni Sald?rganl???ndan etkilenmektedir. Hatta istatistikler göstermektedir ki, Azerbaycan'da ya?ayan mülteci ve iç göçmenlerin durumu Nahç?van'da ya?ayanlara göre daha iyidir.

Anahtar Kelimeler: Nahç?van Muhtar Cumhuriyeti, Azerbaycan, Ermenistan, Karaba? Sorunu.

Introduction

Nakhichevan which is an exclave of Azerbaijan has a total area of 5.5 thousand km2 which consists 6.3% of Azerbaijan. Nakhichevan includes the administrative districts of Babek, Julfa, Ordubad, Sadarak, Shahbuz, Sharur and Nakhichevan city. The official population of the Autonomous Republic is 364,500 persons which consist 4.5% of Azerbaijan’s population.[1]

Between 1988 and 1994, the Armenians forcibly obtained control over the district of Mountainous Karabakh and seven bordering regions which covers almost 20% of Azerbaijan’s territory and also attacked the Autonomous Republic of Nakhichevan. But all the attempts to invade Nakhichevan Autonomous Republic between 1988 and 1994 were failed. Almost 1 million Azerbaijanis have been driven out of their native lands as a result of this conflict.

The Armenian version of the events: The war over the Mountainous Karabakh was waged between the government of Azerbaijan and the Armenians of the Mountainous Karabakh, who formed a small republic independent from Azerbaijan at the end. Although Armenia provided assistance to the Karabakh Armenians and she actively involved to the conflict, Armenians repeatedly try to show that Armenia did not involve to the conflict in Mountainous Karabakh. As a proof of this denial, recently Chairman of Christian Democratic Union, Khosrov Harutyunyan, announced “we must do everything possible that the conflict is viewed as the Azerbaijani-Karabakhi one.” Despite all these efforts, attacks and cruel acts of violence against Azerbaijanis by forces belonging to Republic of Armenia in Azerbaijan’s mainland; Armenian threats and attacks against the Nakhichevan Autonomous Republic, which has no boundary to the region where the real conflict occurred, clearly reveal that the conflict between Armenia and Azerbaijan is not limited to Karabakh. Armenian aggregation is part of a design to create a ‘Greater Armenia’ out of Azerbaijani lands. Numerous attempts to invade the Nakhichevan Autonomous Republic (AR) have been carried out by Armenian forces from the Republic of Armenia not by Armenians living in Karabakh. Furthermore several times Armenian officials claimed Nakhichevan as a part of Armenia. Besides, these events reveal that Armenia has more ambitions and ideas than only helping Mountainous Karabakh Armenians, the Armenian blockade of Nakhichevan is also proof of enrollment of Armenia in the conflict more than supplying assistance to Karabakh Armenians.[2]

There are a lot of papers investigating the cost or damage of blockade of Armenia. However there are almost no papers investigating the damage or cost of blockade of Nakhichevan by Armenia. While it is impossible to quantify fully, the aim of this paper is to investigate the cost of the Armenian aggregation and blockade for Nakhichevan Autonomous Republic of Azerbaijan. This paper mainly examines the effects of the blockade which is imposed by Armenia to Nakhichevan Autonomous Republic on the economy and the people of Nakhichevan. For this study mainly reports by international organizations, international news agencies and to a smaller extent Azerbaijani sources were used. Mainly the reports of World Bank, United Nations, UNICEF, European Bank for Reconstruction and Development (EBRD) and The State Statistical Committee of Azerbaijan (SSC) were used to analyze the impacts of Armenian aggregation and blockade on Autonomous Republic’s social and economic life. This paper reveals the impact of conflict, especially the blockade, by comparing Nakhichevan with other districts of Azerbaijan and comparing the living conditions of Nakhichevanis with the people living other districts of Azerbaijan especially with refugees and IDPs who are the main victims of conflict.

I. A Partial View of the Cost of Attempts to Invade Nakhichevan

Armenians see Nakhichevan as their historical land and the railroad connection between Iran and Armenia trespasses through Nakhichevan. Thus, between 1988 and 1994, there have been numerous attempts to invade the Nakhichevan Autonomous Republic (AR) along the territory close to the Turkish border. Most of the serious attacks happened to the Sadarak region of Nakhichevan which has vital and strategic custom with Turkey. In addition to human loss, these attacks caused significant amount of financial damage to the economy of Autonomous Republic.

UNICEF’s survey of Azerbaijan is important to show the damage of the war on Azerbaijanis. The survey shows that the percentage of orphaned Azerbaijani children born between 1986 and 1990 were 7 times; and children born between 1991 and 1995 five times higher than the children born between 1996 and 2000. Furthermore the level of orphanhood in IDP/Refugee population is significantly higher than the rest of the population (5.3% to 3.1%). These results indicate that children born between 1986 and 1995 (during time of war over Karabakh) lost their family members more than the ones born after 1996. Although there have been several attempts, Nakhichevan never been faced with large scale military invasion by Armenians accept the village of Karki, also the number of IDPs and refugees in Nakhichevan is relatively smaller than other regions of Azerbaijan.  Lack of large scale invasion decreased the number of Azerbaijanis killed during combat activities with Armenia with respect to other regions of Azerbaijan which has a border with Armenia.  Lack of large scale invasion, relatively smaller number of deaths during combat activities and low number of refugees decreased the number of children who are orphaned in Nakhichevan.  In Nakhichevan 97.1 % of the children are living with both parents. This is the highest percentage in the country. Only 1.2% of children have one or both parents dead and this percentage is at least 2 to 3 times lower than other regions of the country. [3]

January 19 1990, Armenian forces ran over Azeri village Karki (or Kerki), which is a city surrounded by Armenian territory. About 2000 refugees from Karki had to leave their homes and came to Nakhichevan.[4] Today they are still located in Nakhichevan. The most serious attempts to invade Nakhichevan occurred between 1992 and 1993. Interestingly when the assaults to Nakhichevan reached peak the serious assaults at Karabakh were at the highest level, which indicates the coordination between the attacks of Armenians in both Azerbaijani territories.

The most serious attacks started in May 18, 1992, when well equipped military forces attacked strategically important part of the Azerbaijani-Turkish border in Sadarak region. The first day of the attack forty soldiers and civilians were seriously wounded and four people were killed, including a doctor trying to rescue a wounded soldier and a woman looking for her son. A result of these attacks the town of Sadarak was evacuated.[5] Later most of the displaced people from Sadarak returned to their homes, only the displaced people from insecure border villages near Sadarak, which are overlooked by Armenian Army posts had difficulties to return because of fear.[7] When the IDPs returned Sadarak region, they found themselves in reconstruction process because Sadarak district had been destroyed due to Armenian aggregations.  

In 2004, in Nakhichevan Autonomous republic there are total 1367 refugee and IDP families (total 5078 people). 4005 (167 families) of these people are refugees and 1073 (300 families) of them are IDP.[7] These people needs shelter, food and jobs. Although more than a decade has passed since the cease fire, housing for all these people is still not available. The loans and funds from international agencies have been used to build new housing for refugees and IDPs. Furthermore, the Sadarak region which has been destroyed by Armenians had to be rehabilitated, for these works, international loans, mainly, were used. 12 years after the major destruction was occurred, on July 17, 2004, the Program of Restoration of the occupied territories of Azerbaijan in Sadarak region was completed. 7 secondary schools with 1612 seats, a three-stage pumping station capable to irrigate over three thousand hectares of Sadarak territories, 24 sub-artesian wells, 75 apartment houses, a support electric power station, 20 km long overhead transmission lines and drinking pump stations, which were destroyed by Armenian aggregation, were restored by the funds from Islamic Development Bank.[8] On July 17, 2004, Sadarak region returned to where it was before conflict.

Although there has been a cease fire since May 12, 1994, still today, time to time, there have been attacks against the Nakhichevan Autonomous Republic. The last bloodiest attack happened on July 17, 2003. Subunits of the Armenian Armed Forces attacked the Armed Forces of Azerbaijan near the village of Germechatag of Shahbuz region of the Nakhichevan Autonomous Republic. One Azeri soldier was killed and another one wounded.[9] Although these attacks caused human loss which might seem a little effect, their impact to the economy is bigger than expected. First, IDPs who have homes close to the Armenian border do not want to return their homes due to the fact that their lives might be in danger and second, the international investors do not want to spend their money in a place which is not stable. Therefore besides human loss, these small scale attacks continuing after the cease fire result in significant amount of capital loss. Refugees/IDP and the direct damage of Armenian attacks to the Nakhichevan Autonomous Republic have diverted international and governmental funds, which have been spending for restoration of the damaged region and supplying food and shelter to IDPs/refugees, who were driven out from their native lands as a result of Armenian aggregation, rather than improving the infrastructure and economy of the region. These damages and diversion of funds definitely caused significant delay in improving the living conditions in Nakhichevan.

II. The History of Blockade

There are two railroad connections between Baku and Yerevan: the Baku-Megri-Nakhijevan-Yerevan (southern route) and Ghazakh-Ijevan-Yerevan lines (northern route). The southern route, which traverses 46 kilometers of Armenia before entering Nakhichevan Autonomous Republic of Azerbaijan, served to carry 85% of all goods to Armenia and Nakhichevan.[10] Azerbaijanis marked July 29 1989 as the beginning of Armenian blockade to Nakhichevan because on that day, trains, which were going from Azerbaijan to Armenia, were attacked in the territory of Armenia.[11] Despite all difficulties Azerbaijan tried to continue to send shipments. After the first attack several trains coming from Azerbaijan were attacked, robbed and the passengers killed in the territory of Armenia. In September, 1989, Azerbaijani railroaders went on strike due to the attacks to the trains in the territory of Armenia. It is interesting that some sources try to show the strike of Azerbaijani railroaders as an organized strike to block shipments of materials to both Armenia and Karabakh.[12] Not only Azerbaijani railroaders who were carrying goods to Armenia, the ones carrying to Nakhichevan also went on a strike due to the lack of security in Armenian territory, therefore, strikes were not for blocking shipment to Armenia. Similarly, almost exactly fifteen years later, at the end of July of 2004, Turkey’s truckers association stopped shipping to Iraq after the death of a truck driver. Turkish truck drivers have halted transportation and refused to continue shipping due to the attacks while delivering goods to Iraq.[13] The reason for halting transportations in both situations was the same. Simply there was not any security and Azerbaijani railroaders and Turkish truck drivers did not want to put their lives in jeopardy.

In November, 1989, rail road traffic between the Azerbaijan and the Armenia stopped due to the attacks to Azerbaijani trains in the territory of the Armenia. All attacks happened in the Armenian territory. The 10 kilometers of the southern route inside of the Armenia was destroyed[14] (the rest was destroyed in 2003) [15]. The aim of the Armenians was to block the goods going from Azerbaijan to Nakhichevan, however, when Armenian’s were trying to cut their enemy’s vital transportation route, they cut their own. So, in reality, the Armenians, who were constantly trying to show themselves as the victim of the blockade, destroyed their main supply route; hence, they blockaded themselves. The northern route was cut off by Azerbaijanis in order to protect their country when they realized that the route was used to supply goods to Karabakh Armenians.

Since the beginning of the Armenian blockade Nakhichevanis has been living in conditions like the Medieval Ages. The Armenian blockade of Nakhichevan has resulted in lack of connection to outside world (including to Azerbaijan’s mainland), and lack of electricity and fuel for heating and cooking. The blockade crippled the economy in exclave and Nakhichevanis are still trying today to survive without adequate heat, sufficient food, or medical care. 

III. The Cost of Blockade

Both The Republic of Armenia and Nakhichevan Autonomous Republic are landlocked. Under the Soviet central system, unlike Nakhichevan AR whose economy was based on output and manufacturing farm products, Armenia developed an industrial sector which mainly supplied manufactured goods to her sister republics. After the collapse of the Soviet system at the end of 1991, Armenia had to switch her economy from highly industrial economy to a small-scale agriculture economy.  On the other hand Nakhichevan’s economy was already an agricultural economy. In other words after the fall of the central soviet system, the poor people of ex-Soviet Union did not need computers from Armenia but they still needed food. As a result, the impact of the fall of central soviet system was lighter in Nakhichevan than in Armenia. Therefore, the primary reason that ruined the Nakhichevan’s economy is the Armenian blockade rather than fall of central Soviet system.

The economy of Autonomous Republic is mainly based on the output and the manufacture of farm products. There are also light food processing enterprises in Nakhichevan and only 0.5% of Nakhichevan is covered by the forests.[16] It is a fact that Nakhichevan’s economy is severely suffering from the Armenian blockade. The production has been reduced by two thirds due to the blockade of Nakhichevan (the industrial production decreased by 99.99%).[17]

1. Lack of Energy

Until the beginning of 1992, 33,330 subscribers in 4 cities, 2 settlements with city type and 91 villages were provided with natural gas by Shusha-Lachin-Bichenek-Nakhichevan gas line. Since January of 1992, the activity of high-pressured main gas line which was providing vital energy to Nakhichevan was stopped by Armenia. 29,042 apartments, 3384 domestic subscribers, 19 communal enterprises, 207 organizations and 20 industrial objects were cut of from natural gas. Ten years after cease fire took place, in 2004, Nakhichevan was only place in the Caucasus region deprived of natural gas and winters, here, are very harsh. Due to the cut off natural gas, 340 employees of 470 gas housing were laid off or had to take leave of absence. The gas lines in Nakhichevan, which have not been used since the beginning of 1992, started falling apart. $20 million will be spent only to restore the gas lines in Nakhichevan. Besides this, more than $1.2 million (6 billion Manat) is needed to restore the internal gas lines inside multi-floored buildings (8,000 subscribers) in Nakhichevan. About 20 industrial and production enterprises are still waiting for gas to fully operate.[18]

Nakhichevan primarily depends upon Iran for energy because Iran is the only neighbor of Nakhichevan which has rich hydrocarbon sources and can provide energy (gas, electricity and fuel) to the Autonomous Republic. This monopoly position gives the Islamic Republic of Iran the opportunity to sell slightly more expensive gas or electricity to Nakhichevan.[19] Since 1994 there have been discussions with Iran to supply gas by a 36-kilometer pipeline between Khoy and Culfa. Since the price Iran is insisting on charging is almost double that which Nakhichevan would have to pay for gas from Russia and Turkmenistan there has been no agreement until 2004.[20] At that time a deal in which two states involve a gas swap was signed between Iran and Azerbaijan.  Iran will supply gas to Nakhichevan and Azerbaijan will supply gas to Iran from Astara. Iran will keep 15% of volumes as a service charge.[20] More than $17 million will be spent for installation of pipeline to Iran from Astara.[21]

Prior to the blockade Nakhichevan was getting electricity from Armenia and since 1991 electricity lines coming thorough Armenia were cut. After the blockade Nakhichevan started getting electricity from Turkey (with no cost), Iran and some of the electricity was produced from water dam “Araz”. In 2004 roughly, 52% of electricity which was used in Nakhichevan was supplied by Iran, 36% by Turkey and 12% was generated by “Araz”.[22] Although there have been improvements, still in 2004 the electricity which was supplied is lower than demand (150-160 megawatts).[23] Iran tried to use its monopoly on Nakhichevan’s energy supply to pressure Azerbaijan for her own international demands. Several times power supply from Iran to Nakhichevan was cut by Iranian officials. In 1995, almost a month after Iran had been excluded from the Azerbaijani oil consortium (Contract of Century), Iran cut the electricity supplies to Nakhichevan, and interestingly it was just three weeks later Iran agreed to supply Armenia with natural gas and electricity for a period of 20 years.[24] Most recently in 27 October, 2000, Iran cut power supplies to Nakhichevan using $45 million debt of Azerbaijan as an excuse. Iran resumed power supplies on November 4, 2000 after negotiations with Baku.[25] Iran and Baku agreed for construction of Ordubad power dam in August, 2004, and increasing electricity supply from Iran to Nakhichevan.[26]

Trade blockades contribute to the elevated process of energy in Nakhichevan which made it difficult to pay increased energy tariffs for Nakhichevanis, most of whom are unemployed. The gas prices will be at least 15% higher in Nakhichevan because of Iranian connection fee. Due to the blockade electricity prices have been increased which resulted in demonstrations time to time.[27] Furthermore there have been restrictions on the usage of electrical appliances,[28] and street lamps[29] which were turned off to reduce the electrical consumption in Nakhichevan.

Transportation between the villages is vital for Nakhichevan where 79.3% of the households are in rural areas, and main health and economic facilities are in urban areas.[30] The fuel used to come from Azerbaijan by trains, after blockade it started coming thorough Iran by trucks. Carrying the fuel by trucks rather than trains increased time and length of the transportation, therefore the cost of fuel. The situations that cause lack of fuel also caused difficulties in public transportation. Only 33% of the villages in Nakhichevan have consistently working normal bus route which is the lowest percentage in the republic.[31]

The blockade of the Nakhichevan AR by Armenia has caused great damage, not only to region’s industry, but to the agriculture of Nakhichevan as well. According to UNEP report, the extreme deficiency of fuel and electric power, which is the result of blockade, did not allow improving and taking soil-recreating measures. The whole territory of the Nakhichevan is prone to salinization and erosion.  More than 63% of irrigated land needs to be improved and is exposed to a certain extent to salinization.[32]

2. Lack of Trade

Since 1991, roads and railways coming to Autonomous Republic from Armenia were decreased.[33] By stopping the traffic through its territory, Armenia prevented Nakhichevan from being connected with other countries including Azerbaijan’s mainland. The blockade increased the transportation costs; lengthened the average distance between Nakhichevan and potential markets and raw material sources including Azerbaijan’s mainland; and altered the trade partners. 

With the blockade, Nakhichevan became like an isolated island with no connection to the outside world. October 31, 1991, Nakhichevan had connection with Turkey via the bridge over Araz which provided a vital route to Nakhichevan.[34] The rail link between Tabriz and Nakhichevan City, through which 3 million tons of cargo was transported, has been halted since the beginning of Karabakh conflict. The closure of this railway link caused $2 billion worth of damage to the countries of the region.[35] In December 2004, in an attempt to ease the isolation of Nakhichevan, Iran and Azerbaijan had agreed on the construction of two bridges: one between Poldasht (Iran) and Saxtaxti (NAR), and the other one between Jolfa (Iran) and Julfa (NAR). Construction costs, for the former is three million dollars and the latter four million dollars will be paid jointly by Iran and Azerbaijan.[36]

85% of goods, which are consumed in Nakhichevan, used to come from Azerbaijan thorough Armenia by railroad.[37] After the blockade goods (almost all of it is fuel) from Azerbaijan started coming either from Iran by trucks or by planes. Carrying the goods by trucks or airplanes instead of trains increased the cost and time of transportation between Azerbaijan’s mainland and Nakhichevan. The blockade of transit routes by Armenia caused the loss of access to raw materials and markets, increased the cost of trade, and naturally decreased the amount of trade.

Nakhichevan is a landlocked exclave. In 2004, Nakhichevan Autonomous Republic had the worst economical conditions in the republic[38] due to the lack of a sales market, raw materials, and energy (45 production and refining enterprises were shut down and the rest are operating 10-15% capacity).[39] Nakhichevan has been running high trade deficits because restrictions on the direct movement of goods results in low export. By construction of Umut (or Umud) bridge across Aras provided the exclave with a vital link to the outside world.  Although new markets are emerging in Turkey and Iran, the blockade severely impairs the economy. The result of the blockade on Nakhichevan AR is; it had to change its trade partners, because Nakhichevan cannot gain access to the markets in Commonwealth of Independent States (CIS). Armenian blockade cut the easy and reasonable access of Nakhichevan with its nearest members of CIS such as Russia, Georgia and Ukraine which have large markets and rich raw materials.

Table I[41]: Import and Export Figures of Nakhichevan

Table 1[41]	Import			Export
	Total	CIS	%	Total	CIS	%
Julfa	8944,6	749,0	8.4	$10,4	0	0
Sadarak	21816,3	0	0	$4157,4	$9,9	0.2
Azerbaijan	2626427,3	851201,8	32.4	2591719,4	333633,1	12.9

Between 1990 and 1995 agricultural production decreased. After the cease fire, the government started spending more money on the economy instead of defense. Returning people to their homes (farms) and daily lives increased the production of crops. However, only the farm products such as vegetables, sugar beets and animal products, which are mainly demanded by Turkey, Iran and Nakhichevan’s population, increased after the cease fire (Table II). On the other hand, Turkey and Iran also have developed farming output, thus the development of Nakhichevan is limited without other trading partners. Production of tobacco, grapes, alcoholic beverages (cognac and vine) and related industries (such as bottle production) which are demanded and imported by Russia, Ukraine, Belarus and Georgia decreased even after the cease fire.[41] Therefore the decrease of production of these products is not related with lack of demand. The decrease is direct effect of blockade.[42]

Table II[43]: Output of crop production in Nakhichevan in thousands tons.

Year	Grains	Tobacco	Vegetables	Potatoes	Fruits	Grapes	Sugar beet
1990	31.3	5.1	4.6	0.4	4.9	101.5	-
1991	26.4	3.3	4.5	0.3	2.3	69	-
1992	25.4	2.9	1.6	0.4	0.6	26.6	-
1993	19.8	2.3	1.1	0.3	0.1	8.8	-
1994	19.3	1.0	1.6	0.4	0.7	30.5	5.6
1995	21.6	0.9	1.3	0.8	0.2	28.3	7.9
1996	22.2	1.3	18.0	6	18.8	30.7	15.5
1997	43.1	1.2	19.4	8.9	20.7	26	23.3
1998	55.2	1.4	22.7	10.3	22.8	24.3	39.1
1999	43.0	0.0155	26.2	10.6	26.2	13.1	38.7
2000	54.4	0.0028	42.7	13.5	28.4	14.0	45.5
2001	63.3	0.00056	47.8	15.2	28.7	13.8	41.3
2002	73.7	-	50.2	13.6	28.8	12.6	115.8

In addition, because of the lack of trade and insufficient funds (the result of diversion of funds for immediate needs such as fuel, food and housing for IDP/refugees) rich natural sources in Nakhichevan such as polymetal ores, rocksalt, marble and construction material fields cannot be used. All of the republic’s molybdenum and dolomite reserves, which are in Nakhichevan, are closed.[44] Even though there is high demand for natural sources located in Nakhichevan, the employees in mining and quarrying field dropped to 127 in 2002 from 215 people in 1999.[45]

In 2004, because of no direct railroad and motor road connection between Azerbaijan and Nakhichevan, the goods to Nakhichevan from mainland Azerbaijan must be carried by air or by motorway through Iran.[46]  Roads in Iran are poor and not reliable, and harsh weather conditions during the winter make transportation through Iran difficult. Due to the blockade, the surface transportation between mainland Azerbaijan and Nakhichevan is more expensive, more difficult and takes an additional day.[47]

Because of the blockade transport costs increased and some nearby trading opportunities eliminated. In 2003 Nakhichevan’s international export was $4.2 million on the other hand its import is roughly $30.8 million.[48] To understand the magnitude of the blockade it might be valuable to estimate some of the missing exports of Nakhichevan to other countries and to Azerbaijan’s mainland.

Indeed, Nakhichevan had a developed construction industry. The blockade related financial difficulties reduced the construction rate and building houses in the region.[49] The transportation blockade severely prevents the trade of heavy and low valued goods (such as building stones and cement) and the products which required special transport requirements (such as meat, glass, bottled products etc).[50] Thus, the blockade prevented export of construction material which is rich in Nakhichevan, although Azerbaijan’s mainland imports construction material.[51] Although Nakhichevan has over 200 mineral water springs which consists 60% of the mineral waters reserves in Azerbaijan[52], due to the difficulties in transportation resulting from the Armenian blockade Azerbaijan had to import the mineral water from other countries instead of Nakhichevan[53] (Table III).

Table III[54]: Some of the Missing Export Items to Azerbaijan’s Mainland.

Table III	Production in Nakhichevan in 1990 (Quantity)	Value of production	Import of Azerbaijan (Quantity)	Value of import
Mineral Water	153 million bottles	$42,000,000	0.8 million decalitres	$28,640
Canned goods	34 million cond. Bottles	unknown	3847,9 tons (canned meat)	$4,386,000
Raw silk	82.7 tons	1,820,000	unknown	$1,107,300
Bricks	7215 thousand pieces	$500,000	4780,5 thousand pieces	$329500
Tobacco	5100 tons	$6,043,000	5383,4 tons	$6,378,800

Although there is no way to find the precise amount of the missing international exports of Nakhichevan, the following method might give an idea about it. In 2003, Azerbaijan’s total export is $2.6 billion. There is no oil production in Nakhichevan and approximately $370 million out of $2.6 billion Azerbaijan’s export comes from products which are not related with oil[55]. Nakhichevan’s population consists of 4.5% of the republic.  Under normal condition Nakhichevan could easily do roughly 4.5% of $370 million export which is $16.6 million. Although there is no oil production, Nakhichevan is rich in mineral water ($40 million export estimated) which replaces oil.56 The total of Nakhichevan export to countries other than Armenia and Azerbaijan’s mainland could be around $56.6 million. This would mean additional $52.2 million in export which is almost five times of exclave’s budget ($11 million).[56]

3. Lack of FDI

Foreign Direct Investment (FDI) is beneficial for the economy. FDI helps to increase production, number of jobs, and most of the time increases export. The energy and transport blockade of Nakhichevan maintained by Armenia restricts FDI. Foreign investors naturally do not want to spend their money where there is no power, no stability and no market. In simple words, foreign investors do not want to spend money for building enterprises under the risk of not becoming operational fully because of limited energy and lack of sales market or the risk of destruction by military action. Since independence, so far Exxon Mobil Company spent some money to look for hydrocarbon sources in Nakhichevan. Azerbaijani Oil Company SOCAR and Exxon Mobil formed a consortium (50%: 50%) to search for oil in Nakhichevan. However the search efforts failed in February 2002.[57]

IV. Impact of Conflict on Everyday Life in Nakhichevan
 
This is not the first time that Nakhichevan was blockaded and attacked by Armenians. Between 1918 and 1920 Nakhichevanis suffered from Armenian assaults and blockades.[59] Between 1918 and 1920 in the town of Sadarak 102 people were killed during actual attacks of Armenians and almost 15 times of that number, 1500 people died due to the famine, exposure and maladies.[59] Therefore, poor living conditions resulted by aggregation and blockade causes more serious damage to the people than the actual assaults. Thus the effect of blockade on living conditions of Nakhichevanis was investigated.

1. Unemployment

Because of the blockade a lot of people lost their jobs and poverty increased. By 62.9% today Nakhichevan has the highest poverty incidence in Azerbaijan. In addition to this, 13.1% of Nakhichevan are extremely poor.[60] Although official unemployment rate 6.6% in Nakhichevan the real numbers are much higher.[61] There are 198,000 people in Nakhichevan who are able to work and 41948 people are employed which makes unemployment 78.8 %.[62] Furthermore it has been reported that in Sadarak only 230 people out of the 7,500 able-bodied population has jobs.[63]

2. Lack of Water

Access to safe water sources is one of the major necessities for health. Unsafe water is a major invitation for diseases such as trachoma, cholera, typhoid etc. According to statistics in Nakhichevan 31.6% of the population uses the unsafe drinking water sources such as pond, river/stream, unprotected spring etc.[64] This situation threatens the health of the people in the region.

Water is essential for life and for the economy of Nakhichevan where agriculture is the driving force and the climate is dry. The agricultural work is performed only in irrigated lands in Nakhichevan. Due to the blockade the irrigation system in Nakhichevan fell apart because of lack of parts required for maintenance (such as pumps).[65]

According to International Organization for Migration (IOM) report, the opportunities of the local people to manage the family and invest money in agriculture and animal husbandry became limited due to the lack of irrigation water. Dry farms resulted in loss of crops and rise in unemployment. In addition, IOM stated that water scarcity in many parts of Nakhichevan forced people to migrate to other countries, mostly to Turkey.[66] At least one third of the Nakhichevan’s population has immigrated for searching jobs.[67]

3. Child Labor and Education

Another side effect of lack of energy and lack of water is to increase domestic work which is defined as cooking, cleaning, washing clothes, fetching water and caring for children. Due to the blockade the life conditions became worse which increased the heavy burden on the children. For example in the summer time, there is a shortage of basic drinking water especially in south Nakhichevan.[68] The people must walk many kilometers to bring water to home, which increases domestic work especially for children. MICS results indicate that 12.4% of the children in Nakhichevan are doing more than four hours of domestic work.[69] This is the highest percentage in the republic and worse than the situation of children of IDP and refugees (Table IV).

Table IV[70] shows the child labor in Nakhichevan.

Table IV	Domestic Work Less Tan 4 hours/day	Domestic Work 4 or more hours/day	Family Work	Currently Working
Baku	49.9	2.3	1.2	4.6
Nakhichevan	56.2	12.4	8.7	20.2
Center, North	54.7	7.9	4.8	16.6
West, S. West	57.2	5.1	6.3	15.2
South	47.1	1.3	2.4	13.1
Resident	53.7	5.4	4.1	13.4
IDP/Refugee	46.5	3.7	3.7	9.1

Child labor is very important because children who are working are less likely to attend school and more likely to drop out. Nakhichevan has the lowest literacy rate in the republic, 90.6%.[71] This rate is likely to go down because of the incidence of the highest child labor (20.2%)and highest number of drop outs (which is the result of high child labor and high poverty) in the country. 5.9 % of the children who started first grade drop out in first year, which is highest drop out rate in the republic.[72] Besides drop out, parents cannot afford the school expenses, thus the number of children aged 36-59 months in Nakhichevan who are attending some form of organized early education program is the second lowest (2.7%) attendance rate in the republic.[73]

4. Lack of Food and Malnutrition

Due to the blockade Nakhichevan became an isolated place since the beginning of 1990’s. Lack of sufficient food supply caused starvation. When the news of starvation reached to Turkey[74] and Iran[75], tons of food from both countries was sent to Nakhichevan by trucks. This starvation was not a short term incidence. In 1998 the relief agency ADRA provided supplement feeding (4 kilogram food per person per month) for 100,000 needy people in Nakhichevan.[76]

Household wealth correlates strongly with nutrition and children’s nutritional status is a reflection of their health.  High poverty and lack of sufficient food brought child malnutrition to Nakhichevan. Furthermore, lack of adequate food supply and high disease prevalence affected the development of children.  MICS results show that 23.7% of children under-five are stunting (shorter according to their age; chronic malnutrition) and 12.4 % are severely stunting. 19.6% of under-five children are underweight (thinner according to their age; general malnutrition) and 7.2 percent are severely underweight. 7.2% of the under-five children suffer from wasting (thinner according to their height; acute malnutrition) and 1% are severely wasted.[77] The 19.9% of live births weigh below 2500 grams at birth and this is the highest percentage in the country.[78] These numbers reveal the real face of malnutrition in Nakhichevan. Severe undernourishment was prevented by small kitchen gardens and subsidized prices for bread.[79] Although Nakhichevan was never invaded by Armenia and there are relatively small numbers of IDPs and refugees in Nakhichevan, the numbers clearly indicate that Nakhichevanis suffer in most cases more than refugees/IDPs.

The blockades lower the quality of the products produced for domestic consumption.[80] The best example is the quality of table salt sold in Nakhichevan. Deficiency of iodine in the diet is the world’s largest single great cause of preventable mental retardation and can lower the average intelligence quotient (IQ) of a population by as much as 13 points.[81] Furthermore iodine deficiency results in widespread goiter problems, stunned growth among children and miscarriages among pregnant woman.[82] As it is expected the percentage of households with adequately iodized salt is around 11% in Nakhichevan, which is the lowest in the country.[83]

Table V[84]: Cooperation of Nakhichevan with other regions of the republic and total refugee and IDP population particularly with regard to malnutrition and proper salt ionization.

Despite all peace efforts, it is clear that Armenia will continue her aggressive behavior towards her neighbors. By completion of Baku-Tbilisi-Ceyhan oil pipeline in 2005 the export of Azerbaijan will increase. Hopefully the projects which alleviate the isolation of Nakhichevan will be funded easily.

1. Alternative Transportation routes for Nakhichevan

The railway route linking Georgia with Nakhichevan via Turkey can be put into operation. The construction of Kars-Tbilisi railway is on its way.[85] The project of Kars-Nakhichevan railway communication will provide a vital rail link between Nakhichevan and members of CIS as well as Turkey. By using railway communication Nakhichevan can export more products to members of CIS cheaper and easily.  With the opening of Nakhchivan-Erzurum-Istanbul air route Nakhichevan’s isolation will be eased.[86] Better and shorter rail and motorways through Iran will definitely establish communication between Nakhichevan and Azerbaijan’s mainland.

2. Production of sufficient Energy

The recent agreements between Iran and Azerbaijan will solve the energy problem in Nakhichevan temporarily. However, Iran in the past used its monopoly on Nakhichevan’s energy supply to pressure Azerbaijan for her own demands. Recent tension between Iran and USA over international terrorism and Iran’s nuclear program pushed Iran to have better relations with her neighbors.  Iran has Azeri minority which frightens Tehran. Any movement in Azeris of Iran may end the recent good relations between Iran and Azerbaijan. Therefore, Nakhichevan should take steps for self sufficient energy production.

The efficiency of the Araz power plant could be increased easily. With improvements in the economy the Nakhichevanis could by better cars with improved fuel economy. Rehabilitation of the road network will also improve fuel economy. Biomass can be converted into a number of liquid fuels, including methanol, ethanol, biodisel, and pyrolysis oil. In Nakhichevan where agriculture is the main economical branch energy from biomass could be produced. Especially ethanol which could be produced from sugar beet and corn can reduce the energy import of the exclave. Forest management and agricultural soil management is anyhow needed for the prevention of salinization and erosion. Using the forests in a controlled way and using the waste of cereal crops as a fuel in private household equipment might also help to alleviate energy problem of Nakhichevan. Soviet-style buildings do not have good isolation.[87] Building more energy efficient buildings will reduce the energy consumption. According to ERBD Nakhichevan has the best solar energy resource potential in the republic (between 3.0 to 4.7kWh/m2/day)[88], furthermore Nakhichevan has the potential for producing 70MW/year from wind energy.[89] According to same report small hydro power projects on the territory of Nakhichevan are feasible (Table VII).[90]

TableVII[91]: Possible Energy Projects in Nakhichevan.

Table VII	Description	Capacity
Renewable Energy	Wind energy	70 MW
Renewable Energy	Solar energy	3.0-4.7 kWh/m2/day
Hydro power project	Arpchai on Arpchai River	12.0 MW
Hydro power project	Vaikhir on Nakhchvanchai River	4.7 MW
Hydro power project	HPS #1 and #2 on Gianjachai River	12.9 MW

Conclusion

Between 1988 and 1994, Armenians forcibly gained control over Mountainous Karabakh district and seven regions bordering with it which consists of almost 20% of the Azerbaijan’s territory and attacked the Nakhichevan Autonomous Republic. Since the beginning of 1990’s Nakhichevan is under the blockade of Armenia. The Armenian blockade turned the clock back to medieval ages in Nakhichevan. The blockade affected every aspect of lives of Nakhichevanis. The economy is crippled. Production decreased by 2/3. Unemployment increased, 44,798 people lost their jobs.[92] When the numbers of available jobs were going down, the prices went up. Trade stopped. Due to high poverty, prevalence of diseases increased, even the number of suicides increased. It is expected that Nakhichevan has the highest infant and under-five child mortality rate in the republic.[93] One this of Nakhichevanis immigrated to other countries. Although the Armenians complain about the so-called blockade, the economical situation is worse in Nakhichevan than Armenia.[94] According to UNICEF’s survey the living conditions of Nakhichevanis in most cases are worse than the Refugee and IDP population in the country. As a conclusion, although it is getting better, the Armenian blockade made difficult to live in Nakhichevan over 15 years.