As we move beyond the immediate health crisis, policymakers must seize the opportunity to implement bold forward-looking reforms.
The global, regional, and national impact of the COVID-19 pandemic is collateral at all levels, especially at the health, economic, and social levels.
Economic recovery will require a lot of time, maybe three years, and can only be gradual. It will likely be impossible without State support. Furthermore, economic recovery will require the combined efforts of all actors in the public and private sectors. The key is solidarity among groups within each society and between countries.
Morocco is by no means exempt from the macro-economic fallout from COVID-19. According to the Moroccan High Commission for Planning (HCP), all economic indicators show markedly declining forecast levels which, presumably, are likely to deteriorate even more in the future.
Morocco’s GDP shows a forecast decline of 3.8 points, corresponding to MAD 10.9 billion ($1.1 billion) in the second quarter of 2020. The economic growth rate should not exceed 0.8% — as a result of drought, COVID-19, and prolonged lockdown — instead of an average initial growth estimated at +2.5%. GDP growth in the first quarter of 2020 stood at 0.1% compared to 2.8% a year earlier.
Several Moroccan companies have prepared social plans to downsize up to a third of their workforce in order to ensure their survival. This is a reasonable approach, according to the employers, but it may put tens of thousands of people, all classes combined, in precariousness. The State must quickly find a solution.
The Moroccan government has introduced several palliative measures in response to the COVID-19 crisis:
I) Establishment of a zero-rate credit for self-employed entrepreneurs weakened by the crisis.
II) Exceptional accounting treatment to extend donations and charges relating to the period of the state of health emergency.
III) Softening of the declarations of employees affiliated with CNSS who are on a temporary work stoppage. The total of the endowments, contributions, and participation would approach MAD 37 billion (approximately $4 billion).
IV) Adoption of remote work and distance education as flexibility and prevention measures for the public and private sectors and the educational field.
Rethinking Moroccan development
In addition, the COVID-19 pandemic presents an opportunity to think about establishing the new development model on a more social conception of the economy, to give new impetus to the sectors of public health and national education.
We should also be aware of the need to reconsider the State’s orderly disengagement policy, especially in the social sectors. It is important to opt for a new form of state interventionism, smarter and fairer, with better management of budgetary and fiscal instruments.
It is also necessary to adopt more appropriate State regulation of the markets, without de facto monopolies and sometimes anti-competitive practices.
Finally, employment and income-generating activities should be encouraged. The health and economic crisis caused by the COVID-19 pandemic is a worldwide threat, a frank and esoteric break with current paradigms and models.
Another important factor to consider is the digital transformation of all sectors, which will play an even more remarkable role in improving economic competitiveness in the future, using new information technologies. In Morocco, if the administrative and financial institutions have made progress in this area, thousands of small and medium-sized enterprises are still far behind. State support would be beneficial in urging them to invest more in digitalization.
In the area of public health, the main objective will be to improve the health system and infrastructure throughout the country.
Concerning education, the government’s efforts to generalize schooling must be doubled while investing more in training and scientific research.
In short, the development of all of these sectors will help build a solid and solvent economy capable of strengthening the strategy of opening up to international markets.
A chance to rebuild
Morocco has several assets to emerge quickly from the crisis, ensure its economic independence, and allow it to occupy a comfortable position in the world. The country’s solidarity, unity, and political stability will make it possible to project it into the future with confidence, as it always does when exceptional and unexpected events intersect the course of its history.
However, this pandemic poses greater obstacles than previous crises because it is global, economic, social, and sanitary in nature.
As we move beyond the immediate health crisis, policymakers must seize the opportunity to implement bold, forward-looking reforms. This includes redesigning social contracts, providing adequate safety nets, cultivating the skills and jobs that the future economy will need, and improving risk management and the distribution of returns between the public, the State, and the private sector.
If the Moroccan government is to take a leadership role, shaping the recovery and charting a new course for growth will require greater collaboration between businesses, the public, government institutions, and workers. For recovery to succeed, all stakeholders must participate.
Right now, it should be obvious that we cannot go back to a system that benefits a few at the expense of the majority. Forced to manage short-term pressures and deal with long-term uncertainties at the same time, Morocco’s leaders are at a historic crossroads. The new weight of the State gives it the means to start building a fairer, more sustainable, and more resilient economy.
Moha Ennaji is a university professor and researcher in Fez and author of several books, including his most recent work, “The Maghreb-Europe Paradigm.”