Monthly Digest on COVID-19 Impact on SMEs in EAP November 2020

08/12/2020

Armenia

  • In 2021, the state will allocate about 520,000,000 AMD (more than $1 million) to support small and medium-sized businesses in Armenia. According to the Ministry of Economy, businesses will receive the necessary consulting services, training courses, and vocational training to improve access to finance. Read more
  • Armenia’s trade turnover amounted to about $4,220,000,000 in January-September 2020. It has declined by 11.4% compared to the same period of 2019, the Statistical Committee states. Read more
  • The export volumes of goods and services from Armenia in January-September 2020 dropped 4.4% compared to 2019, while the import volumes dropped 13.7%. Read more
  • The EU disburses over EUR 35 million in grants to address the impact of Covid-19 pandemic in Armenia. It is part of EUR 92 million assistance package for Armenia announced last April to support Armenia in its fight against the Covid-19 crisis. Read more
  • In 2021, 31.2 billion AMD (more than $62 million) will be allocated to promote agriculture in Armenia. According to the Ministry of Economy, these programmes are largely due to the pandemic and will come as state assistance to farmers in 2021 to increase productivity and competitiveness of their products. Read more

Azerbaijan

  • Consumption in Azerbaijan decreased by 8% YoY and amounted to 37.8 billion AZN ($22.25 billion). The volume of products and services sold by business entities of the private sector, compared to the first quarter of 2019, decreased by 7.3% and amounted to 36.5 billion AZN ($21.5 billion). More than 50% of this amount was formed by individual entrepreneurs. Read more
  • Azerbaijani farmers received loans worth more that $38 million through the Agrarian Credit and Development Agency. 33.4 million AZN ($19.66 million) of this amount are loans issued for concessional financing of agricultural machinery and animal husbandry, 20.6 million AZN ($12.12 million) – microcredits, which were issued to more that 2,000 farmers. Read more
  • In October of 2020, the turnover of the catering sector in Azerbaijan decreased twice YoY. The total volume of services in this sector amounted to 605 million AZN ($356 million), according to the State Statistical Committee. 46.4% of the turnover of public catering in the private sector falls on legal entities, and 53.6% on individual entrepreneurs. Read more
  • Number of foreigners visiting Azerbaijan decreased greatly due to COVID-19 pandemic. 720,300 foreigners and stateless persons from 155 countries arrived in Azerbaijan in January-October 2020. This is 3.7 times less than in the same period last year. The current sutiation hit tourism sector in Azerbaijan greatly. Read more
  • Azerbaijani banks have reduced business loan portfolio by almost 4%, according to the data by Central Bank. During the reporting period, banks reduced the portfolio of business loans to 8.7 billion AZN ($5.11 billion) or 60.2% of the entire loan portfolio. In October, the portfolio of banks on business loans decreased by 61.3 million AZN($36.1 million). Read more
  • Strict quarantine regime has been extended in a number of Azerbaijani cities. In particular, the provision of field services in all areas, with the exception of all vital activities, as well as pharmacies and grocery stores, has been suspended on Saturdays and Sundays – from November 21 to December 28, 2020. The agencies and organizations working in the private sector and in other fields are advised to reduce the number of employees up to 30 percent and transfer the rest of the employees to remote work. Read more
  • Azerbaijani government approved the provision of the third package of financial assistance to entrepreneurs in the country's regions affected by the coronavirus pandemic, according to the Ministry of Economy. Financial assistance will be provided to nearly 2,000 employees, as well as 13,000 individual entrepreneurs. Support will be provided to taxpayers who have not significantly reduced the number of employees over the past four months. Read more

Belarus

  • According to the Department of Tourism, the export of travel services in Belarus decreased by 60% due to the coronavirus pandemic. Read more
  • In Belarus, 52.5% of companies did not prepare the rainy day fund in case of the second wave of the pandemic. 34.8% believe the financial reserves will be enough for 1-3 months. 52.2% of companies switched to remote work this fall. Read more
  • By the end of 2020, the budget of Belarus will be short of 3 billion rubles ($1.2 billion) due to the pandemic and interruptions in oil supplies. Read more
  • To reduce paperwork-related visits to the government agencies, the validity of some certificates for businesses was extended by 6 months. Similar measures were introduced in April, but then the documents were automatically extended for 3 months. Read more
  • Authorities threaten to liquidate private businesses that do not create their own trade unions by the end of the year. Read more
  • In January-September 2020, the revenue of large and medium Belarusian pharmaceutical companies grew by 17.8% compared to the same period last year. Read more

Georgia

  • Due to COVID-19-related difficulties the companies are facing, revenues fell by more than 50% for 68% of the 774 businesses surveyed, notes the Private Sector Survey conducted by PwC Georgia. Read more
  • Due to the economic crisis caused by the pandemic, the unemployment rate in Georgia increased by 0.7% in Q3 of 2020 and amounted to 11.9%, reports the National Statistics Office of Georgia. The unemployment rate is much lower (4.8%) in rural than in urban (18.8%) settlements. Read more
  • Despite the pandemic, domestic exports hit historic high in Georgia in the first 10 months of 2020. The share of domestic export of total export amounted to 72.1% in January-October 2020. However, the value of exports decreased by 11.1%, while imports also decreased by 16.6%.  Read more
  • The Georgian government has announced a series of new coronavirus regulations due to the sharp increase in the number of daily infections in the country. In the two coming months, economic activities of businesses including large shopping facilities, fairs, shopping centers, construction stores, swimming pools, fitness centers and gyms, sports, cultural, creative centers / studios will be restricted. Restaurants, cafes and bars cannot accept visitors and must only operate for takeaway or home delivery. Any offline events are prohibited. All municipal and intercity public transport except taxis in big cities will be stopped. Online trading and delivery of goods is permitted. Beauty salons and spas, agricultural markets and shops selling food, animal feed, household chemicals and hygiene items, pharmacies, veterinary pharmacies continue to operate normally. The country switches to remote working and studying. Curfew is on from 21:00 to 05:00. Read more
  • The government will continue to give 200 GEL (about $60) assistance for six months starting from January 1 to citizens who lost their jobs after the coronavirus outbreak. Over 125,000 people have already received this state support so far. About 120,000 self-employed people will receive 300 GEL (about $90) one-time assistance from the government, and the state will help them to postpone loans in banks. Read more
  • Government will support employers in maintaining jobs during the crisis by exempting monthly salaries of 1,500 GEL (about $450) from personal income tax for the portion of 750 GEL (about $225) for 6 months. During the previous wave of coronavirus, 33,000 companies and reached 260 million GEL (about $68 million). Property tax for employees in the tourism sector will be abolished by 2021. Read more
  • Apart from subsidizing up to 80% of the annual interest rate on loans of small hospitality businesses – family-owned, small and medium-sized hotels – state program Enterprise Georgia co-financing will be expanded to include restaurants, whose interest on bank loans will be subsidized for six months. Event companies and farmers engaged in growing grapes, citrus and other tropical fruit varieties will be involved in a credit guarantee mechanism that will enable them to get subsidized bank loans for 12 months. Read more

The Republic of Moldova

  • The National Extraordinary Public Health Commission declared a state of Public Health Emergency in the Republic of Moldova for the period November 30, 2020 – January 15, 2021. Authorities decided to close night clubs, activities that involve the presence of spectators in theatres, cinemas, concert halls, etc. Also, it is prohibited to serve customers in public catering units (restaurants, bars, canteens, cafes) between 10 p.m. and 7 a.m. starting from November 30. Read more
  • The COVID-19 pandemic has had a huge impact on the tourism industry in the Republic of Moldova. Thus, according to the data of the National Bureau of Statistics, between January-September 2020 travel agencies and tour operators provided tourist services to 82,100 tourists and excursionists, or 74.3% less compared to the same period of 2019. Read more
  • 180 small and medium-sized enterprises from the Republic of Moldova will receive financial assistance to digitize their business. 57 companies will receive grants of up to 200,000 lei ($11,540) each. 123 enterprises will receive business vouchers worth 20 thousand MDL ($1,160) each to access web development services and to develop social media pages. Read more
  • The Government proposes to reduce the VAT rate from 15% to 12% for the HoReCa sector. The new VAT regime is provided in the draft law on fiscal and customs policy measures for 2021 and will be applied to accommodation services, as well as to food and beverages, except for alcoholic beverages. Read more
  • The "Guide to Financial Resources for SMEs and Startups" has been launched. It will include all information of interest to future and current entrepreneurs, from startup funding to support resources available at the development stage, which can be accessed in a consolidated document. Read more

Ukraine

  • During November 14-15, under conditions of the weekend quarantine, Ukrainian restaurants lost 27% of their turnover. According to Poster survey, weekends account for the bulk of catering revenue. Read more
  • Due to the pandemic, more than 10% of small and medium-sized enterprises in Ukraine are on the verge of bankruptcy and will soon go out of business, according to the research by UNDP in Ukraine. The research also justifies that by the end of 2020, more than 9 million people will face financial difficulties. Read more
  • The President has initiated a special program to support SMEs due to the lockdown. One-time financial aid of UAH 8,000 (EUR 234) to the officially employed with a wage less than UAH 30,000 (EUR 878) over Q3 and private entrepreneurs being registered for more than 3 months. According to calculations, more than a million citizens will be able to receive assistance under this program, and its total amount will be about UAH 10 billion (EUR 292.6 million). Also, enterproses will receive compensation for the costs of paying a single social contribution for employees. For this, UAH 1.5 billion (EUR 43.9 million) is provided for about 120 thousand legal entities. Read more
  • In case of the quarantine strengthening, 200,000 private entrepreneurs will be exempted from paying all taxes and fees, including the unified social contribution. The program of assistance to private entrepreneurs with children under 10 years old will be introduced – this  is assistance for partial unemployment. Read more
  • Since the start of the “Affordable Loans 5-7-9%” program, authorized banks have already issued 5,813 loans totaling UAH 13.458 billion (EUR 393.8 million). Of these, UAH 9.5 billion (EUR 278.5 million) were issued as refinancing of preliminarily received loans. Entrepreneurs received 2.6 billion (EUR 76.1 million) for capital investments, and UAH 1.3 billion (EUR 39.1 million) as anti-crisis loans at 3%. Read more

EU4Business Updates

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    EU4Business has published the Citizens’ Summaries for the 6 EaP countries with the overview of major results of the past year in the region and per country. In 2019, 78,995 SMEs were supported through the EU4Business Initiative, generating an extra €1.3 billion in income and 117,254 new jobs, growing their turnover by 16.1%, and increasing their exports by 5.9% as a result. Read more
  • EU4Business Launches New Portal as Part of 2020 European SME Week in Ukraine
    On 10 November 2020, the new EU4Business web portal marks the opening of the 2020 European SME Week in Ukraine. The renewed portal is a convenient tool that covers the numerous opportunities offered by the European Union for business development in Ukraine, in particular to help Ukrainian small and medium-sized enterprises withstand the economic challenges of the COVID-19 pandemic. The EU4Business team expects to launch other 5 country portals by the end of 2020. Read more
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