Diplomacy
Analysts Call for Unified Economic Body Linking Armenia, Azerbaijan and Georgia
April 7, 2026
4
Min
As the South Caucasus enters what analysts are calling a pivotal window of opportunity, a growing chorus of regional experts is calling for the establishment of a formal, standing economic body that would link Armenia, Azerbaijan, and Georgia in a structured framework for trade, investment, and connectivity cooperation. The proposal, which has gained traction in think-tank circles and is now being discussed at senior government levels, reflects a conviction that the region's piecemeal approach to integration has left significant economic value on the table.
A Georgian political analyst, speaking at a Tbilisi conference in March 2026, articulated the case most directly: "The South Caucasus has all the ingredients for a functioning economic region — complementary resources, geographic proximity, shared infrastructure, and growing trade flows. What it lacks is an institutional mechanism to coordinate, arbitrate, and amplify these natural synergies." The proposal envisions a body modelled loosely on ASEAN's economic secretariat, with a mandate covering trade facilitation, joint infrastructure planning, and investment promotion.
The timing of the proposal is not coincidental. The Armenia-Azerbaijan peace process has removed the principal political obstacle to regional integration that defined the South Caucasus for three decades. With direct trade resuming between Baku and Yerevan for the first time since the Soviet era, and Georgia serving as an active facilitator of both parties, the three-country framework is no longer purely hypothetical. Prime Minister Pashinyan's description of Georgia's role as "truly praiseworthy" carries an implicit acknowledgment that trilateral cooperation is already taking shape organically.
Economic complementarities across the three countries are substantial. Azerbaijan possesses vast energy resources and capital but limited manufacturing depth. Armenia has a highly educated workforce and growing technology sector but constrained market access and infrastructure connections. Georgia offers the most developed logistics and financial services infrastructure in the region, along with Black Sea access and the most extensive international trade treaty network. A structured framework could allow each country to maximise its comparative advantages while collectively addressing shared weaknesses.
The Middle Corridor's expansion provides concrete infrastructure around which cooperation could coalesce. The EU's €10 billion investment programme explicitly involves all three South Caucasus states, with Azerbaijan, Georgia, and Armenia each playing distinct but complementary roles in the corridor's functionality. A regional economic body could serve as the institutional interlocutor for EU corridor investment, improving coordination and reducing the transaction costs of cross-border project implementation.
Obstacles to formalising such a body remain significant. The peace treaty between Armenia and Azerbaijan has not yet been concluded, and residual sensitivities on both sides mean that formal institutional engagement requires careful sequencing. Georgia, which has navigated its position as a bridge between the two former adversaries with considerable diplomatic skill, would need to play a leading convening role while avoiding any appearance of taking sides.
International observers, including the EU and the US State Department, have signalled support for increased South Caucasus integration as a component of broader regional stability. Atlantic Council analysts have noted that Washington's TRIPP initiative could provide both the financial incentive and the institutional scaffolding for a regional economic body, linking corridor investment to governance benchmarks that would encourage the necessary political cooperation. Details are available at the Atlantic Council.
For businesses operating across the South Caucasus, the prospect of a regional economic body is potentially transformative. A harmonised regulatory framework, unified investment promotion, and jointly managed corridor infrastructure would reduce compliance costs, improve logistics predictability, and create a combined market of nearly 20 million people that would be far more attractive to international capital than any single country in isolation. The proposal deserves serious attention from both governments and the private sector, according to Azerbaijan Press Agency.
