Iran to Tap Into Wealth Fund to Combat COVID-19

EghtesadOnline: Leader of the Islamic Revolution Ayatollah Seyyed Ali Khamenei has approved the withdrawal of $1 billion from the National Development Fund of Iran—the country’s sovereign wealth fund—to help fight the coronavirus epidemic.

News ID: ۷۴۹۸۳۷

11 April 2020

President Hassan Rouhani has thanked the Leader for the decision, the president's website reported.

“The needs of the Ministry of Health and Medical Education to confront the coronavirus crisis will be met through NDFI’s resources and preferably from domestic products and knowledge-based companies,” the president wrote in a letter to the head of Plan and Budget Organization, Mohammad Baqer Nobakht.

“Based on their economic and social situation, a number of countries have worked out mechanisms and far-reaching measures to give a jolt to their economies and incentives for their people to stay home, without worrying about their living costs,” Kayvan Kashefi, a senior member of Iran Chamber of Commerce, Industries, Mines and Agriculture, said in a write-up for Otaghiranonline.ir.

Referring to the fallout of the crisis for businesses and economic enterprises, Kashefi said, “For several economic operators, including those in services sector and tourism, Norouz—the Iranian New Year holidays [March 20-April 3, was the peak of business activities. With much of the country in shut down and many people having lost their jobs, all economic sectors will soon report signs of a severe recession. Further restrictions in border trade for the next 2-3 months would result in the shortage of raw materials for manufacturing units, decline in production and yet another flood of layoffs and unemployment.”

Underlying the importance of quick response to help cushion the effects of the corona crisis, Kashefi said, “The use of NDFI resources must be planned and carefully supervised by the parliament. Aid packages should be granted to both households and distressed industries, including small- and medium-sized enterprises.”

$305m Allotted to Unemployment Insurance Fund

According to Masoud Babaie, an official with the Ministry of Cooperatives, Labor and Social Welfare, the government plans to allocate 50,000 billion rials (about $305 million) to unemployment insurance fund to support those who have lost their jobs amid the outbreak of coronavirus.

“To prevent the spread of the virus, applicants are urged to fill out online forms for unemployment benefits at the newly-designed website 'bimebikari.mcls.gov.ir' within 30 days, instead of personally going to the ministry’s bureaus," he said.

“As per the joint guideline signed by the Cooperatives Ministry and the Social Security Organization on March 30, workers of 10 job groups and economic subsectors that have been hit by coronavirus outbreak and are subject to the provisions of the Islamic Republic of Iran Labor Law, the Social Security Act and the Unemployment Insurance Law will qualify to receive unemployment benefits for three months,” he was quoted as saying by IRNA.

The official noted that policyholders of other insurers, such as the self-employed, construction workers, carpet weavers, public transportation operators and drivers, are not eligible for unemployment benefits.

Earlier, the Central Bank of Iran released a list of businesses that have been directly affected by the outbreak of the novel coronavirus disease, COVID-19. These businesses can apply to receive support and facilities from banks.

The list includes food preparation and distribution centers, including restaurants, teahouses and other such centers; tourism centers, including hotels, inns, hostels, road recreation and service providing centers and other such businesses identified by the Industries Ministry; air, rail and road transportation whether inter- or intra-city; travel agencies; apparel production and distribution units; bags and footwear production and distribution units; distributors of nuts and dried fruit, confectionaries, ice creams and juice; sport and recreational centers; cultural and educational centers; and handicraft production and distribution centers, ILNA reported.

List of Businesses Allowed to Resume Activity

At the request of the coronavirus taskforce, Iran Guild Chamber has prepared a list of businesses that will be allowed to resume activity as of April 11 in Iranian provinces and as of April 18 in the capital, Tehran. The proposed list will be handed to the taskforce on Wednesday, according to the head of Iran Guild Chamber.

“The taskforce will make the final decision. Many factors, including health protocols and employment rates in different businesses, have to be taken into account,” Saeed Mombeyni was also quoted as saying by Mehr News Agency.

Qasem Noudeh Farahani, the head of Tehran Guild Chamber, says around 85% of businesses are included in the list and will be allowed to resume activity.

The official said that the remaining 15% are businesses that entail crowd gatherings such as restaurants, cafes and service centers, adding that for these businesses it will take a longer time before they can resume normal operations.

This is part of Iran’s plans to scale back restrictive measures adopted to minimize exposure to the novel coronavirus in business outlets under its new Smart Distancing Initiative.

As per the plan, low-risk businesses are scheduled to resume activities.