Stefan Meister
Head of the Center for Order and Governance in Eastern Europe, Russia, and Central Asia at the DGAP
June 29, 2026
A Declining, but More Dangerous Power: Russia’s Receding Reach in the Neighbourhood
Russia’s aggression against Ukraine not only marks the end of the collective European security order, negotiated after the Cold War, but also accelerates Moscow’s decline as a regional power. Russia is waging this war not from a position of strength—but of weakness.
Following Ukraine’s Revolution of Dignity (2013–14), the Kremlin saw no option but to resort to military force to avoid losing the country entirely. The full-scale invasion of 2022 aimed to restore Russia’s sphere of influence and reverse the degradation of Russian imperial standing in its ‘near abroad’.
However, President Vladimir Putin has achieved exactly the opposite. Russia was viewed, since the end of the Soviet Union, as a security provider in some countries of the South Caucasus and Central Asia and (wrongly) recognised by many in Europe as a stabilising force. Now, its neighbours increasingly see Moscow as a security risk from whom they want to distance themself.
The war of aggression against Ukraine has once again reminded countries like Kazakhstan, Georgia, and Moldova how dangerous it is to live too close to Russia. We are now observing balancing strategies, including a search for alternative trading partners and routes, as well as, in the case of Moldova and Ukraine, the pursuit of EU integration. Huge losses in Ukraine forced Russia to redeploy some troops and weapons from its military bases in Tajikistan, Armenia, and the occupied Georgian regions of Abkhazia and South Ossetia.
This has degraded the Kremlin’s military capabilities and power projection in Russia’s neighbourhood. Short of troops to spare and focused on Ukraine, Moscow sought to avoid being dragged into regional conflicts. Azerbaijan has capitalised on Russia’s relative weakness to complete the conquest of Nagorno-Karabakh in 2023. Following the Second Nagorno-Karabakh War, Moscow mediated a ceasefire in 2020—and thus acquired the right to station up to 2 000 internationally unrecognised ‘peacekeepers’ to protect the local Armenians who have for centuries lived in the area. However, Russia was unable or unwilling to follow through, which allowed Azerbaijan to forcibly displace the Armenian population of Nagorno-Karabakh, while Moscow withdrew its forces earlier than initially agreed.
A Weaker Bargaining Position
The war in Ukraine and sweeping sanctions have eroded Russia’s negotiating position vis-à-vis both regional and external actors, forcing the Kremlin to recalibrate its interests in the ‘post-Soviet space’. In particular, Moscow is in dire need of new markets for its oil and gas, as well as alternative trade routes and partners to circumvent sanctions.
The South Caucasus has become an important transit artery to Iran and further to India. To export its products via the north–south corridor, Russia needs good relations with Azerbaijan and Georgia. In the summer of 2024, Putin paid a two-day visit to Baku, highlighting the significance of this partnership. The escalation following the downing of the Azerbaijani Airlines plane over the Caspian Sea in December 2024 and Putin’s admission in October 2025 of the Russian air defences’ mistake suggested that Baku was willing to neither accept Moscow’s dominance nor make any concessions. Azerbaijan closed the regional branch of Rossotrudnichestvo and terminated operations of the Russian House in Baku.
Since the start of the full-scale invasion, Putin has visited Central Asian countries more than ever before. Similar to the South Caucasus states, Kazakhstan, Kyrgyzstan, and Tajikistan, as members of the Eurasian Economic Union, are especially critical to circumventing sanctions. Some of them now import Russian resources at lower prices, and their overall bargaining positions have been strengthened. This is further reflected in a growing sense of confidence at summits, where Central Asian leaders no longer speak Russian but instead address Putin in their national languages.
The Central Asian states have begun to coordinate more closely.
Kazakhstan, Uzbekistan, and Azerbaijan seek to develop the Middle Corridor transit route across the Caspian Sea and through the South Caucasus to boost trade with Europe, bypassing Russia. Moscow repeatedly tried to pressure Astana by disrupting Kazakh oil exports via Russian ports, which only spurred the search for alternative means to access the European markets.
Two Regions, One Trend
The principal trend in Central Asia is the intensification of regional cooperation. Similar to Russia’s approach to the South Caucasus, Moscow has always exploited interstate conflicts to increase its own influence: while acting as a mediator, the Kremlin has fuelled tensions to maintain control. Now, the Central Asian states have begun to coordinate more closely on the economy, the use of natural resources (such as water), and regional infrastructure. In 2025, Kyrgyzstan and Tajikistan concluded an agreement, mediated by Uzbekistan, that ended a decades-long border dispute.
Likewise, the countries of the region have been deepening cooperation with China, the EU, the US, Turkey, and the Arab states—and doing so in a coordinated manner. In the South Caucasus, Azerbaijan has been working closely with Turkey on the military front, which was crucial for its victory in the Second Nagorno-Karabakh War, while Israel has emerged as its major arms supplier. Russia, in the meantime, has been losing shares across defence markets in both regions.
The countries of the region have been deepening cooperation with China, the EU, the US, Turkey, and the Arab states—and doing so in a coordinated manner.
Even in Armenia, which has historically treated Russia as a protecting power and primary weapons supplier (at discounted prices in the framework of the Collective Security Treaty Organisation), Moscow has been replaced by India, followed by France. By prioritising the front lines in Ukraine, the Russian military-industrial complex has been losing its traditional markets in the region, especially to China and India. Furthermore, not sufficiently backed by Russia during the war with Azerbaijan, Armenia suspended its membership in the Moscow-led CSTO.
The Rise of Third Powers
The growing influence of external actors in the post-Soviet space is yet another trend that highlights Russia’s decline. Moscow is losing its dominance and becoming just one of many players. Turkey has become a major stakeholder in the South Caucasus and has been gaining political and economic leverage in Central Asia. Through the Organisation of Turkic States, Ankara has established a platform to boost, first of all, cooperation with Central Asian countries and Azerbaijan on economic issues.
Iran has long accepted Russian hegemony in the South Caucasus due to Russia’s ability to keep western countries out, or at least balance them. Since 2022, however, Tehran has become more active in the region as Moscow has struggled to maintain the power equilibrium. After Russia ceded its role as a broker between Azerbaijan and Armenia, Iran has intervened in favour of the latter, also accepting an EU Monitoring Mission to Armenia on the border with Azerbaijan. Both the EU and Iran have overlapping interests to stabilise Armenia and prevent an escalation with Azerbaijan. In the past, Iran would not have agreed to such an arrangement, but since Russia’s decline in the region, Tehran has become more supportive of initiatives of other external actors like the EU.
Moscow is losing its dominance and becoming just one of many players.
Armenia and Azerbaijan have since negotiated a peace agreement bilaterally—without Russian involvement for the first time—guaranteed by the US. It was confirmed at a summit in Washington in August 2025 between Prime Minister Nikol Pashinyan and President Ilham Aliyev, with US President Donald Trump present. The so-called Trump Route for International Peace and Prosperity (TRIPP) engages the US in the region as a security guarantor between Baku and Yerevan. Russia, meanwhile, can only watch as its adversaries and partners alike gain influence in its ‘traditional backyard’—a scenario unthinkable a few years ago.
Since 2022, the EU has shed any regard for Russia’s interests in this shared neighbourhood. In addition to individual member states supplying military and financial resources to Ukraine, Brussels has offered Ukraine, Moldova, and Georgia the prospect of accession to pull them out of the ‘grey zone’ between Russia and the EU. In parallel, the EU’s strategic approach to the Black Sea, published in May 2025, has elevated the region’s significance and defined, for the first time, European security policy objectives. To this end, the EU—together with international financial institutions such as the European Bank for Reconstruction and Development and the Asian Infrastructure Investment Bank—will invest in alternative trade routes to Central Asia and beyond via the South Caucasus. Separately, both the EU and member states, such as Germany, have developed 5+1 formats to foster economic and trade relations with Central Asian partners.
Russia can only watch as its adversaries and partners alike gain influence in its ‘traditional backyard’.
Above all, however, it is China that has benefited most from Russia’s receding sphere of influence. Already the dominant trading partner in Central Asia, China is investing in infrastructure along the coasts of the Caspian and Black Seas, from Kazakhstan to Georgia, and has inked free trade agreements with several countries in both regions. For many, Beijing is increasingly a security partner, taking over Russia’s traditional role: it supplies digital and surveillance technologies, as well as offers training for border troops and security forces. Moreover, China is the leading exporter of electric vehicles, meaning it will also provide digital service platforms for other sectors in the future. Even though Russia continues to export internet surveillance technology, it has been losing competition to China.
The End of Russian Hegemony
All these developments underscore Moscow’s diminished clout in its ‘near abroad’. Russia, albeit still a regional heavyweight, faces increasing challenges from external powers and must compromise to an extent it never has before. New orders are emerging in the South Caucasus and Central Asia, driven by local and global developments, while the Soviet legacy is being increasingly marginalised, especially among younger generations. The states themselves are gaining more agency, and Russia cannot bargain with them from the same position of strength, as it once did. For instance, Armenia—traditionally heavily dependent on Moscow for trade, energy, and strategic infrastructure—has been enhancing cooperation with the EU while curtailing Russian influence step by step, including in security and border control.
It is China that has benefited most from Russia’s receding sphere of influence.
For the first time in recent history, there is no hegemon determining the South Caucasus’ fate. States are shaping the new regional order and balancing relations with external actors. Azerbaijan positions itself as the leading force in the South Caucasus dynamics, whereas in Central Asia, Uzbekistan and Kazakhstan are at the forefront. Moscow is now viewed as a security risk even by authoritarian states, as it attempts to influence elections and domestic discourse through disinformation, and no longer has any red lines regarding the use of force.
Russia, nonetheless, remains one of the world’s largest nuclear powers and continues to coerce its neighbours through military, economic, and energy leverage. Yet decoupling is underway. Moscow is weakening and lacks the resources, as well as soft power, to steer regional dynamics in the neighbourhood. It is thus becoming an even more disruptive actor that projects power through military and hybrid means, but is unable to dictate regional order. This is precisely what drives the post-Soviet states’ desire to distance themselves more and more from the big neighbour to the north.
The US–Israeli war on Iran will not reverse this trend. In the short term, it does give Russia more revenue from the lifting of US oil sanctions and may affect the supply of American weapons to Ukraine. But this does not solve structural problems for Russia, whose leadership lacks a long-term vision. Even if the war in Iran might jeopardise the TRIPP in the South Caucasus and make the northern trade routes more attractive to the Central Asian states, it will not end their interest in diversifying away from Russia.
This article was written for the Lennart Meri Conference special issue of ICDS Diplomaatia magazine. Views expressed in ICDS publications are those of the author(s).
