Domestic Economy

Latest on Coronavirus Relief Payments

Latest on Coronavirus Relief PaymentsLatest on Coronavirus Relief Payments

Loans paid under the government-backed relief program increased by 50% over the past month, according to the taskforce combating the economic impact of coronavirus. 
Virus-impacted businesses have received 53,130 billion rials ($180 million) by Sept. 29, of which 11,230 billion rials ($38 million) were offered to transportation companies and 41,900 billion rials ($142 million) to 14 groups of businesses hard-hit by the outbreak of Covid-19, ISNA reported. 
According to the Ministry of Cooperatives, Labor and Social Welfare, so far, 704,000 businesses have registered for the bailout program, of which 512,000 were found eligible for the final registration stage. 
The ministry says documents of 508,000 businesses have been sent to banks and 238,000 of them have received 45,000 billion rials ($153 million) in loans.  
Public transportation operators, educational centers, beauty salons, women’s clothing shops, gyms, rehabilitation centers for disabled people and not-for-profit schools accounted for the lion’s share of applications submitted to the Ministry of Cooperatives, Labor and Social Welfare for coronavirus loans.
Out of 492,510 applications registered at, the official website of the Ministry of Cooperatives, Labor and Social Welfare for the government-backed bailout loans, 289,000 were filled out by public transportation operators, educational centers and beauty salons, IRNA reported last month. 
Following the government’s approval of a 750 trillion-rial ($2.5 billion) package for low-income households and struggling businesses impacted by the coronavirus outbreak and its economic consequences, a total of three million enterprises from 14 main groups of businesses and 850 subgroups were identified. 
Of these three million businesses, 1.3 million have insurance codes and 1.7 million don’t. They have 2.8 million insured employees and three million uninsured employees. 
The Central Bank of Iran's list of distressed businesses as a result of the new coronavirus (businesses directly hurt by the outbreak) is as follows:
- Businesses, institutions and companies responsible for any meal prepared outside the home, including restaurants, buffets, reception halls and coffee houses. The Ministry of Industries, Mining and Trade is responsible for determining whether these businesses are eligible to receive government aid. 
- Businesses active in tourism and hospitality sector, namely hotels, apartment hotels, tourist centers, centers receiving pilgrims, guest houses, eco-lodges, leisure centers and museums. The onus is on the Ministry of Cultural Heritage, Handicrafts and Tourism to determine whether these businesses qualify to receive government aid. 
- Transportation companies, namely air, road, rail and marine transportation firms. The Ministry of Roads and Urban Development is responsible to decide the eligibility of businesses for receiving the loan.
- Intra-city public transport companies. The Interior Ministry is to ascertain whether they qualify to receive government loans. 
- Travel agencies. The Ministry of Cultural Heritage, Handicrafts and Tourism is tasked with deciding their eligibility. 
- Apparel manufacturers and distributors. The Ministry of Industries, Mining and Trade will determine the eligibility of these businesses. 
- Manufacturers and distributors of footwear and bags. The Ministry of Industries, Mining and Trade will establish the eligibility of these businesses.
- Confectionaries and shops selling nuts, dried fruits, ice-cream and fresh juice. The Ministry of Industries, Mining and Trade will decide the eligibility of these businesses.
- Gyms, sports and leisure centers. The Ministry of Sports and Youth will conclude whether these businesses qualify for the loans. 
- Cultural, educational and art centers, as well as media groups. The Ministry of Culture and Islamic Guidance, Education Ministry and the Ministry of Science, Research and Technology will jointly determine their entitlement to receive financial support. 
- Handicraft manufacturers and distributors. The onus is on the Ministry of Cultural Heritage, Handicrafts and Tourism to determine whether these businesses are eligible. 
- Health Ministry’s licensed private-run health and treatment centers, including laboratories and those providing para-clinical services.
- Driving schools, barber shops and beauty salons. The Ministry of Industries, Mining and Trade will determine the eligibility of these businesses.
- Privately-held kindergartens that work under the supervision of the State Welfare Organization of Iran
- Companies offering exhibition services, including exhibition organizers
- Businesses operating at free trade zones and special economic zones
- Broiler chicken farms, greenhouse and floriculture businesses and ornamental fish breeders.



2.8m Businesses, 6m Jobs Hit Hard

The coronavirus has hit hard an estimate of 2.8 million businesses and close to six million jobs in Iran, according to Alaeddin Azvaji, the director general of Policymaking and Job Department of the Ministry of Cooperatives, Labor and Social Welfare. 
“By being hit hard, I mean, these businesses were either forced to close or reduce their capacity substantially,” he added.
Early projections by the ministry put the number of jobs at stake at approximately one million; these jobs were mostly in businesses whose main activities revolved around Iranian New Year holiday and purchase of spring merchandise. But later in May, the impact of the disease on businesses went deeper and wider. 
At first, getting past the coronavirus crash seemed like a V-shaped recovery but then it transformed into a W-shaped recovery, following the second wave of coronavirus in late June. The second wave was not as severe as the first in March and April.
Noting that a total of 850,000 insured workers have applied for three-month-long coronavirus unemployment benefits, the official said, “Estimates show that the outbreak of coronavirus has hit more than 1.2-1.3 million economic enterprises with more than 2.6 million uninsured workers. These figures might have changed over the past six months; some of this unemployed population might have been reemployed.”



Service Providers Constitute Majority of Unemployed

Fifty-nine percent of all workers who lost their jobs due to the outbreak of coronavirus were service providers, says Masoud Babaie, an official with the Ministry of Cooperatives, Labor and Social Welfare. 
“Sixty-two percent of businesses affected by the virus were also involved in the services sector. Workers in the industries and agriculture sectors accounted for 31% and 1% of the jobless due to coronavirus respectively. Nearly 31% and 3% of the virus-affected businesses were in industries and agriculture sectors, respectively,” he said. 
“Close to 12,500-13,500 people typically file for unemployment benefits annually. However, over 871,400 applied for unemployment insurance following the outbreak of coronavirus by July 31, of whom 730,882 were subject to the three-month relief program. Since then, 107,000 continued unemployment claims have been registered.”

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