Russian will pay $162 wage at virus-hit firms: Putin
President Vladimir Putin on Wednesday said small and medium-sized businesses will receive direct government aid to pay staff a wage equivalent to $162 during the virus lockdown.
Putin made the announcement during a televised conference call with government ministers. The "direct non-repayable financial aid" will help businesses pay staff for April and May, Putin said. He said companies should be able to apply from May 1 and this should involve the minimum of red tape.
Russia is experiencing a growing COVID-19 epidemic with 24,490 confirmed cases and 198 deaths. Putin has ordered a period of "non-working days" until the end of April, to reduce the virus spread, during which people are supposed to be paid while staying at home.
However many companies are struggling to do this during the shutdown and have cut pay or forced employees to take unpaid leave. Putin said the government aid will be 12,130 rubles ($162) per member of staff per month. Last year the average monthly salary in Russia was 47,468 rubles ($636 at the current exchange rate) according to the state statistics agency.
The government aid is a quarter of this. It is the same as the top amount of unemployment benefit for Russia as a whole, while Moscow has hiked unemployment benefit to 19,500 rubles. To be eligible, companies need to have retained 90 percent of their staff as of April 1. Putin said the funding would go to small and medium-sized businesses in the sectors most affected by the pandemic -- restaurants and cafes, tourism and hotels -- as well as those trading in non-food sectors
The amount of funding available prompted anger from some Kremlin critics. "He's showered us with gold. How many seconds does it take (Igor) Sechin to earn 12 thousand?" wrote popular blogger StalinGulag, referring to the head of state oil giant Rosneft. Russia has already announced measures to soften the impact of the virus on business, including deferred tax payments.
The central bank also released funds to banks to offer cheap loans to small businesses, but Putin said on Wednesday that banks were reluctant to issue them. He said state Vneshekonombank (VEB) would guarantee such loans to reduce risks to commercial banks. The president also announced new state-subsidised low-interest loans for major strategically important companies to buy raw materials and parts to ensure their production continues.
He also said the government would provide an extra 200 billion rubles ($2.7 billion) to ensure stability of regional budgets, while airlines will receive 23 billion rubles ($306.2 million) in emergency support. Leading opposition politician Alexei Navalny tweeted that Putin was offering "crumbs of help" and "they will all go to the largest companies."