Why are there high interest rates on loans in Azerbaijan?

President of Azerbaijan Ilham Aliyev has signed a package of decrees предусматривающих обновление системы оплаты труда во всех учреждениях, финансируемых из государственного бюджета. Analysts assess this step as a comprehensive structural reform in the public sector.

Azerbaijan is attempting to move its investment policy into a new phase, balancing its long-standing “open door” approach to foreign capital with a clearer assertion of state control over assets considered strategic. Amendments approved by President Ilham Aliyev to the law “On Investment Activity” aim to clarify the legal basis for government intervention in strategic investments while preserving formal protections for investors.

Azerbaijan is attempting to restructure its fiscal system, seeking to turn the tax system into a more sophisticated instrument of economic governance. A forum held in Baku titled “A Look into the Future of the Tax System: A New Governance Model and Data-Driven Decisions” highlighted the authorities’ ambition to modernise fiscal policy and place data-driven decision-making at the centre of economic management.

Azerbaijan’s latest attempt to tighten control over public finances reflects a familiar dilemma for resource-rich states: how to modernise fiscal management without fundamentally reshaping the institutions that underpin it.