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Nazrin Abdul

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Following decades of occupation, Azerbaijan is rapidly transforming the liberated territories of Garabagh and Eastern Zangazur into economically vibrant and strategically integrated regions. This transformation is not only a matter of infrastructure development -- it represents a broader vision of national reintegration, socio-economic revival, and geopolitical consolidation.

At the heart of this strategy is the “Great Return” policy, outlined in the government’s long-term vision under the “Azerbaijan 2030: National Priorities for Socio-Economic Development”. This initiative aims to repopulate the liberated areas with Azerbaijani citizens, provide sustainable livelihoods, and fully integrate these regions into the national economy. It is a multifaceted policy that blends infrastructure investment, regulatory reform, and targeted financial incentives.

A landmark shift in housing access

In a significant move to accelerate settlement and economic activity in these areas, President Ilham Aliyev signed a decree on July 16 introducing changes to the preferential mortgage loan system. The decree opens the door for citizens - particularly young families - to purchase housing in Garabagh and Eastern Zangazur under favorable terms.

Under the new provisions, the preferential mortgage can now cover up to 90% of the residential property's value in the liberated territories. Moreover, the mortgage repayment burden is tied to the borrower's income, with a ceiling set at 75% of their monthly income. Exceptions apply when the mortgage covers less than 60% of the property's value, creating flexibility for lower-income borrowers or those with partial financing.

According to economist and member of the Milli Majlis (Parliament) of Azerbaijan Economic Policy Committee, Vugar Bayramov, these adjustments are expected to significantly boost demand for housing in Garabagh and Eastern Zangazur:

"This change will both accelerate the return of citizens to the region and stimulate the formation of a dynamic economic environment. It's not just about housing - it's about laying the foundation for economic sustainability."

This incentive-driven approach aligns with broader trends in post-conflict reconstruction, where concession mechanisms - such as tax breaks, low-interest loans, and regulatory exemptions - are commonly used to attract both population and capital.

The scale of public investment in the liberated territories underscores the state’s commitment. According to the Ministry of Finance, 4.85 billion manats have been allocated from the 2024 state budget for reconstruction - a significant share of the total 19 billion manats projected to be spent post-2020.

These investments are primarily directed toward critical infrastructure:

• Over 3,000 kilometers of highways have been constructed;

• 45 tunnels totaling 70 kilometers are under development;

• 450 bridges are planned;

• Railways and two international airports have already become operational.

This is not just physical rebuilding - it is strategic repositioning. Infrastructure connects the region to domestic and international markets, enhances military mobility, and encourages private investment. In essence, roads and airports are being treated not only as transportation links but as economic arteries for the future.

The use of concession mechanisms - such as preferential mortgages - is a textbook example of how states can use incentivized policy tools to achieve demographic and economic objectives in post-conflict zones. In Azerbaijan's case, these tools serve multiple strategic purposes:

- Demographic resettlement: By making housing affordable, the government encourages voluntary return, critical for securing long-term control and reversing displacement trends caused by the conflict.

- Economic anchoring: Affordable housing serves as a stabilizing factor for families, allowing the development of local markets, education systems, and employment networks.

- Investment magnetism: As state infrastructure develops and demand grows, these regions become more attractive to private investors, both local and international.

- Geopolitical symbolism: Every home built, road paved, and airport opened sends a message of irreversible sovereignty and national restoration.

As Azerbaijan pushes forward with its reconstruction and reintegration agenda, one of the major challenges will be ensuring long-term sustainability. Efficient public spending, private sector engagement, transparent governance, and environmental resilience will all play crucial roles in transforming the liberated territories into thriving regions.

Ultimately, Garabagh and Eastern Zangazur are becoming more than liberated territories - they are evolving into laboratories of Azerbaijan’s future development model: a blend of strategic concession, inclusive settlement, and infrastructure-led growth.