ISSN 2330-717X

Covid-19: Putin Announces Support For Businesses – OpEd

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Russian President Vladimir Putin has announced new measures to support businesses, and prevent them from collapse as the world is currently witnessing an acute escalation of the coronavirus epidemic and the global economy as a whole at risk, and expected to shrink. 

“Owing to measures taken in advance, we have so far been basically successful in slowing a broad and rapid spread of the disease. However, we should understand that Russia cannot shut itself off from this threat if only because of its geographical location,” Putin said in a special televised address to the nation on Wednesday. 

“Small and medium-sized businesses and micro businesses, especially in the services sector, are now facing objective difficulties due to declining orders and revenue. These businesses need help to stay open, which means retaining their employees. Our most crucial task is to ensure stability in the labour market and to prevent a surge in unemployment,” Putin said. 

Acknowledging that government assistance would be needed in dealing with this problem, Putin further proposed the following measures to support the enterprises and industries most affected by the current difficult situation. 

  • to defer all taxes on small and medium-sized businesses, except for VAT, for the next six months. In addition, micro businesses should also be granted a deferral on their contributions to social insurance funds. 
  • bank loans held by struggling SMEs and micro businesses must also be deferred for the next six months. 
  • the Government and the Central Bank to propose and take additional action to ensure stable lending to the real economy, including through state guarantees and subsidies. 
  • companies experiencing hardship must be protected from bankruptcy.

In this connection, there will be a six-month moratorium on bankruptcy claims by creditors against companies and on the recovery of debts and penalties. 

Putin said that these measures would apply to companies operating in the sectors most affected by the current difficult situation. He instructed the government to constantly monitor developments and, if necessary, expand and review the list of the industries requiring support. 

Putin also signed a decree on Wednesday establishing March 30 – April 3, 2020 paid days-off across the country in order to combat the spread of the novel coronavirus. 

In related latest developments, the Russian government has instructed the Federal Air Transport Agency to suspend all regular and charter flights on March 27, except for flights aimed at bringing Russians home.

The move followed the March 25 meeting of the government’s Coordination Council for the Prevention of the Coronavirus. The Russian government has launched an online hotline to keep the country’s people informed about the coronavirus situation.

According to officially reported figures, the total number of those infected with COVID-19 has reached 410 in Moscow, and has identified 658 cases of the virus in Russia.

Kester Kenn Klomegah

Kester Kenn Klomegah

Kester Kenn Klomegah is an independent researcher and a policy consultant on African affairs in the Russian Federation and Eurasian Union. He has won media awards for highlighting economic diplomacy in the region with Africa. Currently, Klomegah is a Special Representative for Africa on the Board of the Russian Trade and Economic Development Council. He enjoys travelling and visiting historical places in Eastern and Central Europe. Klomegah is a frequent and passionate contributor to Eurasia Review.

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