The Moorish Wanderer

10 Milliards et Un Seul Objectif

Posted in Dismal Economics, Moroccan Politics & Economics, Morocco, Read & Heard by Zouhair ABH on February 20, 2013

Entre 2006 et 2010, l’Etat aura dépensé un budget cumulé de 10 Milliards de dirhams pour lutter contre la pauvreté, l’exclusion sociale et, in fine, réduire les inégalités sociales. 10 Milliards pour une population qui reste encore à définir en quantités. La première question qu’on se poserait, maintenant que le programme a été bouclé: le revenu des ménages pauvres s’est-il amélioré sur la période? En d’autres termes, serait-il possible de comparer d’évolution du revenu par ménage pour cette population, au transfert théorique des 10 Milliards.

Intéressons-nous particulièrement au décile le plus défavorisé, c’est à dire aux 10% des ménages les plus pauvres, chaque année sur la période 2005-2010. Alternativement, on peut faire la même comparaison pour les ménages en dessous du seuil de pauvreté relative (c’est-à-dire les ménages touchant un revenu inférieur ou égal à 50% ou 60% du revenu médian)

Selon les données publiées sur le site de l’INDH, les 10 Milliards ont été distribués annuellement avec une croissance annuelle de 10% chaque année, passant de 1.5 Milliards de dirhams, à 2.5 Milliards. D’un autre côté, la population-cible a augmenté de 580.000 en 2006 à 651.000 en 2010. En cumulé donc, le transfert théorique par ménage du programme serait de l’ordre de 15.000 à 16.200 dirhams par ménage sur 5 ans. Cette somme représente le montant de transfert théorique dont bénéficierait le ménage.

En observant les grands aggrégats de l’économie nationale, on observera aussi que le Revenu National Brut Disponible entre 2006 2010 a augmenté, en moyenne, de 9.38% (ou 3.31% lorsqu’on calcul le revenu par ménage) d’un autre côté, l’évolution du revenu par ménage du décile inférieur sur la même période a été sensiblement proche (3.29% en moyenne annuelle) on peut donc supposer que de ce point de vue, l’écart des revenus pour cette population n’a pas été trop défavorable.

la croissance stable des transferts théoriques n'arrive pas à lisser les fluctuations de revenus pour la couche la plus défavorisée

la croissance stable des transferts théoriques n’arrive pas à lisser les fluctuations de revenus pour la couche la plus défavorisée

Le graphe reprend l’évolution du transfert théorique versus l’évolution de gains de revenus pour le dernier décile. On observe que pour un budget INDH moyen par ménage croissant, la fluctuation des revenus de ces même ménages n’est pas plus lisse que celle des années précédentes.

L’argument en faveur des dépenses engagées par le programme de l’INDH devrait se mesurer surtout au lissage des gains de croissance qui bénéficient aux pauvres, et ensuite au montant moyen de transferts exigés pour sécuriser cette croissance. Prétendre que l’INDH déboucherait à une diminution (de moitié) de la pauvreté absolue n’aurait pas de sens, à moins de considérer que l’existence de populations très pauvres au Maroc est très coûteux, plus coûteux que d’opérer des transferts directs à ces populations. Car dans l’absolu, il ne s’agit pas tant d’obtenir un résultat (la réduction du taux de pauvreté en absolu)  que de maximiser le rendement de chaque dirham alloué au budget de lutte anti-pauvreté. Les résultats prime facie indiquent que pour chaque dirham dépensé dans le cadre de l’initiative s’est traduit par un gain par ménage de 20 centimes. Nous sommes en droit de se demander si ce programme a été efficace en termes budgétaires.

Les objectifs principaux de l’INDH, ceux en définitive qui auront capturé l’essentiel des financements alloués, correspondent à des programmes dont l’issue attendue serait celle d’une réduction de la fluctuation des revenus de la couche défavorisée: la définition même de la précarité étant l’impossibilité, pour un agent donné, d’anticiper l’évolution future de ses revenus. Le succès d’un programme de l’INDH serait, de prime abord, de réduire cette incertitude. Dans le cas présent, l’indicateur de succès serait donc l’évolution de la volatilité relative du revenu des ménages appartenant aux couches les plus défavorisées. Un succès devrait montrer une réduction de la volatilité relative au bénéfice des ménages-cibles.

l'écart est calculé comme le rapport de la volatilité du revenu du dernier décile sur celle du revenu médian par ménage.

l’écart est calculé comme le rapport de la volatilité du revenu du dernier décile sur celle du revenu médian par ménage.

Le deuxième graphe montre bien une rupture par rapport à la tendance lourde de creusement des inégalités face à l’incertitude des revenus futurs. Il serait donc honnête de reconnaître cet aspect au programme INDH: entre 2006 et 2010, l’écart a bien été quasi-constant. Néanmoins, lorsqu’on compare les gains obtenus pour les ménages les plus défavorisés par rapport au coût global, on observe que le gain cumulé pour les ménages défavorisés de la réduction de l’incertitude-revenu a été d’un peu moins de 230 Millions de dirhams – le rendement cumulé au bien-être social de l’INDH a donc été de 2.3%.

Ce chiffre est différent du premier résultat, car il dénote d’une quantification de l’amélioration du bien-être des ménages du dernier décile. Il est cependant ironique d’observer que le résultat aurait été exactement le même si le gouvernement avait décide d’affecter directement cette somme (230 Millions) aux ménages directement pendant cinq ans. Le trait est certainement forcé, puisque plusieurs programmes sont en fait des investissements de micro-projets (donc générant des revenus plutôt stables et indépendants de l’assistance perpétuelle des autorités publiques) mais enfin il serait intéressant de noter que l’écart d’incertitude du revenu a redémarré en 2011, une assertion qu’il s’agira de vérifier lorsque les agrégats pour 2012 et 2013 seront arrêtés.

Le bénéfice social étant sommes toutes marginal commensurable aux efforts déployés, nous sommes en droit de nous poser la question qui fâche: étant donné que ces transferts débouchent sur un jeu à sommes nulles, qui sont les populations mises à contributions? Il peut être ainsi suggéré que la classe moyenne, contribuable captif par excellence, aura été la plus grande contributrice de ce vaste projet de justice sociale, peut-être même le bouc émissaire de celui-ci.

Note technique:

Les résultats obtenus (pour ceux qui s’y intéresseraient) sont calculés à partir d’une densité de distribution des revenus calculée comme suit:

f(w) = \int_{0}^{\infty} \lambda \exp{-\lambda~x} \textup{d}x

avec le revenu moyen \dfrac{1}{\lambda}

Le revenu de la population défavorisée est calculé sur la base de la probabilité d’appartenance au dernier décile, ou encore de réaliser \mathbb{P}(w<x) = .1

La volatilité de la croissance du revenu pour une classe sociale donnée est calculée comme un écart type sur l’historique des variations depuis 1955 jusqu’à la date t: \sigma_{t,i}= \sum\limits_{t_0 = 1955}^{t}[\sigma_t - \mathbb{E}_t(\sigma)]^2

Tallyho Politics, The Reign of Amateur Policy-makers

The Political apparatus in Morocco is a shambles. I say shoot the old lot, bring the young and let them make mistakes. Sounds radical, doesn’t it?
Joke aside, it’s been a long time since the political parties in Morocco failed to devise policies, and when they do sketch some feeble argument, it is so diluted that if it ever was put into practise, they wouldn’t know where to start first. On the other hand, policy-makers in Morocco lead the charge with formidable support from McKinsey-style consultancy firms. The trouble is, a country like Morocco cannot be run like a corporation. And even if it is so in the minds of the young fellows at the Royal Cabinet (which I expect to join any moment now. There’s always hope, isn’t there?) the corporation is certainly not run in the best interest of its shareholders, only to the board’s benefit.

Policy and social engineering are worked out under the assumption that the objective is to maximize the country’s welfare. There remains a great deal of blur in defining what one might mean by that word: “welfare“. In fiscal matters, it may come to the idea of taxing individuals and companies more than others, while in social policy, it also means helping some social classes more than others. There’s also a great deal of ideology in policy-making, even among the high-brow circles of consultants: under the veneer of technocracy, there’s a political motivation behind strategic thinking like the ‘Plan Maroc Vert‘, ‘Halieutis and the INDH or indeed anything of the sort like the high-speed network.

Perhaps I am over-rating the Palace’s task force. It has been a question I often ask myself: how are decisions taken up there? Whether on economic policy, or on-the-spot decision crisis like the Aminatou Haidar case, or the issue of protest camps in Agdim Izik, how are decisions made up there? Do they meet in a war-room, delineating scenarii then discussing the likelihood of each one until they reach the best decision?  Because we know, we all know it’s not some old-fashioned fool that takes the decisions in Morocco (even global institutions like rating agencies know that) so it must be that the Royal Cabinet has some kind of modus operandi I assume to be ultra-rational (given the high proportion of  engineer and business graduate from the French Grandes Ecoles). And yet, it looks as though only fools and incompetents are in charge. Please allow me to expatiate; and ad absurdo reasoning would be best. Let’s consider the ONA-SNI case: if the firm is really set on pulling the country out of poverty and into prosperity, how come its dividend policy never shows it?

I mentioned before an opinion that has been formed on the economy front: there is, among other things, a consensus that the private business of His Majesty can pull the economy. The idea is that we need the Moroccan equivalent of Chaebol, the Korean conglomerate of Banks and Industries that played significant part in making South Korea what it is today: a first-class country that is now considered to be member of the G20 club, when, 50 years ago, its GDP per capita was lower than Morocco’s, and the best thing they could have ever manufactured at the time was T-shirts. The idea was therefore to imitate, as it were, the Korean experience with companies like SNI-ONA, or indeed Attijari Wafabank and other national heavyweights. The economic model sounds good: at the price of domestic monopoly, Morocco fields a first-class holding able to operate on global markets with the required size to win us some surplus that would be redistributed. In other words, the private monopoly captures the common surplus in order to expand, and then redistribute it through pay rise or investment in intangible assets. This is the semi-official line. The financial statements tell otherwise, though.

ONA Shareholders per share. the only public fund -CDG- has a ridiculous 2.73%

Now, doesn’t it strike you as odd that the fleuron of our largest firms should invest so little and distribute these high levels of dividends to the shareholders? Between 2004 and 2010 -prior to the smoke screen withdrawal of ONA SNI shares- the holding distributed an average of about 3/4 of its benefits (which reached the billion of Dirhams at least);

while the rare investments they undertook where mainly about mergers and real estate speculation. The Chaebols, on the other hand, had a gargantuan appetite for asset acquisition (which also meant that they favoured a rigorous dividend discipline, translated into high levels of savings – something that did not prevent them from using audacious financial structuring) and are, at the end of the day, radically different from our own sketchy, greedy, money-grabbing beloved conglomerate. So much for the economic new era

Even the ‘Grand Workshops’ our 8.00 o’clock news are so keen to laud, the fulsome praises elude the main question of: ‘who benefits from what’. Plan Maroc Vert is a favourite: the official line states that small farmers would benefit from cutting-edge policies like ‘aggregation’. For those who are not familiar with the plan, it has two main implementation strategies: the first one is export-oriented, very monopolistic that favours already existing large domains, industrial-like farms (among which [drum rolls…] the Royal Domains) the other one, which looks like it was hurriedly put together, is designed to help ‘directly’ the small farmers. Cooperatives, micro-credit, etc… just enough to keep their heads above the water. How could Plan Maroc vert be helpful when funding is so biased towards large, wealthy farmers?  Do we need to remind the readers of the figures? Yes we do, it’s always beneficial to  put things in prospective: MAD 80 billion is made available for 961 projects with only 562.000 farmers and 545 projects for 855.000 farmers (Those that should be helped and supported) get no more than MAD 20 billion.  In other terms, and under the provision all farmers benefit from the Plan Maroc Vert, 39% of the farmers (most of whom are quite wealthy) get 80% of the funding.

In economic terms, the policies are not, to say the least, caring about the majority. Unless they take the view that the common welfare is that of a privileged minority, the 10% sort that has 40% of the total national income, the sort of passengers able to pay for the TGV between Tangiers and Casablanca. Perhaps the idea is that already rich people would get richer and richer, till they reach a point of satiety such that they would spend money, to the benefit of the less-off. If that’s the view, this kind of rapacious capitalism is bound engender serious resentment from the excluded. Oh, wait it’s already happening !

(Credits to Al Wandida for circulating the video)

Now that the economic model proved its shortcomings, social and political strategies prove to be at best coy, and in any case dangerously hegemonic. Say the Moudouwana was a great improvement (although one can cast doubts whether it was just a return to the 1957 square) it was a show that was full of symbolism: to the liberal side, it was a clear signal that His Majesty is the one calling the shots, and their liberal agenda prospers as long as His pleasure allows it to. To the conservatives, he proved he could block whenever he wanted the perceived westernalization of Morocco, and  confirmed his role as the sole source of religous legitimacy. On this issue and on may others, His Majesty made his King Louis XIV’s apocryphal quote: ‘l’Etat, C’est Moi‘. And all the policies the little helping hand and the shadow army are not, in the long term, to His, or Morocco’s best interest.

FAEH: The Architect of His Majesty's political project.

The PAM project, on the other hand, is the only old-school trick: the infamous Front de Défense des Institutions Constitutionelles, Rassemblement National des Indépendants, Union Constitutionnelle or Parti Justice et Développement (Among Others) all roved to be temporary rough patches when the opposition was resolute in its stand. the PAM is a patch against the abnormal high abstention rate the 2007 general elections recorded; A motley of activists, a bizarre amalgam of renegade left-wingers, rural and Mafioso-like notables and hungry young opportunists. Does it restore confidence in partisan politics? The PAM designers are in for a shock, I dare say.

Events in Tunisia -to which I must confess my complete astonishment, why, a regime like Ben Ali’s to fold like a house of cards!- proved that an excessive concentration of wealth, power and legitimacy is, on the long run, a disastrous fuite en avant.

In these conditions, why should anyone try and give additional credit to a regime so stubbornly greedy, and how long should it take them to realize that monopolising bright minds -and neutralizing their most valuable assets, i.e. ideas- is not going to help them further, and fuels a resentment that I warn might develop into a incommensurable social conflagration.

Oops, They Have Done It. Again.

I believe there are such things as gifted amateurs. But at the Maghreb Arabe Presse, just as well as in the Foreign Ministry, the people in charge are professionals. When they are about to commit some cock-up, they proud themselves to do it wholesomely, and they never forget to reiterate it, to make sure it is done properly. Indeed, just like a year before, Morocco refused the Human Development Index (HDI) findings and argues for a better index reflecting the huge efforts Morocco consented during the last decade (actually, it just focused the criticism on its shortcomings).

The Foreign Ministry published a communique, following which it criticizes the HDI findings, essentially, as they put it, because it “failed to capture the quantitative and qualitative progress Morocco achieved during the last decade”. The communique also casts great doubts about an index “based on 2004 data, a year before the INDH was launched, and therefore could not integrate it in its computations”.  Well, our officials seem to be sore losers; Besides, the UN are not going to change a whole index just so that our country, particularly just because our ranking fell to a pathetic 130th rank. It is no good to criticize an indicator that puts the light on how pathetic all the development strategy went wrong.”طاحت الصومعة، علقو الحجام” as they say. And it is not like the HDI failed utterly to capture any hint of progress: They do recognize, in good faith, that Morocco: “Between 1980 and 2007 Morocco’s HDI rose by 1.20% annually from 0.473 to 0.654 today”. So it is not like we scored that bad. It’s just that other countries are actually doing much better than us in terms of poverty eradication and the like, as the graph below shows:

I would like to briefly discuss the HDI’s intrinsic methodology. According to the methodology paper they put on, the index “is a summary of  human development. It measures the average chievements in a country in three basic dimensions of human development“. These are listed as follow:

* Life expectancy at birth

* Adult Literacy and Gross enrolment ratio (number of pupils actually at school compared to the overall children at age to go to school)

* GDP per Capita.

The index then takes into account other parameters as well, making it increasingly comprehensive as the variables grow more complex. It can there fore be safe to dismiss the criticism of the HDI as being “carelessly carried out” as a feeble and baseless one (For those with doubts still left, there is a more technical paper here that should be convincing enough). The computations used to get an overall result are crystal clear.

The results are a bit "back-of-the-envelope" of the kind, but the result are definitely robust

What seems to be the criticism here (and I have to say, the Foreign Ministry produced quite a feeble argument) is on the criteria. Of all the three, Morocco has a lot to do, and on others, Morocco failed utterly. You can download here all the data the UNDP used to calculate our index (and therefore, our ranking).  Just a few figures to look at (all the figures are circa 2007):

* Adult (15 years old and above) Literacy rate: 55%

* GDP per Capita (PPP US $): $ 4108

* Population living below $2 a day (2000-2007): 14%

* Female estimated earned income (PPP US$): $1,603

* Male estimated earned income (PPP US$): $6,694

As I mentioned before, there is an exhaustive list to look at, but the figures are, truth be told, a blunt evidence of failure. I am not saying the various missed out totally inequality, or did not address at all child poverty and the like. But these policies failed to deliver, or meet the deadlines and the requirement. Let us look now to what other countries did in terms of Human development compared to Morocco. I’ve taken the liberty to prepare a graph with a group of countries, with data available here for a broader comparison.

HDI Comparison Table. Morocco is outperformed by other countries over a long period of time, so it is more a matter of structural weakness, rather than just delayed policy effect

What about the INDH then? The communique’s cornerstone argument was that the HDI did not fully take the INDH effect into account, which could lead to a negative bias on our efforts and commitment for a development strategy. Let us then have a look at the INDH figures too. According to the plan, some 10 billion MAD were channelled to development projects over the 2006-2010 period. These spendings aim at, as they put it, reducing the levels of poverty and social exclusion. It strikes me as odd that, at any time, test requirements were prepared. I mean, the money is spent, there is an audit, everything is checked, that’s fine. I was actually amazed at the level of detail the INDH got to. Very good indeed, and it is right it should be so.

But at no time there is a battery of commitments, something that might go like: the INDH is commited to reduce child poverty by a% over the period, or find a suitable shelter for b thousands homeless third-age people. 10 billion is a formidable sum of money to spend, and I am sure the cooperatives and/or charities that get the money would carry out their job just fine, but at the end of the day, isn’t the task of the goverment to plan, anticipate, forecast for that kind of policy? Isn’t it a basic scientific approach for one to set some failure test with respect to targets? Otherwise, it looks as though it’s all propaganda, and on the top of it, international organizations cannot get proper accounts of it.There remains the possibility I might have overlooked this data, so if there is someone kind enough to provide me with the data, I would be very thankful.

Recently, Oxford University produced a very exhaustive poverty index. The evidence is compelling, Morocco is doing worse, compared to countries like Tadjikistan, Syria, Jordan or Turkey. The index is gaining credibility fast, and is about to be added to the UN’s index nomenclature. Would the Foreign Ministry issue a statement on the matter as well?

Our officials should look for a simplier explanation why our rankings stagnate or worsen: the policies they carry out, while delivering good results -and even that is a matter of debate- are not that good. The results, when compared to other countries, are mediocre, or below the expectations. It is no good to critcize an indicator just because it shows you failed, or did worse compared to other countries.