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Forecast Podcast: Clashes erupt between Armenia and Azerbaijan, sparking concerns of a broader conflict

Map highlighting Armenia and Azerbaijan

Editors Jimmy Lovaas and Alex Moore discuss the recent clashes between Armenia and Azerbaijan, plus more on Mexico Independence Day security measures, Serbia banning EuroPride, Queen Elizabeth’s funeral, El Salvador buying back debt bonds.

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These stories and others are also available in our free weekly Forecast newsletter.

This episode was produced with work from Factal editors Irene Villora, Vivian Wang, David Wyllie, Joe Veyera and Alex Moore.  Music courtesy of Andrew Gospe

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Factal Forecast podcast transcript

This is an unofficial transcript meant for reference. Accuracy is not guaranteed.


Welcome to the Factal Forecast, a look at the week’s biggest stories and what they mean from the editors at Factal. I’m Jimmy Lovaas.

Today is September 15th.

In this week’s forecast we’ve got Mexico Independence Day security measures, Serbia banning the EuroPride parade, a funeral for Queen Elizabeth, El Salvador buying back debt bonds and a look at the recent clashes between Armenia and Azerbaijan.  

You can also read about these stories and more in our weekly newsletter, which you can find a link to in the show notes.

Independence celebrations in Mexico City

Information compiled by Irene Villora

JIMMY: Mexico will commemorate the 212th anniversary of its independence from Spain on Friday. It will be doing so with a military parade and extensive security measures in place.

More than 18,000 members of the country’s armed forces will participate in the event at the center of Mexico City, where more than 10,000 people are expected to gather for the celebration. 

The city’s government started implementing enhanced security measures earlier this month in preparation for the event. 

Those preparations include a ban on people carrying fireworks or gunpowder on public transport and strict monitoring of metro stations. 

The state’s security office also announced a deployment of more than 1,400 police officers in the capital and additional resources like ambulances.

Now, a dry law will also be in place in at least five local municipalities of Mexico City [Tláhuac, Xochimilco, Tlalpan, Iztapalapa and Cuajimalpa] starting Thursday night in an effort to minimize altercations during the festivities. 

Public transportation will operate on a special schedule with travel impacts expected due to closures of some stations and roads near the military parade will be closed for the duration of the event. 

Special security measures will also extend beyond the capital on Thursday and Friday as celebrations take place nationwide. 

2022 EuroPride march banned in Belgrade, Serbia

Information compiled by Vivian Wang

JIMMY: Serbian authorities have issued a last-minute ban of the annual EuroPride parade planned for Saturday in Belgrade. 

Organizers, however, say they plan to go ahead with the march despite the ban and despite right-wing, anti-LGBT groups announcing a march through Serbia’s capital on the same day. 

Both marches are banned, according to the country’s interior ministry.

Of course, the ban on the EuroPride parade came just a few weeks after President Aleksandar Vucic announced he would not permit the event to take place in Belgrade. 

He acknowledged it was a “violation of minority rights,” but cited several reasons for the decision, including border tensions with Kosovo and concerns about right-wing and religious protests. 

Serbia has held Pride events in recent years without incident, but governments in the past have banned Pride parades and some in the early 2000s even faced violence from far-right nationalist groups. 

Now, if the EuroPride march and the anti-LGBT counterprotests move forward despite the ban, the risk of conflict will be high in Belgrade on Saturday, not only between EuroPride participants and counterprotesters, but also law enforcement attempts to crack down on both movements. 

EuroPride organizers have also announced they will be pursuing a legal appeal, saying the ban is unconstitutional.

Funeral of Queen Elizabeth II

Information compiled by David Wyllie

JIMMY: Monday will see the state funeral of Queen Elizabeth II, the longest reigning monarch in British history. It is expected to draw large crowds to London and nearby Windsor. 

World leaders, royalty and dignitaries are expected to attend, including U.S. President Joe Biden, leading to a major security operation that is already underway.

Following her death in Scotland, ceremonial processions and her lying in state at Westminster Hall have drawn hundreds of thousands of people. In fact, lines at the public visitation in London stretched along the banks of the River Thames. 

According to the funeral plan, the lying in state is scheduled to end early on Monday morning, hours before the funeral service at Westminster Abbey. 

The service, scheduled to begin at 11 a.m. local time, is a short journey from Westminster Hall. After the proceedings, the Queen’s coffin will be driven to Windsor Castle, west of London, for a service and committal in the royal chapel.

Now, the funeral is expected to pose unique challenges for London and the surrounding regions’ public services.

Large crowds, of up to a million people or more, are expected to gather on the Mall outside Buckingham Palace and in royal parks where they will be able to watch the funeral on large screens. 

Transport for London says services are expected to be busy and stations in central London may be closed. 

Numerous road closures are in effect across central London, especially in Westminster, with members of the public encouraged to walk. 

The day of the funeral has been declared a public holiday, with many businesses choosing to close, and it will end the 10 days of national mourning declared following her death.

Buyback window closes for El Salvador bond program

Information compiled by Joe Veyera

JIMMY: Holders of El Salvador sovereign debt bonds maturing in 2023 and 2025 have until Tuesday to take part in a voluntary buyback effort. The government has said the offer will not exceed $360 million

When the buyback plan was first unveiled earlier this summer, some saw the effort as a way to counter speculation about a potential default, with the announcement sparking a double-digit jump in the price of the junk-rated securities. 

El Salvador has bet heavily on Bitcoin — establishing it as legal tender last September — but it is down approximately 50 percent on its investments in the cryptocurrency. 

That move also put strain on the relationship between the country and the traditional credit market, as well as the International Monetary Fund.

Now, despite skepticism from analysts, President Bukele said in July that the country has the liquidity “not only to pay all of its commitments when they are due, but also purchase all of its own debt (till 2025) in advance.”

Armenia-Azerbaijan flare-up

Information compiled by Alex Moore

JIMMY: Our last item for this forecast is on the recent clashes along the Armenian border with Azerbaijan. For more on that I spoke with our Europe desk lead Alex Moore. 

JIMMY: Hi, Alex.

ALEX: Hello, Jimmy. 

JIMMY: You know, let’s just jump right into this. I guess to start, it was seeming like things had calmed down a bit between Armenia and Azerbaijan, but it looks like things went sideways this week or maybe even a little bit backwards. Can you catch us up to speed on what’s been going on?

ALEX: Yeah, of course. On the night, late the night of September 12, so Monday this week, really intense clashes broke out along the border region of Azerbaijan and Armenia as well as in the disputed Nagorno-Karabakh region, which bled later to Tuesday morning. And, yeah, the fights have continued ever since for the last couple of days. The Armenian side has confirmed at least 105 casualties with the Azerbaijani side confirming at least 50. But according to some unconfirmed reports, those numbers are very low. Both sides are apparently into the hundreds of casualties. So that marks easily the deadliest clashes since the conclusion of the 2020 Karbach war in November of 2020.

JIMMY: I saw that on Tuesday Russia said it had brokered a ceasefire. Did that fall through?

ALEX : It did. It did. Yeah, that fell very quickly. So the clashes continued ever since Monday night and they’ve continued to be very intense as of Wednesday.

JIMMY: Just to put things into context, how does this new flare-up compare to those in the past?

ALEX: Yeah, so like I said, it’s the most intense fighting flare-up since the 2020 war, which lasted for 44 days and was an extremely intense war that killed thousands – at least 7,000 according to low end estimates – and the two sides also fought a war, of course, in the late 80s into the early 90s for six years. What makes this different compared to the war in 2020 is that it has in large parts taken place, apparently, on sovereign Armenian territory, whereas in 2020 it was largely confined to the Nagorno-Karabakh region, which is disputed between the two. And since the war froze in November of 2020, with Azerbaijan agreeing to a peace deal where they seized large swaths of formerly Armenian- controlled territory in Nagorno Karabakh, there have been periodic clashes on a pretty low level, largely in the Nagorno-Karabakh, obviously, but this is easily the most intense, both from the intensity of the fighting, the weapons used – you know, Azerbaijan is using drones – and the fact that sovereign Armenian territory has been hit pretty heavily. And Armenia confirmed that Azerbaijan had punctured the state border. So not in Nagorno, in, like, the, you know, the sovereign, internationally recognized territory of Armenia. How much exactly we don’t know. There are a lot of unconfirmed reports that are currently floating up that I will not spread about just how far they’ve gone, but certainly a vastly marked escalation from anything we’ve seen since 2020. And in some ways, even compared to 2020 it’s different.

JIMMY: What are the main conflicts here? What’s driving these clashes, essentially?

ALEX: Yeah, it’s, you know, at its core, for the most part, it’s just another one of your post-imperial Soviet conflicts. The conflict dates back to the nineteen-tens really, but the seeds were sort of sowed when the Soviets colonized the region and they made the Nagorno-Karabakh Autonomous Oblast within Azerbaijan territory. So, while they were both colonies of the Soviets – they were both SSRs – the conflict was dormant, but when the Soviet Union collapsed, just your typical post-imperial war. Things obviously flared up very quickly in the late 80s and early 90s and ever since it’s been this low level conflict that has reared its head of course in 2020 and now once again. And it has to do with the, to be clear, I mentioned the Nagorno-Karabakh Autonomous Oblast, but the status of Nagorno-Karabakh, which Armenia essentially won in a war in the late 80s and 90s and administered as this place called the Republic of Artsakh under Armenian rule. And in the 2020 war, that was flipped and Azerbaijan conquered good chunks of Nagorno-Karabakh. Not all of it. Artakh still controls a sliver of it, including Stepanakert, which was their capital.

JIMMY: I hate to put you on the spot, and I know you can’t read the minds of the countries’ leaders, but do you think there’s much of a risk of these clashes leading to a broader conflict?

ALEX: I think, broader in the sense of a less localized war than we saw in 2020, which, while there was significant foreign assistance given to Azerbaijan, namely with Turkey and Israel being prominent armers of the Azerbaijani armed forces, that was a localized Nagorno-Karabakh war, whereas this has spilled over. And again, we don’t know just how much, but it spilled over at least a little into Armenia’s sovereign territory, which is a bit of a marked escalation compared to even 2020. And Armenia is a member of the Collective Security Treaty Organization, which is a Russia-led collective security alliance, somewhat akin to NATO. And because of that, Armenia has triggered – they took the very unprecedented step on Wednesday to trigger Article Four, which is the collective defense clause of that. So the CSTO, and you can read Russia, namely, has so far refused to intervene directly, militarily, but given that, you know, you’re looking at the potential risk of a proxy war involving Russia and Turkey. If this were to, like, truly spill over into Armenia proper outside of Nagorno-Karabakh. 

JIMMY: Well, I think everyone is hoping that doesn’t happen. While we wait to see how this all pans out, what do you think folks should be watching for next?

ALEX: Yeah, you know, as we discussed, the big question right now for me is just how deep into Armenian territory Azerbaijan went. So, Armenia’s Prime Minister Pashinyan, in sort of a marathon Q&A in the Parliament earlier on, on Wednesday, he mentioned that 10 km2 of territory had been invaded by Azerbaijan. We’ve yet to sort of see confirmation of just how extensive that control is. And the political situation also bears watching. I mentioned Pashinyan, he faced very strong protests in 2020. So Wednesday night, late Wednesday night, a lot of protesters hit Yerevan and were outside of Parliament because, during his marathon talk to Parliament, Pashinyan had a little slip of the tongue where he seemed to suggest that he’d be open to recognizing Baku sovereignty over Nagorno-Karabakh, which Armenia does not of course, in exchange for peace, which prompted some protest. He quickly clarified on Facebook posts that he did not mean Baku sovereignty over Nagorno-Karabakh. But the political fortunes of Pashinyan, you know, he could, very possibly he could face a no-confidence vote if members of his own coalition defect. And I mentioned Russia, too, of course. You know, I think it’s extremely unlikely that you see direct Russian intervention from a military standpoint against Azerbaijan, even with Armenia invoking the CSTO collective defense clause, but they’re going to be involved somehow. So yeah, I mean, a lot of moving parts to watch for.

JIMMY: Well, Alex, that’s all the time we have for today, but I thank you greatly for getting us up to speed. Such an important story. 

ALEX: Yeah, thank you. 

JIMMY: Take care.

Note on Armenia-Azerbaijan flare-up interview:

JIMMY: One quick note about the interview you just heard, shortly after we finished recording it, the Secretary of Armenia’s Security Council announced that a ceasefire had been reached with Azerbaijan. As of Wednesday evening, Azerbaijan has yet to confirm this. It also remains to be seen if any ceasefire will hold.

JIMMY: As always, thank you for listening to the Factal Forecast. We publish our forward-looking podcast and newsletter each Thursday to help you get a jump-start on the week ahead. Please subscribe and review wherever you find your podcasts. We’d love it if you’d consider telling a friend about us.  

Today’s episode was produced with work from Factal editors Irene Villora, Vivian Wang, David Wyllie and Joe Veyera. Our interview featured editor Alex Moore and our music comes courtesy of Andrew Gospe.

Until next time, if you have any feedback, suggestions or events we’ve missed, drop us a note by emailing hello at factal dot com.