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Turkish Export-Oriented Small and Medium Enterprises Benefit from Funding

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The World Bank’s Board of Executive Directors today approved a partial credit guarantee in the amount of EUR 250 million (US$ 273,580,000 equivalent) to Turkey Export Credit Bank (Eximbank) for the Turkey Long-Term Export Finance Guarantee Project. The project has the objective to improve access to longer-term finance for Export Oriented Small and Medium Enterprises (EOSMEs)[1] and Export Oriented Mid-Cap Enterprises (EOMCEs)[2]. At least 70 percent of the guaranteed loan amounts will be used for sub-loans to EOSMEs, and at least 10 percent of the guaranteed loan amounts will be earmarked for lending for women-inclusive firms.

IBRD Partial Credit Guarantee will enable Turkey’s Eximbank to raise up to EUR 500 million in long-term funding from commercial lenders, so to as to be able to provide working capital and investment sub-loans to private exporting enterprises. It will also assist Eximbank to achieve longer maturity and lower all-in cost than are currently achievable without a guarantee. The Project will utilize the market finance raised by Eximbank with the support of IBRD Guarantee to extend sub-loans to eligible SME and Mid-Cap exporters.

In the longer term, achieving sustained rapid export growth will require that exporters become more competitive by producing high quality goods at more attractive prices, expanding the product range to the faster-growing market segments, and increasing the production of more capital intensive and technologically sophisticated goods, all of which will necessitates new investments. However, due to the impact of COVID-19, there is a need to help viable exporting firms tie over to the post-COVID era.

“In the short term, it is essential to preserve the export capacity of Turkey as its firms have severely been affected by the onset of COVID-19 crisis, so that they will be able to survive and contribute to the future recovery,” says Auguste Kouame, World Bank Country Director for Turkey. “This project will contribute to providing uninterrupted and improved access to finance to viable exporting firms during these difficult times. It will therefore help preserve Turkey’s participation in global value chains.”

Turkish EOSMEs and EOMCEs receiving the credit from Eximbank under the Project will be the main direct beneficiaries. Another project beneficiary will be Eximbank itself and the broader universe of Turkish exporters served by it, insofar as the Project is expected to strengthen Eximbank’s capacity to raise long-term funding in international markets, and to channel this funding into longer-term loans to exporting enterprises, including SMEs and women-inclusive firms.

Prior to COVID-19, access to long term finance was identified as a major constraint to Turkish firms’ export performance. COVID-19 has intensified this constraint. 

“Access to finance is particularly constrained for Small and Medium Enterprises (SMEs) who account for 73 percent of total employment, 62 percent of total revenue, 58.3 percent of total investment, 55.4 percent of total exports, and represent 99 percent of all firms in Turkey,” remarked Alper Oğuz, Task Team Leader of the Project. “Financing the technology upgrading and productivity improvement of SMEs is vital for Turkey to reach its ambitious export growth goals.”

The project is aligned with Turkey’s Country Partnership Framework (CPF) for FY18-FY21, which focuses on the three strategic objectives of growth, inclusion, and sustainability. The Project will contribute to the CPF by enhancing access to finance for underserved markets and improving competitiveness and employment in selected industries. The project is also aligned with the WBG approach to supporting client countries in mitigating the impact of COVID-19 on their economies, firms and workers.

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The COVID-19 Shock to Kazakhstan’s Economy Largest in Two Decades

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For the first time since the late 1990s Kazakhstan’s economy is expected to contract by projected 3 percent in 2020 with a moderate recovery by 2.5 percent in 2021, according to the World Bank’s latest Kazakhstan Economic Update (Summer 2020) – Navigating the Crisis report.

Although Kazakhstan’s GDP showed mild growth at 2.3 percent in the first quarter, economic activities weakened in the following months as commodity prices dropped, trade declined, and COVID-19 preventive measures slowed economic activity. Consumer demand showed moderate growth at  at 1.2 percent,  reflecting growing concerns over COVID-19 and the restriction measures. Investment is expected to ease to 1.0 percent annually, supported mostly by the on-going foreign direct investments into the oil and gas industry and residential construction. Supply disruptions and currency depreciation pushed up inflation to above the upper bound of the National Bank target range.

“The authorities acted early to contain the COVID-19 pandemic, and the accumulated fiscal buffers allow the government to introduce a relief package to mitigate the impacts of COVID-19 on the economy,” said Sjamsu Rahardja, Senior Country Economist, World Bank in Kazakhstan. “Weak demand and oil prices, as well as the protacted pandemic expose significant risks to the economic outlook. Authorities may want to consider using the available resources to provide relief to the poor and vulnerable, protect productive assets, and introduce reforms to sustain economic recovery.”

A prolonged crisis is likely to increase poverty and can increase inequality in Kazakhstan. Preliminary estimates suggest that poverty rate may rise in 2020 from a projected 8.3 to 12.7 percent – equating to more than 800 thousand additional people living in poverty. The shock to the labor market in Kazakhstan due to both the pandemic and the mitigation measures, is expected to have severe implications for jobs, particularly in sectors that employ low-skilled workers.

The report also argues that COVID-19 has a negative impact on human capital development in Kazakhstan. Unequal access to quality education, especially during lockdown, can negatively impact human capital development for the poor. School closures could result in learning loss of more than one-third of a school year and the impact could mean a decline in the Program for International Student Assessement (PISA) points. As most students in the country currently perform around the threshold for functional literacy and assuming some will lose more than others, the estimates suggest that the percentage of students performing below functional literacy will increase by 3 percentage points (from 64 to 67 percent).

“The impact of COVID-19 on education and learning losses will have a decades-long impact on the economy by an estimated 2.9 percent, amounting to an overall economic loss of up to $1.9 billion every year”, says Jean-Francois Marteau, World Bank Country Manager for Kazakhstan.  “A focus on improving access to quality education, including distance learning, would be important to prevent a decline in the quality of human capital, especially among Kazakhstan’s low-income population.”

The report concludes that under the risk of a prolonged slump in the global oil market, Kazakhstan’s pathway for a resilient recovery may focus on strengthening the effectiveness of public administration and services, including the use of e-platforms to deliver key public services, better tax administration, and a mechanism to review and redeploy fiscal resources toward better state programs. A renewed emphasis on reforms in the logistics, digital telecommunications, and financial sectors could help the overall private sector explore new opportunities.

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China-Eurasia Council condemns aggression of Azerbaijan

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China-Eurasia Council for Political and Strategic Research strongly condemns Azerbaijani aggression which Baku started on July 12, 2020.  Azerbaijani Ministry of Defense is a threat for the entire World as it is speaking about its aims to strike Metsamor Nuclear Plant, which is located in Armenia. Baku must understand that this is a crime against humanity, and it is equal to nuclear strike.The destruction of Metsamor Nuclear plant will be a disaster not only for Armenia, but also for Iran, Georgia and Azerbaijan, it will harm World’s environment and stand a real problem for several generations of the World. It is worth mentioning, that this time Baku attacked the Northern borders of Armenia, which are sovereign territory of the Republic of Armenia according to International law. Azerbaijan violated the principle of territorial integrity of a sovereign state, which is one of the important pillars of International law.

China-Eurasia Council for Political and Strategic Research condemns Azerbaijan for using force against civilian population of Armenia and calls for peaceful negotiations. Baku must show solidarity and join global ceasefire initiated by the UN secretary general Antonio Guterres and must not try to escalate the situation on the border to deflect public attention from the situation concerning the outbreak of Covid-19 in Azerbaijan. We call official Baku to take care of Azerbaijani people in the hard times of Coronavirus and not send its soldiers to real death.  Being multinational Council, for us It’s terrible to hear about lossfrom both sides and we express our sincere condolences. Hopefully peace will come to South Caucasus, which is an important crossroad in Eurasian mainland and it can stand a very important link for Belt and Road Initiative, if all problems solved in a peaceful way.

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Condemnation Of Armenian Aggression By Friends Of Azerbaijan (FoA)

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Friends of Azerbaijan (FoA) strongly condemns the coward act of Armenians aggression in the Tovuz district of Azerbaijan that is a sheer violation of international borders and law. The act is an attempt of Armenia to drive global attention from the peaceful dialogue and negotiation process on Nagorno Karabakh.

In an online meeting of the delegates of the Friends of Azerbaijan (FoA), a joint declaration of condemnation has been issued by the honorable members of Friends of Azerbaijan (FoA). 

According to this declaration, Armenian aggression can jeopardize the whole South Caucasus region. The incident on July 12, 2020, is being considered as a direct attack on Azerbaijan and the repercussions of this incident can result in massive catastrophe in the entire region.


The delegates of Friends of Azerbaijan (FoA) stressed the global powers to come forward and take serious action on Armenian intervention by violating the international border of Azerbaijan. The act of Armenia is an open challenge to the sovereignty of Azerbaijan.

Malik Ayub Sumbal founder of Friends of Azerbaijan (FoA) termed that Armenia is losing its legal and moral position on Nagorno Karabakh and there is mounting pressure on Armenia by the international community for the peaceful solution of Nagorno Karabakh according to the UN Resolutions. At this time to get rid of such kind of diplomatic moves, Armenia has launched another major front in Tovuz. 

When the whole world is busy against the Covid19 Armenian Prime Minister has chosen a very dangerous path that can take the whole region into war and bloodshed. 

Friends of Azerbijan (FoA) is firmly standing with shoulder by shoulder to the people of Azerbaijan and martyr’s families at this hour.

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