The Prime Minister has signed a decree approving the “Action Plan on the Implementation of Paragraph 10.2 of Presidential Decree No. 1950 of March 19, 2020 of the Republic of Azerbaijan on Measures to Reduce the Negative Impact of the Coronavirus (COVID-19) Pandemic and the Resulting Sharp Fluctuations in Global Energy and Stock Markets on the Economy, Macroeconomic Stability, Employment, and Business Entities in Azerbaijan.” Commenting on the decree, Vusal Gasimli, Executive Director of the Center for Analysis of Economic Reforms and Communication (CAERC), stated that the Action Plan covers three main directions: support for economic growth and entrepreneurship, support for employment and social welfare, and macroeconomic and financial stability.

In the area of economic growth and entrepreneurship, 215 million AZN has been allocated to cover part of the salaries of 300,000 employees working in sectors affected by the pandemic. On average, 717 AZN will be spent to preserve one paid job. Additionally, 80 million AZN in support is planned for 300,000 individual (micro) entrepreneurs affected by the pandemic. Tax relief and deferrals for affected businesses total 115 million AZN, including temporary exemptions from property and land taxes, profit (income) tax and simplified tax relief, reductions in social insurance burdens, and temporary VAT exemptions for essential food and medical imports.

New loans totaling 500 million AZN will receive a 60% state guarantee, and half of the interest rate will be subsidized by the government. A mechanism will be created for unsecured microloans in the agricultural sector. For entrepreneurs in pandemic-affected sectors, 10% of the interest on existing loans totaling 1 billion AZN as of March 10, 2020, will be subsidized for one year. Funds allocated for concessional mortgage loans will increase by 90 million AZN.

Entrepreneurs renting state property or land who have suffered losses will not be charged rent until the end of this year.

Measures to increase non-oil exports include facilitating export registration and sales, applying customs duty exemptions for imported goods not locally produced, and speeding up customs clearance, inspections, and certification procedures.

A new model for economic growth will be implemented in the post-pandemic period. The main priorities of state economic policy will include construction, mining, petrochemicals, digital economy, transport, trade, logistics, telecommunications, domestic tourism, agriculture, and manufacturing. A State Investment Holding will be established to centrally manage companies on behalf of the state, improve transparency and efficiency of operations and investment programs, and ensure competitiveness. A new privatization program will also be prepared.

Construction will be considered a sector that generates both new value and employment, while creating a multiplier effect across other sectors. To accelerate urban and regional development and implement strategic projects in construction, the Azerbaijan Construction Corporation will be created. This corporation will manage the long-term portfolio of strategic projects, develop new projects, attract investors, and implement pilot projects.

A total of 280 million AZN will be allocated to support vital passenger transport.

In the area of employment and social welfare, the key objectives include preventing unjustified layoffs of 1,574,000 employees in the public and private sectors and maintaining salaries for employees on leave. Temporary employment for the unemployed will be provided through 50,000 paid public jobs, and 200,000 registered unemployed individuals will receive a one-time payment of 190 AZN over two months. The self-employment program will cover 11,000 people, while unemployment insurance will support 20,000. Ten million AZN has been allocated to increase discounted electricity limits to 100 kWh for April–May, and 40 million AZN will cover tuition fees for students from socially vulnerable households.

The macroeconomic and financial stability direction requires developing a new macroeconomic framework to implement the high-capacity Action Plan. Changes in fiscal policy will create new monetary policy objectives. The Central Bank will grant regulatory relief to banks to manage obligations of affected entrepreneurs, ensuring stability in the country’s financial and banking sector.

Overall, the main task of the Action Plan is to protect citizens and businesses from the negative effects of the pandemic, maintain the functionality of the economy, and implement a new model of economic growth in the post-pandemic period. In addition to 2.5 billion AZN allocated by Presidential Decree, another 343.6 million AZN will be sourced from other funds, including the Unemployment Insurance Fund and the State Social Protection Fund. Considering 110 million AZN in donations to the Coronavirus Response Support Fund and the initial 10 million AZN allocated to the Cabinet of Ministers, Azerbaijan’s budget for combating the COVID-19 crisis reaches 3 billion AZN, equivalent to 12.3% of state budget revenues or 3.6% of GDP.

Moreover, to maintain the stability of the manat—the only post-Soviet currency not devalued during the crisis—1.928 billion USD was sold from the State Oil Fund in March alone. Under President Ilham Aliyev’s leadership, Azerbaijan allocated the largest portion of GDP in the post-Soviet region to fight the COVID-19 crisis, aiming to position the country favorably in the post-pandemic period.