Sources: Haqqin.az, Minval.az, Bloomberg
Around 70 entrepreneurs have been detained in Azerbaijan in the past few days,
reported on May 11. Those businessmen reportedly defaulted on large loans from the International Bank of Azerbaijan (“IBA”) and engaged in “fraud schemes.”
also reported that the investigation took place following Ilham Aliyev’s order to put an end to fraud in the banking center.
The same source indicates that most of the apprehended businessmen had “close links” to the former IBA chief, Dzhahangir Gadzhiev, and the total value of unpaid loans equaled 6 billion manats.
Critics, however, argue that the arrests are politically motivated aimed at salvaging Azerbaijan’s ailing economy, following the drastic devaluation of manat in February this year. The Central Bank on Feb. 21 set the manat at 1.05 against the dollar, compared with 0.78 earlier,
reported. The move took place amid pressure on the country’s finances from plummeting oil prices.
Political analyst Arastun Orudzhlu, head of research center “Vostok-Zapad,” told
that the arrests were part of the overarching attempts to “neutralize a ‘risk group’ that may pose problems for the authorities.”
“We know that today Azerbaijan is in crisis,” Orudzhlu said. “The authorities cannot deal with the budget deficit and, therefore, need to take tough measures. Of course, what is happening is not only due to economic reasons. To fill the holes in the budget, [the government] did not have to arrest these entrepreneurs. It was enough to demand that they either sell their property or confiscate it. Thus, the debt would be repaid.”
He added that the actions were driven by “a political factor.” The economic crisis may “activate” individuals that wield “substantial financial resources” and may pose challenges for the current government, the analyst commented. The government would also use the confiscated resources to cover the country’s budget deficit.
Orudzhlu predicted that further arrests may take place in the future.