Baku, April 17, AZERTAC
President of the Republic of Azerbaijan Ilham Aliyev has held a meeting through videoconference with the participation of Minister of Labor and Social Protection of Population Sahil Babayev and Minister of Economy Mikayil Jabbarov.
The head of state made a speech at the meeting.
Speech of President Ilham Aliyev
- When discussing the results of the first quarter on 14 April, I issued a number of instructions. Of course, all of them must be fulfilled and you should regularly inform me about their implementation. Additional instructions will be given today, as the pandemic continues. Despite the fact that the situation in Azerbaijan is under control, we need to take measures in accordance with the situation. The priority issue for us - I have already said this but I want to say it again – is the health of our people, their life and social protection. At the same time, under these conditions, we should pay more attention to the economy, of course, because everyone should know that if we do not have strong economic opportunities, we will not be able to successfully pursue social policies, especially during the pandemic, as this disease and its consequences require major financial resources. Therefore, I want to say again that the main priorities for us during the pandemic are people's health, their social protection and the growth of economic activity in accordance with the situation.
Everyone needs to know that this great disaster has put the whole world to a serious test. To date, more than 140,000 people have died in the world. This disease defies all boundaries. Whereas at the initial stage it was imported into Azerbaijan from outside, then the process of internal infection began. However, I must note that as a result of tough preventive measures, we are keeping the situation under control. In a sense, the statistics of the last three to four days provides the basis for some optimism. I should note that in recent days the dynamics between the number of infected and those who have recovered is already positive. In other words, more people recover than get infected.
This is mainly due to the measures taken. I want to say again: if we had not taken preventive measures in a timely manner, then there wouldn’t be a thousand patients in Azerbaijan, but perhaps 10,000, 20,000, maybe even more. We are currently studying the experience of developed countries. The healthcare system in these countries has always been an example for many states. However, it is possible to say that the health system of countries with great potential is now in crisis. And this is natural, because the spread of the disease is so high, the disease spreads so quickly that the health system of no country, including Azerbaijan, can cope with it. Therefore, our main goal was to prevent the increase in infections that was observed, to break the chain of infections. All measures taken were aimed at overcoming this situation with small losses, helping our people, protecting them from this disaster and ensuring their social protection. I believe that the restrictive measures we have taken so far, their gradual tightening, as well as the provision of social protection for people working in areas affected by the pandemic, are a good reflection of our correct policy. I want to say again that in the last three to four days there has been a positive trend. We will continue to keep the situation under control in order to see how long this dynamics will continue, whether it is stable and what additional measures should be taken, because the world has faced a great challenge and we see that countries often struggle against this evil alone.
Of course, Azerbaijan as a responsible and reliable member of the world community has taken very important steps to strengthen solidarity in this area both domestically and internationally. I can say that national accord in the country has grown to an unprecedented level. This once again shows the greatness of our people, demonstrates that we as a people and as a state show maximum solidarity on difficult days, help each other, in particular, provide assistance to low-income families. Naturally, first of all, the state, entrepreneurs, public organizations, individuals – we once again demonstrate the best qualities inherent in our people.
As you know, the Cooperation Council of Turkic Speaking States, in which Azerbaijan is currently the chairing country, has become the first organization in the world to conduct a summit in a video conference format. This summit once again demonstrated our solidarity and unity. It showed that we stand by each other on difficult days.
The thousands of letters I have received in recent days indicate that the Azerbaijani people appreciate the work being done by the state. Of course, this inspires us even more. This suggests that although people's lives were complicated by the quarantine regime that affected people’s normal life and created problems for many, the vast majority of our people, while aware of this situation, support the state. We must continue to be active in the fight against this disaster, take preventive measures and try to overcome this difficult situation with small losses.
As for the quarantine regime, as you know, it was envisaged until 20 April. However, in the unanimous opinion of experts, the quarantine regime needs to be extended. I believe that this will be the right step because there are only the first manifestations of positive dynamics so far. We must make it sustainable. Therefore, I believe that the Task Force will announce this in the near future. I believe that the extension of the quarantine regime is the only right decision.
Given this, we, of course, must further enhance the social protection of our people. The Azerbaijani people are well aware that we immediately began to seriously deal with this issue. A significant part of the salaries of those working in areas hard hit by the pandemic is being paid by the state. There are more than 300,000 people in this category. At the same time, the state has allocated large financial resources to facilitate the financial situation of about 300,000 representatives of micro-business. Thus, about 600,000 people belonging only to this category are receiving financial support from the state. Public sector wages are paid in full. Currently, the vast majority of about one million people do not work, but the state pays them their wages. So this once again demonstrates the humane essence of the Azerbaijani state. This shows – I repeatedly said this long before the coronavirus – that our policy is centered on the people of Azerbaijan. The difficult situation of these days once again shows that our words are complemented with our deeds and we always practice what we preach.
However, taking into account the fact that the quarantine regime will be extended, we need to play on an exit in advance. I am giving you instructions on this issue: we tightened the quarantine regime in a phased manner and we should relax it in the same phased manner. How will this happen? The government, including ministries, should work on this issue and submit proposals. We must already plan on where this relaxation should begin with because I hope that during the extended quarantine regime a certain relaxation is not excluded. Nevertheless, we need to take action in accordance with the situation.
Of course, in connection with the current situation, I am most concerned about people's health. Our doctors are doing everything possible to help people. As you know, our healthcare system is facing a great test. The fact that our healthcare system has not collapsed is primarily due to the fact that we were able to control the spread of the disease. If it had got out of hand, then our healthcare system would not be able to cope with it. Some developed countries – their situation is shown on TV and Internet resources these days – do not have the opportunity to treat people at all. Some patients are placed in the corridors, on the floor, lie on the floor and simply remain in the hospital building. Hundreds and in some cases more than a thousand people die in the most developed countries. Why? Simply because the healthcare system cannot cope with that, there is no room in hospitals, sometimes there is a lack of necessary equipment. If the healthcare system of these countries had functioned normally, then the lives of most of these people could have been saved.
In recent years, our healthcare system has come a long way. Today, coronavirus-infected people are being treated in more than 20 public hospitals. The vast majority of these hospitals have been built in the last 16 years, including the “Yeni klinika” with 575 beds, the most modern healthcare institution in our country where more than 100 patients are currently being treated. In addition, many patients are undergoing treatment in the educational-therapeutic and surgical clinics of the Azerbaijan Medical University, which were built at my initiative. Many patients are treated in central district hospitals built in the districts in recent years. In particular, patients receive treatment in three new hospitals opened in the cities of Goranboy, Gazakh and Shamkir in March this year. There are facilities for 500 beds. So more than a thousand beds were commissioned in March. According to my instructions, 10 modular hospitals are currently under construction in our country. I believe that after these hospitals begin to operate, an additional 2,000 beds will be available there in the next one to two months.
So we are doing all the preparatory work. Today we clearly see the professionalism of our doctors. It is no secret that sometimes there were critical attitudes to the activities of health workers. The healthcare system of Azerbaijan was allegedly in a terrible state, patients in Azerbaijan allegedly do not receive proper treatment and wealthy people prefer to go abroad. True, there are such facts, and not only in Azerbaijan, as wealthy people from much richer countries than us receive treatment in leading clinics of Europe and America. This is a global practice. But we rely only on our own capabilities these days. Our healthcare system is being developed by Azerbaijani doctors with state support. The fact that complex operations are conducted in Azerbaijan today, there are various examinations in connection with the coronavirus, there are 18 laboratories – all this multiplies our strength. So we can be completely sure today that the capabilities of our healthcare system and the professionalism of doctors are up to standard. I want to express my gratitude to the doctors for their dedication and heroism once again. Therefore, I am absolutely sure that as a result of the extension of the quarantine regime, we can further reinforce the positive dynamics.
In this connection, of course, we need to address the problems of low-income families more broadly. To date, we envisaged that the quarantine regime would last until 20 April. But it will be extended. The number of people seeking help has increased significantly. These appeals and applications are widely analyzed and maximum transparency should be ensured. At the initial stage, the plan was that 200,000 people would receive assistance from the state in the amount of 190 manats. I believe that, given the general situation and in order to strengthen social protection of people, we must bring the number of people of this category to 600,000. So for two months, the state should pay 190 manats a month not to 200,000, but 600,000 people. People in this category are representatives of the poor. At the same time, they are people who have lost their jobs due to the coronavirus and those who are employed unofficially. The state also takes care of their problems, although I have repeatedly addressed them, saying that unofficial employment must end because it will create problems for you. You will not be able to get the unemployment insurance, unemployment benefits, pensions, medical insurance. Recently, as a result of the activities of the Ministry of Labor and Social Protection of the Population, the Ministry of Economy and other relevant agencies, tens of thousands of new employment agreements have been concluded. I do hope that after this difficult situation is over, people still working in the shadow economy will take this into account and understand that the only way forward is to get out of the shadow. I am urging entrepreneurs: put an end to unofficial employment. I urge employees once again: do not work without an employment contract, demand one for yourself. If an entrepreneur does not want to conclude an employment contract with you, immediately inform the Ministry of Labor and Social Protection of the Population, the Ministry of Economy and the Presidential Administration. We will punish these entrepreneurs. In the current circumstances when the state has mobilized all its resources, to deceive it, to evade taxes and to think only of one’s own material interests is nothing short of a betrayal. There can be no other name for this. Therefore, I am instructing you that in April-May, for two months, 600,000 people should receive 190 manats per month from the state. I am asking citizens who will receive these funds to open a bank account to receive the second payment. The first payment will be made this month, so some people may not have the opportunity to open a bank account. But the second payment will be made in May. Until that time, each of 600,000 people must open a bank account and receive a second payment by a bank transfer. This is our request. This is our demand.
Therefore, your ministry is now facing very serious tasks in connection with this issue. You have to provide these payments in a short time. I want to ask the Minister of Labor and Social Protection of the Population: there are 13 days left for the end of the month, how quickly can these payments be made to 600,000 people and how many people can receive these payments daily? Please report on that.
Minister Sahil Babayev said:
- Dear Mr. President, within the framework of the Action Plan you have approved, a relevant Cabinet of Ministers resolution of 17 April established a mechanism to support the unemployed, those employed unofficially who have lost their jobs due to the special quarantine regime, and also, as you noted, people from low-income families. We started payments on 9 April. Whereas 10,000 people were paid daily at the initial stage, we have recently increased this figure to 20,000-25,000. As of yesterday evening, payments were made to 140,000 people. Based on today's payment plan, an additional 25,000 people will be paid. According to your instruction, we will try to bring the daily figure to 25,000-30,000 by the end of the month in order to fulfill it as quickly as possible, and so that in late April and early May each of the 600,000 people can receive these funds. The main issue is also related to how people receive these funds because due to a large number of daily payments in any form, there may be large concentrations of people in the banks and post offices. Therefore, we tried to resolve this together with the Ministry of Transport, Communications and High Technologies. The main burden falls on our post offices. Until now, they have coped with the task very successfully indeed. But we believe that all payments will be made no later than the first week of May. If, in accordance with your order, a significant part of second payments is made by a bank transfer, then, of course, things will go faster.
President Ilham Aliyev: Good! Therefore, citizens receiving the first payment should once again be advised to open bank accounts. Addressing our banks now, I want to ask them – this will require a lot of work – to show maximum efficiency here. If all of the 600,000 people open bank accounts, as we want and recommend, then, of course, this can create certain problems. Therefore, the banking sector should also be prepared for this. Thus, from now on, these people will receive their salaries by transfer, transparently, and fulfill their civic duty. This is the surest way. Do you have anything else to say on this issue, i.e. in connection with the upcoming additional work?
Minister Sahil Babayev: Dear Mr. President, there are a number of other programs related to unemployed and those unofficially employed who have lost their jobs during the special quarantine regime – the program of paid jobs announced at your initiative. You instructed us to significantly expand this program, so there are plans to create an additional 50,000 public jobs. The implementation of this program has already begun. Let me report that to date, 5,000 unemployed are already involved in this work and the signing of employment contracts with them is at the final stage. We will try to fully complete this within 10 days.
Mr. President, another program is a self-employment program. On your instruction, the World Bank has been involved in the self-employment program. In addition, Azerbaijani banks have already joined it as well. This year we plan to create micro-farms for 12,000 families. This is all in connection with the unemployed, Mr. President.
President Ilham Aliyev: In connection with the opening of paid public jobs, based on the experience of previous years, we planned to open 37,000 jobs at the beginning of the year. I must also note that this program has been implemented for three to four years. Some people involved in these jobs at the initial stage subsequently switched to other jobs with higher salaries. Therefore, we planned this program in the range of about 30,000-40,000. However, due to the pandemic and given the inevitable increase in unemployment, I gave an order to bring this figure to 50,000 at the initial stage. But now I believe we should increase it to a higher figure – 90,000 paid public jobs should be created this year. This area also requires very serious control. We have already discussed this issue. The mechanism is more transparent today. Unfortunately, control here was at a zero level at the initial stage and local executive authorities often abused it and appropriated the funds intended for the poor. This is utmost dishonesty. It is because of this and other crimes that three heads of the executive authority have already been arrested and their dirty deeds have been documented and disclosed to the public. They have disgraced themselves and their ancestors, they have caused great damage to their loved ones, to the state. We allocated these funds so that people who can’t find work or have low working capacity get paid at least the minimum wage, bring home a little money. We raised the minimum wage to 250 manats, but they appropriated it, kept people’s cards, withdrew money from them and enriched themselves. This is a crime and moral ugliness. You cannot call this otherwise. Therefore, all relevant authorities should henceforth pay very serious attention to this issue. I am asking citizens too well: if someone’s name is recorded but they don’t receive a salary, let them inform us. Thus, we will provide 90,000 unemployed people with public jobs.
As for the self-employment program, we talked about this issue last time, and I think that attracting 12,000 people to this program this year is a very good indicator. On our initiative, the World Bank also joined this program. At the same time, Azerbaijani banks joined it for the first time. I do hope that Azerbaijani banks will help more people from this category next year.
I also asked you to increase the number of people receiving targeted social assistance. What is the situation and growth dynamics in this area recently?
Minister Sahil Babayev said:
- Dear Mr. President, 80,000 families, or more than 330,000 people, are already covered by the targeted social assistance program. Compared to 1 April, growth accounts for 10,000 families, or 36,000 people. On your instruction, this trend will also be regularly increased. Targeted assistance as an important mechanism to support our low-income families will continue to be provided on your initiative.
President Ilham Aliyev: Very good! At the same time, at a meeting held on 14 April, I asked you to provide martyr families with the envisaged homes. You informed me about this. Of course, due to the quarantine regime, public events cannot be held these days. But we should know that we must reach the target figure by the end of the year. This help will benefit 1,500 martyr families. How many families will still be registered then? Please report on that.
Minister Sahil Babayev: Dear Mr. President. When the implementation of the program began in 2014, i.e. of those registered as of 1 January 2014, there will only be 1,500 people left by the end of this year.
President Ilham Aliyev: So after 1,500 families are provided with homes this year, there will be 1,500 families left. We will be able to resolve this issue perhaps in a year or two. This will complete the program on the provision of housing to all people of this category.
I would also like to ask about the construction of DOST centers. True, these centers do not operate in the current conditions. But our program provided for the construction of several centers this year. As soon as the quarantine regime ends, these centers must certainly begin to operate. What has been done in this area? I have participated in the opening of two centers. How many more centers are to be built this year and are they ready?
Minister Sahil Babayev: Dear Mr. President, work is under way on the construction of seven more centers this year. There are plans to open four of them this year. One is ready now. This is the DOST center No 3 and it covers Nizami, Surakhani and Sabunchu districts. We have fully prepared it for opening, so as soon as the special quarantine regime ends, it will begin to operate. This center can receive approximately 700 people daily and provide support to our vulnerable citizens. Other centers are to be established in Sumgayit, Absheron, Barda, Guba and Sheki districts. Work on each of them is underway. Inshallah, you will be updated as the construction of these centers is quickly completed.
President Ilham Aliyev: Good! In connection with the economic sphere, we now need to take steps that, in the current difficult conditions, could maintain economic activity, of course. Everyone knows that today, in connection with the pandemic, practically all countries have shut their borders. Work continues only in the field of trade and cargo transportation. However, since shopping centers are closed, there is a decline here. The situation with cargo transportation is relatively normal. Of course, the policies we pursue in the economic sphere, the economic stability create additional opportunities for us in the fight against the pandemic. Three days ago, we talked about the results of the first three months of the year and I do not want to repeat that. So far there is a positive trend. But it is possible that in April, May and June there will be a recession, because if we compare the results of the first two months with the results of three months, we can see that there is a decrease in the gross domestic product. At the same time, there is a decline in the non-oil sector. Although we see growth, the way things will develop in the coming months, of course, will depend on how long the quarantine regime lasts. At the same time, keep in mind that the quarantine regime will be maintained for some time. What additional actions do we need to take under the quarantine regime in order to maintain economic activity at least to some extent and, as soon as the quarantine regime ends, increase it without wasting time? Therefore, when I say that we must come out of the quarantine regime step by step, this also applies to our economic sphere. You should already have priorities in this area. I want to say again: it is not even ruled out that under the quarantine regime, which will be extended beyond 20 April, we can reopen certain areas. We see from the experience of other countries, including developed ones, that such initiatives are being put forward. The quarantine regime has a very negative impact on the economy of every country and we cannot say how long this impact will last. Therefore, we need to take such steps in order to be more prepared for the post-quarantine regime during this period. I believe that if the issues I noted are resolved positively, then unofficial employment after the quarantine regime will be eliminated because tens of thousands of employment contracts were concluded during this period and people working informally will be convinced that the only correct course of action is to come out of the shadow economy. Of course, as I have already noted, the current conditions will put a huge moral burden on those who wish to violate economic laws. Let me say again that in the current conditions attempts to deceive the state will be tantamount to betrayal. Therefore, keep in touch with entrepreneurs, continue the contacts in order to educate them and encourage them to work honestly. They need to be shown how much the state has taken upon itself. I don’t want to compare Azerbaijan to any other country, but notice that the salaries of workers in the areas affected by the pandemic are being paid by the state. There are 300,000 people, and this is a lot. There are also about 300,000 representatives of micro-businesses, and the state also pays them as well. I gave you instructions in connection with tax benefits, tax breaks, and I want you to report on this issue. What measures have been prepared and when will this package be submitted to the Milli Majlis?
Minister of Economy Mikayil Jabbarov said:
- Thank you, dear Mr. President. First of all, I would like to emphasize that we planned on and are carrying out all our work in accordance with your two instructions. The first is to preserve the existing economic structure and employment. The second is to provide for activities in the new environment.
As operational information, I would like to bring to your attention that the process of providing financial support to enterprises and private entrepreneurs, including representatives of micro-businesses affected by the pandemic, is successfully ongoing. The process is carried out online. Explanatory videos are shown and there is a “hotline”. The figures for today are: financial assistance has already been provided through the Ministry of Finance and agent banks to 11,567 taxpayers – businesses with a total of 123,343 employees and 22,949 entrepreneurs.
In accordance with your second order, a package of amendments to the Tax Code has been prepared. It has been agreed with all state bodies and consists of the following parts. First, a number of tax benefits and tax breaks are offered to taxpayers working in areas that were directly affected by the pandemic until 1 January 2021. These include the provision of full tax benefits on property and land taxes, a tax benefit of 75 percent of the profit, a 50 percent reduction in tax rates withheld from individuals at the source of payment for rental of immovable property, i.e. a reduction from 14 to 7 percent, provision of a 50 percent discount on the amount of simplified tax for activities in the field of public catering and passenger transportation within the country.
The second direction is the provision from 1 January 2020 to 1 January 2021 of a 50 percent tax exemption for micro-businesses working simplified tax, i.e. a reduction from 2 percent to 1 percent turnover, as well as a tax break for the calculation and payment of current tax payouts.
Finally, the third direction which applies to all business entities provides for the following tax benefits for the period up to 1 January 2021: deduction from income without taking into account the expenses incurred in connection with the necessary preventive measures, including disinfection, taken by taxpayers to prevent the epidemic, protect the life and health of the population, as well as urgent import tax exemption for the food and medical supplies in accordance with the list you, Mr. President, have approved. In other words, this is a fairly broad package whereby, as you noted, enterprises will operate in a new regime.
President Ilham Aliyev: Have discussions been held with entrepreneurs on this issue?
Minister Mikayil Jabbarov: Dear Mr. President, within the framework of the working groups established in accordance with your order, discussions have been held with the participation of business entities, the Confederation of Entrepreneurs, the Association of Banks of Azerbaijan and all relevant state bodies, and the opinion of entrepreneurs has been taken into account.
President Ilham Aliyev: What is the attitude of entrepreneurs to this package of proposals? Does it suit them or do they want more benefits? Please report on that.
Minister Mikayil Jabbarov: Dear Mr. President, with regard to tax benefits, this is a wide and comprehensive package. As you know, this is not the only support mechanism. As an example, the issue expected to be discussed at the Financial Stability Council today is to take into account the impact of the pandemic on all other businesses and, for example, soften regulatory measures for bank loans. What does this mean for an entrepreneur? This allows banks the opportunity to soften their current loan payments, restructure them and provide a delay. This work is carried out in the Ministry of Economy on the initiative of the Central Bank, the Association of Banks within the framework of the working group and other relevant working groups with the participation of entrepreneurs. This decision is also to be brought to your attention soon.
President Ilham Aliyev: Good! It is necessary to promptly and transparently carry out all my instructions. I am sure that as a result of the adoption of these measures, we will strengthen the social protection of the population, provide additional support to entrepreneurs and, most importantly, protect the lives and health of our people.
I am sure that the Azerbaijani people will understand the extension of quarantine correctly. I want to say again that this creates great difficulties for all of us. However, the life and health of people are above everything else. We have to endure this for as long as it is necessary. I must also note that a very large social and economic package has been put in place to improve the situation of our people. Whereas earlier it was estimated at 1 billion manats, it was then valued at 2.5 billion manats. As a result of my latest instructions, this economic package will now exceed 3 billion manats, perhaps even 3.5 billion manats. We will do as much as necessary. Azerbaijan has mobilized all its resources to get out of this situation with small losses, to protect the lives of our people and to be ready for the post-pandemic period. I am sure that we will ensure that. Thank you!
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