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Between the Old and New: Life in Morocco’s Unstructured Economy

One mother told me that her child did not want her to go to his school because he is embarrassed by how she talks and dresses.

Rabat – When approaching development projects in Morocco, or simply building a business, a good understanding of Moroccan socio-economics is necessary. In any of Morocco’s cities, it is evident that people in the same place belong to different socio-economic structures: the “old economy,” the “new economy,” and the in-between “unstructured economy.”

Failing to understand the dynamics of each one and how they interact will likely lead to the failure of a social or economic project, such as those with the goal of lowering poverty or violence.

Morocco’s three economies: the new economy, the unstructured economy, and the old economy.
The ‘old economy’: A communal system

A few decades ago, most Moroccans belonged to the old economy. Characterized by a large family structure, houses hold extended families, and most of the rooms are shared. The majority of people’s food is produced locally and cooked at home.

People use traditional medicine when they get sick, and pregnant women rely on a midwife, called the “kabla,” to deliver their babies at home. However, with a lack of modern medicine, some people die from childbirth or illnesses that are easily treatable.

In the old economy, people are financially backed by their families, and in case of major need, they collect money from the village members who give depending on their financial ability.

Life in the countryside is also hard physical work and requires long hours. People who might want to pursue an “intellectual” career do not have the opportunity. While there were many good things about traditional life, some people are drawn towards life in the city, in the “new economy.”

Read also: ONDH: Rural Moroccan Adults Have 2.2 Years of Education on Average
The ‘new economy’: Success in the city

In the new economy, families are smaller. People rely less on their children when they get old, and almost every working person gets insurance and retirement plans. The family structure does not support parents or siblings financially.

In Morocco, people in the new economy have enough resources to get visas to Europe, the US, and Canada. Usually, the parents are educated, and they can interact with the international economy.

They have access to goods and services at international prices, like restaurants, clothing brands, home appliances, and mobile phones. They can basically get the same goods as a middle-class person living in Europe or the US.

The ‘unstructured economy’: An uncomfortable in-between

In between these two stable, structured economies is where many Moroccans live today. Many of them are the second or third generation of those who have emigrated from small villages to live in big cities. But they have not yet integrated into the new economy.

This migration has created a culture that is unstable in which people are lost and confused. Old people from the rural areas, or “learoubiya,” know this very well.

In some cases, people lack the security of their families and communities, and yet they have no insurance or retirement plans. Some have to support their parents or siblings, yet they lack access to insurance, retirement, and all the social benefits the new economy provides.

The struggle of this generation is illustrated by a conversation my father had with an older man. My father was a principal for a grade school in a remote village near Guercif, a city in northern Morocco halfway between Fez and the Algerian border, and sought to encourage education.

Once, he was talking to an old man about the benefits of school and how important it is to send children to school. The old man replied that they were afraid that sending their children to school would leave them with no future. He explained that the children who went to school would soon have to move to a big city to continue their high school.

In some cases, children have to move out at an earlier age to continue their grade school studies because of a lack of schools near home. The parents must pay the full cost, and often children have to live with other older children in shared apartments.

Read also: Student Dropouts in Morocco Decreased by 15% in 2016-2017 School Year: Ministry

Parents have very little money to pay for their children’s rent, food, and books. In some cases, children are by themselves with no adult supervision to monitor and help them solve their problems. Most of these children return to their villages without finishing their studies, yet they do not know how to work their lands.

Older people describe them as “wearing a shirt with a pen and slick-backed hair and unable to work the land.” If these students stay in the city, the most they can earn is around MAD 2,000 ($208) per month, without a formal work contract or insurance.

If they go back to their villages, they are basically useless since they no longer know how to live like their parents. It is at that point when people lose their old values but have not transitioned all the way to enjoy a modern way of living.

The jump from one way of living to another has left many people doubting their parent’s values and not fully understanding the values of the new social structure they are entering. It is common in Morocco to hear older people complaining about the younger generations and how the children have lost respect, manners, and seriousness.

What happens when transitioning from the old to the new economy?

Imagine a young man whose parents have emigrated from a small village to a big city. With all the cultural baggage they have, most likely he will have a large family, at least four siblings, and probably a stay-at-home mother who feels she is losing control of her children as they grow.

Since most of the parents in this situation are illiterate, they cannot help their children with their homework. One mother like this told me that her child did not want her to go to his school because he is embarrassed by how she talks and dresses.

Children no longer see their parents and traditional values as an example to follow. Parents cannot help their children compete in the new world.

Mothers are illiterate and cannot communicate with their children’s teachers, and fathers are working hard and serving others for a mediocre salary of MAD 1,500 MAD ($156) per month that does not allow the family to make it to the end of the month. Most of these children drop out of school before high school.

Imagine a young man walking into a brand store where one pair of shoes could cost as much as half of his monthly salary. Imagine him passing by a restaurant where lunch could cost two days’ salary. He needs to work four months to buy an iPhone.

All these things would not be appealing to his parents who grew up in farms and villages. They have no desire for a smart phone and no habit of eating out. They comment on how the pair of shoes or the phone is overpriced. But how does the teenager view this? An iPhone, designer shoes, and eating out is appealing to a young person.

People in the unstructured economy cannot afford what the new economy is offering: Access to a functioning labor market, insurance, and retirement. But they also do not enjoy the space, simple life, large family, and community support their parents had.

Young people lose faith in society and try to earn a living their way, and poverty, bribery, delinquency, and unemployment become a culture.

Life in the unstructured economy

Health insurance and retirement are products that most Moroccans cannot afford. I found out how impractical they can be in a conversation with Jalal, a 28-year-old man. I was trying to convince Jalal how important insurance is and how having insurance could save him from poverty in case he gets sick.

He was quiet for a few seconds, and then he explained that in his case it does not make any sense to spend a third of his MAD 2,000 ($208) monthly salary to buy insurance. Rent and food come first. Then he explained that it is more likely his 60-year-old mother will get sick than himself.

So he determined to save the insurance money because he can spend it on better uses.

Jalal’s activity does not meet the modern economy’s criteria in which activities are registered and taxed, people are insured and have retirement accounts. His work is viewed as marginal, temporary, and in a sector that will be absorbed by the formal economy over the years.

Economists label this kind of activity as “informal,” and it is seen as a temporary phenomenon that will disappear over the years. However, decades have passed since this term was defined in the 1950s, and it is clearly not a temporary condition in Morocco.

Jalal’s work meets his needs; it pays for his food, rent, and his mother’s medical bills. Jobs like Jalal’s are a natural evolution of a society that is in transition from a traditional to a modern economy.

Because the unstructured economy involves a large part of the Moroccan population, the country needs policies that give it the structure it lacks. Public services have to be re-designed around the needs and abilities of these Moroccans.

Morocco’s old and new economies are both stable structures with defined values. But the unstructured economy requires public policies that focus on information, healthcare, and retirement management to improve these people’s lives.

Read also: Student Dropouts in Morocco Decreased by 15% in 2016-2017 School Year: Ministry

The views expressed in this article are the author’s own and do not necessarily reflect Morocco World News’ editorial views.

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