The Moorish Wanderer

Welfare: is the Price to pay THAT high for the deficit?

First off, I happened to read some feedback from RNI’s La Pasionaria Mbarka Bouaida (who is no longer Member of Parliament) on the 2012 Budget Bill, and she had that weird comment on the Welfare expenditure embedded in the budget:

Ce projet de loi de finances a une forte dimension sociale, pensez vous que le gouvernement a les moyens de ses ambitions sociales ?

Tant que le nouveau gouvernement n’attaque pas les réformes de fond comme la refonte de la caisse de compensation, la réforme fiscale, la problématique de l’emploi public et privé… il ne pourra pas tenir ses engagements sociaux. En l’absence de ces réformes, le déficit commercial va dépasser les 200 MMDH ; la croissance ne dépassera pas les 3%, les réserves de changes sont ramenées à 4 mois d’importation tant qu’il n’y a pas de mesures de relance.

and I was wondering whether the budget actually has a lot of money in store for welfare programs; Most of these are categorized under ‘Special Treasury Funds’ (CST) and from what I can tell, that’s all in all 7.8 Bn dirhams. That’s 2.26% of the total Budget expenditure, and 21% of total deficit. When one takes a harder look at budget lines, the cost of welfare does not account for a lot in terms of deficit, Public Service borrowings and other costs of opportunity that might justify the abysmal budget our representatives have been presented with.

if the budget is indeed putting an emphasis on welfare, then it is badly distributed

The expenditure on ‘welfare’ departments has not increased a lot; Education and Health are the biggest contributors to the Budget welfare programs, and they have scored respective increases of 6,9% and 10.7% year-on-year. Not a lot there too, considering the 18.3% of overall Budget increase.

Unless one consider the Compensation Fund to be a welfare program by itself, which is a bit of joke, considering how it benefits at 85% about 600,000 households – I just don’t see many households benefiting from 7.600 dhs, and it doesn’t seem like it has any effect in bringing inflation to the current 1.1%. The deficit, in short, is not due to the welfare programs, but to the reluctance to tackle subsidies and carry out real fiscal reform.

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