Baku / 16.05.17 / Turan: The appeal of the "International Bank of Azerbaijan" (IBA) to the New York court on attaching obligations to foreign creditors is an indicator that the bank chose between very bad and bad. This opinion was expressed in an interview with Turan's "Difficult Question" program by the expert-economist, executive secretary of the REAL movement Natig Jafarli.
It was very bad scenario when in different parts of the world, creditors would initiate lawsuits against the IBA due to the failure to fulfill financial obligations. The IBA had to be responsible for this with movable and immovable assets that the courts could arrest. Therefore, a bad option was chosen.
After the transfer of debt obligations to the state and the relevant judicial decision, this will be impossible, but this will have a negative impact on the financial situation of Azerbaijan.
The further will depend on the negotiations between the government and creditors. On May 23, at a meeting with creditors, the head of the Ministry of Finance Samir Sharifov will try to agree on a schedule for the payment of debts.
In any case, the ongoing will severely impact on the investment environment, which will deter investors. Here we must add the absence of a fair judicial system and frequent changes in tax and customs rules. So, only this year in the Tax Code was introduced 201 change.
The investment climate is also adversely affected by the state of the banking sector. According to official data, the volume of problem loans is 10%. International rating agencies call the figure 15-30%.
Banks can not collect money for loans, and issue new loans. It is no accident that mass layoffs primarily take place in this sphere. Therefore, one can predict the rapid closing or merger of many banks.
Despite the stabilization of the manat rate, in comparison with January, inflation remained double-digit. Along with this, economic activity fell.
For a long time, there was a primitive economic model in Azerbaijan: business activity was supported by the state budget - large construction and repair projects were allocated. At the same time, investment expenditures reduced by 4 billion manats and this negatively affects the economy and reduces the incomes of the population. -B06-
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