The Moorish Wanderer

A Change is Coming Your Way

This is a sponsored post: yesterday, Capdema students and young active Moroccans abroad have organized a Democafé in Paris, Rabat, Ifrane, Lyon, Nice and Montreal on the upcoming general elections scheduled for November 25th. A Great debate, very engaging audience and certainly many new faces all of which only confirm my optimism for what might very well be the second greatest generation in Morocco.

And so the debate on elections goes on, livelier than ever. I would like to coalesce two of my favourite subjects, Politics and Economic Policy, into one blog post, if I may. In my opinion, the next government will have to sort out a swelling Compensation Fund, an unfair taxation system, a galloping bureaucracy, with the implications that unpopular policies will have to be implemented. Incidentally, I have been apprised of another reason with the Democratic/Radical left engaged in boycotting next elections: the idea is, the next government is very likely to collapse before us, partly because the crisis -upcoming or current- will force its disintegration, and force the regime to resort to the last card on the table, a genuine democratic reform. I wish that was possible (but without the crisis bit, obviously) but the thing is, we need a strong, homogeneous government to carry out these policies, because otherwise it is going to be the same set of targets: Belkhayate, Baddou and Abbas El Fassi, for all their perceived weaknesses and corruption, are not really answerable to the people, first off because they need not to account for before parliament, and second because government coalition is too stretched on the ideological spectrum to afford a United We Stand, genuine collective responsibility. Amazing though it may be, El Fassi Government, originally predicted to fall within months or few years, held forth and completed a 4-years tenure with minor adjustments.

The economic policies I was referring to are not those bombastic lines displayed on makassib.ma I am referring to the disturbing Article IV presented before IMF in September, and the willingness displayed by finance minister Mezouar to carry on a 10% budget cut. I am trying to figure out how: if indeed the 10% cuts are aimed at unnecessary expenditures, then all the talks about good government ever since DVD have been idle, and bureaucracy, rather than dying away, is back and well and alive. That’s almost MAD 30Bn off the book

Fan-chart, late 2010. Error in expected inflation "converges" to zero over time.

The 2010 Bank Al Maghrib annual report has been released a week ago: as usual, a great deal of effort has been put in assessing the “Mood of the Nation’s Economy”. Governor Jouahri has been quick to point out that government debt has grown to alarming levels:

Cette évolution s’est traduite, malgré le léger redressement des recettes fiscales, par un creusement du déficit hors privatisation, passé de 2,2% à 4,6% du PIB ainsi que par une rupture de la tendance baissière du ratio de la dette publique directe qui s’est établi à 50,3% au lieu de 47,1% du PIB. […]

L’exercice budgétaire de l’année 2010 a été essentiellement caractérisé par une accélération du rythme de progression des dépenses, accompagnée d’une modification notable de leur structure. En effet, les dépenses de compensation ont plus que doublé d’une année à l’autre, sous l’effet du renchérissement des matières premières, portant à 7% le taux de progression des dépenses ordinaires, contre une baisse de 3,5% en 2009. En revanche, dans un contexte de consolidation de la croissance non agricole, les dépenses d’investissement du Trésor ont marqué une quasi-stabilité après quatre années de hausse rapide.” (pages 5 & 87)

Not that we are back to the dark years of 1980s, but he has worried that compensation expenses and the increase in public sector manpower might further the strain on public finances, and subsequently, the economy as a whole. More interesting though, the report introduces a new tool in its motley of charts, a tool I believe might give us  good indications on what we might not know. (I recommend a great read on the model, as delineated in the 2007 annual Monetary Report, pages 27-29)

The fan-chart computes expected levels of inflation over a pre-specified time frame. Because these projections are not fixed, the modernised variables are randomized such that expected inflation has such and such confidence probability to be within the boundaries of specific levels. Now, I trust BAM economists to be highly competent and dedicated to their tasks, but I would very much like to know the effective impact of government debt on their computations; it is a given to consider government debt -especially domestic debt market- to push inflation upwards. The intuitive argument being,the Moroccan government has to pay back its debt with some nominal (face-value) interest rate. But, they can get away with it by “printing money”, or even if they don’t, the expenditure would take care of it, for instance by increasing public service payroll at a rate higher than, say, GDP Growth, the famous “Too Much Money Chasing Too Few Goods” line. But expected inflation remains very stable around 2%. I would argue that no inflation rate at such (low) level can be achieved without a drastic halving of public deficits (as Debt-to-GDP ratio remains within acceptable limits)

A left-wing government would go “tax & spend”: close tax loopholes, re-institute -if they can- the agricultural tax and the 42% marginal income tax, institute a wealth tax on millionaires, cut VAT and Corporate tax deductions for real-estate developers, etc. all of which can expand considerably government receipts for 2-3years, enough to payback debt and bring it within acceptable limits, while avoiding unnecessary social unrest. A right-wing government would go “slash & burn”: keep the tax loopholes or go further in alleviating the tax burden on corporates and individuals, while cutting public expenditure, compensation fund or other. Government pay-check could also be balanced, but to the risk of social unrest, food riots, and social resentment going berserk. The next finance minister will have to be a bold wizard to conciliate seemingly contradictory economics.

Stable inflation rate of 2%. More interestingly, projected growth over next decade is 5%, a close figure to my own projection for potential growth.

And so, the need for a strong government coalition is not only in the interest of Haves, but the Have-nots would also benefit from clear-cut decisions: either their last safety net will fall and they shall stand up to a fairer income distribution (a message the Feb20 movement can carry on pretty well) or benefit from a change from within designed to bridge income and wealth gaps. In any case, a weak coalition will just keep on postponing the inevitable: on minimum wage, on income inequality, on healthcare coverage, on employment, pussyfooting is not in the interest of anyone. I would welcome a homogeneous right-wing government coalition -very similar to that of the Mâati Bouabid government in 1979- as long as they have a free hand to implement their policies, because we will then engage in a policy debate. With a weak coalition, disharmonious voices within a fragile ship would deflect public awareness from what the government does, to what petty politics goes inside it. Grown up politics, and genuine care for those who will bear the brunt of any economic crisis do dictate embracing the idea of strong government, so as to level up both the playing field and civic awareness.

More than ever, “it’s the Economy, Stupid” rules all, and parties with convincing messages across the economic topics can carry sympathy and votes with the electorate.

The Lowest Turnout Ever -Yet

It is a bit early. In facts, too early to say. There is still almost two years to go before the next general election scheduled for 2012 (but the King can always change his mind and call for an early election, just like he would delay it) but the result is fairly easy to anticipate the results: low turnout, a more fragmented than ever parliament, and no real, committed ruling coalition.

Perhaps the now popular PAM (the monarchist Parti Authenticité & Modernité) will be part of it, but it is unlikely to get a large majority to rule by itself. Historic data shows it: no political party can rule Morocco. No coalition has ever done so by itself; We claim to be a constitutional democratic and social Monarchy, yet the power remains, by law, by constitution and De Facto in the King’s hands. In these conditions, voting for a party is meaningless; Why try to give legitimacy to an institution that does not hold real power then? The largest party in the lower house, cannot muster individually more than 30% of the total seats, whatever their political philosophy -when they do have one.

It is spooky how constant the political institutions in Morocco are: apart from the monarchy that is, over a little less than half a century, no political party -constituted political party- has ever managed to reach an outright majority, and as such, all of the governments since the first elected parliament -1963-  all coalitions where too weak to be government majority -as well as being a complete fabrication, the so-called administrative parties-.

1963 Elections. 141 Seats, no outright majority. (Source: Barnabé Lopez Garcia, "Cuarenta anos de procesos electorales" Arabic version, 2009)

The 1963 elections were the first ones in Morocco. the main competitors were the historic main party, the Istiqlal,  its left-wing breakaway, the UNFP (Union Nationale des Forces Populaires, 1959) and the FDIC (Front de Défense des Institutions Constitutionnelles) an aggregate of parties that was put together to provide for a  “workable” majority, to the king’s convenience.  the FDIC was made up with the help of the Mouvement Populaire (MP) that was founded in 1957 to counter Istiqlali influence, the Parti Socialiste Democratique, an empty structure Ahmed Reda Guedira, King Hassan II‘s right-hand man and finally, a junior partner, most difficult to explain, the Choura & Istiqlal Party (PDI), the only partner that can be described as a “national party” (following the canonic dividing line between administrative and national parties in Morocco). This heterogeneous front was supposed to win the elections decisively, but failed in the process, though it managed to get the highest vote count, but still short of the absolute majority.

A. Ouadghiri’s accounts of the campaign are quite edifying:

“[…] à quelques jours de l’échéance, elle se ranime par de nombreux meetings tant des gouvernementaux que des opposants, par des distributions de tracts et de manchettes de journaux […]Au fond, le FDIC n’a pas obtenu après coup la majorité absolue. Il ne la retrouve qu’en racolant quelques indépendants […] l’UNFP, en dépit de la modestie de ses moyens, a un succès incontestable au sein du prolétariat urbain qui lui accorde une confiance massive. La surprise électorale au sein de ce prolétariat urbain, c’est la victoire de Guédira, chef de file du FDIC qui l’emporte à Casablanca dans un quartier d’ouvriers, ce qui fait dire à l’opposition (Ndlr, the UNFP and Istiqlal) que c’est grâce au blé américain distribué “à gogo” aux familles ouvrières casablancaises que le proche collaborateur du Roi a emporté son siège à la chambre des représentans. […] Cette accusation contre Guédira est concrétisée par une démarche effectuée auprès de l’ambassade des Etats-Unis d’Amérique à Rabat par un groupe de 5 Istiqlaliens[…]”. (Le Maroc: de la Mort de Mohammed V à la Guerre des Sables 1961-1963, 1981 Edition)

This election is quite specific: it was the first one, the opposition parties were not even convinced of its validity -because no constitutional convention was held beforehand as they were promised, and the constitutional referendum showdown’s effects were still vivid in their mind. Still and all, the whole thing looked as if the new king wanted a parliament for tactical purposes. facade-wise, it was a good publicity for the newly founded Moroccan democracy: not too conservative, but not too radical either. Anyhow, the balance of power was outside parliament as the years to follow were to show.

Two years after, the king declared a state of emergency after the students riots; On June 1965, he was effectively the absolute ruler of the land. Morocco had to wait until 1977 to get its post-state of emergency elected parliament. The result came as a shock to many parties, especially to the opposition, now gathered within the Koutla: the June 1977 legislative elections delivered some 140 MPs, among which 81 were directly elected, the Istiqlal party was trailing behind with about half the number, and the USFP with 15 members of parliaments. These SAP (Sans Appartenance Politique) were slowly turned out into a party starting from October 1978, when the Rassemblement National des Indépendants was founded and De Facto, the main coalition party under the leadership of the incumbent Prime Minister Ahmed Osman – Hassan II’s brother-in-law. the SAPs, and later on, the RNI, were part of a coalition government that gathered also Istiqlal and the Mouvement Populaire (a workable majority of over 80% seats). But the coalition was fragile: the Istiqlal participation was not wholehearted, and so was the Mouvement Populaire’s involvement (there was a split between the two historic founder Dr El Khatib and Aherdane). it eventually broke down when, shortly before 1984 elections, the RNI suffered a split, when a rogue group of MPs (57 to be precise) founded in June 1982 the Parti National Démocrate (PND). The spin-off was symptomatic of the instability of the ruling coalition and therefore, its weakness in managing the country by themselves.

The same process iterate itself with during the Maati Bouabid government in 1981. Instead of getting non-partisan individuals and then merging them together in a brand new party, the incumbent prime minister was given the task to create a new party ahead of the election. A party ostensibly economically conservative (libéral would be the precise term) Late 1982, he issued a declaration to an array of middle and high-ranking officials, private firms executive officers… the intermediary elite so to speak; the content can be summarized in few bullet points: Monarchy and institutional support and consolidation of the present democracy. There was demur about the project of creating a new party, but eventually, in April 1983, the newly founded Union Constitutionnelle (the name is a sort of a pied-de-nez to the opposition party USFP) was to be the standard-bearer of the policies Morocco has to implement as part of the Structural Adjustment Program imposed by the IMF after the reserve currency and debt crisis Morocco and other third-world countries faced early 1980’s. The party managed to get 55 seats during the 1983 elections, secured 5 portfolios, but was supporting a technocrat prime minister (M. Karim-Lamrani) In short, the 1980’s, besides being a period of confrontation between the left-wing opposition (some USFP MPs refused to keep their seats when the King decided to extend the parliament session) was such that some political parties provided the numbers for legislative process, but had no real say or authorities to that matter. Strangely though, a prominent partner of the Koutla, the Istiqlal party, was member of this government. It just shows how weak coalitions are, whether in opposition or government, there is, as far as the 1980’s were concerned, no stable coalition, a brilliant illustration of cooperative game theory.

Save for the FDIC in 1963, large parties cannot provide for more than 30% of the seats in the lower house (the Parliament, or the seats subject to direct election, following the different regimes between 1963 and 1984)

1993 was, in the King’s own terms, a disappointment. He was expecting an “Alternance” government (and apparently, M. Boucetta was considered a suitable Prime Minister, a position he turned down) but the opposition Koutla, denouncing gross falsifications during the legislative campaign, refused to continue the negotiations with the monarchy about a possible transfer of government (other roadblocks arose, mainly about the interior department that was under the firm hand of Driss Basri) and things went as they were before: obedient administrative parties and their MPs supporting a government that had legitimacy outside parliament, in the King’s trust. Following the 1993 results, the political map of parliament was even more fragmented than before.

Things started to go worse from that time onwards. I wish I wouldn’t say it, but it looked as though at the twilight of his reign, king Hassan II wanted to weaken the political opponents to the extent they would pose no threat to the then crown-prince, now king Mohamed VI. And if there was any such project, it certainly did reach its objective, for the following elections, opening up parliament for opposition parties -admittedly, to prepare the Alternance Consensuelle– increasingly changed into a house of multitude of parties, each pulling for something, regardless of their origin, political loyalty or size. 2002 and 2007 are no difference to that.

Elections. Why Bother?

Why the boring facts and the even more boring history? It is necessary so to show that first, parliamentary parties are notoriously weak. Not that I favour the introduction of chief whip position in Moroccan parliamentary politics -even though it will be of great benefits no doubt- but no party can really claim the full support of their MPs. In facts these very MPs, usually local barons, are the ones controlling the large parties at some point. It has been the curse of the USFP and moderately (and increasingly as their thrust for power grows more insistent) that of the PJD, that for a party to grow beyond a critical threshold, they need the support of local notabilities, and they have to come to terms with them one way or the other, usually at the expenses of their proclaimed principles. So, besides weak discipline among the parliamentary parties, configuration for coalitions are equally weak. Before I elaborate on that, some figures are worth to point out: 5 parties were represented in the 1963 parliament, 8 in 1984, 21 in 2002. In 1984, the three largest parties had 3 seats out of 4 in parliament. In 2007, only 40%. Starting from 1997, the likelihood of a “strong coalition” grew smaller than ever. Coalitions, under formalized conditions, are not meant to be stable when they operate under the rule of a majority, because any junior partner can leave it, thus pulling it apart. And that is particularly true in Moroccan politics. The fact government majority are stable across time in Morocco -as indeed they are- is irrelevant; it is he sheer paradox in their inner composition that should confirms how fragile and volatile they are.

When parliament is not the actual holder of legislative power, and when government does not answer to this very parliament, then there is no need for that body, or rather, there is no need for voting for them. I am quite sure may MPs are of good heart and honourable intentions, but politics is about institutions, ideas and principles. I can see none of those in our بارليمان .

If it is going as usual, I am not voting on September 2012. And I shall derive painful pleasure in watching the Moroccan people given a puppet Prime Minister. You have been warned.