Editorial – The economy we shall seek

By Abdellatif Ouahbi

As we try to understand the essence of the Moroccan economy, we come to realize a series of contradictions that make it even harder for us to assess our economic paths and outcomes.

These contradictions take different forms and aspects; for instance, the Moroccan economy was proven to have great potential, however, its outcome is far from positive. Moroccan society, on the other hand, enjoys a broad youth base that is more open to the world as we know it today, yet, for some reason, our institutions are still loyal to their old-fashioned structures, making no progress whatsoever.

For its part, the government’s claims stipulate that everything is fine and in order, while the truth is that most citizens suffer in silence; And at a time where various reforms have been made to improve the business climax, Morocco still ranks low in terms of its growth economic index, let alone the ambitious sectoral strategies that lack coordination in order to achieve the expected results.

In fact, all 65 international free trade agreements signed by Morocco were not sufficient to reduce the arising deficit, which prompted the Economic, Social and Environment Council, in its 2016 report, to call on the government to review such conventions to serve our country’s interests.

Thus, despite engaging in several legal and institutional reforms, the Moroccan economy is still facing a series of emerging challenges for a variety of social segments are becoming more and more vulnerable while an estimated few enjoy obscene wealth.

The Covid-19 pandemic has swept our economy, which had been, in the last 20 years, enduring some sort of discrepancy between the volume of investment ratios within Morocco’s GDP (estimated at 31%), and the country’s economic growth rate (no more than 3.5%), meaning that investment in sectoral policies and infrastructure did not bring about significant growth rates that are likely to establish a more profound economic dynamism with the purpose of creating jobs, developing production and increasing domestic consumption.

Against this economic backdrop, Covid-19 swept our country in March of last year, prompting the state to put the entire country under quarantine as to anticipate the pandemic’s spread, yet, all economic activities were seriously affected. The situation at the time led the state to adopt a more flexible policy by issuing compensations to large social segments, as well as a series of employees and enterprises, in order to maintain the minimal productivity rates and preserve a relevant consumption limit. Within this context, the state managed to establish an anti-Covid-19 fund, and formed an economic vigilance committee to ensure maintaining social integration and cohesion within our country.

The threat that Covid-19 represents has affected all of our citizens, let alone that the pandemic has hit our country during a poor agricultural year. We all know that Morocco’s economy depends on rainfalls, and the fact that the agricultural sector alone employs 16.33% of our labor force and contributes with 5.65% to Morocco’s GDP.

And since the kingdom has prioritized health and safety over the economy, it is safe to say that the quarantine decision will have severe repercussions on employment and wages for an undetermined period of time, in the prospect of discovering an effective drug or a viable vaccine.

It is no secret that the Moroccan economy depends on consumption, tourism and trade, therefore, it shall take a serious hit due to Europe’s quarantine policies towards the epidemic. Besides, Morocco will miss out on remittances, and is expected to suffer a significant reduction in terms of exports (58%) and tourism (70%). These unprecedented rates and numbers will cause Morocco’s GDP to decline to an even 5.1% in 2021.

The Anti-Covid-19 Fund alone – given all the expenses it requires – is likely to jeopardize public finances due to the high social and economic expenditure rates that have been allocated to reduce the pandemic’s effects, as well as the drastic reduction in tax entries, especially the tax on companies, which shall bring the central administration’s debt to an estimated 73% of this year’s GDP.

All these negative impacts and repercussions require some time for assessment, provided that the post-epidemic challenges will be more complex. Since our economy has poured all its effort and components into fighting the epidemic, it shall not be easy for the latter to find the right balances in order to maintain social cohesion on the one hand, and ensure its rise after the epidemic on the other.

As we tend to contribute to the national debate on the post-Covid-19 phase, we shall review the structural characteristics that have marked the Moroccan economy from independence to this day, for this shall enable us to point out our strengths and weaknesses vis-à-vis the economy, and thus, come up with proper alternatives aimed at ensuring economic recovery and development once the pandemic is long gone.

All those who believe in democracy and patriotism shall turn this pandemic into a real life opportunity by critically assessing the situation as it is today, especially at the economic level, for the current circumstances helped us learn more about the world in general and our country in particular, therefore evaluate our local competencies, whether at the level of individuals, provided their solidarity and sense of awareness, or at the materialistic level, given our country’s various wealth resources, for they are sufficient enough to push upon our nation if proper investments are to be made.