Moroccan government misses growth targets as opposition grows

Poor growth, a rising unemployment rate and discontent from poor and middle-class voters pile on the pressure for Abdelilah Benkirane's Cabinet.

al-monitor Residents stand in front of their homes after the authorities executed an order for destruction of uncontrolled housing in a suburb for sale near Rabat, Feb. 13, 2012. Photo by REUTERS/Youssef Boudla.

Topics covered

unemployment, morocco, middle class, finance, economy

Jul 23, 2014

The Moroccan parliamentary opposition criticized the performance of the government, led by the Islamic Justice and Development Party (PJD), describing it as “disappointing and far from the aspirations of the citizens in the economic, social and human rights fields,” after two and a half years of its five-year mandate.

Two days ago, heads of parliamentary blocs delivered speeches stating that the government did not meet their expectations in terms of developing a business environment, bringing in foreign and domestic investments, creating more job opportunities for young people and improving the living standards of the middle and the poor classes. These classes have borne the burden of the economic crisis associated with the aftermath of the Arab Spring and the global financial crisis [of 2007-09]. It's worth mentioning that growth in Morocco dropped from 4.8% in recent years to only 2.3% during the second quarter of 2014, while the debt doubled to reach around 80% of GDP. Therefore, repaying the deficit in the state accounts became partially dependent on foreign debts.

Some interventions confirmed that the government tried to reform the economic situation and social funds by raising the prices of basic goods and services, ensuring the rights of workers and wage-earners, taking out foreign debts to fill the budget deficit and abiding by the recommendations of the international financial institutions. According to these institutions, supporting the economy is linked to lifting subsidies on prices, which led about 3 million people into poverty and increased the number of vulnerable people to about 30% of the total population.

The government is expected to raise prices of water and electricity early next month to about 50 billion dirhams ($6 billion) worth of investments required by the National Office for Electricity and Drinking Water between 2014 and 2017. Observers expect the decision to stir a strong reaction among the poor, who are most affected by the price rise, which previously affected the middle and upper classes.

MPs said the government exaggerated the figures and indicators for political reasons, as revealed by national statistical institutions.

The latter believes that the forecasted growth figures are exaggerated. Moreover, according to the Central Bank of Morocco the expected growth rate will range between 2.6% and 3% by the end of 2014. This is at a time when Morocco needs a growth rate higher than 5% to counter youth unemployment, which rose to an alarming rate and now accounts for more than 20% of the active category. The national unemployment rate is estimated at 10.2% compared to 9.4% at the end of 2013.

On another note, the opposition accused the government of distorting information and misleading public opinion by providing incorrect data in a political attempt to hide its failure to manage the economic and social issues. This was the heaviest criticism suffered by the Cabinet of Moroccan Prime Minister Abdelilah Benkirane, since its formation in the end of 2011 in the midst of a constitutional amendment in Morocco.

Hakim Benchimach, head of the Authenticity and Modernity Party, said, “The government is unable to solve economic and social problems and difficulties but justifies its failure by accusing others of obstructing its work.”

The parliamentary majority also commended the performance of the Benkirane Cabinet, which has just completed half of its mandate, and stated that [the government] tackled sensitive matters and sectors that no previous government dared tackle. This was in reference to the reduction of price subsidies by cutting the expenses of the compensation fund and reviewing the status of the retirement fund. Both suffer a shortage of resources in light of an increase in expenses and they declared a war on corruption and the rentier economy.

According to analysts, the growing criticism of the government is because the middle and the poor bear the cost of the social-economic reform, estimated at tens of billions of dirhams, and the future generations bear the burden of reimbursing internal and external debts, in light of the failure to achieve the economic objectives set three years ago during the Arab Spring wave. These objectives included registering a 7% growth rate, reducing the unemployment rate to 8% and eliminating poverty and vulnerability by transferring part of the financial surplus to the most vulnerable groups in society.

The failure to achieve these objectives may be one of the direct causes for the growing opposition against the government, in addition to the diminishing effect of the Arab Spring, the declining influence of the Muslim Brotherhood in more than one Arab country and the reservation by some European capitals about the Islamic economic choices of the Arab Spring countries.

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