The goal of USAID’s strategy for Azerbaijan is an enhanced enduring partnership that advances the country’s development progress. USAID seeks to support the Azerbaijani government’s engagement with citizens, particularly the most vulnerable; assist the government to create a more diverse and durable economy; and utilize a development dialogue approach to establish the basis for a long-term partnership that serves Azerbaijani and U.S. national interests.
Azerbaijan is surrounded by regional powers that have long sought to increase influence in the region. Keeping Azerbaijan leaning towards the West is important to U.S. national security interests. These interests are rooted in Azerbaijan's critical role in enhancing a strong, prosperous, and free Europe that is energy independent of Russia and politically independent from aggressive neighbors. Azerbaijan’s role as a major energy provider to Georgia is a key element of stability in the region and beyond. In addition, a stable, independent Azerbaijan on Iran’s northern border also contributes to containment of Iran’s destabilizing influence affecting the Middle East. As a secular, generally Western-oriented state with a Shi’a Muslim-majority population, Azerbaijan could serve as a model throughout Eurasia and the Middle East, provided there is consistent USG and European engagement and support to Azerbaijan’s development trajectory.
USAID will support selected reforms with activities that have implicit governance elements. For example, private-sector opportunities like export diversification, agriculture enhancements, and tourism will benefit from support to improve the business enabling environment through good governance-oriented reforms. Supporting the government’s interest in boosting small and medium enterprises through more capable business associations has the added benefit of increasing citizen and private sector engagement with the government, while also building citizens’ advocacy skills. It is expected that this process of building trust will produce discrete democratic gains in the short term, while laying the foundation for more significant change in the long term.
USAID believes that Azerbaijan can attract greater domestic and foreign investment by making improvements in legislative and regulatory areas that will improve private sector competitiveness. A strong regulatory environment, including competition law and anti-monopoly regulation, will increase employment and development outside of the oil sector, providing greater economic resilience during oil price fluctuations. USAID seeks to support the diversification of the economy through micro, small and medium enterprises (MSMEs), with a focus on youth, women, farmers and small and medium-sized agribusinesses, and to improve the business enabling environment. The Mission has identified access to finance, business skills, and the trade regulatory environment as significant barriers to Azerbaijan’s economic growth.
Valid Through May 2025
This CDCS was developed and finalized in 2020 as COVID-19 became a global pandemic. USAID/Azerbaijan will continue to monitor its potential impact and if needed, the Mission will re-evaluate the strategic approach.