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EBRD: A bank’s mission gone awry

Many development banks invest in countries whose governments flagrantly abuse the rights of their people writes Jessica Evans. But with its unique political mandate to only support countries that exercise “multi-party democracy [and] pluralism”, the European Bank for Reconstruction and Development, EBRD, was meant to be different. Yet 25 years on, it seems to be abandoning its mandate.

Azerbaijan is a key case in point. In recent years, its government has escalated repression against its critics, a dramatic deterioration in an already poor rights record. It has arrested or imprisoned dozens of human rights defenders, journalists, and bloggers on politically motivated charges, prompting others to flee the country or go into hiding. Just last week, two of the country’s most outspoken activists, Leyla and Arif Yunus, were finally allowed to leave the country to receive much-needed medical treatment after spending 16 and 15 months, respectively, unjustly imprisoned.

And Azerbaijan doesn’t just lock people up. It has also frozen some bank accounts of independent civic groups and their leaders, impeding their work, and in some cases forcing them to shut down. New laws make it almost impossible for independent groups to use foreign funding, which is essential for them to operate independently. Meanwhile, the Panama papers have exposed evidence indicating the existence of President Ilham Aliyev’s family’s extensive and secret offshore accounts, with various business interests including in gold mining.

This is ironic considering a year ago the Extractive Industries Transparency Initiative, which promotes good governance of resource-rich countries, downgraded Azerbaijan’s status because of its flagrant disregard for fundamental freedoms.

Given its clear mandate to promote human rights and democracy, one would expect no less from the EBRD. But it has continued business as usual in Azerbaijan, lending to the government and private sector in a range of areas that benefit the ruling, and abusive, elite.

In March, in a rare response to international pressure, Azerbaijan released 14 journalists, human rights defenders, and activists who had been prosecuted on politically motivated charges. Two were freed under suspended sentences, and others pardoned by the president, but they all still have criminal records and those under conditional release could easily end up behind bars again. Many others remain in prison on bogus charges.
Those still held include a political analyst, Ilgar Mammadov, in defiance of the European Court of Human Rights decision on his case and the repeated calls by the Council of Europe Committee of Ministers to free him; the prominent investigative journalist Khadija Ismayilova; a youth activist, Ilkin Rustamzadeh; and another journalist, Seymur Hazi.

Instead of bankrolling new projects, the bank should press the Azerbaijan government to take concrete and measurable steps toward reform, including repealing legislation that runs contrary to democracy and human rights, releasing journalists and activists still unlawfully detained, and expunging all charges against them. The degree to which the government meets these benchmarks should directly impact the bank’s operations in the country, with any public lending or lending benefiting the extractives industry suspended until the relevant reforms are completed.

EBRD has done the right thing by limiting its lending in Turkmenistan and Belarus because of the governments’ attacks on civil and political rights, developing a strong set of benchmarks to reach before operations with the bank can resume. Belarus released key political prisoners last year, but it has not met most other targets and authorities continue to routinely arrest or harass government critics. Yet the bank is using this tiniest of political openings in Belarus to justify upping its investments there. If it does this, the bank would be wavering on its commitment to civil and political rights in a country where it had previously stayed true to its political mandate.

Further afield, the bank’s 2012 expansion into Egypt, Morocco, Jordan, and Tunisia was an important opportunity to press for democratic reform and greater respect for human rights in those countries. But despite horrific events in Egypt that leave no doubt that the government rejects the principles of multiparty democracy, the bank has merely glossed over the country’s abuses, and failed to demonstrate it only lends to governments that protect the fundamental rights of their people.

Twenty five years after it was founded, the European Bank for Reconstruction and Development should realign itself with its mandate. Cleaning up its act in Azerbaijan is the right place to start.

Jessica Evans, a human rights lawyer, is a senior advocate and researcher at Human Rights Watch, focusing on international financial institutions

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