ADB approves $250m loan to Azerbaijan to mitigate effects of COVID-19
By Ayya Lmahamad
The Asian Development Bank approved a $250 million loan to Azerbaijan to support implement the comprehensive plan to mitigate the health, social and economic impacts of the COVID-19 pandemic.
ABD’s President Masatsugu Asakawa noted that the continuing effects of the coronavirus pandemic threaten to upend the significant gains made by Azerbaijan in improving the economy and reducing poverty.
“ADB remains fully committed to supporting Azerbaijan and this program will help the government maintain its pandemic response measures, protect the poor and vulnerable, and lay the foundations for economic recovery,” Asakawa said.
The Bank’s president emphasized that the restrictions introduced to control the spread of the pandemic in Azerbaijan have led to a decrease in trade, tourism, remittances, and consumer demand, while oil revenues declines due to the global economic slowdown.
He stated that Bank’s COVID-19 Active Response and Expenditure Support (CARES) Program will provide budget support for the government’s ongoing health, social protection and macroeconomic stabilization measures.
It should be noted that the government’s health measures include additional payments for health care workers, nationwide rollout of mandatory health insurance, procurement of medicines and medical equipment, and scaling up medical facilities’ capacity to test for and treat COVID-19 patients.
Moreover, to strengthen social protection, the government has increased monthly allowances for low-income households and expanded the number of households eligible for support to 80,000.
In the meantime, the government has implemented measures including the creation of 17,000 temporary public jobs, interest rate subsidies for bank loans to businesses affected by the pandemic and financial support for selected state-owned enterprises, in order to help stabilize the economy.
Additionally, the program provides for women support, including enabling the supply of appropriately sized personal protective equipment for female health workers; supporting additional payments to health care workers, of which at least 65 percent are women; enabling coverage of women under mandatory health insurance, old-age pensions, targeted social assistance, and interest-free education loans for low-income households, etc.
The loan is funded through the COVID-19 pandemic response option under ADB’S Countercyclical Support Facility. The Asian Infrastructure Investment Bank is working to provide a cofinancing loan of $100 million, subject to board approval, to support the government’s pandemic response along with the CARES Program. In addition, ADB will also provide $250,000 in technical assistance to support ongoing public financial management reforms such as the medium-term debt management strategy, rule-based fiscal management, and effective medium-term budgeting to ensure that these critical reforms are not derailed by the pandemic.
Azerbaijan has been a member of the Asian Development Bank since 1999. Since then, the bank has committed $4.4 billion in loans, $32.28 million in technical assistance projects, including ADB-administered co-financing for Azerbaijan.
It should be noted that earlier, ADB forecasted 1.9 percent GDP growth in Azerbaijan’s economy for 2021.
Ayya Lmahamad is AzerNews’ staff journalist, follow her on Twitter: @AyyaLmahamad
Follow us on Twitter @AzerNewsAz