Civil Society in Central Asia

The Legal Regulation of NGOs: Central Asia at a Crossroads

The Legal Regulation of NGOs: Central Asia at a Crossroads Scott Horton and Alia Kazakina Proceeding at an uneven pace, the three nations ofthe Central Asian Union have now reached an important crossroads in their treatment ofnongovernmental organizations (NGOs). Each nation inherited the late Gorbachev-era style law on public associations and has built on this base in the enactment of a Civil Code envisioning noncommercial corporate structures. In order to provide a sustainable platform for the development ofNGOs, however, another step is critical: the enactment of a comprehensive law governing noncommercial entities and according them appropriate tax exemptions. In this study, we briefly consider the development ofthe nonprofit sector in Central Asia, and discuss major features ofthe existing legal regime governing the activities ofnonprofit organizations in the states ofthe Central Asian Union-Kazakhstan, Kyrgyzstan, and Uzbekistan (collectively, the "CAU")where the most important progress in NGO activities has been achieved. Of course, what matters is not just what the laws on the books say, but how they are interpreted and applied by the government officials charged with their enforcement. With this in mind, we will also discuss some experiences "from the trenches" in addition to reviewing relevant laws and regulations. The Legal Environment and NGD Sustainability The Central Asian republics have existed de jure as independent nations since the breakup ofthe Soviet Union in 1991, and they have evolved out ofthe Moscow-centric legal orbit at varying paces over the past seven years. A great deal has been written and said about their evolution ofmarket-economic structures , but the development ofthe nonprofit sector in these countries has attracted much less attention. It is difficult to describe the process on a regional basis, since genuinely independent NGOs appeared first and most vibrantly in Kazakhstan and Kyrgyzstan and subsequently also in Uzbekistan. In Turkmenistan , the situation continues to be rather bleak, with the exception of a few brave environmental and public service organizations. Tajikistan has attracted enormous attention from foreign NGOs, many ofwhich have been permitted to operate with great intermittent freedom, but the NGO environment there is more the result ofa disabled state apparatus than a consequent regime of legal regulation or promotion. Taking these considerations into account, we will focus on 34 The Legal Regulation ofNGOs 35 the situation in the core CAU republics to the exclusion ofthat in the peripheral republics ofTurkmenistan and Tajikistan. In the CAU, we can trace the development of a small but increasingly selfsustaining and professional NGO community, which has embraced learned professions, cultural and educational organizations, and public interest advocacy organizations. Of course, we should be frank in acknowledging that a good part of this community has come into being in order to take advantage ofthe sudden wealth of funding opportunities brought by the major multilateral and bilateral development programs. Whether much ofthis community will survive the inevitable withdrawal ofUSAID, TAGS, and similar funding organizations is an important question which must be considered with greater urgency as time passes. We frankly question whether the donor organizations have given enough weight to sustainability as an issue and criterion in their grant-making, especially in light ofthe fact that most grant-making in the region supports specific projects often crafted by development agencies, and little appears to have been granted in the form of core operating support. In any event, creating a positive legal environment may be an essential element in insuring sustainability ofthe most worthwhile ofthe NGOs brought into being by the great donor tsunami of 1994-96. A legal environment which will give domestic NGOs a fighting chance entails two critical elements: appropriate corporate vehicles for NGO activity, which can be registered and maintained with a minimum ofbureaucratic runaround ; and a system oftax exemptions and benefits that promotes a culture of private and corporate giving, domestically and from abroad, to support legitimate NGO activity, whether it be educational, religious, artistic, scientific, or public interest advocacy. At this point, the first objective seems within the grasp ofNGOs in the CAU, but the second still seems elusive. Moreover, a system of tax benefits will only work to promote NGO activities ifthe Central Asian republics can develop a culture ofresponsible taxpayers. At present, suffocating tax burdens in the region are spurring most businesses (probably excepting the significant foreign investors) to engage in broad-scale tax evasion. We must recognize that this is not only a problem for the state in its efforts to meet revenue objectives, it is also a long-term nightmare for the cause...