Azerbaijan is setting the rules in a changing South Caucasus

Azerbaijan’s strategic rise is turning it from a transit state into a regional rule-setter, with the Middle Corridor giving Baku growing influence far beyond its size, analyst Ahmad Alili says.

Alili, director of the Caucasus Policy Analysis Centre, told AnewZ’s Context programme that Azerbaijan had possessed the foundations of a “middle power” for years, but its ability to act independently and shape its region only became fully visible after 2020.

“The status wasn’t tested. It got tested in 2020 and in 2023, and we see the results of it,” he said. 

His argument is that the Second Garabagh War in 2020 and the events of September 2023 did not create Azerbaijan’s regional influence. Instead, they demonstrated capabilities that had previously been underestimated.

Speaking to programme host Orkhan Amashov, Alili said Azerbaijan had long pursued an independent foreign policy, maintaining partnerships while remaining prepared to disagree with larger powers when its national interests required it.

That ability to avoid being absorbed into another power’s political orbit is central to his definition of a middle power.

From buffer zone to connector

For decades, the South Caucasus was often viewed primarily as contested territory between Russia, Türkiye and Iran. The growth of the Middle Corridor is changing that perception.

• Azerbaijan to link Single Window system with Middle Corridor partners
• What is the Middle Corridor and why is Azerbaijan central to it?

Also known as the Trans-Caspian International Transport Route, the corridor connects China and Central Asia with Europe through Kazakhstan, the Caspian Sea, Azerbaijan, Georgia and Türkiye.

Azerbaijan sits at its pivotal geographic centre. Cargo arriving from Central Asia crosses the Caspian to the Port of Baku at Alat before continuing west through the South Caucasus.

That position gives Baku something larger states increasingly need: a route capable of diversifying trade away from traditional northern connections through Russia and southern routes through Iran.

The World Bank says coordinated investment and policy reforms could triple freight volumes on the Middle Corridor and halve journey times by 2030. It also stresses that the route’s importance goes beyond China-Europe transit, with greater regional trade expected between Azerbaijan, Georgia, Kazakhstan and European markets.

The European Union has also stepped up its engagement. In 2026, Brussels launched a connectivity platform intended to mobilise up to €2 billion ($2.3 billion) for strategic projects in the Black Sea region and South Caucasus. The EU and Azerbaijan have separately agreed to strengthen cooperation on transport, energy, trade and digital links.

For Alili, however, infrastructure is only part of the story. A country becomes a middle power when it can generate political solutions and influence the rules governing its region, rather than merely following policies designed elsewhere.

‘We are going to set our norms’

Alili’s most forceful point was that external powers must recognise that the South Caucasus has changed.

“We don’t want any external power to walk in and to set the norms. So we are going to set our norms, and there is a new reality,” he said. “You should acknowledge the new reality and accept it, and change your understanding of the region.” 

The statement captures a wider shift in Azerbaijan’s foreign policy posture. Baku is no longer presenting itself simply as a smaller country balancing between stronger neighbours. It increasingly argues that regional actors should take ownership of regional security, economic integration and peacebuilding.

That approach has become more significant as Russia’s influence in the South Caucasus has weakened and other actors, including the EU and the U.S., have expanded their diplomatic and economic involvement.

In July 2026, the European Commission announced up to €200 million ($232 billion) in grants intended to support connectivity and communities in Azerbaijan and Armenia, with the potential to leverage up to €2 billion in investment.

Greater international attention offers investment and diplomatic opportunities, but it also raises a central question: will new transport links strengthen regional ownership, or create another arena for competition between outside powers?

Influence without global reach

Alili draws a distinction between a global power and a middle power. Azerbaijan does not seek to compete with Russia or other major states across every region of the world. Its influence is concentrated closer to home.

“I believe the middle power is about being active in your own region, protecting your own interest in your own region,” he said. 

That regional focus helps explain why the Middle Corridor matters politically as well as commercially.

Azerbaijan does not need to match the military strength, population or economy of a great power to exercise influence. It needs assets and relationships that larger states cannot easily bypass.

Those include its position on the Caspian, transport connections through Georgia and Türkiye, energy infrastructure linking the region with Europe, and close political ties with Central Asian countries.

• Azerbaijan's Middle-Power moment
• Türkiye, Azerbaijan and Georgia sign declaration to boost regional cooperation

The more essential those links become, the greater Baku’s ability to ensure its views are heard.

Geography converted into power

The Middle Corridor still faces obstacles. Ports, railways and border systems must handle rising volumes, while participating countries need more consistent customs procedures, digital coordination and common operating standards.

An EU-backed study published in February said trade along the wider Trans-Caspian route had quadrupled since 2022, but warned that infrastructure remained missing, outdated or inadequate in several locations.

Those constraints mean geography alone will not guarantee success.

• President Ilham Aliyev says TRIPP corridor’s name signals long-term U.S. commitment
• Azerbaijan has 'tremendous opportunities,' says quantum CEO

Azerbaijan’s longer-term influence will depend on whether it can help turn a collection of national railways, ports and border crossings into a reliable international corridor.

Alili’s central claim is nevertheless clear: the country’s role is no longer defined only by where it lies on the map.

Through military capability, diplomatic autonomy and growing control over strategically important connections, Azerbaijan is attempting to convert its geography into lasting regional power.

The Middle Corridor may be the clearest evidence of that transformation - not simply a road between East and West, but a platform through which Baku intends to help shape the future of the South Caucasus.

Tags

Azerbaijan TRIPP Middle corridor Türkiye European Union