Sadakhlo Neutral Zone for Armenian-Azerbaijani Contacts: Use of Trade as a Tool for Conflict Transformation


The collapse of the Soviet empire and the ensuing flare-up of many of its inherent ethnic and political conflicts radically changed the traditional economic ties and geopolitical map of the post-Soviet world. Today, some researchers have pointed out that the best way of solving regional conflicts is trying to link conflicting sides through economic relations and creating an economically integrated area that will benefit all sides in conflict (Champain, 2004, pp. 18–26). The proposed energy supply projects, which are gaining support among Caucasian experts, emphasize the economic priorities of regional cooperation, requiring a new, more pragmatic approach by conflicting political elites to the issues of stability and economic development in the region (Nelson, 2000).

The market in Sadakhlo, a village whose population is predominantly Azerbaijani and is situated on the Georgian-Armenian border, was long known as one of the constant economic hubs in the South Caucasus. Among infrequent ruminations on its character and functional role, it displayed an Armenian-Azeri composition of the trading community, which was a special attraction for many years. This market had existed since the early 1990s and had been actively operating since 1993. Right from the beginning it attracted the unemployed in Armenia and Georgia with its opportunities (Huseynova, 2009, p. 37). Armenians, Azerbaijanis and Georgians went there to trade or to engage in different types of work, whether it be in the form of paid work for someone else or their own business to survive. “Trade relations” were conducted mainly between the Georgian Azerbaijanis and Armenians. The Azerbaijanis were selling, the Armenians were buying and the Georgians, as “landlords,” were “controlling” (Juvarly & Shabanov, 2004, pp. 216–217). The market was closed in 2007. Unexpectedly for the local inhabitants, the closure of the market actualized the idea of a return to agriculture. However, the lengthy history of the market’s existence changed practically all of the routine practices of the inhabitants of Sadakhlo, who had become so used to the profits from the market that today they have little enthusiasm about returning to the previously common everyday work on the soil.

Economic relations between the conflicting sides, the Armenians and Azerbaijanis at Sadakhlo market, are interesting for a number of reasons. Such relations were an indication of the spontaneous processes resulting from economic transition, accompanied by impoverishment of the population. Real living conditions created incentives for people on either side of the frontline to engage in trade — often counter to the politics of the enduring conflict — as is the case with Sadakhlo market on the boarder between the Azeri-populated part of Georgia and Armenia. But large economic interests were tied to, and in many cases would even lead to, these developments. By saying large economic interests, I mean that in the case of trade enlargement the market would lead to the potential economical growth of the region and development of living conditions close to Sadakhlo villages.

Sadakhlo market could be a model for further cooperation between groups whose “mother countries” are in a conflicting situation (Juvarly & Shabanov, pp. 227–238). On one hand, the market is viewed as a model for satisfying the material needs of the Armenians, Azerbaijanis, and Georgians that live on the periphery of Georgia and Armenia, and whose economies are unable to fulfill expectations of the population living there. On the other hand, we see that Sadakhlo demonstrates that relations between the two nations can be different under different conditions and within a certain social, political, and economic framework. From the anthropological point of view, people hold different behaviors in their “mother countries” and abroad. It’s explained in the way that people feel a collective national identity in their “mother countries” that is stronger than when they are in a neutral zone. The strong, collective identity is a problem in the current situation, which hinders communication and needs to be dealt with.

The example of Armenian-Azerbaijani constant coexistence in Sadakhlo market represents an impressive demonstration of compromise. It can also be a demonstration of the experience of successfully realized collective civic contacts in a situation when the so-called nation state does not obstruct the realization of these contacts. Trade and business contacts between Armenians and Azerbaijanis were in most cases perceived as something usual, and even after the closure of the market, the links between traders remain intact, which can be viewed as a positive sign.

The one infallible benefit the Sadakhlo market exhibited is the need for an atmosphere of permanent communication, and it could be of great importance in the future. In times of conflict, such trading areas also serve as locations potentially useful for dialogues. In the event of a peaceful settlement of the conflict, it is precisely these economic “contact points” that will help overcome syndromes of mutual hate in as short time as possible.

To evaluate the role of this trade zone properly, we need to examine the advantages it brings to those living beyond the confines of Sadakhlo. The role and significance of the market and its trade are controversial and open to dispute. But its existence means that it needs to be taken into account, and it is reasonable to explore whether the market can bring some broader overall benefit.

In any case, the Sadakhlo market example has demonstrated that no matter how tense relations are, trade can bring conflicting nations closer together and enrich both sides.




Champain, P. (2004). Introduction. In P. Champain, D. Klein, & N. Mirimanova (Eds.), (2004). From war economies to peace economies in the South Caucasus (pp. 18–27). London: International Alert.

Huseynova, S. (2009). Azerbaijanis and Armenians in Georgia: Spaces of coexistence. In S. Grigoryan (Ed.), Positive examples of coexistence from the history of peoples and states of the South Caucasus (pp. 33–44). Yerevan: ACGRC.

Juvarly, T & Shabanov, I. (2004). The potential impact of Sadakhly market on the settlement of the Armenian-Azerbaijani conflict. In P. Champain, D. Klein, & N. Mirimanova (Eds.), From war economies to peace economies in the South Caucasus (pp. 216–238). London: International Alert.

Nelson, J. (2000). The business of peace: The private sector as a partner in conflict prevention and resolution. London: The Prince of Wales Business Leaders Forum, International Alert, & Council on Economic Priorities.



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What are your thoughts on the subject?


Anna Poghosyan

1 May 2011

Thank you for so supporting and valuable comment Mrs João Sequeira ....

João Sequeira

27 Apr 2011

Hello from Portugal. I really appreciate reading your article, thank you for sharing it. This approach that the form of solving regional conflicts is by linking conflicting sides through economic relations seems to me even more important when we refer to the multiethnic Caucasian countries. The trade in the post soviet war wounded Caucasus is actually proving, by Sadakhlo Market example and eventually among others, to be one of the first steps wich is able to instigate the regional cooperation, beyond the diplomatic efforts.

Anna Poghosyan

7 Apr 2011

Thanks for reading and writing so valuable comment ! If I am not mistaken any trade area between Armenia and Turkey doesn’t exist but there is An Association of Businessmen and these association organizes different activities leading to Armenian- Turkish reconciliation . P.S Armenian -Turkish Boarder was closed in 1993.:)


6 Apr 2011

I like the article and the idea of using the Sadakhlo market as an example of previously existing regional cooperation and integration in the trade field between South Caucasian countries. Of course, economic relations are of a high importance and through having developed economic and trade relations we may overcome existing conflicts between our nations. I wonder if there were any such trade markets between Armenia and Turkey as well after the border closure in 1992. If yes, I would like to read your analyses about it as well. Thank you for your interesting article.