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2015 Challenging Domestic Agenda for Morocco – Jean AbiNader

Lower Energy Prices, Cuts in Subsidies Will Support Economic Progress

 

Photo:  jlaceda

Photo: jlaceda

Jean R. AbiNader, MATIC
January 14, 2015
Jean R. AbiNader, Exec. Dir., Moroccan American Trade and Investment Center

Jean R. AbiNader, Exec. Dir., Moroccan American Trade and Investment Center

In this second in the series on what’s ahead for Morocco in 2015, we look at key domestic issues that are priorities for the government, as well as the people of the country, who are concerned that external factors will complicate Morocco’s progress.

Three primary areas that directly affect the lives of Moroccans and are on the government’s agenda are the economy, reform issues, and internal stability. These three are interrelated, since stability depends on how the economy and reform agenda are managed, as well as wrestling with challenges from extremists in the region.

Economy is Bright Spot in 2015

Although it is anticipated that there will be a slowdown in the economic growth rate due to the continued lethargy in Eurozone countries and little growth in the global economy to which Morocco is linked, overall prospects are quite positive. A recent favorable rainy season coupled with strengthening macroeconomic indicators may push Morocco’s growth rate somewhere between three and four percent, the variance reflecting the drag on the economy created by debt servicing. The major financial rating agencies note that the government is taking all the right steps to reduce subsidies and public sector spending, which will make the country’s balance sheets healthier. In fact, “The IMF stated that the implemented reforms have strengthened public finances and stabilized the economy. However, downside external risks remain, in particular those related to Europe’s slowdown.”

According to FocusEconomics, “Morocco’s economic outlook remains healthy as the government is committed to fiscal discipline. FocusEconomics panelists expect the economy to grow 4.3% in 2015…For 2016, panelists see the economy also expanding by 4.3%.”

The outlook from the rating agencies is similarly positive. “Moody’s credit rating agency stressed that Morocco is heading to a gradual reduction of the budget deficit as a result of the radical procedures adopted by the government, despite the unpopularity of such measures.” “Fitch, the credit rating agency, believes these reforms allowed the reduction of the public deficit from 7.3% in 2012 to 5.4% for the last year and a decline to 4.3% is expected in 2015.”

In line with themes sounded by King Mohammed VI, financial reforms are aimed both at correcting imbalances and weaknesses in the economy and enhancing its competitiveness so as to counter the global economic slowdown by expanding markets in Africa, where Morocco has a competitive edge.

As noted in a recent Al Monitor article, “The fact that the Moroccan economy is keeping away from the red line [of excessive public spending] is basically due to the strategy supervised by the Moroccan king himself. The strategy focused mainly on the diversification of partnerships and opening new markets for Morocco’s exports in addition to the development of business initiatives and attracting foreign investment through adjusting laws in terms of facilitating the movement of profits and tax cuts. However, the most important measure was the king’s declaration of the need to have reforms within the judiciary and get rid of the obstacles that impede the flow of foreign investments.”

King Mohammed has not promoted economic growth without attention to income disparity, which is a continuing issue in Morocco. On the occasion of the Throne and People’s Revolution Day, he raised the issue of the imbalances in the country and said, “We do not want a Morocco where the rich benefit from the fruits of development and are made even richer, while the poor are dragged out of the course of development and made even poorer.”

The Al Monitor article concludes with the caveat, “The Moroccan economy can benefit from modernization, opening new markets and diversifying its partnerships, since such steps ensure the preservation of the economy away from risky red lines.”

Challenging Reform Agenda

A number of bills are in play in the Chamber of Deputies and in committees reviewing proposed laws. In process currently are drafts related to giving greater protection to women and child workers, guaranteeing primary education to disabled children, regulating certain types of mining, enhanced security against terrorism, providing health insurance options for divorced women, ending civilian trials by military tribunals, and judicial reform. Also up in 2015 is the effort to finalize both a media law outlining rights and responsibilities for Morocco’s traditional and contemporary media, and an associations law on civil society organizations.

By the end of the spring session, we will have a clearer picture of progress on the various bills delineated in the 2011 Constitution and expectations of if and when they will wind through the legislative process. Given the heightened security situation, now upgraded due to the Paris attacks, there will certainly be an emphasis on increasing the government’s power to track and interdict potential terrorists.

Enhancing Security Presents Opportunities for “Best Practices”

With the encouragement of its allies, Morocco continues to develop a multifaceted “toolkit” to counter violent extremism, including the training of imams from more than 10 countries in the principles of moderate Islam; special programs for militants who have returned from fighting abroad; mourchidates training of female counselors who work in mosques and community centers; a social media campaign against extremist messaging, and infrastructure enhancements to hardware and software resources. In fact, the country has become a prototype for working domestically and regionally to combat terrorism.

A valued component of this overall campaign is Morocco’s leadership in the various iterations of coalitions opposing extremists. From its active participation in the anti-ISIL effort to hosting meetings concerned with returned militants to the upcoming Marrakech Security Forum, Morocco has demonstrated its commitment to a long-term effort to defeat radicalism and ensure security for its people. Its role has been positively noted by Vice President Joe Biden, EU ministers, and various international agencies and departments. Combined with the country’s efforts to liberalize its political and economic space and generate meaningful jobs for youth, women, and the marginalized, Morocco is working hard to make 2015 a remarkable, progressive year.

 

 

 

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