Economy / Azerbaijan
Azerbaijan
June 2011 | Risk SummaryWe maintain that a full outbreak of another war between both sides over the disputed territory is unlikely, as the costs of such a war would far exceed any potential benefits for either side. However, risks of miscalculation of responses to violent clashes, and populist nationalism in the face of rising popular pressures, mean that such a scenario cannot be completely discounted. International mediation, especially with the involvement of the two main regional powers, Russia and Turkey, which maintain close ties with Yerevan and Baku, have helped to ease tensions.
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