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Paper short abstract:

This paper examines the recent confrontation between Iran and Turkey in the Caucasus region from a political economy perspective within the framework of a new Eurasian economic paradigm encapsulating the region.

Paper long abstract:

Turkish-Iranian relations have been historically characterized by intermittent periods of cooperation and competition short of military conflict, which is a reflection of their traditional omni-balancing tendencies. The initial, albeit subtle, signs of departure from this pattern were observed with the post-2011 transformations in the Middle East. What is remarkably puzzling though is that the two countries never approximated a direct military and diplomatic confrontation in the Middle East as much as they did in the Caucasus after the eruption of the 2020 Karabakh War. This paper thus examines why Turkish-Iranian relations have been peculiarly uneasy in the Caucasus region. I argue that the shift in global economic balances upon the gradual emergence of a new Eurasian economic paradigm has redefined the relevance of the Caucasus region in the Eurasian context, which led Iran and Turkey to recalibrate their own positions and interests regarding the region. I analyze both states’ positions vis-a-vis China’s Belt and Road Initiative, EAEU-Iran preferential trade agreement, and Iran’s recent membership to Shanghai Cooperation Organization as factors greatly informing the new political-economic context within which they operate. Apart from contributing to the literature on the Caucasus crisis by adopting a political economy perspective, the study also provides policy-oriented insights as to the possible areas of cooperation between two states. The study methodologically rests on multiple qualitative methods including historical analysis, process tracing, and discourse analysis of Iranian and Turkish political elites’ statements on the Caucasus crisis and the greater Eurasian integration.