Artsakh (Nagorno Karabakh)[1] is an integral part of historic Armenia since the Urartian era (9-6th cc. B.C.) known as Urtekhe-Urtekhini. As a part of Armenia, Artsakh is mentioned in the works of Strabo, Pliny the Elder, Claudius Ptolemy, Plutarch, Dio Cassius, and other ancient authors[2].

The Nagorno-Karabakh conflict began in 1917, during the formation of three ethnic republics of Transcaucasia - Armenia, Azerbaijan and Georgia, as a result of the collapse of the Russian Empire. The population of Nagorno-Karabakh, 95 percent of which were Armenians, convened its first congress, which proclaimed Nagorno-Karabakh, an independent political unit, elected the National Council and the Government. In 1918-1920 Nagorno-Karabakh had all the trappings of statehood, including the army and the legitimate authority.

In response to the peace initiatives of the people of Nagorno-Karabakh, Azerbaijani Democratic Republic launched a military action. In August 1919, to prevent military conflict, Karabakh and Azerbaijan signed a preliminary agreement. 

Immediately after establishing the Soviet regime in Armenia, on November 30, 1920, the Azerbaijan Revcom[3] made a declaration recognizing territories over which Azerbaijan had claims - Nagorno Karabakh, Zangezour, and Nakhijevan, as inseparable parts of Armenia.

The National Council of Azerbaijan SSR, based on the agreement between the Azerbaijan Revcom and the governments of Azerbaijan SSR and Armenian SSR, the Declaration of June 12, 1921, proclaimed Nagorno-Karabakh an integral part of the Armenian SSR.

Based on the Soviet Azerbaijan waiver's statement of Nagorno-Karabakh, Zangezour and Nakhichevan and the agreement between Armenia and Azerbaijan governments from June of 1921, Armenia also declared Nagorno-Karabakh her integral part. The text of the Armenian government's decree was published in both Armenian and Azerbaijani media. Thus, a legal confirmation of the unification of Nagorno Karabakh to Armenia took place. Within the context of international law, it was the last legal act on Nagorno-Karabakh during the communist regime.

Ignoring the reality, on July 4, 1921, in Georgia's capital, Tbilisi, the Caucasian Bureau of the Communist Party of Russia, convened a plenary session. The fact that Nagorno- Karabakh is part of the Armenian SSR was reconfirmed. However, under Moscow's dictation and Stalin's direct interference, on the night of July 5, the previous day's decision was reviewed. The forced decision to incorporate Nagorno-Karabakh to Azerbaijan and form an autonomous oblast was made, not even keeping procedure. This decision is an unprecedented legal act in the history of international law when the party organ of a third country (R.K. (b)P) without any legal basis or authority determines the status of Nagorno-Karabakh.

In December 1922, Azerbaijani and Armenian SSR was included in the formation processes of the USSR. Only on one part of the territory of Karabakh on July 7, 1923, by the decision of the Central Executive Revolutionary Committee of Azerbaijan SSR, the Nagorno-Karabakh Autonomous Oblast was formed, within Azerbaijan SSR, by which, in fact, the Karabakh conflict was not resolved, but temporarily frozen. Moreover, everything was done so that Nagorno-Karabakh Autonomous Oblast had no common border with Armenia. During the entire Soviet period, the Armenians of Artsakh never put up with this decision, and for decades struggled for reunification with the motherland.

The current phase of the Nagorno-Karabakh conflict began in 1988. In response to the self-determination claims of the Nagorno-Karabakh population, the Azeri authorities organized massacres and ethnic cleansing of the Armenian people on the entire territory of Azerbaijan, particularly in Sumgait, Baku and Kirovabad.

On December 10, 1991, the Nagorno-Karabakh population declared the establishment of the Nagorno Karabakh Republic (NKR) by plebiscite, which fully complies with both international law norms and the letter and spirit of the USSR laws of that time. Thus, two equal state formations were created on the former Azerbaijani SSR territory - the Nagorno-Karabakh Republic and the Republic of Azerbaijan.

In Nagorno-Karabakh and surrounding areas populated by Armenians, the Azerbaijani authorities' policy turned into overt aggression and large-scale military actions against the Republic of Nagorno-Karabakh, which resulted in tens of thousands dead and caused considerable material damage.

Because of the war, Azerbaijan occupied the whole region of Shahumyan and the eastern parts of Martakert and Martuni regions of Nagorno-Karabakh. Neighbouring districts went under the control of Nagorno-Karabakh armed forces, which played the role of a security buffer to block further firing from the Azeri side towards Nagorno-Karabakh settlements.

In May 1994, Azerbaijan, Nagorno-Karabakh and Armenia signed a ceasefire, which, despite violations, is still effective.

Armenia and Artsakh seek a settlement exclusively through peaceful means. Artsakh has no future as a part of Azerbaijan, and whatever is the solution, it must emanate from the will of its people. That is the essence of the right of peoples to self- determination. Azerbaijan has neither legal nor political or moral grounds to claim over Nagorno-Karabakh.



In 1989, the Republic of Nagorno Karabakh was 4.4 thousand square kilometres. The population was 189 thousand people, the vast majority of whom were Armenians. The economy was part of the big Soviet Union economy. Everything was planned from above and approved by Baku. The population of Nagorno-Karabakh was mainly engaged in agriculture. The industry was primarily based on the processing of local raw materials; there were wineries, meat and milk factories.

The war took invaluable human losses from Artsakh. The ceasefire provided an opportunity to start the economy's recovery process (you can find Artsakh's economic development in figures[4] at the end of this Client Note).

It is already about 26 years after the end of the large-scale war in Artsakh. The second Armenian state continues to fight against external threats, blockades, economic difficulties and other challenges—a fight not only for the right to survive but for the right to live with dignity. Fight to create state institutions, a government system, a strong army, a state that meets modern standards, earns the honor of being recognized as an island of democracy in our region.

Undoubtedly, one of the most challenging directions in the reconstruction of post-war Artsakh was the destroyed economy. Today Artsakh is one of the most prosperous republics in the South Caucasus. The population is engaged in agriculture, light and heavy industry, energy and services. Today, Artsakh's products have their worthy place in the Armenian and international markets, increasing the level of its presence, volumes, and geography day by day.

The wines, vodkas, and other alcoholic beverages produced in Artsakh are especially famous in different world corners. Artsakh fresh grapes, mulberries, hornbeams, pears and other fruits provide the incomparably mild taste of the drink produced here. In addition to beverages, the production of foodstuffs has gained momentum in recent years. Artsakh carpets and rugs based on rich historical traditions are in great demand not only in the former Soviet Union countries but also in Europe and the United States.

Undoubtedly, one of the main driving forces for the development of Artsakh's economy is the energy sector. In recent years, several dozen hydroelectric power stations have been established in the country. The modernization of the country's energy infrastructure and reservoirs' repair and operation have allowed the Artsakh authorities to ensure the state's energy security and create electricity export opportunities. In the words of former President Bako Sahakyan, Karabakh gained "energy self-sufficiency" in 2017. That was made possible by constructing 31 small hydroelectric plants on the mountainous region's fast-flowing rivers. A dozen more such plants are reportedly under construction now[5].

The Artsakh economy was worth just 140[6] million USD in 2007, and 660[7] million USD in 2016. Official figures indicate that it has since grown by around 10 percent annually in real terms, despite the lingering risk of a renewed war from the side of Azerbaijan.



[1] We will use both names interchangeably


[3] Revolutionary Committee - the main Bolshevik instrument of power at that time



[6] Approximately

[7] Approximately