Thursday, January 19, 2012

Morocco: The Government's New Macro-Economic Program

Morocco: The Government's New Macro-Economic Program

By Morocco News Agency Staff

Rabat, Morocco --- January 19, 2012 ... In preparation for the presentation of the Benkirane government’s statement and program, the Moroccan Cabinet Council began elaborating on the specifics of the government’s program and particularly the macro-economic and social plans.

Benkirane is cognizant that no socio-political reform is possible in Morocco without a profound economic recovery. Moreover, the rapidly deteriorating economic crisis in the West, and Europe in particular, puts additional burden on the Moroccan economy for it is connected to Europe’s.

The macro-economic data in the government’s program is most impressive and challenging but not unattainable. 

The government’s macro-economic data expects a respectable annual growth rate of 5.5% for the next five years. Consequently, the government in Morocco will have the budget deficit reduced to 3% over these five years, and the inflation compressed to an average of 2%. 

Although, as discussed below, the government anticipates an increase in public sector employment, payroll should be limited to 10% of the GDP against the current 10.3%. The government hopes to achieve this through the concurrent increase in the GDP and recalculation of salaries in the public service.

A major component of the Benkirane economic development program for Morocco is a fair distribution of wealth through restructuring of the economy rather than debilitating taxation. Benkirane calls this approach “the moralization of public life” and it is associated with the priorities “in the new social pact” advocated by the government.

A major instrument of the economic reforms in Morocco relates to employment. The struggle against unemployment is not an easy task. The government is adamant on reaching an unemployment rate of 8% within five years. 

The government plans to create 200,000 new jobs annually via the promotion of both public and private investment. The government wants to increase the annual training and integration program to about 50,000 beneficiaries. This way, the government will be able to absorb a significant segment of unemployed graduates. However, the government plan foresees “dialogue” as the ultimate solution to addressing the youth unemployment. Young graduates will have to comprehend that the state alone cannot absorb them all. 

The idea is to explain reality while setting out the limited available resources. Instead, the government will encourage the creation and expansion of a labor market in the private sector by supporting the investment in manpower. The new, democratic government in Morocco is convinced that the private sector is willing to absorb a large proportion of unemployed graduates provided that there is no debilitating taxation on the profits from investment and business enlargement resulting from job creation. The Benkiran government already reassures the business community in Morocco that economic expansion including employment will be encouraged and rewarded.

The Benkirane government hopes to recover funds and improve the overall economic performance through the much heralded fight against corruption and bad governance. 

This objective is emphasized in the roadmap of the new government. Initially, the government intends to clean and streamline the management of public facilities. A pension reform is also a priority given the state of the various government-controlled and -guaranteed funds, and because this is a time bomb that must be defused this year or by 2013 at the latest.

The Benkirane government’s plan anticipates that a large number of presently unemployed graduates and future graduates will be absorbed into the major social programs the government is committed to expanding in conjunction with the private sector.

One of the highest priority programs of the new government in Morocco is health care. 

The government is adamant on providing access for all citizens according to their needs, regardless of their ability to pay. The services offered will be of quality and patient-centered. Emphasis will be placed on the lower rates of maternal and child mortality - achieving the Millennium Development Goals. This will require the expansion of medical and social services through the recruitment of quality manpower. To address the huge financial cost of the program, the government expects the gradual spread of RAMED (Health Insurance Plan for the poor) through better management at the public sector and the inclusion of private sector business.

The other high priority by the new government is education. 

The Benkirane government’s plan envisages a comprehensive program encompassing the entire educational spectrum from basic literacy to advance academic studies. Again, educational opportunities to all and the pursuit of excellence are at the heart of the government program. In the pipe is the launching of such national initiatives as “public schools of excellence”, “Moroccan university as a leader in training and scientific research” and “the fight against illiteracy as a pillar of human development”. 

The government is convinced that improvement of literacy is a precondition for the overall upsurge of the economy in Morocco. Hence, an urgent priority is the creation of the National Literacy program with the goal of reducing the illiteracy rate to 20% by 2016 and complete eradication by 2020.

Another priority involving employment issues in the impoverished urban slums is housing. 

The new government approach in Rabat aims to challenge the procedures presently followed for the reduction of slums and the fight against the spread of slums. The objective is to build 150,000 new homes a year. Toward this end, the government will strengthen the guarantee fund to better support access for “decent candidates” for housing who do not have regular resources. Emphasis in this program is on the unemployed uneducated youth who will be in effect employed in the building of their own houses and neighborhoods. This will put them in the workplace as skilled labor. In order to fund these programs, the government intends to revise the tax rules to encourage private sector investment in housing construction and rental. 

The new government in Morocco seeks to regulate the housing market by establishing objective criteria for project approvals - from construction to renting. Furthermore, the transfer of public land to private sector developers will be simplified on the basis of tenders.

Basically, the Benkirane government’s statement is based on the application of good governance principles to the management and implementation of the provisions of the new Constitution. The stakes are high.
The Benkirane government will be facing great challenges once it begins the implementation of the promised action. After all, the expectations of the public that has just voted for Benkirane and his government are enormous. 

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