The answer is simple- because Aliyev wants to have it. Full stop.
All the talk about the image, obligations, modernity is all bla bla and nothing more than a caprice of a leader (or his teenager son).
So I just want to make it clear, that this is the only reason Azerbaijan is hosting Formula 1.
According to the State budget of 2016 193.3million manats were allocated for international activities and fees to international organizations. This includes 71.3million maintenance costs for the country's diplomatic corps; 32million for the payment of the country's share in international financial and loan organizations and fees for membership to social and political organizations [???]; 90million for costs of other international activities.
But nowhere in the budget we are told what these "international activities" are and which social and political organizations Azerbaijan is a member of for which it pays its dues.
But turns out it is ok. Because Azerbaijan needs this. Or President does. Vakhid Akhundov thinks it is not a bad idea to spend some of the country's currency reserves on games- because who the hell cares about the fact that people are hungry and that we really do not need another event of such proportions for which we have no clue how much we are paying because the government is refusing to fully disclose its expenditure.
Like here, where the sports minister Azad Rahimov makes a claim that the budget is less than 150million but how much it is exactly he also does not say because apparently to recite the whole budget is "too difficult". He does mention however the 12million manat spent for the roads, and 30million spent on the pit stop. The rest is a mystery. Just like every other big international event where budgets were kept under strict control.
But the problem at the end of the day, isn't about how much we are spending on this event or any other thats in the pipeline. The problem is that we should not be hosting it in the first place. Not when we should be channeling all our financial resources in making lives of average Azerbaijanis easier amid the on-going crisis.