On 16 December 2020, the OECD organised an EU-supported capacity-building webinar for the government of Afghanistan on improving firm liquidity in the COVID-19 context.
The event was an opportunity to discuss the impact of COVID-19 on the Afghan economy and to see how policy-makers in the country have reacted to ensure that firms have the liquidity and financial conditions necessary for survival and recovery. The webinar was conducted as part of the OECD Policy Component of the EU Central Asia Invest initiative, with the capacity-building themes based on the OECD Peer Review of Afghanistan that was conducted in 2018-19. The webinar brought together experts from the OECD and Azerbaijan, who shared expertise and experience with stakeholders from Afghanistan.
Opening the session, H.E. Mr Mohammad Homayoon Azizi, Ambassador of Afghanistan to France, underlined the severe stress that the global health crisis has placed on Afghanistan’s society and economy. The Ambassador also expressed his thanks for the OECD’s acceptance of President of Afghanistan H.E. Mr Ashraf Ghani to join his economic advisory board. Echoing the Ambassador’s remarks, Mr Sulaiman Bin Shah, Advisor to the Minister of Industry and Commerce, noted the difficulty in ensuring Afghanistan’s firms had the liquidity necessary to survive, a challenge that has been exacerbated by the country’s persistently large informal sector. Mr Mohamed El Azzouzi, Team Leader of the Economic and Regional Development Unit at the EU Delegation to Afghanistan, expressed concern over deepening poverty and the urgency to get help to those that need it most and to provide financial support to firms for job creation. Building on the momentum of the recent Geneva Conference, the EU aims to expand its support to developing trade in Afghanistan.
Ms Talisa zur Hausen, Policy Analyst in the OECD Eurasia Division, presented an overview of the impact of the crisis on Afghanistan’s economy and returned to a number of key messages identified in the OECD’s 2018-19 Peer Review of Afghanistan, in particular the challenges of access to finance and digitalisation to support firm development in the country.
Mr Robert Patalano, Ms Catriona Marshall and Mr Riccardo Boffo from the OECD Directorate for Financial and Enterprise Affairs and Mr Kris Boschmans from the OECD Centre for Entrepreneurship, SMEs, Regions and Cities gave a comprehensive overview of policy responses to firm liquidity challenges in OECD countries, including central bank measures and financial support mechanisms for SMEs. Mr Ilkin Aliyev of the SME Development Agency of Azerbaijan brought a regional perspective to the discussion, offering an overview of tax and financial measures taken in his country to support firms throughout the crisis as part of a national Action Plan.
An open discussion between the various experts and stakeholders from Afghanistan followed, highlighting the request for further support by the private sector reported by Harakat and presentations of existing financial mechanisms in Afghanistan, including the Afghan Credit Guarantee Foundation.
Concluding the session, Mr William Tompson, Head of the OECD Eurasia Division, expressed his gratitude for the government of Afghanistan’s continued support for co-operation with the OECD and the EU’s support for that work. He reiterated the OECD’s readiness to support Afghanistan in charting its economic recovery, suggesting that the next workshop tackles the issue of digitalisation.