Private Sector Activity (PSA) Quarterly Progress Report

The project focuses on improving the competitiveness of the private sector, particularly in the agriculture and rural economic activities, building the capacity of business support services, and reducing barriers hindering the development of micro, small, and medium enterprises (MSMEs). This will contribute to a more secure and sustainable Azerbaijani economy. During the third quarter of Year 1, the Activity adapted to the unique challenges posed by the global coronavirus pandemic (COVID-19). In response to the restrictions and challenges resulting from the pandemic, PSA modified its activities to continue implementation while adhering to necessary safety measures and lockdown requirements. The Government of Azerbaijan provided a favorable environment for agribusinesses by permitting businesses in the agricultural sector to move freely throughout the country for business purposes during the quarantine period. However, many physical activities, such as face-to-face discussions, group meetings, and travel, were restricted or limited due to PSA's policies to manage risk to employee, partner, and beneficiary health, or the application of mandatory quarantine regimes by the Government of Azerbaijan. Since mid-March 2020, PSA's Baku office has been closed, and staff have been working from home, supplemented by some limited field work while wearing masks and practicing social distancing to the maximum practicable extent. Project management moved online, with weekly staff meetings conducted via video conferencing. The Activity continued to implement its components, including Developing a More Diversified Non-Oil Economy and Improving the MSME Business Enabling Environment. Component ONE focused on developing value chains for agritourism, berry, hazelnut, orchard fruit, pomegranate/persimmon, and perishable vegetable production. Component TWO aimed to improve the business enabling environment through the Azerbaijan Small and Medium Business Development Agency (SMB). Component THREE supported Azerbaijan's economic reforms through cross-cutting activities, including Monitoring, Evaluation, and Learning (MEL), Communications and Outreach, and Environmental Management and Monitoring. The Activity also continued to implement its Technology Transfer Fund (TTF), Access to Finance, Food Quality and Safety, and Youth Engagement initiatives. The partnership with the Azerbaijan State Agricultural University and Oklahoma State University was also maintained, as well as the collaboration with AzPromo, USACC, and USAID. The Activity's progress was monitored through the Performance Monitoring Plan (PMP), and technical assistance was provided through Short-Term Technical Assistance/International Assignments.