By Thomas de Waal in Stepanakert (CRS No. 22, 10-Mar-00)
The man who used to run the defiant Armenian territory of Nagorny Karabakh, former commander-in-chief Samvel Babayan, is out of power and searching for a new role - this time in politics. The leaders of Karabakh cannot agree over the peace process: Babayan says he is not convinced the war is fully over while the official authorities are more optimistic.
Babayan, whose slight frame and quiet manner make him look more like an artist than a famous war veteran, ran the Karabakh armed forces, which defeated Azerbaijan in 1994. He was sacked as defence minister last December.
Although Babayan says that he has yet to decide whether or not to stand for parliament, he is almost the only Karabakhi leader to insist that deadlock in the ongoing peace talks carries the danger of renewed fighting. He maintains that, as a military man, he is better placed to make progress at the negotiating table than the politicians.
"If there are no concessions from both sides, we are moving towards war," says Babayan.
However, the territory's elected leader, Arkady Gukasian, believes that there has been a definite shift in mood over the Karabakh dispute. "I think the main thing is that neither in Armenia, nor in Nagorny Karabakh, nor in Azerbaijan do people believe that the other side wants to resolve this question by military means," he said.
"I myself am convinced - and I think this is the opinion of the majority of the population of Nagorny Karabakh - that, in Azerbaijan, the party of war is not strong enough to convince us that we have to decide this problem through force."
Certainly, Karabakh feels more peaceful than it has for many years. Gukasian ascribed the thaw in relations to the talks now being held between the presidents of Armenia and Azerbaijan, Robert Kocharian and Heidar Aliev.
Last month an independent Karabakh member of parliament, Karen Ohanjenian, visited Baku -- the first such high-level trip by a Karabakhi Armenian since the conflict was suspended in 1994.
Ohanjenian went to Azerbaijan in his capacity as a member of the Helsinki Citizens' Assembly, but the authorities gave his presence great publicity. He was received by the presidential administration and interviewed on television and in the newspapers -- interviews in which, he said, his frank views on the Karabakh situation went unedited. He also met former Azerbaijani neighbours, who told him of their longing to return to their homeland.
"The reception I got from those inviting me and from ordinary citizens changed my impressions radically about Azerbaijan," said Ohanjenian. "People recognised me on the streets, said 'Welcome', 'Let's build peace!' It was very pleasant."
Meanwhile, the Karabakhi leadership is adamant that Babayan's power is waning. According to Karabakh's foreign minister, Naira Melkumian, when Babayan was sacked last December, "Everyone breathed a sigh of relief"
Karabakh's elected leader, Gukasian, comments, "I think that these myths, which were born during the war-years, convinced some members of the population, including Samvel Babayan, that they were irreplaceable, that they were almost saints. All of that, of course, is far from the truth. Nothing extraordinary has happened. Samvel Babayan has over-estimated his possibilities, over-estimated his strength. He was a good commander, but he was always a weak politician."
The dispute is also an economic one. Babayan not only ran the army, but came to control large parts of the economy, including several factories. The Karabakhi leadership has weakened Babayan by jailing several of his associates on corruption charges. In order to outflank the influential veterans' association Yerkrapa, which is run by Babayan's comrades, a new pro-presidential organisation has been formed.
The opposition for its part is making use of a new newspaper, 10th Region - a reference to the idea that Karabakh is Armenia's 10th province - which openly criticises the authorities.
But while war politics continue to take centre stage, other storm-clouds are gathering in the wings. The state of the republic's economy is likely to become a crucial factor in any future political showdowns.
In Stepanakert, there is a superficial impression of prosperity. The city itself has now been fully rebuilt. There is day-long electricity, supplied from Armenia, and the Goris-Stepanakert road, built with diaspora money, is probably the best Armenian highway outside Los Angeles.
However, behind the scenes, the economy is in a slump. Many Karabakhis have left for Armenia or Russia in search of work; unemployment among those who have remained behind is extremely high. According to a local taxi-driver, this modestly-sized town boasts more than 130 taxis, which explains why they are touting for fares on every street corner.
The scars of war may be healing over, but new grievances are likely to take their place. Only the parliamentary elections, due to take place before June 23, will truly show where the population's allegiances lie.
Thomas de Waal will be reporting from the Caucasus this year for the BBC World Service and researching a book on the Karabakh conflict. He is co-author, with Carlotta Gall, of "Chechnya: A Small Victorious War" (Pan).