USAID contracted Chemonics International and the International Center for Not-For-Profit Law to strengthen Civil Society Organizations (CSOs) in Azerbaijan through the Building Local Capacity for Development (BLCD) project. Civil society in Azerbaijan has deteriorated greatly since the 1990’s, and the project’s primary goal under USAID was to reinvigorate local organizations to promote the public interest and agenda. The project began in 2012, and sought to empower CSOs, sustain regional resource centers for CSOs, and improve the legal environment for CSOs. The program utilized training programs, grant proposals, and local CSO experts to help build capacity for CSOs. The program also worked with resource centers by conducting capacity training and compiling information pertinent to local CSOs. BLCD worked to engage government actors by drafting legislation, participating in dialogue with policymakers, and denouncing harmful legislation. While the program was successful in its adoption, it was cut short in 2016 due to sudden changes in the regulatory environment that notably inhibited the project’s continuation^[i].

Lessons Learned

Overall, the efforts by BLCD and its stakeholders were moderately effective in strengthening Civil Society Organizations in Azerbaijan. The project successfully temporarily improved the capacity and resources of 22 CSOs and resource centers^[ii]. However, there are several lessons to be learned from the fulfillment of this contract:

1. Similar projects should work with CSOs to more effectively compete for and utilize local resources and financing, as opposed to potentially unstable international funding. This can be done through increased training on grant writing and pitching, as well as a digital portal with information on possible local donors.
2. In the future, projects should be aware that changes in the policy landscape of the operating country may be volatile. It is important to engage policymakers early-on via stakeholders with personal communication channels and mutual interests. This can be done through roundtable discussions and recommending legislation early.

Regional Context and Background

The Central Caucasus region has long been a hotbed for political unrest. Azerbaijan, despite recent accomplishments, is no stranger to this disruption. After declaring independence from the Russian Republic after its fall in 1918, the nation soon became a Soviet Socialist Republic^[iii]. Since Azerbaijan’s full independence from the Soviet Union in 1991, Freedom House has cited that the political environment in Azerbaijan is not pluralistic and lacks sufficient competition^[iv]. The environments with regards to pluralism and competition in neighboring countries, such as Armenia and Georgia, are categorized similarly^[v]. Azerbaijan’s score has fallen rapidly since the election of its current President, Ilham Aliyev. Human Rights Watch also condemned and legally tried the regime’s treatment of human rights activists and NGOs, which presented a large issue concerning civil liberties^[vi]. These unsatisfactory rankings are based on the country’s ruling regime having a long and troubled history of imprisoning critics to the government and media, primarily out of fear of retaliation and rebellion. These constraints have made it increasingly difficult to promote public interest and policy aspirations throughout the country, which is critical in the development of Azerbaijan both economically and politically.

Problem in Azerbaijan

Civil Society Organizations in Azerbaijan are categorized by the International Center for Social Research as trade unions, educational organizations, community groups, or any group of citizens that promotes a general interest of the public^[vii]. Since 1991, the government has imposed stringent compliance regulations on CSOs, which are accompanied by substantial penalty fines if they fail to be met. These act supplementary to the ruling regime’s ability to jail critics and dismantle organizations that are seen as threats. In turn, many CSOs are fearful of lobbying in the public interest and building upon dialogue with government officials. The government has taken action to freeze assets and bank accounts of CSOs which are deemed threatening or illegitimate, such as in the case of The Extractive Industries Transparency Initiative^[viii]. Stringent regulations from the government, coupled with public fear of punishment, create a struggle for these organizations to function effectively in promoting the general welfare and public interests.

Many CSOs primarily lack capacity, resources, planning, funding, and the proper infrastructure to perform adequately and address the needs of their constituent bases. These organizations also lack the necessary capabilities in recruiting and maintaining a staff, which constitute a fundamental issue in terms of long-term stability. In addition, dozens of smaller CSOs do not have the legal or financial resources to even formally register with the government and achieve chartered status. Idealistically, these disadvantaged CSOs would have been able to gain assistance from government-chartered regional resource centers, whose primary function is to support CSOs. However, these resource centers often lack sufficient resources themselves, and are unable to administer the appropriate services to CSOs in need.

This substandard environment for CSOs and resource centers across Azerbaijan began to draw international attention from the West at the turn of the century. The European Union added Azerbaijan to its list of donations from the Civil Society Facility, an organization for EU neighborhood countries to bolster civil society^[ix]. The U.S. Agency for International Development also took notice, and created a contract (Building Local Capacity for Development) to support and strengthen Civil Society Organizations in Azerbaijan^[x].

Primary Actors

U.S. Agency for International Development (USAID)- The United States’ primary agency for promoting civil assistance to foreign nations. The agency works in over 100 countries across the globe to provide humanitarian assistance, promote global health, empower women and girls, catalyze innovation and partnership, and support global stability. Issued and funded the Building Local Capacity for Development (BLCD) project^[xi].

Chemonics International- International development firm headquartered in Washington, D.C. that utilizes 5,000 development specialists in over 70 countries to drive change in democracy and governance, sustainability, and supply chain, among many other technical areas. Functioned as the prime contractor in the BLCD contract, working to facilitate the development of CSOs in Azerbaijan and work with local stakeholders to deliver the contract^[xii].

The International Center for Not-for-Profit Law (ICNL)- Works to improve legal environments for civil society worldwide. Promotes fundamental freedoms in countries and regions all over the world in the areas of navigating restrictions, enhancing international norms, creating knowledge, raising awareness, and strengthening local actors. Worked as a subcontractor on Chemonics’ contract with USAID, collecting research and analysis from various stakeholders throughout the project^[xiii].

Azerbaijan NGO Support Council- Established in 2007, the NGO Support Council works to facilitate relationships between Azerbaijani NGOs, the government, and greater Azeri society^[xiv]. The Council was critical in BLCD’s support of CSOs in Azerbaijan, primarily by initiating strong relationships with the organizations and loosening regulations.

Azerbaijan Ministry of Justice (MoJ)- The Ministry of Justice is the primary regulatory agency within Azerbaijan. The Ministry is tasked with creating meaningful laws and legal reforms for the greater benefit of Azeri society^[xv]. The Ministry was fundamental in the eventual implementation of policies that led to the termination of BLCD.

Local Civil Society Organizations (CSOs) and Resource Centers- Local CSOs play a major role in advocating for the public interest, providing public services, and tending to the needs of citizens in Azerbaijan. Resource centers are government-chartered organizations dedicated to supporting regional CSOs. BLCD supported twenty CSOs and two resource centers across the areas of Democracy in Governance, Health, and Economic Growth^[xvi].

Methods

At the end of the project, BLCD was a $4M, four-year contract that aided twenty Civil Society Organizations and two resource centers. The project began in November 2012 and sought to encompass three main focuses^[xvii]:

-          Empower crucial CSOs engaged with public interest agendas technically and organizationally

-          Develop CSO resource centers that are able to support smaller or more marginalized public interest CSOs

-          Improve the regulatory structure and legal environment for CSOs to operate and sustain

In order to empower CSOs, BLCD first selected twenty prominent organizations working in the areas of Democracy in Governance, Health, and Economic Growth over the first two years. The project then conducted thorough Organizational Capacity Assessments (OCAs) using the USAID guide for each of the CSOs. An overwhelming majority of the groups were determined to be lacking capacity in the areas of resource management, project management, and administration. Each CSO then worked with BLCD to develop a customized improvement plan, focusing on areas which were initially determined to be unsatisfactory. The groups were originally educated through two management training programs in both computer security and financial management. The goal of this training was to educate CSOs on effectively managing their resources, maintaining a balanced budget, and using basic information technology securely. These training sessions were led by local consultants in order to engage the greater Azeri community and utilize resident expertise. At the end of the first and second years of the project, groups had the opportunity to apply for grant proposals from BLCD to sponsor CSO-specific projects. The project awarded ten grants ranging from $8,000 to $12,000, which allowed CSOs the opportunity to invest in themselves while developing valuable grant-writing skills. BLCD also compiled and constructed good governance handbooks for Azeri CSOs, which included functional methods for the organizations to enforce internal accountability and best practices^[xviii].

In the early 1990’s, the government of Azerbaijan established over 40 regional resource centers to effectively engage and support CSOs in their locales. By 2012 the remaining resource centers were exceedingly unfit to sustain themselves, much less local CSOs. BLCD initially selected two resource centers in key Azeri regions, and performed the required preliminary OCA appraisals. BLCD selected the CSOs based on proximity to organizations in the area, as well as potential capability for government collaboration, as to avoid early termination. Similar to the CSOs, BLCD guided the two resource centers in creating their own plans for sustainability, which were evaluated consistently throughout the project. Chemonics also advised the centers on collaboration with local universities that offered programs and courses in nonprofit management and leadership. The project enlisted local web developers and engineers to produce a web-based portal containing valuable documents, trainings, and information for Civil Society Organizations that did not have immediate access to BLCD’s grant programs, or were in impoverished areas that lacked the sufficient outreach and resources necessary to maintain a successful CSO^[xix]. Ultimately, the portal was not fully approved and therefore did not sustain past the preliminary stages.

Due to the changing legal environment for CSOs throughout the implementation of the project, it became inordinately difficult to promote collaboration between BLCD stakeholders and the Azerbaijani government. BLCD’s first step in ameliorating regulatory conditions was utilizing the International Center for Not-For-Profit Law in creating an Assessment of the Legal Framework for CSOs, which outlined the primary legal concerns for Azeri organizations, as well as regulations to be aware of. This analysis was updated again midway through the project, and has been cited in various pieces of academic literature^[xx]. Additionally, BLCD constructed several other guides and example legal forms crucial to CSOs, and distributed them accordingly to beneficiaries and stakeholders. In addition, the project enabled organizations by hosting informational sessions for CSOs, which informed leadership of integral policy modifications and current regulations. In addition to monitoring these policies, the project formally denounced harmful legislation towards CSOs from 2013 to 2015 and drafted new amendments to strengthen the legal environment. Unsurprisingly, the Azerbaijani government rejected all of BLCD’s proposals without significant attention or examination. BLCD also participated in a civil society forum in January of 2014. This forum resulted in a letter to President Aliyev demanding change for the damaging December 2013 amendments to regulatory CSO laws. This directly catalyzed a dialogue between Azeri CSOs, BLCD stakeholders, and government actors in early 2014. Although the project was unsuccessful at directly influencing national Azerbaijani policy, it was fruitful in fostering change in the Azeri Non-Governmental Organization Support Council. The project successfully lobbied for two advantageous amendments in the Council to support a deadline extension for CSOs to apply for grant registrations, and reduction in the list of necessary documents for the registering^[xxi].

Project Challenges

Unfortunately, the project was ended prematurely in 2016 due to damaging changes in the Azerbaijani legal environment and regulations surrounding CSOs. Starting in late 2013 after the presidential elections, the regime began to further scrutinize CSOs and tightened restrictions on the capabilities of these organizations. The government adopted Rules on Registration of Grant Agreements in 2015, which required all CSOs to register with the Ministry of Justice after they completed unreasonably complex registration as a legal entity. Subsequently, the government passed the “Donation Rules”, which required any organization receiving a foreign donation to register the donation with the Ministry of Justice. These were followed by further regulations in October of 2015 that restricted any service or grant provided by a foreign contractor to be registered. These regulations all allowed for unrestricted surveillance of CSOs by the Azeri government, which in turn created freedom for the government to arbitrarily reject a CSO for almost any or no reasons, and impose unwarranted and harsh penalties for failing to comply^[xxii].

CSOs in the Democracy in Governance sector were most heavily impacted by these penalties, with only the Transparency in Azerbaijan, Young Accountants Union, and Constitution Research Fund able to sustain their capacity building. Most other Democracy in Governance organizations were forced to close their doors due to being the subject of criminal investigations after the 2013 presidential elections, or lack of financial resources after Western donors were cut off. This increased scrutiny in the Democracy sector was perhaps due to the proliferation of anti-democratic values by the current regime, along with fears of the development of an opposition. While Healthcare and Economic Growth CSOs had marginally more success, they too were faced with minimal growth and reductions in funding. Solely the Small and Medium Enterprise Center and the Azerbaijan Children Union have experienced successes in the harsh environment. These restrictions on international funding have led to the intensification of competition for local funding. Many of the beneficiary organizations have also failed to implement BLCD’s teachings into their practices, as training was cut short due to the imposed restrictions.

Conclusion and Recommendations

In conclusion, it is important to evaluate the BLCD project with regards to its scalability to other organizations in the future. In terms of strengthening local Azeri CSOs, the project did an excellent job of temporarily building organizational and technical capacity. However, many CSOs’ leadership and key allies were not galvanized enough by BLCD to promote long-term success, with the future for many looking bleak. Democracy in Governance organizations specifically were hit the hardest by regulatory funding crackdowns and criminal investigations, possibly due to the political nature of the organizations themselves. Health and Economic Growth CSOs and resource centers were also negatively affected, with the majority terminating or suspending operations after the BLCD program concluded. Many of the lasting organizations now must also compete with each other for limited local resources and funding due to these restrictions. BLCD’s early termination, coupled with fear of investigation, has prevented many of the CSOs from implementing the capacity-building techniques that BLCD sought to instill. In the future, projects should focus on preparing Azeri CSOs to gain local funding in order to emphasize sustainability. Azerbaijan's volatile political climate will continue to impede international actors from providing resources, which increases the importance of enabling CSOs to successfully attain resources domestically. This may be done through various grant-writing workshops, more information on potential donors for CSOs, and sessions for pitch coaching. BLCD was exceptionally innovative by incorporating a digital program in its approach, being that a majority of Azeris have access to the internet^[xxiii]. A similar digital approach can be used to host additional online workshops and portals for information. These portals may be constructed using local consultants, and will be highly scalable to other similar projects due to low marginal costs.

In addition, BLCD did not effectively engage policymakers and government actors well enough. Future projects should seek to build a dialogue with the national government and local actors much earlier in the process, in order to not only foresee changes in the legal environment, but facilitate discussion between all actors throughout the project and beyond. The challenge is to maintain visibility while also creating dialogue with anti-democratic stakeholders. This may be done by engaging local channels of communication with government actors and hosting additional roundtable discussions with CSOs and politicians.  It is also imperative to interact with local stakeholders, such as the head of the “Constitution” Research Fund Alimammad Nuriyev, who have extensive channels of communication with the government and mutual interests[xxiv]. This will allow for the opportunity to recommend policy earlier, and work more closely with the government to fine-tune it. Open communication with policymakers will also maximize transparency and minimize the likelihood of criminal investigations into Democracy and Governance CSOs.