Time in Yerevan: 11:07,   20 May 2024

Republic of Artsakh initiates multiple business support projects seeking to restore war-torn economy

Republic of Artsakh initiates multiple business support projects seeking to restore war-torn 
economy

YEREVAN, AUGUST 24, ARMENPRESS. The 2020 war heavily affected the economic development of Artsakh, causing decline in virtually all branches.

In 2021, the GDP dropped 12,7%, while industrial output declined 33,6% compared to 2020.

In response to a query from ARMENPRESS, the Minister of Finance and Economy of Artsakh Vahram Baghdasaryan said that the biggest drop was recorded in agriculture because nearly 75% of Artsakh’s arable lands, 85% of pastures, most part of fertile grounds and nearly 90% of irrigated agricultural areas are in territories which Azerbaijan captured and is now occupying.

The number of livestock was reduced by over 50%. Agricultural output dropped 51,1% compared to 2020.

“The only branch where we recorded growth after the war is construction, and this is due to the large-scale apartment-building projects implemented by the government. In 2021, the volume of capital construction carried out with all sources of funding grew 48,3% compared to the previous year,” the minister said.

The economy of the post-war country: Problems facing businesses in Artsakh

Businesses in Artsakh suffered heavily due to the war materially, logistically and in terms of resource, among them are organizations that were working in territories which were lost during the war.

Minister Baghdasaryan says the Artsakh Government’s priority is to restore the economy in a short period of time by applying promotional programs, modern technologies and effective mechanisms which will enable to ensure small industrial capacities with high-level quality and increase of work productivity.

“Particularly, we are planning to implement programs in agriculture, industry (mining, light and process manufacturing) and in several other branches. Our goal is to create the kind of an economic system which would generate all the mechanisms through which it will be possible to solve the security issues and ensure the continuous increase of the levels of employment and livelihood of the population,” Baghdasaryan said.

SME activities in post-war Artsakh

The government of Artsakh is carrying out a number of programs to support SMEs and improve the business climate after the war. A large-scale tax privilege package was initiated which covers nearly all types of taxes aimed at easing the tax burden of businesses.

“Most businesses working in the 10% profit tax rate sector were exempted from paying profit tax before 2022, and the rate will be set 5% starting 2023. Private entrepreneurs were similarly exempt from revenue tax in the same period. Agricultural output trade is exempt from VAT until 2026,” the minister said.

 

Other programs include privileged terms and direct support for the restoration of lost businesses:

Companies and individuals who suffered material damages due to the war are offered a treasury promissory note with a 5-year maturity date and 7% yield. The individuals and companies are able to receive the money earlier starting 2023 July in case of presenting a business plan which envisages the recovery of a lost business or launch of a new one.

In 2021 the government also launched a grant program promoting innovation and entrepreneurship aimed at developing agriculture, process manufacturing and village tourism.

Problems and Solutions Regarding Exports and Imports

Some enterprises having had sustainable export volumes and who were already well-known in foreign markets are regrettably among the businesses which are left in territories occupied by Azerbaijan.

“This all can’t not have an impact on the country’s export volumes and structure, which caused various new challenges and requires more effective mechanisms of state support to advance domestic products in foreign markets. From this perspective, the ministry of finance and economy is taking practical steps to promote the exports of domestic products and provide support to producers, as well as projects aimed at representing the range of products of domestic producers in foreign markets,” Minister Baghdasaryan said.

The government plans to ensure the representation of domestic producers in international expos and seminars soon.

 








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