# The Moorish Wanderer

## Who Will Get The Big Job?

Posted in Flash News, Morocco, Read & Heard by Zouhair ABH on December 10, 2012

5 candidates are competing to replace the dean of representatives and incumbent USFP premier, Abdelouahed Radi. 5 candidates with similar and different views, no doubt. And I thought this is the chance to assume, then prove political agents in Morocco are capable of rational strategies and decisions – and that will be put to the test, on the weekend 14-16th of december.

This is textbook game theory, where the game is as simple as it gets: during USFP’s convention, the delegates from all over Morocco need to vote for the candidate they believe can lead them to victory in 2016, or at least be in position to share some of the spoils a strong contender generates. I would like to think the centre-left party would do some introspective thinking about its political philosophy, its alliance strategy, but the would-be leaders would be hard-pressed to deliver results. So, setting aside the assumption of a selfless leader eady to sacrifice their (his) political future for the sake of the party, I would posit all 5 candidates have every incentive to go for -at least implicitely- an immediate positive return.

As mentioned before, the voting game is about declaring preferences. So it is quite possible the next USFP convention would end up in a deadlock – although it has a very low probability of happening:

$\mathbb{P}(deadlock)=1-\frac{\max {V}_{i=1}^5}{5!}$

(5! is the factorial, with a value 120, as there are 120 different combinations of listing preferences)

and even lower probability if USFP delegates are very adverse to rowdy convention outcomes (and recent history shows), ie. $u\left[\mathbb{P}(deadlock)\right]$ where u(.) is strictly concave to denote this risk aversion.

For each delegate thus, there is a ranking, I would like to add to a small constraint: the delegate has a strong preference for the first choice, their candidate, and then enunciate weak preferences for the remaining four:

$V_1 \succ V_2 \succeq V_3 \succeq V_4 \succeq V_5$

An equilibrium (the election outcome) does not necessarily mean a majority of delegates select the same first choice. To illustrate this, assume the rules of elections have been altered. Instead, the party convention will go through 5 ballots, each candidate is submitted to approval or rejection. The equilibrium here depends on the candidate order. This step is simply internalised by each and every delegate: they weigh in different outcomes, and eventually come up with a choice that maximizes a series of objectives (party victory, personal gain, idealistic aims, etc.) their respective preferences are solved using backward induction.

Since party convention rules for two ballots, preferences will be broken down in first-hand choices, and second-hand choices if the former fails.

Let us now consider more down-to-earth elements of this election: presumably, USFP needs a strong leader to measure up to Hamid Chabat, or Hakim Benchemas, or indeed the Head of Government, Abdelilah Benkirane. Meaning their next Secretary General has to adopt opposition-like strategies, including:

1/ Very active and visible on the media

3/ A member of parliament (MP)

Point 2 and 3 are correlated – a member of parliament has a privileged access to mainstream media an outsider lacks. As it turns out, this rules out two candidates, Fathallah Oualalou and Mohamed Talbi (Zaidi, Lachguar and Malki being all three representatives) to be first choice for a whole lot of delegates. In fact, the weight party delegate allocate to this quality (being an MP) is roughly equal to the percentage of those delegates whose preferences are based upon that criterion: what is the probability of choosing a member of parliament as a first choice. answer: 60%. That is not to say 60% of the delegates will chose between Zaidi, Lachguar or Malki, but each delegate has a 60% chance of of choosing one of these candidates. But since it is expected some 1200 delegates will attend the convention, my assumption would be that 720 delegates will vote for one of the three ‘premium candidates’, and then scramble for the remaining 480 that votes primarily for the two other candidates, on the second ballot.

Let me make an assumption about the 480 ‘idealists’: presumably, a large percentage of those will vote for Fathallah Oualalou, and his votes will be crucial for the two parliamentary contenders. Notice I mention two, and not three. The proof is in three steps: first, assume all three candidates have equiprobability of getting the 720 votes – this means on average each one gets 240. A winner needs to get at least 361 additional votes, so the other 480 votes are not going to be split evenly across the first three contenders, which means only the first two of the parliamentary contenders really matter.

The crucial player in the two-ballots game is thus M. Oualalou: if he comes in second or first in the first ballot, he will be elected on the second,his support has every incentive to stick by him, in addition, support from his parliamentary competitor’s rivals will consolidate his lead. This is based on the assumption that delegates supporting a parliamentary candidate on the first ballot rank the other two behind M. Oualalou.

On the other hand, if M. Oualalou comes in as a third candidate, his support might make a difference. This is because one of the parliamentary contenders in the run-off could be too polarizing, and even support transferred from M. Oualalou might not be enough. This leads me to lay out some assumption about M. Driss Lachguar, whose own record shows he can be a serious contender, but his polarizing figure could produce a backlash and elevate another, ‘Dark Horse’ candidate to the Premier position.

In many respects, Mr. Lachguar is favoured to be USFP’s next boss: he is a member of parliament, has been involved in the decision to withdraw USFP from coalition talks and join in the Opposition, and rattled sabres over the appointment of M. Karim Guellab as Speaker of Parliament House. Yet many party delegate might not be interested to vote for him on the second ballot (that is, if he makes a first, or close second) and could vote for another, less illustrious candidate in an “Anti-Lachguar” stampede. And yet, there is a chance a Lachguar-Oualalou ticket might get a win, provided the following conditions:

1/ Lachguar supporters stick by him on the second ballot
2/ There is a common pool of Lachguar-Oualalou supporters
3/ Lachguar supporters are expected to cast slightly more votes than Oualalou’s

In fact, the minimum number of Oualalou supporters among the 480 delegates ready to switch on the second ballot, described earlier would be:

$240+480\times\alpha-\alpha^2\times (V_{FO},V_{DL})$

(this is assumed to differentiate between core Oualalou supporters and those likely to switch support to Lachguar

a simple FOC gives: $\max_\alpha V(FO,DL)= \dfrac{\partial V(FO,DL)}{\partial \alpha}=0$ yields $\hat{\alpha}=19.1\%$ so Lachguar only needs 20% of Oualalou’s supporters to throw their support behind him to win the ballot, should Lachguar come a close first or second.

## Get Some! Get Some! Comments on the 2012 Budget Bill

Posted in Dismal Economics, Flash News, Morocco, Read & Heard by Zouhair ABH on March 15, 2012

And finally, the Finance Ministry has gone to Parliament House with the new budget. Ministers Nizar Baraka (PI) and Driss Azami Idrissi (PJD) have both taken turns to deliver their Budget Statement before parliament, and though I did not listen to it live, but from the figures I came across, I can predict a few things and/or comment on others;

[Exclusively, you will find on this link the Budget Bill].

A raw assessment for this new budget is that the fresh whiff of new government has been squashed by the hard, cold reality of, well, old government; on all the major investment plans, on fiscal policy, on the whole business of government, this new coalition has proven to be conservative in its choices, à contre-temps with the defiant and hopeful tone set by Head of Government Abdelilah Benkirane. So this not an earth-shattering budget, it is simply business as usual.

The budget goes 346Bn dirhams, that is 44.3% of GDP, for a 5% deficit. There is no way the government will reach the 3% deficit limit they have pledged to in their manifesto. Istiqlal and PJD have lost in terms of fiscal responsibility; in absolute and relative terms, a similar level of deficit dates back to 2001: 34Bn deficit, 8% GDP. But 2001 was the light at the end of the tunnel, and privatization revenues turned the deficit into a small surplus of 500 Million dirhams. This year is full of uncertainty, even the language both ministers adopted in their respective statement was cautious: spendings are there to guarantee social balances; the truth is, the sole development policy any government in the past two decades has ever implemented was to make sure growth was high; when the cycle is expansionary, that is of no particular problem; but now that we are heading toward a mild downturn, there is pressure to keep people happy, and the fact no major changes have been introduced in taxation paints quite a picture: the trade-off obviously favours the immediate present to the expenses of future stability.

Bad news for PJD: current expenditure has been projected for 187Bn, 16Bn up from the initial 171Bn appropriated in the initial Budget bill. For the life of me I can’t figure out where the 16Bn came from, and I for one would not hesitate to draw an interesting parallel between the gung-ho, austere approach PJD ministers boast on newspapers, about how they will squash unnecessary expenses; I particularly enjoyed digging up some Lahcen Daoudi quotes:

Well, the biggest increase in expenses has been without a doubt on current expenditure: 23.8% in paywage, stationary requisitions and other administrative expenses, while public investment increased only 11.3% year-on-year, quite a first step coming from a government bent on showing their toughness on waste and unnecessary bureaucracy. The 2012 fiscal year has blown PJD’s economic credibility right out of the gate, in my opinion.

What worries me though is not the budget breakdown per categories of expenses; According to the figures Minister Azami laid before Parliament, there is no substantial increase -and by that, I mean at least a dozen Billions- in fiscal receipts, and I surmise from the figures Public Borrowing Requirements will jump from an initial 61Bn to 65Bn, while repayments will remain unchanged, some 42Bn including interests. Not only has the government failed to keep its word on the 3% deficit limit, it has planned to over-borrow this year. For sure, domestic debt alleviates the danger of default and wards off potential threats on Morocco’s foreign currency reserves, but only up to a point; let us not forget that liquidities are drying up; such a large increase in PSBR will inevitably push yields higher – a scenario a lot of businesses and individuals dread; as a matter of fact, the generous fiscal exemptions this government and the governments before are providing Real Estate developers might turn against them and kill off an essential component of economic growth in Morocco.

And finally, there’s a disturbing news embedded in the Budget statement: it projects  2.5% inflation rate for 2012. To go from 1.1% inflation in 2011 to 2.5% in 2012 shows that subsidies, the Compensation Fund in fact, can do only so much, before the harsh reality of facts catches up with a well-meaning government: subsidies do not work; the measures proposed by the government do not work, and the inflation rate testifies to that matter: the Compensation Fund does not reward hard-working families by protecting their purchasing power, it secures established businesses good and generous rents; 2.5% is a moderate rate of inflation however, but I would very much like to hear Ministers Baraka, Azami or Boulif spin it to justify a 40Bn boondoggle that benefits only the 1.3 Million wealthiest households.

## Failure To Lead: PJD and the Budget Kuffufle

Posted in Dismal Economics, Flash News, Moroccan Politics & Economics, Morocco, Read & Heard by Zouhair ABH on February 23, 2012

I like the CM behind @PJDOfficiel . I really do; but let us face it: when it comes to specific questions a citizen is allowed -required, I might argue- to ask his elected representatives, there is an obligation to answer the request, or at least to refer back to specific official communiques related to the matter. Unfortunately, it seems my questions were not deemed ‘respectful’ towards the senior government coalition partner’s official twitter account. Plus I feel they get away too easy with the Bread-and-Butter issues of fiscal responsibility only too often. Time they get out of their socially conservative comfort zone, I’d say.

First off, I should perhaps point out I recognize to this government all legitimacy in managing the affairs of our nation; contrary to the overwhelming majority of the pro-democracy Feb20 movement and a majority of my PSU party, I did not support the boycott option, and I have wholeheartedly accepted the parliamentary November 25th elections whose results placed PJD ahead of its competitors with about a third of all popular votes.

My questions were well-defined, focused and specific to the Debt and the Deficit, based on the Treasury estimates at around 6% of GDP for 410Bn in public debt -contrary to the Party’s own manifesto pledge and the Government statement laid before Parliament, a target of 3% Deficit:

I can always try and find some more ‘offensive’ tweet, but I fail to find any that would elicit outrage, or to say the least some annoyance to an excessive scrutiny on my behalf:

PJD's twitter account strikes back... and they are not very happy

Anyhow, we have a couple of news about the new Budget Bill, and the sneak peek does not seem to be all that enticing; in fact, it just confirms my earlier claim the PJD-led government has buckled on the Compensation Fund, even as it benefits the privileged few and encourages rent-seeking economic activities. The tweets read:

(tweets are here, here and here, and roughly translate to: “(Head Of Government) Benkirane declared the Budget Bill will be presented before Parliament within the next three weeks; the Budget Bill has allocated the Compensation Fund around 40 Billion, when it was funded some 54 Billion last year. Some of the proceeds will be directed to alleviate the hardships vulnerable groups of society, especially Orphans, Widows and others”.) the claim that they have managed to halve the Compensation Fund expenses from 54 to 40Bn is false: they have, at best, managed to halve it from 41.1Bn to 40Bn as per Treasury Estimates, December 2011. The discrepancy is actually a Compensation Credit -hence not immediately funded- that needs to be paid back to Oil-importing businesses like SAMIR.

In a final act of mockery, the CM tried to reassure me that my  remarks were ‘passed on’:

O RLY? I guess I will be waiting by for the Budget Bill then…

## Moroccan Elections for the Clueless Vol.13

What would it take for a party (or more likely, for a coalition of parties) to win elections and form a government next November 25th?

This is the immediate post-elections worry: right after the polling stations are closed, when the electoral map shapes up, no matter what the turnout is, the process of forming the next government is boiling down to simple arithmetics on the number of seats. Because the Head of Government needs a vote of confidence, he’d better be sure he’d already secured the votes and the seats. It is as simple as it gets: there are 395 seats, and the next government needs to secure a 198 seats-strong super-caucus (a 197 seats in fact, considering the number of small parties in parliament). As for the ways and means to secure such a majority, the discrepancies in computing majorities on local and national ballots (NB) make it trickier.

The super-caucus has two (actually three, but the same computation applies to the Women’s and Youth’s ballot) classes of seats: locally-elected representatives, some 295 of them, and candidates on national ballots, 60 women and 30 young men. The national ballot results are to be computed following Art.85 of OB 27-11 organizing the House of Representatives: first, political parties failing to reach the 3% threshold of popular votes are eliminated (just like those local candidates with less than 6% votes, as per Art.84’s provisions) and the number of seats allocated per remaining party in the same way candidates are elected on local ballots commensurately to a certain factor computed on the number of votes per seat. And so, parties with large caucuses (that is, a caucus of 30 representatives and more) are more likely to trust the national ballot seats. But the next leading party needs to have some strong allies too. Why so? First because no political party in Morocco can seriously claim to carry an absolute majority of seats. And second, a coalition of strong parties has a better chance at capturing a large caucus on the national ballot. By contrast, a coalition with one strong senior partner and smaller parties, while it can claim some percentage on the NB slots, will be handicapped on its overall majority.

Nonetheless, the A8 “Alliance of Democracy” might well prove to be a smart combination of small and large parties: the juniors partners have only slim possibilities to go beyond the 6% threshold nationwide, and thus would not, in theory, capture collectively more than a dozen seats and no slot on NB. Their mission, in short, is to make up for the shortfall if the larger partners fail to deliver, but only just. the big quarter, RNI-PAM-MP-UC has to claim a large but specific chunk of seats because of the double constraint on their coalition strategy: as de jure Leader of the Coalition, RNI needs a strong showing as first party in terms of votes, a tough challenge, considering PJD, Istiqlal and USFP will not go down without a fierce fight.

By playing their cards right, the A8 coalition might well win the election with less than 153 seats on local ballot but more than 45 seats on national ballot, so as to reach the magic number of 198 easily, and if the quarter falls short of overall majority by a seat or two, the small parties gravitating around can make it up.

And so the assumption goes as follows: PJD can carry as much as 60 seats on local ballots -which is not out of the realm of possibilities. RNI needs to beat that number, say by carrying 65 seats. Because the assumption goes with RNI and PJD as the two leading parties, they will each get around 18 seats on national ballot; by setting the strongest terms as such, they will also condition the number of national ballot seats for other parties. A further assumption sets PPS as the party with the smallest caucus on these slots -which was the case for 2002 and 2007- as well as allowing for some estimations on what is the number of seats PAM, MP and UC need to carry so as to maximize both their overall caucus and their standing on NB.

Projection for an equilibrium case - A8 coalition vs PJD, Koutla and other parties.

The set of assumption goes on, with UC as the ‘weakest link’ of the quarter, and finally MP and PAM measuring up to Istiqlal and USFP (that is, carrying roughly the same number of seats, with a slight advantage to the Administrative Parties in terms of local caucuses- the NB seats will not vary much in this case). And so the result goes as follows: for UC with locally-elected 20 representatives-strong caucus (plus 6 on national ballot) marks the lower boundary for A8 (and PPS with a couple of seats less, the boundary for the present Koutla)

The graph shows an absolute majority for A8 coalition, but that was only possible for each quarter member strong enough to place a percentage close to RNI and PJD results. And that is the key for a winning coalition; a mixture of strong parties to shore up seats from NB slots, and smaller parties to make up the shortfall because the slots do not account for coalitions but only individual parties.

I am aware these assumptions are too restrictive (meaning they might not apply at all) and rely too much on an over-rationalization of Moroccan politics. But so far, and save perhaps for some rumours and noises on possible defections and turnabout, it seems there is a clear intent, from the A8 coalition’s side, in sticking it to PJD and promote RNI as ‘The First Party’. In what terms, and how would that apply is left to question.

## Head Of Government – Whatever it takes

Two days ago, political Talk-show “Nou9at 3alal 7orouf” (“dotting the i’s”) hosted a strange performance, with outgoing finance minister Salaheddine Mezouar and likely next head of government putting on a show to display his supposedly naked charisma and to collect good marks as an outstanding public speaker. Correct me if I am wrong, but his performance lacked proper preparation, or his spin doctors (if he has any) figured out just right how to go to the earth of the Silent Majority of Moroccan voters.

"One may smile, and smile, and be a villain" (Shakespeare - Hamlet)

By the way, M. Mezouar and many of the other guests did not seem to know much about basic fiscal and economic policy principles, or even worse, the history of their respective parties. Again, I can’t make much out of it, whether their incompetence was guileless or belies some cunning, ruthless political skills. What was clear, however, was M. Mezouar’s eagerness to be the next Head of Government – whatever it takes.

On taxes and debt, the Minister was very evasive, though he did hint to what I already suspected to be the case: piling on the debt and increasing borrowings are paying up for his tax cuts and loopholes; He only hinted to it, so he did not have to justify it, nor did he need to burnish his so-called economic competence skills; Quite the opposite, he persisted in claiming his tax cuts have generated much positive externalities, boasting his record in sustaining Morocco’s GDP growth during the credit crunch and the 2009 global recession to 4.9% (very close to the potential economy growth) when global GDP plummeted -2.04%. He was belittled the potential danger of piling debt to MAD 398Bn, perhaps because he is betting on a robust growth that would outpace borrowings and thus somehow allay its burden on the economy.

An audacious bet indeed, considering the discrepancies in terms of required growth (at least 6%) and what the economy can achieve without triggering excessive inflation or unemployment (no more than 5% for a 2% inflation)

But the show was not about his record at the Ministry. That was road-test leadership bid for the next election; this explains why his message was a motley of sub-signals to various interest groups, especially to the “progressist-modernist” spectrum; he has consistently dropped in not-so-subtle hints that, as a leader of an 8 parties-strong coalition, he will not compromise with moderate Islamist PJD party, basically attacking them over their double-talk on women’s rights and gender equality.

(update: RNI Website uploaded a video of the talk show for everyone to watch)

In fairness, Minister Mezouar can boast RNI’s liberal record and rhetoric spin on these issues, but his attack on PJD has been so agressive, that it was a shame no one reminded him he has embraced Representative  Imam Abdelbari Zemzami‘s PRV party as a coalition member; the same Zemzami who published a pro-necrophilia fatwa not so long ago. Because RNI has been very keen on positioning itself at the centre of the political spectrum, I was expecting M. Mezouar to be tough on law and order; he was not. He sounded like a bleeding heart liberal, denouncing poverty as the roots of all evils of crime, stressing the need for further education to lift up those of our fellow citizens who fell to such depths. Not a word about police force or sentences guidances – quite a curious observation from a self-styled left-wing radical, but there goes my argument: as a right-of-centre moderate, M. Mezouar failed to tune in to the traditional topics of his electorate; he offered the sight of a politician angling for the widest possible consensus to win government leadership. To a petulant PPS co-guest, he says:

I am open to any kind of coalition on the basis of a progressive social agenda

and that was a clear rejection of PJD.

"Smiling Mezouar" no more.

My impression was that Salaheddine Mezouar looked desperate in trying to win over sympathy and become the next Head of Government. He played on all chords: progressive, centrist, even populist, with a pity line that “[his] retired father received only a 400dhs pension” but got caught when a retired from the audience challenged him on raising the minimum pension for a population that suffers most from inflation- he shrugged it off by stating Pension Funds do not fall within government purview. But at the bottom of his beliefs -if he’d ever had any- his policies can be seen through the not-so-clever web of words: downsizing government, cutting taxes for the wealthy and leaving pensions funds to themselves. He did not seem remotely interest in social issues, and on those areas the elected executive has a clear mandate, he is likely to be pushed by the most conservative elements of his coalition to the right.

Overall, his performance, for those with a keen interest in Moroccan politics has been abysmal: he looked tired, he did sound genuine; as a regular tweep (twitter user), I was half-surprised his party’s twitter feed and his supporters did not spin his performance – there was nothing to spin. And that man might well be the next Head of His Majesty’s Government: Bland, with no substance, and no motive but to reach the top of the greasy pole.