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Jouahri: Social Disparities Grow in Morocco Despite Government Reforms

Jouahri: Social Disparities Grow in Morocco Despite Government Reforms

Rabat – Despite Moroccan governmental and royal social projects and the governmental reform of the subsidy fund, there are still social disparities and reforms lack follow-up.

Abdellatif Jouahri, the governor of Bank Al-Maghrib (BAM), Morocco’s central bank, presented the King with the annual report of the economic and social situation in Morocco on Sunday.

Subsidy fund lacks follow-up

Morocco’s government introduced subsidy reform five years ago to make the subsidy fund beneficial for poor Moroccan people. Nevertheless, the subsidy system still needs continuous follow-up, according to Jouahri.

The Moroccan government has phased in the removal of subsidies on sugar and floor. According to government, the removal of subsidies on food products will be offset by the government funding social development projects dedicated to supporting poor Moroccan people.

Subsidy reform on butane gas has not been implemented yet. According to government, it will enter into force in 2022. However, there have been calls within the Parliament to remove subsidies on butane gas. On May 29, MP Abdellah Bouanou of the Justice and Development party (PJD) criticized the delay of subsidy reform regarding butane gas. He urged the government to start removing subsidies on butane gas.

Speaking to King Mohammed VI, Jouahri said the reform of the subsidy fund has been successful. However, he asserted that the reform should be completed following a comprehensive policy. The policy should be based on the adoption of real prices for better distribution of resources.

“At the same time, most vulnerable families should be given support,” he added.

According to Jouahri’s report, after the implementation of subsidy fund reform and fuel price deregulation, in favorable conditions characterized by low oil prices, there was no follow-up on fuel prices.

“Five years after the launch of the reform, the upward trend in oil prices currently puts the reform at stake and again raises questions about the circumstances surrounding its implementation.”

Bouanou stated in May that the difference between the government’s set prices and today’s prices is nearly MAD 1 per liter. “Moroccans annually consume some 6.5 million tons [of fuel]. So, we easily reach 7 billion dirhams in additional profit in one year.”

On July 10, Omar Balafrej, an MP for the Federation of the Democratic Left (FGD), also claimed that oil companies in Morocco made an additional profit of MAD 17 billion from the deregulation of fuel prices enacted in December 2015.

He proposed the government confiscate the extra profit earned by fuel distribution companies and spend it on government projects.

Enduring social disparities despite social and economic programs

Although the state made efforts as part of the National Initiative for Human Development (INDH) and social programs, Jouahri said there are growing social disparities, especially in rural areas.

“The disparities remain large between different social classes, which creates a sense of exclusion among large parts of the population,” he added.

In 2017, the INDH created 44,000 projects for the benefit for 10.3 million people, 50 percent of whom were in rural areas.

According to INDH, a total of 4.2 million women participated in income-generating projects in 2017.

Since the beginning of 2018, King Mohammed VI has launched many development projects across Morocco.

In January, during King Mohammed VI’s visit to Agadir, eight agreements intended to promote the industrial sectors of the region were signed before him. The agreements were part of an industrial plan in the Souss Massa region.

In May, the King also launched three humanitarian projects in the Kenitra region, 40 kilometers north of Rabat, to promote economic and social conditions of poor women. With an estimated budget of MAD 26 million, the King launched a building project to provide housing for families of fishermen in Mehdia, a center for vocational training and job integration in Sidi Taibi, and a center for vocational training in agricultural logistics in Souk El Arbaa.

In his speech on Throne Day, the King stressed the need to continue developing projects and overcoming the obstacles that hinder economic and social development.

“We shall continue to move forward together and work hand in hand to overcome transient as well as objective hurdles and bring about conditions that allow us to continue implementing development programs and projects, create jobs, and provide for a dignified life.”

The King also spoke about a new initiative to establish a “consolidated social register,” to gradually improve social welfare projects in the short and medium term.  

“This is a national registration system to identify families that truly deserve to benefit from social assistance programs.”

“It is a strategic and ambitious social project which concerns large segments of the Moroccan population,” he added.

Government reforms should be completed

According to Jouahri’s report, “Morocco has made great efforts in recent years, but the level of achievements indicates that our country not only needs to continue and expand its reforms, but also, in particular, to implement and complete them in a timely manner.”

The governor of BAM pointed out that “many of the major projects that were launched have not yet been completed, and others have not achieved the desired results.”

As for the business climate in Morocco, Jouahri stated that some constitutional institutions are not performing their functions as expected regarding providing convenient conditions for investment and creating job opportunities. “The two sectors are suffering stagnation because of delay in some constitutional institutions’ decision-making.”

Corruption, weak labor force training, and the informal sector are among the main obstacles that affect the Moroccan business climate, Jouahri claimed.

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