Businesses affiliated to Iran Chamber of Guilds have suffered as much as 3,000 trillion rials ($12 billion) in losses since the beginning of the coronavirus pandemic, Mohammad Baqer Mojtabaie, the general secretary of the chamber, said.
“However, only 7% of them applied for the loans backed by the government under the Covid-19 relief program during the first quarter of last fiscal year [March 20-June 20, 2020],” he was quoted as saying by ISNA.
Noting that the loan volume was negligible, with about 120-160 million rials ($480-$640) for each worker and a maximum of three workers per enterprise, Mojtabaie said, “The 12% lending rate was another reason behind the lukewarm reception toward the government’s relief program. Given that the benchmark interest rate in Iran is at 18%, business owners believe that the government’s 6% interest rate subsidy is not worth the cumbersome application process and length of time it takes to receive the credit.”
Two-Week Lockdown
Tehran’s Grand Bazaar has been ordered to close for two weeks starting April 10, to contain the rapid spread of infections.
According to Qasem Noudeh-Farahani, the head of Tehran’s Chamber of Guilds, aside from Tehran’s Grand Bazaar, all non-essential businesses, i.e., group II, III and IV of jobs are forced to shutter, since the capital city has been demarcated as a “red zone”.
Only essential businesses categorized as Group I, including bakeries, supermarkets, grocery stores, car shops, chain stores, health and treatment centers, pharmacies, factories, transportation companies, public parking garages, post offices, internet service providers, press, nursery homes and print shops are allowed to remain open in red zones, Fars News Agency reported.
Restaurants, food, ice-cream and fruit juice outlets in Covid-19 red zones are only allowed to operate takeaways and delivery during the ongoing two-week lockdown.
According to a statement by Iran Chamber of Guilds, shopping malls, except for specialized malls selling tires, auto spare parts, ironware, computers and flowers in red cities, must close during the period.
Businesses violating the coronavirus containment measures will be subject to closure of their outlets for up to 15 days, Fars News Agency reported.
Iran’s 31 provincial capitals were placed on red alert, as a fourth wave of infections is sweeping across the country at an unprecedented pace and the total number of infected cased has surged past two million.
However, travel agencies can stay open during the two-week coronavirus shutdown.
According to Hormatollah Rafiei, the head of Travel Agents Guild Association, airlines and rail companies can operate and therefore, travel agencies are allowed to sell tickets.
“However, they are advised to have a minimum number of staff members needed,” he was quoted as saying by Mehr News Agency.
Noudeh-Farahani said shops and businesses have been forced to close down while insurance and tax offices, as well as banks, are allowed to carry on their activities.
“Guilds work hand in hand with banks, so the government should have imposed restrictions on banks as well,” he said.
1m Businesses, 3m Jobs at Risk
Iran Chamber of Guilds recently issued a statement expressing concerns regarding the economic implications of a new surge in Covid-19 cases.
“Official figures suggest an increase in the number of new infections due to the decline in compliance with Covid-19 safety protocols during the Iranian New Year holidays. More cities and counties are falling in the high-risk red zone for coronavirus transmission and widespread closures of businesses are likely to ensue,” the statement read.
“If more cities, including Tehran, Karaj and Isfahan, move into the red zone of the country’s color-coded coronavirus framework, more than one million businesses affiliated to ICG will shut down and three million people will become jobless.”
The statement was released before the provincial capitals were placed on red alert.
699k Jobs Salvaged by Relief Program
A total of 699,000 jobs were safeguarded throughout the coronavirus crisis as a result of loans that were backed by the government under the Covid-19 relief program.
According to Alaeddin Azvaji, director general of Policymaking and Job Department of the Ministry of Cooperatives, Labor and Social Welfare, a total of 235 trillion rials ($940 million) in loans were allocated to 14 groups of businesses, including 858 subgroups, in the first stage of the program.
In the second stage, which is still underway, “transportation”, “tourism and handicraft industries”, “sports and youth”, and “culture and art” were found eligible to receive, respectively, 37,000 billion rials ($148 million), 20,000 billion rials ($80 million), 8,000 billion rials ($32 million) and 18,000 billion rials ($72 million) in loans.
“So far, more than 513,000 economic enterprises have signed up for Covid-19 relief program at Kara.mcls.gov.ir, of which 388,000 businesses have received the low-interest loans [at the 12% lending rate] and 125,000 are undergoing the loan process,” Azvaji was quoted as saying by Fars News Agency.
“Iran’s labor market experienced one of its worst crises in the last fiscal year [March 2020-21]. Surveys by the Statistical Center of Iran show nearly one million people lost their jobs compared with the year before. Figures by the Social Security Organization of Iran indicate that 998,000 of insured people became redundant in the first quarter of last year [March 20-June 20, 2020].”
Noting that unofficial employment [jobs without health insurance and retirement benefits] accounts for 29% of Iran’s overall number of jobs, Azvaji said, “An estimated 476,000 uninsured workers became jobless in Q1 of last year, which brought the total number of lost jobs to 1,474,000 then. However, SCI numbers suggest that some of those who left the labor force last spring returned to work in the subsequent quarters.”
Remote Working Program
The remote working program of government employees will remain in place as before and the highest-ranking executive in charge of the management of the organization will decide upon the presence or teleworking of employees.
According to Alaeddin Rafizadeh, a senior official with the Administrative and Employment Affairs Organization, the bylaw on remote working of employees as per the color-coded system was issued on Nov. 17, 2020, and remains in effect.
According to a government classification, colors “red”, “yellow” and “white” indicate the R value, or the number of people a patient can pass the disease to, in a respective county.
“Our emphasis is on preventing interruption of services; people must have access to essential services at all times,” he told ISNA.
The Administrative and Employment Affairs Organization has divided services into two categories: essential and normal services. In yellow zones, 100% of employees of agencies providing essential services need to be present at the workplace. But the physical presence of employees of other agencies would be restricted to two-thirds of full capacity.
In orange zones, the physical presence of employees of agencies providing essential services would be restricted to two-thirds of full capacity. But the physical presence of employees of other agencies would be restricted to 50% of full capacity.
In red zones, the physical presence of employees of agencies providing essential services would be restricted to 50%, provided that it won’t cause interruption in delivering services. The physical presence of employees of other agencies would be restricted to one-third capacity.
Rafizadeh noted that in all organizations, pregnant women, those with health conditions and women with children under age six must be placed in the top priority group for teleworking.
