The Moorish Wanderer

Moroccan Elections for the Clueless Vol.8

It seems Parti du Progrès et du Socialisme (PPS) political party is the first (to my best knowledge) to release their manifesto for the November 25th Elections. About time they did! Well, it is not like we were holding our breath for some ground-breaking, innovative or well constructed document.

I don’t know what to make out of this document. My criticism is justified, in the sense that PPS party has been in office as a junior partner in all government coalitions since 1998. They have had ministers in small and large departments: right from the start, former party boss My Ismail Alaoui was appointed Education minister (thus overseeing the largest ministerial department per human resources and budget spendings) he was assisted by Omar El Fassi as the Secretary of State for Higher Education and Research; And finally, Said Saadi, as Employment and Family minister (the unfortunate protagonist of a failed attempt to push for progressive legislation in favour of women) the same party retained some ministerial posts ever since, with Nabil Benabdellah (current PPS Premier) and Khalid Naciri (hum…) both Communications ministers and Government Spokesmen. Finally, the party has no shortage of academics and young intellectuals -like Youssef Belal, to put together a decent manifesto.

PPS election symbol

The writing's not on the book. (Wikipedia Picture)

Sadly, they did not; perhaps they do not see it as part of the political exercise; or perhaps they know there is already a manifesto somewhere, and theirs has no chance to be carried out.

Let us take a leaf from this manifesto:

” – Réorienter l’investissement vers les secteurs productifs et créateurs d’emplois qualifiés.

  – Inciter les entreprises au réinvestissement des profits à travers des avantages fiscaux”

Well. That’s quite commendable to promote public and private investments; but where is the funding? and what would be the impact of these incentives on growth, domestic investment and on the public finances themselves? How can they get the private sector on board with their policy? It seems they consider the present investment trend is inadequate, and tends to go to non-productive sectors, with limited job creation. That might be true, but the PPS has been part of all government coalitions ever since the Alternance. Are they telling us now that something is wrong with the economy? If they are, why didn’t they do something about fixing it? And while we are at it:

Engagement : Développer les ressources publiques et rationaliser leur emploi.

- Réformer en profondeur le système fiscal sur la base des principes suivants : allègement de la TVA sur les produits
de première nécessité, impôt sur la fortune et les successions, élargissement de l’assiette fiscale, lutte contre la
fraude et l’évasion fiscales, pénalisation fiscale de la rente et de la spéculation, imposition accrue des très hauts
revenus.
- Réévaluer les dépenses fiscales et mettre fin à l’exonération de la grande agriculture
- Prendre des mesures incitatives en faveur de l’épargne nationale.
- Rationaliser les dépenses publiques à travers une gestion axée sur les résultats.
- Réduire le train de vie de l’Etat en luttant systématiquement contre tous les gaspillages
- Redresser les finances publiques et recourir raisonnablement au déficit budgétaire et à l’endettement pour
l’investissement dans les secteurs d’avenir : équipement, éducation…

Is it necessary to remind the reader that Mr Alaoui was also an Agriculture Minister between 2000 and 2002, he did nothing to end the moratorium on agricultural taxes. I mean, this is not some opposition party ready to trash the incumbent government’s record; since they have remained in office for so long, and by the custom of cabinet collective responsibility, what they are denouncing as government weaknesses are, in the final analysis, their own record.

As a matter of fact, there are some quantitative pledges on that manifesto; how they will fund them, or any relative details about them remains to be determined.

* Minimum wage: MAD 15 and indexed on consumer price index.

The way these numbers have been announced is murky at best: kudos for the hourly minimum wage increase to MAD 15, but how will they implement it? Since the present hourly minimum wage is MAD 11.7, is this 28% increase going to be spread across the next 5 years, or is it a one-shot, annual increase for 2012? And how will they apply the CPI indexation?

Let us go for the conservative estimate that this MAD 15 objective is for 2016. That means an annual increase of 5%. Now, they are either already taking into account CPI inflation (around Bank Al Maghrib target rate of 2%) which means real minimum wage increase is going to be 3%, hardly good news, since these levels have been observed in the late 1990s. Otherwise, their inflation indexed increase will be at least 7%. The figure goes even higher if the 28% increase is carried over 2 years intervals, or as an annual increase. The economic cost of such increase, though subject to debate, might not be a sound economic policy, especially when a real variable (income) is tied to inflation.

* 250,000 new jobs

Again, there are no details about the 250,000 new jobs target; are they referring to newly created jobs? Or is it a net creation of jobs? Or is it a target for unemployment reduction of 250,000? They have been clear however, that they will create 250,000 jobs per annum; That means they want to create (or net create) a million jobs by 2016. In any case, it is going to be an almost impossible task: the percentage of active population is on the decline; this means they can only reach their target by giving jobs to the unemployed. At a rate of 250,000 jobs a year, we will certainly reach full employment, no doubt; the question is: how will they do it? how much is it going to cost? What are the considered options for such a policy: taxation, private sector incentives, public investments program, job training… where will the money come from to finance all of this?

* 50% Pensions upgrade

Well, since we know the CMR pension fund is likely to be bankrupt by the end of the decades, I assume this 50% upgrade in pensions means they are considering raising retirement age and/or contributions. Or perhaps privatizing the whole thing altogether? The proposal is too vague to even consider.

* Reduce health cost contribution of households from 54% to 20% * 2% general budget allocated to culture * 2% general budget allocated to sport

The three measures (health, culture and sports) will increase government expenditure alone by 5.8% per annum; that is to say, increasing the Sports department’s budget 4 times from 1.4Bn to 5.7Bn, and Culture budget from 513Mln to 5.6Bn. Additionally, the public share of healthcare cost goes up to 19Bn, an 11.45% annual increase in health expenditure from the current 11Bn. And so, the proposed policies indicate that the projected budget will go up to 310Bn, with no specifics on its breakdown, or commitment to limit the bureaucracy share from these proposed increases. Will these benefit households and individuals? there is little evidence in the manifesto, or elsewhere that it would.

* 150,000 additional social housing units per annum

This is a truly unrealistic target given the present contract agreements signed with the real-estate developers. What will happen is, attached fiscal incentives will grow even more to allure developers and sign up for these procurements; and instead of having 600,000 new proprietary households by 2016, real-estate tycoons will increase their wealth by 2Bn every year, thanks to the exemptions and tax loopholes.

* 750 youth foyer

With the current 510 Foyers across Morocco, this bombastic increase of 47% proposed by PPS means they will allocate only 117Mln out of their commitment to increase Sports department to 5.7Bn. Even their projection, it seems, has been off-charts and will inevitably benefit central government bureaucracy instead of local infrastructure to the youth. 

* MAD 10,000 universal minimum annual income

The only bright spot in an otherwise abysmal manifesto, the proposal conditions the cash relief to the poorest households with putting children in school. As a matter of fact, PPS has been rather generous on this; the number of households living below poverty line is around 340,000 households; considering the average household size of 8 individuals, a the cash relief initiative would cost about 20Bn; they have however stated the scheme is also conditional on the households’ income and origin.

Verdict: Sketchy, vague, wasteful and grossly incompetent with respect to the existing resources at PPS’ disposal. Hopefully, there will be no shortage of manifestos in the coming weeks!

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