By the numbers .. What have the Arab countries offered to raise the debt burden of citizens and companies in the Corona crisis?

Al-Jazeera reporters

With the spread of the Corona virus, economic life almost completely ceased, and institutions and companies, then employees and workers, stopped, and losses and debts accumulated.

Decision makers no longer have to face the repercussions through financial and tax policies that sometimes depend on direct subsidies and other times tax exemptions, or delay the payment of loan installments and open the door to loans with concessional interest.

How did Arab governments deal with this situation? Details in this joint report of Al-Jazeera Net correspondents.

Morocco .. Postponement of payment
Al-Jazeera Net correspondent Mariam Al-Taidi reported the details of the Economic Vigilance Committee’s decision to suspend the payment of bank loan payments by private sector companies, and to perform the duties of engaging in the National Social Security Fund.

National banks have announced a delay of three months in installments for outstanding loan and finance installments with rent, without fines for delay.

The debt on non-financial companies is about 759 billion dirhams (about $ 79 billion), with estimates for 2018.

Economic analyst Rashid Oraz told Al Jazeera Net that the debt is rising and the government has so far only postponed the payment.

He added that the weight of the size of public debt puts pressure on government intervention in favor of individuals and companies, and reduces the possibility of taking direct measures in favor of these people.

Data show that household debt at the end of 2018 amounted to more than 342 billion dirhams ($ 36 billion). Household current debt represents 31% of GDP.

The kingdom resorted to using the prevention and liquidity line, which it previously signed with the International Monetary Fund, to withdraw an amount of approximately three billion dollars, which will be used mainly to finance the balance of performance.

The external debt in December 2019 was about (35 billion dollars), which represents 30% in relation to the gross domestic product.

The internal debt amounted to 582.5 billion dirhams (about 61 billion dollars), which represents 14% of the gross domestic product, according to data from the Public Treasury Directorate for March 2020.

Algeria .. Loans Facilitation
Al-Jazeera correspondent Abdel-Hakim was very knowledgeable of the interference of President Abdel-Majid Taboun last Monday, where he ordered the payment of ten thousand dinars ($ 75) for each family, in addition to conducting a quick census of the affected families before Ramadan.

As for the assistance of economic institutions, the authorities have decided to postpone the payment of taxes, loan installments and tax declarations, in addition to other customs facilities, and the Bank of Algeria issued measures to ensure liquidity and facilitate the granting of loans.

The "Association of Presidents Forum" suggested a return to the printing of money in order to pay the wages of workers who were temporarily laid off due to forced unemployment.

The National Union of Young Investors, for its part, raised the alarm about the presence of ninety thousand companies on the verge of bankruptcy, and demanded to reschedule their debts or grant tax facilities and exemptions from social security.

"It is difficult to compensate the unauthorized workers in the parallel market because of the difficulty of controlling them and directing aid to them in a fair and worthy way," Al-Jazeera Net correspondent quoted financial expert Abdel-Qader Barich as saying.

However, Braiche stressed that the government should put forward an economic rescue plan because "it will face a double crisis by the end of 2020 at the level of internal budget financing and external financing of the economy."

The size of the internal debt amounted to about fifty billion dollars, while the external debt remains less than two billion, at a time when President Teboon revealed the assistance proposed by the International Monetary Fund and the World Bank without interest worth 130 million to tackle the spread of the Corona virus.

Tunisia .. loan scheduling
Al-Jazeera Net reporter Mohamed Ali Latifi monitored a number of official procedures, the most prominent of which was the delay in the performance of loan installments for six months, starting in March, for institutions and professionals, and the central bank reducing the interest rate.

The Ministry of Finance decided to reschedule the taxable debts of the affected institutions for the next seven years, in addition to deferring the payment of the payments for three months, starting in April, and allowing the exporting companies to raise the local marketing rate from 30 to 50%.

For individuals, it was decided to delay the repayment of loans for six months for those whose wages exceeded one thousand dinars ($ 340) and three months for those whose wages were less than one thousand dinars.

Al-Jazeera Net reporter quoted economic analyst Areem Belhadj as warning against the severity of the debts with the repercussions of the Corona virus.

Belhadj predicted that the public debt will reach 89% of the GDP, at the end of this year, and that the external debt will reach 110% of the GDP.

In front of the Corona pandemic - the Al-Jazeera correspondent says - the government borrowed from the Islamic Development Bank and the International Monetary Fund about a billion dollars, in addition to donations from a number of institutions.

Prime Minister Elias El-Fakhfakh announced a credit line estimated at five hundred million dinars (170 million dollars) to finance several sectors such as tourism, transportation and traditional industries and to enable them to obtain new loans to continue to work, and allocate an estimated three million dinars (102 million dollars) to support a resource and payment line for companies Small and Medium.

Mauritania .. Tax exemptions
The most important decisions of the Central Bank - according to Al-Jazeera Net correspondent Habibullah Al-Khader - included reducing the compulsory reserve ratio from 7% to 5%, which gives commercial banks the ability to expand, and reducing the proportion of credit facilities from 9% to 6.5%.

The People's Bank announced that its debtors whose wages are less than five hundred dollars are exempt from paying three months, and that it is ready to postpone the payments due throughout 2020.

The correspondent quoted economic analyst Abdullah Muhammad Awah as saying that the decline in the interest rate on banks should be reflected in the loans of individuals from ordinary banks to reduce the rate of profits.

President Mohamed Ould Cheikh El-Ghazwany announced the exemption of all basic materials from taxes throughout the year, and the establishment of a national social fund to counter the effects of Corona, for which the state had allocated 25 billion ounces ($ 67.5 million) in addition to opening the fund to donors. Donations amounted to $ 15 million.

The government did not announce its need for loans in the face of Covid-19, but rather reassured citizens that the services and projects that were programmed would not stop.

On March 14, the World Bank provided a $ 5 million grant to the Ministry of Health in support of its efforts to tackle Corona, and gave a $ 52 million grant to the Synergy Agency to support its social projects.

The external debt constituted 67% of the GDP, which is equivalent to $ 3.7 billion. It is expected that this year it will rise to 69% of the GDP, or four billion. 

Egypt .. Actions for defaulters
The Central Bank decided to postpone the loans and interest of individuals that amount to four hundred billion pounds ($ 25.4 billion) beginning in March for a period of six months, and decided to raise the accumulated old interest on 940 thousand citizens, estimated at nine billion pounds, besides raising cases from 220 thousand defaulters.

There are about 21 million individual bank customers in the country, and 192,000 private sector companies. As for public and government sector loans - which are estimated at six hundred billion pounds - they were postponed for six months, in addition to raising forty billion for troubled private sector companies from old interest, according to Al-Jazeera correspondent Net Mahmoud Refaat.

Economist Mamdouh El-Wali says to Al-Jazeera Net that the initiative to postpone loan payments to individuals and companies includes calculating the six-month interest, and paying 50% of the loans. He expected that companies will be unable to pay due to a lack of liquidity or direct them to production and wages.

The guardian added that "what the government has done is postpone the payment of tax and insurance dues without exemption from them, except for the tourism sector, which was exempted from the real estate tax for three months."

He pointed to the government's tendency to borrow $ 450 million from the African Development Bank, half a billion from the Japan International Cooperation Agency (JICA) and 150 million from the French Development Agency, despite the external debt reaching 112 billion at the end of 2019.

According to the guardian, the way for the government to either postpone the repayment of some of the outstanding loans or the new borrowing to repay the previous loans.

And the external debt jumped - according to the central bank data, at the end of last September - to 109.36 billion dollars.

Sudan .. Exempting the private sector
, Issam Ali, a member of the Economic Committee of the Forces for Freedom and Change, told Al Jazeera Net that the Ministry of Finance exempted the private sector companies from taxes for a period of three months, without specifying the effect of this exemption on the public budget, which needs to expand the tax umbrella as one of the solutions to the economic crisis.

He adds that the Minister asked the President of the Islamic Development Bank in Jeddah to support the Bank of Sudan to confront the Corona pandemic in the amount of ten million dollars, and to move the non-independent resources within the projects currently funded by the bank by reallocating within the limits of 35 million, expecting the bank’s contribution to strengthen Khartoum's capabilities to confront Corona to reach seventy Two million.

The size of the external debt is about $ 58 billion, according to the latest official census. The principal debt ranges between 17 and 18 billion.

The government also launched a "My Commodity" campaign as part of a package to support individuals to counter the effects of the full closure due to SK.

According to the statement of Mohamed Hussein Abdel Qader, the official of the rations and services at the Ministry of Labor and Social Development of Al-Jazeera Net, a committee that includes government agencies and neighborhood resistance committees counted the daily workers and the poor before the inauguration.

According to this official, "My Commodity" program supports 11 commodities, including sugar, edible oils, Egyptian beans, lentils, flour and onions. The list will be upgraded to 18 commodities soon.

After the meeting of the Security Committee to prepare a matrix of arrangements for the implementation of the comprehensive ban, Khartoum’s Governor, Ahmed Abdoun, announced the payment of this month’s salary to state workers starting from Wednesday, and a plan to distribute goods in the neighborhoods.

Iraq .. Liquidity Crisis
Al-Jazeera Net correspondent Salam Zeidan stated that the government has not yet taken decisions to confront the recession in the economy caused by the Corona virus, after the failure of the public and private sectors, except for the monitoring of six hundred billion dinars (five hundred million dollars) in the Social Solidarity Fund, granted from it Sixty thousand dinars (fifty dollars) for each individual who did not receive a salary from the government divided into two months only for each month 25 dollars.

According to observers, the government neglected companies and business owners in the Corona crisis, and made them face their fate on their own, bearing the costs of closing the economy without offering them loans or grants.

The crisis affected ten million people so far working in the private and parallel sectors, the majority of whom lost their jobs, in addition to the small projects facing the fate of bankruptcy.

The executive director of the Association of Private Banks Ali Tariq told Al Jazeera Net that the banking sector froze loan payments for a period of three months, and the central bank supported the process of postponing the payment of premiums on citizens by supporting bank liquidity and reducing its legal reserve to 13% for a period of six months.

He added that the banking sector provided forty million dollars to the Ministry of Finance, at a time that needs the support of companies and the salaries of their employees for the efforts of a state and not a private sector, the private sector cannot provide ten billion to support the popular effort.

Economic analyst Manar Al-Ubaidi said that the government suffers from a liquidity crisis and faces a large deficit in its revenues due to the drop in oil prices.

Jordan .. Restructuring Loans
The Central Bank decided to allow banks to restructure loans for individuals, small and medium-sized companies, and the liberal professions affected by the Corona pandemic.

 Local banks also decided to postpone the installments of last March, along with a package of procedures related to pumping liquidity into the local market, according to Al-Jazeera correspondent Ayman Ayman Fadilat.

The Ministry of Finance decided to postpone the entitlement to the sales tax until the amounts are received, to allow companies to pay only 30% of the customs fees, and to postpone 70% of them, in addition to other procedures.

The government obtained a $ 1.3 billion IMF loan over a four-year period before Corona.

There are about 1.1 million borrowers in the Kingdom, who constitute 16% of the population, and the value of their loans exceeds 15 billion dinars (21 billion dollars). The average monthly burden of an individual’s debt is about 50% of the total monthly income of the borrower.

Economic analyst Maan Al-Qatamin called on the government to present a clearly defined economic stimulus package with a clear program, through which it intervenes to save the troubled companies and institutions, indicating that the package of measures that have been done is not sufficient.

He explained that the government has not yet borrowed from abroad or treasury bonds to counter Corona, suggesting transfers in budget items to address existing problems. The kingdom suffers from debt exceeding thirty billion dinars (43 billion dollars).

Qatar .. stimulus package The
government approved a package of financial and economic incentives that are consistent with the accuracy of the stage, by allocating an amount of 75 billion riyals (about 20.6 billion dollars) to support the private sector, and to enable companies to confront the operating costs and take off after the crisis ends.

In a statement to Al-Jazeera Net, Qatar University economics professor Rajab Al-Ismail believes that government measures have had a holistic view of economic conditions, and have taken into account the role of the private sector and its direct impact from the Corona crisis, and for this it supported it with incentives and facilities that support its economic role, which is indirect support for individuals as well.

Concerning private sector companies, the Central Bank instructed banks and banks to postpone outstanding loan installments and interest or returns resulting therefrom, for those affected from the affected private sector institutions, for a period of six months as of March 16, without corporate fees or delay interest, and without any Impact on its credit rating, led by the retail, tourism, hospitality, entertainment and services sectors, and manufacturing industries.

The Development Bank also launched the National Guarantee Program, with full funding from the government, and aims to help private companies affected by the difficulties of paying short-term payments, including salaries and rental benefits.

The program enables companies to borrow with a financing ceiling of no more than 5.7 million riyals for each institution, at a differential interest rate of no more than 2% added to the central bank's interest rate, with a one-year grace period for the principal, after local banks obtained guarantees of three billion riyals ( $ 820 million) to avoid any impacts on the local banks' credit ratings.

And the consultant member of the Qatar Financial Center Rashid Al Saad considered - in a statement to Al-Jazeera Net - that these measures have contributed so far to curbing the negative effects on the economy.

Kuwait. . Incentive
measures A package of early economic incentive measures and measures taken by the government to face the repercussions of the Corona virus, the first of which was to postpone the installments due to all citizens and residents of banks for a period of six months, according to Al Jazeera Net correspondent Nadia Al-Dabbas.

According to central bank data, the total number of citizens borrowed is about 455.3 thousand borrowers, while these debts total 13.02 billion dinars (about 42 billion dollars).

A professor of economics at Kuwait University d. Anwar Al-Shariaan decided that it is positive, not only from its human side, but also from its economic aspects, as there will be significant financial savings after the return of normalcy, which would stimulate markets by increasing the purchasing power of the population by providing these funds.

The Central Bank announced the reduction of the discount rate by a percentage point to 1.5%, after it was previously 2.5%, as this reduction is the lowest historically, aiming to reduce the cost of borrowing for all economic sectors, individuals and institutions, to enhance an environment supportive of economic growth and maintain monetary and financial stability .

As for corporate loans, the financial and economic analyst, Ali Al-Enezi, indicates that the government also took a decision to postpone loan installments and credit facilities for its clients of small and medium-sized companies for a period of six months, while canceling the interest and profits resulting from this delay and any other fees.

Kuwait depends in its budget on oil by about 90%, and the total foreign public debt reached at the end of the second quarter of 2019 about 19.3 billion dinars (62.5 billion dollars).

According to the latest report of the Audit Bureau, the gross domestic product (GDP) amounted to 39.28 billion dinars (127 billion dollars), and the public debt ratio reached 13.8%, 43.3% for non-financial companies, and 10.1% for the financial sector.

According to Al-Anzi, Kuwait faces an expected budget deficit even before the Corona crisis, which prompted the government to put a bill before the National Assembly to allow it to borrow at a value of twenty billion dinars (about $ 65 billion).

The government has various options in the event that the parliament’s response came with approval of the law, but analysts are likely to resort to external borrowing, explaining that its cost will be limited taking into consideration that Kuwait’s credit rating is “AA” high.

Economic analyst Maitham Al-Shas explains that the Corona crisis prompted the government to spend from the new budget to deal with the expenses it needed and visited the state, such as health, defense and the interior.

Because the decision-makers in the Arab countries were obligated to take measures to save individuals and institutions from the effects of the heaviness of debt, the consequences of the debts that countries will resort to facing the Corona virus will have repercussions for future generations.