APPOINTMENT OF THE AKHANNOUCH CABINET
A coherent and united Executive is what we want. Now that it is constituted and appointed by King Mohammed VI, the Akhannouch government has its work cut out for it. Its five-year term has nothing to do with that of the El Othmani cabinet. The current health, economic and social situation is unprecedented in more ways than one.
The country is at a turning point in its history. The economy is at half-mast due to the health crisis. Its recovery is struggling to find its way. The first major challenge of this government is the 2022 Finance Act, in other words the State’s operating budget.
When we talk about the budget, we inevitably talk about the budget deficit. Deficits have accumulated over the last two years, especially in view of the economic crisis, which is the result of health restrictions and sporadic stoppages of activity in entire sectors of the national economy.
In this regard, what has marked the 2020 and 2021 budgets is the significant compression and decrease in ordinary revenues (tax and non-tax) as a result of this economic gloom. The new government must find solutions to replenish the state coffers. But it is not by emptying the pockets of the small taxpayer, with fines and penalties and new taxes, that we are supposed to do it.
It is time that the wealthy of the country were seriously taxed. By a wealth tax or by some other means to which we will give a less embarrassing or irritating name, it does not matter. In any case, the solidarity of the country’s wealthy is more than ever called for. And we will have to put an end to total exemptions for the benefit of certain sectors under the pretext of boosting the economy. Because when we know that the global public debt is close to 100% of the GDP (Gross Domestic Product), we cannot admit that 40% of the State Budget is pumped directly from the service of the public debt.
If therefore the letter of framework of the 2022 Finance Bill is already established by the outgoing government, it will be necessary to ensure a return to the pre-sanitary crisis budgetary balances. The much desired economic recovery is fatally dependent on the progress of the vaccination campaign and investment. The more sanitary restrictions required by the epidemiological situation, the more the economic machine is seized up. It will be necessary to mobilize to ensure the supply of vaccine doses on an international market that is extremely tense because of high demand and a supply that cannot keep up.
Regarding investment, the recovery plan has seen the launch of financing mechanisms guaranteed by the state but which aim only to absorb the arrears and fixed charges of companies. As for the investment plan that the Fund Mohammed VI should spread and implement, we have not seen anything yet. Nothing at all!
Another issue is the cuts in the public investment budget, which reached 14.4% in the first five months of 2021. This calls into question the will of the outgoing government to put the economic recovery plan on track. For there can be no recovery without investment. As strange as it may seem, in these times of crisis when the state budget is becoming thin, operating expenses are increasing. This means that the government does not want to make efforts to reduce the lifestyle of ministries and public institutions. Crisis or no crisis, the outgoing government did not know about austerity.
Worse, the debt charges and the interests of the debt increase. The increase in budgeted debt charges is attributable, in the first half of 2021, to the 10.7% increase in principal repayments (20.9 MMDH) and 3.8% increase in debt interest (11.5 MMDH). What will happen with the new government? We will see. Another battle horse: the wage bill of public servants, which exceeds 12%, far higher than 8%, the international standard and that advocated by financial organizations such as the IMF (International Monetary Fund). We are already wondering how the new government will increase the minimum salary of teachers in the national education system by one third!
On the social level, there is a malaise that does not say its name. Large sections of the population, including the defunct middle class, are barely surviving. The reason is the high cost of living. How will the new government, composed of liberals who support the abolition of the Compensation Fund, preserve the purchasing power of Moroccans without subsidizing consumer prices? It is even unthinkable in view of the vertiginous rise in prices (food, raw materials…). Let’s wait and see what the new government’s genius is on this very sensitive socio-economic issue.
The erosion of purchasing power is also linked to the rise in unemployment. In terms of figures, the unemployment rate increased by 0.5 points between the second quarters of 2020 and 2021, from 12.3% to 12.8% at the national level, according to the High Commission for Planning (HCP). A small nuance to note: this rate is distorted or does not reflect the magnitude of reality when we know that it does not include the unemployed who do not declare themselves as such to the Anapec (National Agency for the Promotion of Employment and Skills).
All the parties that make up the government majority advocate growth and development. We can boost economic growth, but we cannot talk about development without an equitable redistribution of wealth and without true social justice, the basis of which is the revaluation of household incomes, the generalization of social protection (while mobilizing funding) as initiated by King Mohammed VI and access to quality education and health care within the reach of all.
In the same vein, the next government must work hard to implement the new development model that recommends all this and more. This roadmap of tomorrow’s Morocco requires a concerted approach. And it is at this level that we will see, very soon, if the components of the future majority prioritize -or not- the general interest over the interest of each political group.
The promises of the election campaign are evaporating into thin air. What remains is the work on the ground. And, as such, the Akhannouch government is eagerly awaited to implement its promises and especially to find solutions for financing the socio-economic axes of its program without increasing the bill of the large segments of the population in difficulty.
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