One Billion Manat Economic Support Package Adopted

Baku / 05.04.20 / Turan: The Cabinet of Ministers of Azerbaijan announced on April 4 a package of assistance to the economy and social sphere for AZN 1 billion.

The document consists of an Action Plan to reduce the negative impact of the global pandemic and a sharp decline in energy prices on the world market for entrepreneurship, employment and the country's economy.

According to the document, in 2020, AZN 215 million will be allocated from the state budget to pay part of the wage to 300,000 employees. The government allocated AZN 80 million to financially support another 300,000 micro entrepreneurs. In order to reduce the impact of the crisis on employment, in April-May, 200,000 unemployed will be paid 190 manat per month (minimum subsistence level), and another 50 thousand unemployed will be paid 300 manat per month. Unemployment insurance benefits will be expanded for 20,000 people. For this purpose, AZN 20 million will be allocated from the Unemployment Insurance Fund.

In addition, the state will cover tuition costs (40 million manat) for students who are members of families belonging to socially vulnerable groups. The limit of discounted electricity for the population in April-May will be 100 kWh. This increase will cost the government AZN 10 million.

According to the government, extending the time for paying taxes for economic entities affected by the pandemic will lead to a budget deficit of AZN 115 million in April.

AZN 0.5 billion of bank loans will be allocated for the restoration of the activities of economic entities operating in areas affected by the pandemic. According to the document, 60% of these loans will be guaranteed by the state guarantee, and interest rates on loans by 50% will be subsidized from the state budget. For this purpose, 20 million manat was allocated from the budget.

Additional 50 million manat was allocated to the Entrepreneurship Development Fund to continue providing soft loans. Another 90 million manat is provided for preferential mortgage loans.

The most supported area is transportation. According to the Action Plan, financial support for vital passenger transportation will cost the state budget AZN 280 million.

The government provides for subsidizing interest rates on the loan portfolio of business entities, including small and medium-sized businesses, in the amount of 1 billion manat from other sources of financing by March 10, 2020. This requires 50 million manat.

The government instructed the Ministry of Labor and Social Protection to “work with employers and provide daily supervision” with employers to avoid unjustified layoffs and job cuts.

It should be noted that the Action Plan is also aimed at taking measures to introduce a new model of economic growth in the post-pandemic period. One of them is the creation of the State Investment Holding for managing companies from a single center on behalf of the state. Another area is related to the construction sector. The Azerbaijan Construction Corporation will be created here to create a new mechanism for the development and implementation of strategic projects.   -08D-