The Asian Development Bank (ADB) has approved a $250 million loan to the government of Azerbaijan to help implement its comprehensive plan to mitigate the adverse health, social, and economic impacts of the coronavirus disease (COVID-19) pandemic, Report informs referring to the ADB website.
“The continuing effects of the COVID-19 pandemic threaten to upend the significant gains Azerbaijan has made in improving its economy and reducing poverty,” said ADB President Masatsugu Asakawa. “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.”
Lockdowns to control the spread of the pandemic in Azerbaijan have resulted in lower trade, tourism, remittances, and consumer demand, while oil revenues declined due to the global economic slowdown.
ADB’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.
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.
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. Other social protection measures include increased old-age pension payments, monthly allowances, subsidized utility services for internally displaced people, and interest-free loans to low-income families for higher education.
To help stabilize the economy, 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.
The program will support women in several ways. These include 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. Women will also benefit from allowances and utility subsidies for internally displaced people; the creation of additional temporary public jobs, of which at least 40 percent are provided to women; and interest subsidies on bank loans for micro, small, and medium-sized enterprises, of which at least 25 percent are owned by women.
The loan is funded through the COVID-19 pandemic response option (CPRO) under ADB’s Countercyclical Support Facility. CPRO was established as part of ADB’s $20 billion expanded assistance for its developing member countries’ pandemic response.
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.
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. The technical assistance will help strengthen the coverage and implementation of mandatory health insurance and the social security system.
ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members - 49 from the region.