The Moorish Wanderer

Going down with style, PSU Boycotts Nov.25 Elections

Posted in Flash News, Moroccan ‘Current’ News, Morocco, Polfiction, Read & Heard by Zouhair ABH on September 19, 2011

One has to hand it to the comrades: when they go down, they do so in style indeed. late Yesterday, PSU National Convention voted in favour of boycotting November 25th elections. This piece of news, just like any other, has its bad and good spins. Good news, PSU has been, as usual, very open about its proceedings, and the decision to boycott was openly and democratically discussed. If this isn’t free and open partisan democracy, I don’t know what is. Bad news, too, as fellow Blogger Omar El Hayani pointed out (bitterly)

Anyway, by doing so, PSU and the Democratic Alliance lose some support among the more moderate of sympathisers and likely voters. On the other hand, these live (or are registered) in districts PSU candidates, whatever their fame and statutes, will never carry. The decision to boycott elections was, I suspect, a counter-move to appease allies on the left, and perhaps a bid to confirm party strength by postponing the crucial question of radical dissidence or moderate opposition. I fear that with the high spirits gathered during weekly demonstrations, some old-guard PSU are rekindling with their far-left youth. Nostalgia is alright, but not to the expenses of compromising the build up of a strong democratic left-leaning party.

I still believe that boycott decision is just a temporary setback. Come the 2014-2015 local elections, PSU and its Democratic Alliance partners can engage into meaningful campaigning and carry genuine popular support by trying to prove they are fit for office. I submit that a strategy disparaging parliamentary elections as idle and inefficient, while advocating local elections are the real popular test to submit to, is a winning strategy, both on the medium and short run. As for any illusions on the regime’s strength and viability, the impact of boycott on behalf of the radical left remains, truth be told, peripheral.

Yet, for all the unobliging comments the decision has triggered (among others, on the twittoma) the Radical Left can, whenever possible, show some strong numbers when it comes to elections. Once labelled elitists, Left-leaning activists can carry seats other parties fail to woo; Indeed, the candidate’s personality and charisma matter a great deal, but when ideological commitment is conjugated with those essential ingredient, the Radical Left manages to build itself safe strongholds on the electoral map. I suggest it would be a shame to lose both parliamentary and local electoral base there. And I do hope the leadership will have keen insight on the matter. Sooner or later, PSU and its allies (including Annahj by the way) will have to confront itself to the electoral litmus test, and prior local activism or elected offices are going to be crucial to deal with local Moul Chkaras, or very active PJD operatives in the area.

Since they first contested elections in 1984, the average turnout carried by New Left candidates hovered around 150,000 votes. Though the high watermark was recorded between 1993 and 1997, the numbers held steady in 2002, and have even risen in 2007, considering how all major political parties (including PJD) lost votes in the process. And yet, the New Left still fails to rise above the 5-6 seats-odd in parliament house, when its electoral base allows for a dozen seats, even 25-30 commensurate to their electoral base. Indeed, ballot system, and the features of New Left electorate doesn’t allow for an expansion in their caucus, unless the Alliance keeps on growing, a double-edge strategy, since accelerated alliances and mergers within the left-leaning field both provide it with momentum and seemingly political strength, but also makes collective endeavour in electoral competitions very hazardous: in 2007, the Alliance agreed on common tickets over 75% of all contested districts, and separate candidates in the remaining 25%. However, crucial constituencies (like Rabat) were hotly contested by party leadership, because of the symbolism it carries, and as a way to summon up the blood and exacerbate the feud with a weakened USFP. But overall, common campaigning finds favour with the electorate: in 1993, the Koutla effectively campaigned jointly on all districts, and found itself with 1/3 of total expressed popular vote, a result no coalition ever achieved before or after.

But coming back to the implications the boycott induces, I was referring to “going down in style“. Unless the party finds itself an alternative playing field, there is no way we can keep on taking to the streets every two weeks: the party needs financing, visibility on public outlets and measurable strength to submit the authorities to its will, or at least to make its voice heard with strong credibility. Annahj can afford to stand firm on its Refuseniks position because it does not function as a political party. PSU and PADS (and to a lesser extent, CNI) on the other hand, cannot.

The crucial point is, the boycott directive will not be massively followed (to the tune of 200,000 voters) and these released votes will either go into an invalidated ballot, or in favour of a third party.Thousands of these votes will go, depending on the contested district, to one party or the other. The argument is that once these voters commit to these third parties, a scheduled comeback will be as painful, as tedious and as costly as it gets for the new candidates. I suppose the 31 OADP candidates had a hard time looking for votes in 1984, as they have just made the transition from clandestine activism to “normalized” politics. It would have been best that long-term views prevailed over the temptation of getting dragged to the left over this boycott business. In this, I believe Mohamed Bensaïd Ait Idder was right in advocating to keep on campaigning:

Watching Mohamed Sassi and Najib Akesbi advocating (O so bitterly) for electoral boycott was akin to that of a disillusioned lover seeking revenge by vowing celibacy: it hurts twice, and only themselves are to be blamed for it. The 2007 and 2009 poor showing were wake-up calls: I understand the PSU enjoyed a great deal of popularity with many likely voters, and these might -just might- have gone to the polls and slip a ballot endorsing PSU candidates. Perhaps Profs. Sassi et Akesbi gambled upon this momentum to reach out for voters; they enjoy, after all, high profile publicity, immense respect across the political spectrum and with the general public (when they get to know them) and, in Akesbi’s case, a valuable electoral experience as a former USFP local board member in Hay Riad neighbourhood (Rabat). But there is a catch to a political campaign, in Morocco and elsewhere: the financial cost and risk for a candidate to undertake such an endeavour.

Because campaign funding schemes in Morocco are still rudimentary (either because candidates are old-school fund-raisers, or because of the restrictive set of regulations imposed on political funding) candidates frequently need to finance themselves, which involves either a strong belief in winning the seat, or at least to do a 3% showing, necessary to be reimbursed by State funding. PSU (and Alliance partners) failed to capture Rabat seats, and were further humiliated by not passing the 3% threshold. The same story goes for 2009. A university Professor on a MAD 150,000-200,000 annual tenure cannot afford to campaign every now and then, and systematically lose election and money. Boycott makes sense for both our leaders. But by saving money in Rabat, we lose Representatives. Lahcen Fathallah (Chtouka Ait Baha) El Mokhtar Rachdi (Jerrada) and Mhamed Abdelhak (Sidi Bennour-Ouled Frej).

Votes in 2007 encompass the alliance (AGD) and individual votes gathered by PSU and PADS candidates. PS Votes have been accrued as well.

We lose 475 local board members if the boycott applies equally to local elections. In short, an all-out boycott, for the sake of the principle, will loses the only remaining imperfect, but nonetheless the most trustworthy indicator of popularity/political strength, i.e. the electoral base. Supporting bi-monthly demonstrations might be a commendable thing to do, but it goes as far as alienate lukewarm support from otherwise potential activists, opinion leaders, funding sources, good will that isn’t readily available when PSU (and other members of the Democratic Alliance) decides to go back to elections.

Indeed I am not happy with my party’s decision. My dissatisfaction is not out of sheer alacrity for election campaigns, but because of the enumerated facts above, the single genuinely democratic party in Morocco, the party that allows open debate on important issues without stifling dissent (such as my good self in this case) cannot shut itself off the silent majority that might just be successfully wooed by the charms of our unique brand of partisan democracy. I do hope all these elements have been pondered during debate held last weekend during the Convention, and I remain nonetheless optimistic about the prospects. We might be going down with style, but this is not the first time the New Left manages a Phoenix-like comeback. We have started with 30,000 odd electoral base in 1984, we certainly can always do better. And we shall.

I assume this boycott thing is only temporary, just a signal that whatever the party’s support and its size, we are a force to be reckoned with (the party of ideas, for instance) As a matter of fact, we need time to settle down and ponder on the last few months. We need to prepare for an already much postponed conference to renew the leadership. We need to review in depth our political and economic message we try to get across. We need to shift the focus om more down-to-earth issues without losing out of sight those issues that made the “New Left” brand: deep institutional reforms. In a sense, the boycott might just well be this pretext we need to attend to these more urgent tasks. For sure, we have now conceded the next couple of matches to other parties, and this allows them to get the better of us. But then again, we have nothing but time to oppose to their watches. OADP always made it and muddled through in tougher years. We can do just as well.

“I’ll Be Back” General Douglas McArthur, Philippines, 1941.

It might take a while, but it’ll be back.

The Triumph Of Mediocrity

Posted in Flash News, Moroccan ‘Current’ News, Moroccan Politics & Economics, Morocco, Read & Heard by Zouhair ABH on September 18, 2011

The position of Youth and Sports Minister ranks quite junior in the Moroccan government. But the incumbent minister, Mr. Moncef Belkhayat, has managed with a mixture of gaffes, brazen insolence and cheer populism, to give it some panache, although that pretty picture laboriously put together with an intense PR campaign is bound to come off when it comes to substance. But then again, judging from his fan base, substance isn’t Mr. Belkhayat’s strong suit. The perpetual candidate, kissing babies, holding hands, fondling the taxpayer’s money and hurling verbal abuse to his detractors, however, is a second nature in our minister.

He could have gone down in history as yet another bland minister in an otherwise average cabinet (and our ministers can be, even in their brightest days, very average people) he managed to gain for himself and his department a notoriety many of us will remember him for, long after he is out of office.

At first glance, our minister is “modern”: he is one of the only two ministers, and three public officials (to my knowledge) with a twitter account, and so goes the story, interacts personally on his facebook fanpage too. He has a business degree (supposedly from the best university in the world, ever) and extensive experience in the private sector with prestigious firms like Procter & Gamble and Meditel.

But the carefully-crafted PR picture he seeks to burnish falls apart when it comes to content: he has been frequently accused of embezzlement, cronyism, the works. And yet, still facing these charges with no risk to be impeached or otherwise. I guess that’s what happens when a minister is not appointed by his theoretical boss (the Prime Minister, by the way…)

His “Jebha” has no limit: originally an Istiqlal member, he quickly switches loyalties to RNI prior to his appointment on July 2009 as Youth & Sports Minister. He doesn’t seem to bother much about it, and has been brazenly clear on the subject:

La Vie Eco: Vous étiez toujours istiqlalien. Et puis soudain vous entrez au gouvernement sous l’étiquette Rniste. C’est de la transhumance de haut vol…

M. Belkhayat: L’explication est simple. Nous sommes tous, en tant que personnes, responsables chargés de bâtir et de construire un modèle de société basé sur la modernité du progrès. J’ai toujours affiché un positionnement clair par rapport à cela. J’estime que le RNI et l’Istiqlal se rejoignent sur beaucoup de ces principes. […] comme il y avait des équilibres à préserver, le portefeuille de la Jeunesse et des sports devait revenir au RNI. Et vu que ce parti présente une plateforme politique en ligne avec mes convictions, et de concert avec le RNI, nous avons décidé de faire une transhumance qui est mineure parce que je n’avais aucun rôle dans les instances du PI. Surtout que cela ne va pas à l’encontre des intérêts de l’Etat.

This opportunistic stance takes positively dangerous proportions when, prior to Feb 20 demonstrations, he claims on his Facebook board Feb20 activists are manipulated by lobbies targeting “National Unity”. (I suspect his “A+B” gaffe is in the process to become a Moroccan meme)

Moncef Belkhayat

C’est la preuve par A + B que nos ennemis infiltrent nos réseaux sociaux et qu’il faut qu’on fasse attention. Je vous suggère d’entrer sur le site qui traite du sujet pour contrer cette initiative visant notre intégrité territoriale. Restons mobilisés derrière le projet de société de Sa Majesté le Roi que Dieu l’Assiste. ALLAH ALOUATANE AL MALIK!

Like · · Share · 08 February at 16:41

In any standard-issue democracy, the best thing he would have done after each of his gaffes is to resign, but then again, he has no retribution to expect from his constituents; As a matter of fact, his is a constituency of one, and so far, he doesn’t sound irate about the mischief of little Moncef.

The #A8Gate has triggered some old animosity between USFP and RNI parties, the former accusing the latter of being an administrative party, responsible for the 1977 elections debacle (where Abderrahim Bouabid, USFP Premier at the time, lost to an independent-turned RNI candidate in Agadir, a UNFP-USFP stronghold) and earlier today, the Minister engaged into some very aggressive criticism of what remains a member of governmental coalition; The electoral campaign kicked off very earlier, it seems. But then again, his proverbial clumsiness sheds interesting lights on how our Minister deals with substance, and, among others, how he deals with figures…

Was RNI in opposition during these last 15 years?

According to the Minister, USFP should renew itself after 15 years in power. I respectfully submit to him that RNI has been a major coalition member in all governments since 1977, just the same as Istiqlal. He doesn’t get his facts straight on this one (and on many others) I suspect he has little knowledge of his party’s history, or any knowledge at all of government politics since 1956…

But the Minister also has problems with calculus. For sure, RNI party is a large political organization, and ranks fourth in terms of seats and third in popular vote. But he fails to see that since 1993, his party has lost popular votes. I submit, again respectfully, that he is not even aware of how many votes his party (RNI I mean) has gathered over time. It seems that in his mind, gaining one notch in terms of seats in parliament house necessarily means an increase in the number of popular votes. Coming from someone holding an Experimental Sciences High School diploma, I have doubts over his command on interpreting figures laid before him.

Since 1993, RNI lost 376,873. Hardly a result to boast about.

Now, in 1993 general elections, RNI carried 824,117 popular votes. In 2007, they managed to deliver only 447,244. By contrast, USFP (and Istiqlal for 1993) carried respectively 1,580,723 votes and 408,945. Now, while the minister is right about USFP electorate in decline, his statement about RNI on the rise can hardly stand when one considers the graph below; The minister seems to forget that all major political parties lost votes between 2002 and 2007, and that losing less than one’s competitor is hardly a feat to speak of. On the other hand, he made that extraordinary claim that I should “take into account some changes” in my figures on popular votes. I wonder how, since the numbers I have put before him are actual popular votes, and are, on top of it, official figures only hardcore nihilists would gainsay. Perhaps the Minister is thinking of reversing himself and defect to the Nihilist side, who knows?

Note: in 1993, Istiqlal and USFP contested elections on joint campaign, thus the 1.53 Million carried votes

I have to give credit to Minister Belkhayat. This morning, our tweets-exchange was a fruitful meeting of minds. But then again, he really doesn’t know how to defend himself, or perhaps he didn’t think he was going to be discussing technical matters with a very thorough observer and student of Moroccan politics. I understood, from our exchange, that he has only a superficial knowledge of his (supposedly) party’s electoral score over the last two decades, or indeed how the ballot system can create discrepancies between the number of seats and carried popular vote. He also seemed very shaky on more fundamental, macro-economic facts (that was on an earlier exchange on Twitter too) and made that extraordinary claim on USFP failure in privatizing public assets (an irony, given the minister’s own self-proclaimed economic entrepreneurial neo-liberalism)

I can't tell whether he is in favour or against privatizing IAM...

Again, I fail to find elements buttressing his claim on the total cost of privatization. My argument goes as follows: first, if RNI ministers felt so strongly about privatizing Maroc Telecom, Régie des Tabacs and other public assets between 1998 and 2002, why didn’t they threaten to resign their offices? And how come a party member supposedly embracing supply-side and trickle-down economics rail against such a sound economic policy, from his own ideological point of view? And does he realize he makes a fool of himself by denouncing Maroc Telecom Privatization, and at the same time praise the dividends it generates?

The second argument, already made superfluous by the minister’s very distinguishable flip-flopping, is based on sound data from Bank Al Maghrib: Since 2001 nothing on the Central Bank’s deposits and engagements abroad indicate inflationary exposure, nothing indeed in the vicinity of what the minister referred to (around MAD 10Bn) BAM net foreign reserves have increased steadily at an annual average rate of 5.63% between December 2001 and July 2011. For the record, Régie des Tabacs-Altadis paid some MAD 7Bn to the Finances Ministry, and IAM MAD 3Bn, a total of MAD 10Bn the Minister mistakenly referred to as a drain on public finances.

And finally, I suspect the minister has been behind the extraordinary claim made on improving minimum wage, and the implication on purchasing power and standards of living. He claims minimum wage increased in real terms. If he is referring to the 2.37% real increase in favour of the bottom 10%, while the über-rich enjoyed a 37% increase in paid dividends, then, yes, there is an improvement in purchasing power.

Our 41 years-old Minister has frequently been portrayed as a young-generation politician, easygoing, forthcoming and tech-savyy. I suggest we have been issued instead with a juvenile version of old style politics. And he doesn’t do his homework very well, too.

Let us now sit back and enjoy our political virtuoso at work:

“Moul Chkara” and the Challenges for Moroccan Democracy

Posted in Flash News, Moroccan ‘Current’ News, Morocco, Read & Heard, Tiny bit of Politics by Zouhair ABH on September 17, 2011

Two bits of news: PSU members are still quibbling over participation in November 25th Elections. These are moment when one just close their eyes and think of a remote island, with nothing to entertain oneself but J. Waterbury’s book, “Commander Of the Faithful”. And parties are fighting to endorse local notabilities reminds us that whatever the ballot system, whatever goodwill shown on behalf of every party in the game, local power-brokers will decide the outcome of a sizeable chunk of  – about at least 1/3 of parliamentary 295 directly elected seats.

Truth be told, I was a resolute advocate of a partial boycott regarding elections, meaning, boycott general elections but participate en force in local elections; these are usually the most direct opportunity to work for the electorate: what can a handful of representatives do to their constituency, when they cannot pressure parliament and government to adopt amendments they see fit to improve the livelihoods of their constituents, and further the causes of the communities their support? Unless the opportunity of building up a sizeable parliamentary party is acquired, parliamentary representation has no direct political benefit other than sinking candidates finances and shackle them when they manage to carry the contested seat. By contrast, the position of local mayor or representative in the community council is a good springboard to earn some field experience, and build up legitimacy as a responsible, honest and efficient elected official.

Time for leadership over consensus.

The contradiction in boycotting general elections and going full speed in local ones is not inherent to the party’s position, but rather to that of the discrepancy between actual power in parliament and government on the one hand, and the parallel -no longer underground- structure bypassing seemingly elected officials. At local level, the one thing that actually makes a difference is that the electorate gets the opportunity to report on possible changes in their everyday lives: fixing potholes and maintaining public lights might be categorized as coalface politics, but that’s a necessary test “new politics” advocates need to take and pass in order to claim a larger, more nation-wide mandate from the Moroccan communities.

But whether we like it or not, the PSU Parliamentary and Board Community Party caucus (that is, elected MPs and members of local community boards) has a point there: the decision to boycott elections on November 25th is not endogenous to the party; Many party activists are pushing for it out of fear to lose speed with the Feb20. Movement, an endless spiral bod for who’s fitter to carry the radical message to the masses, among the left-leaning parties supporting the movement. This only exposes further the constant contradictions of a tribunite party (yes, PSU is populist and elitist at once…) I do hope the meeting scheduled for this week-end will, above all, maintain the party’s unity and symbol as a rallying flag to all young voters eager to engage in the new politics they feel would level up Morocco’s political playing field.

Elections on November 25th will not, in all likelihood, be the elegy of Moul Chkara. This vernacular refers to the local notability, whose influence and wealth can actually direct electoral outcome in specific constituencies: rural areas on the Atlantic coast and their hinterlands, the Sahrawi provinces and the North areas on the Mediterranean front, to mention but a few. These have been only too often labelled as the remaining signs of Basri-era (and Basri-style) elections, a blot on elections the authorities have been desperately trying to market each and every time as the “most-transparent-free-and-fair-elections-since-the-last-one”. And yet, it takes an original mind (or a particularly disconnected from real politics) to view the existence of Moul Chkaras all over Morocco as a potential opportunity. Their über-rationality would help.

The current modus operandi is relatively simple: local VIPs get elected themselves to represent their strongholds, no one can challenge out of financial superiority for instance. But eventually, age, or judicial and legislative threats take them out, though their influence resists what is essential a small dent on their status. So they push for the younger generations, their children. The example of Representative Mbarka Bouaida, elected on the Women’s list for RNI party, is eloquent: as the daughter of another representative (Tantan, RNI) and a local power-broker indeed. Soon, many more representatives will try and convince their better-educated, more tech-and-communications-savvy, children. If their offspring does not rise to expectations, they can always find themselves a spiritual son or daughter to endorse for their seat.

Next step requires a lot of change within the existing structure of local loyalties and intricacies of tribal politics; and if indeed these notabilities do devote their incredible power over their local communities to serve them as well, then even a left-wing candidate could have a shot at barren constituencies: for instance, a PSU-AGD candidate can carry easily Bojdor and locked it with 20,000 votes, a juggernaut landslide, provided local tribe chiefs meet over a nice sweet tea and convince them to endorse their bid for election, and through them, their support for a constitutional scheme that would give Sahrawi denizens a broader, larger autonomy in managing their local affairs, for instance. No bribe, no money, just influence and personal charisma and charms in the service of the Bojdor community and its local notabilities. Moul Chkara retains their status as power-brokers, and allocate their endorsement to those whose (non-monetary) argument swayed them.

Can it be done? I mean, can Moul Chkaras around Morocco be persuaded it would be best for them, and their communities to step aside and endorse progressive candidates? Again, ideology has little to do with it; Even Diplomatic Cables from the US Embassy pointed out the precedence of personality over political ideology:

Personality Matters 
9.  (C) Residents, particularly in rural areas, often told our observers
that they were voting for a person rather than  a party. 
Most residents reported
that they saw little to no  ideological or political difference between the parties.
If an individual was perceived to have worked for a neighborhood  or was well
respected then he or she stood to win support.
Rachid Nanae, an out-of-work resident of a shantytown in the
Ben M'sik neighborhood of Casablanca, told our observers that 
he voted for Jawdad, Mayor of Casablanca, because he had fixed the roads and 
provided other public works to the neighborhood.
At the same time, party affiliation as a discriminator was not completely abandoned.
Also from anecdotes from voters, the PAM appeared to reap many undecided voters
because of the party's "newness" and/or the closeness of PAM de facto chief
Fouad Ali El Himma to King Mohammed VI (Refs C and D).

Their pursuit of personal or parochial interest could prompt notabilities into endorsing progressive candidates, and these should certainly not feel guilty about it; After all, even Annahj high-raking officials are board members of UMTunion, a place where virtue is a scarce commodity.

go get the endorsement of a Moul Chkara, near you.

The idea is to induce these local leaders into supporting our candidates over others, so as to free themselves from the grip of Interior Ministry officials: I suppose the local Caid or Governor will have a hard time taking on notabilities supporting fire-brand radical left-wingers (as a matter of fact, it did happen, in the UNFP good old days) Does it sound crazy? Yes it does, but it is currently the only way to build up nationwide local support, with a reliable source for money, contacts and influence.

Pushing the Boundaries of Potential Growth

Posted in Dismal Economics, Moroccan Politics & Economics, Morocco, Read & Heard, Tiny bit of Politics by Zouhair ABH on September 13, 2011

An interactive reader pointed out to me a few days ago that the proposed regression in an earlier post about potential growth. The remark focused precisely on the estimated TPF: .16. No way productivity and technical progress would record such a high number, especially for Morocco.

Model shows constant returns to scale, as well as robust indicators

But the model is not wrong, quite de contrary: the measured logarithmic GDP is real GDP growth, with 1981 as base year. Because the domestic economy was in deep recession during the 1980s -due to the conjugated effect of debt crisis and contracting GDP- any growth observed with respect to that base year is not adulterated by yearly fluctuations; This modus operandi fits the long-term framework for estimating labour and capital contribution to growth, as well as the estimation of potential GDP. Because the global economy has recorded a phenomenal increase in productivity and technical progress, the residual of 0.16 is logical and expected; as a matter of fact, at least 95% of estimated values are positive, which vindicates the robustness of this model. And so, it is safe to say that on average, over the last 30 years, TPF have contributed 0.16 bps to real GDP growth. We can do better, and we must do better, because, as Prof. Akesbi pointed out, our average growth rate – as well as potential growth- are too low to catch up with emerging economies.

While I have considerable doubts over Prof. Akesbi’s claim that Morocco needs to do8% GDP growth to be an emerging country, I certainly agree the Moroccan economy needs to expand without putting strain on its productive factory, or induce inflationary pressures. Not that Moroccan cannot do 8%, but reaching such a target would inevitably trigger inflationary pressures, just like in the mid-1970s: Morocco recorded 10.81% growth in 1976, but was hit back with a 12.6% inflation rate the year after; Of course, the Moroccan economy at the time could not on itself create a Chinese-style growth, something that was swiftly followed by an inflationary spiral fuelled by borrowings and geopolitical conjecture that led in the 1980s to sever crisis and recession.

Since mid-1990s, inflation broke away from GDP growth lag, as output gap has been, on average, negative over the period

An 8% growth bridges only partially the accrued output gap since 1991, and Morocco basically needs to keep up 8% for about a decade to beat potential GDP, an impossible task to perform, even with a halcyon global economic conjecture. It would be better -and smarter- to think of different ways to expand our economy; And as it happens, the “White Heat of Technology” Prime Minister Harold Wilson referred half a decade ago perfectly applies to Morocco: invest in research & development, primary, higher and continuous education, and encourage smaller but more innovative and adventurous businesses to lift us up and expand output for all of us. We start with 0.16 points contribution to growth. The challenge is to go to 1 to 2 full points for growth; It can be done, and it is to the benefit of everybody to do so.

The cost to push potential GDP growth 2 basis points above over a decade is MAD 135Bn, or MAD 132Bn when adjusted for inflation. That means an average R&D spending of MAD 13.3Bn per annum. These spendings are not necessarily public commitment, and private sector can chip in too; But over all, a 13Bn overhaul is double Agriculture and Fishery ministry investment spendings, or 3 times spendings on expanding Education and Research.

But then again, we are in for a different kind of future with our esteemed leaders; the kind of investment for the future engineered higher up is TGV, Tangiers port and other trickling-down economics.Education, Small business and scientific research are not the priority.

Makassib: The Government’s Record?

Posted in Dismal Economics, Flash News, Moroccan Politics & Economics, Moroccanology, Morocco, Read & Heard by Zouhair ABH on September 12, 2011

A couple of days ago, was activated on-line to publicize the government’s achievements over the last 4 years. A PR campaign supposedly designed to give a flattering record of what the government did for the Moroccan people during their tenure. It’s new, it’s colourful, and… sometimes economical with the truth, to say the least. Larbi opened the charge with a gambit on the half-truths over unemployment. I’d follow with something that has attracted my attention over inflation, real wages and minimum wage.

According to the website:

الرفع من الحد الأدنى للأجر في القطاع الخاص ب 25% (من 1936,74 درهم إلى 2337,84 درهم)؛

The minimum wage actually increased a little above 20% by the website’s own figures, so the remaining 5% are funny money, a 2012 projection in fact, for which the incumbent government cannot claim credit, since it is on its way out shortly. This increase translates the government’s effort in sustaining dialogue with unions and their willingness to improve minimum wage even though it supposedly put a strain on public finances or on the domestic economy. This caring government wants to show that their policy aimed at reducing wage and income inequality was successful by acting in favour of the bottom 10% households.

3.27% real increase between 2008-2011 compared to 5.2% between 2005-2007

But then again, the real data shows these very same households did not improve their standards of living in the proportions this PR campaign tries to put forward as the precise improvement of income. As a matter of fact, the government’s claim a 20% increase in minimum wage actually redistributed further growth gains is contradicted by official statistics: minimum wage recipients have improved their real income but its evolution has fallen short of overall GNI growth, which means in dynamic terms that their real income and real relative income decreased over time. So much for social-liberalism on behalf of Istiqlal and RNI economic team…

First off, the above-quoted simplistic statement fails to take into account inflation-adjusted minimum wage and even more so, a specific computed inflation for the lower income-earner households: indeed, nationwide inflation fails to take into account the more sensitive price-elasticity these consumers display when it comes to basic goods. Indeed, a higher average propensity to consume edible goods can lead to at least one-point additional inflation on the annual synthetic index. In these conditions, trumpeting that nominal minimum wage increased 20% (or 25%) is meaningless until it has been re-computed on real basis.

According to HCP figures, nationwide inflation increased some 6% between early 2008 and mid-2011.  This means that the 3-years real (and effective) increase in minimum wage was closer to 13%, or 3.27% annual real increase.

When the composite index is computed on the basis of a larger coefficient put on edibles (48.3% instead of 41.5%) the actual inflation poorer households need to take into account is 6% instead, and that means  actual improvement in real wages is closer to 12%, i.e. a 2.87% annual improvement, hardly a makssab to speak of, especially when these are compared to the higher rates of compensation minimum-wage recipients enjoyed during the late 1990s, some 5.23% annual increase, in real terms. As such, the ‘effort’ the government supposedly put to secure higher minimum wage level did not make up for the 2005-2007 freeze.

Real minimum wage decreased compared to GNI per Capita, even though nominal terms marginally improved in 2010

When compared with recorded GDP and GNI growth rates over the period, minimum wage has fallen behind. In economic terms, the argument goes any indexation mechanism might trigger inflationary pressures, something this government, Bank Al Maghrib and the IMF cannot contemplate.

But then again, that bombastic figure, the 25% announcement, tries to slip in the idea that minimum wage actually increased at a higher pace, which it did not all the way over the considered 3 years. True, nominal minimum wage caught up with GNI growth in 2010, a commendable figure- the government should have highlighted it instead of indulging in shabby deceptions. But then again, we are reasoning in nominal terms: when we look closely at real variables, it is obvious that yet again, standards of living have definitely not improved: 2010 was a bad year for real GNI per capita, but was even worse of minimum wage, with respectively 4.11% and 0.99% year-to-year.

Let us now indulge in some gleeful partisan comparison: the MASI Dividend index (computed as the daily difference between MASI gross and net return indices) shows some 35.27% increase in 2010, compared to 2.47% in nominal terms. Well, these are good news for hard-working poor households, to know that stock exchange tycoons have increased their profits 1.3 over one year when they have benefited from a marginal 2.47%.

Caring government.