Country FilesNorthMorocco Country Profile 2015: Coalition struggles with unpopular reform


Morocco Country Profile 2015: Coalition struggles with unpopular reform

By The Africa Report

altWith local and regional elections coming up in June as well as polls for the Chambre des Conseillers elections in September, 2015 will be a testing year for the government.

The Islamist Parti de la Justice et du Développement (PJD) has been struggling from a weakened position since it formed a new coalition government in 2013. The government's priorities are reform, improving public finances and encouraging the development of new economic sectors.

The local and regional elections are set to follow the country's new administrative division, but the law on that still has not been voted. The number of regions is set to be reduced from 16 to 12 as part of a decentralisation plan. The interior ministry is redrafting the proposed law after complaints that it would violate the rules of the 2011 constitution.

altAhead of the planned legislative polls in 2016, the Chambre des Conseillers election is a high-stakes affair for the PJD because it does not have a majority in this upper chamber of parliament.

Since its historical victory in 2011, the PJD has been implementing a series of unpopular reforms of state subsidies and pensions in order to tame the budget deficit, which was at 7% of gross domestic product. The party campaigned on an anti-corruption platform but has not made many advances on that front.

Uneasy coalition

The PJD and its ally Istiqlal parted ways in 2013, and tensions between the parties have been high ever since. The PJD now leads a coalition government in which it is in a weakened position. Political dialogue between prime minister Abdelilah Benkirane and the Istiqlal secretary general Hamid Chabat is at a standstill.

The Parti Authenticité et Modernité (PAM), Istiqlal, Union Socialiste des Forces Populaires (USFP) and Union Constitutionnelle had threatened to boycott the 2015 local elections because they disagree with the government about the regional reform process.

Istiqlal and the USFP work together well, but they are suspicious of PAM, which was founded in 2008 by Fouad Ali El Himma, an ally of King Mohammed VI.

In July 2014, Mohammed VI celebrated 15 years on the throne by talking about the progress the country has made since 1999 but also expressing concern about "social disparities". The government expects moderate economic growth over the next few years as reforms impact the economy.

The country's close ties to Europe, which has its own economic worries, is the greatest potential drag on the economy.

In April 2014 the commerce ministry introduced the Stratégie Emergente aux Ecosystèmes Performants, an updated version of the 2005 Plan Emergence that was designed with the help of the consultants at McKinsey. It forms the country's new industrial policy for 2014-2020. Its goals are the creation of 500,000 jobs and increasing manufacturing's share of gross domestic product from 14% to 23%.

The government plans to create an industrial development fund of Dh20bn ($2.3bn) to finance projects in the offshoring, automotive, textile and leather, aeronautics, electronics and food-processing sectors.

Growth sectors

Newer sectors like aeronautical component manufacturing are taking off. In July, Aircelle Maroc announced that it will start making parts for the Airbus 330neo. However, the government is worried about overall growth levels. 

In September, Bank Al-Maghrib, the country's central bank, lowered the interest rate below 3% for the first time to encourage banks to increase their loan portfolios and support the economy.

Finance is another growth sector. Casablanca Finance City is now ranked 51st out of 83 cities in the Global Finance Centers Index. It was 62nd in 2013 when it first joined the list and is now ahead of Moscow, Dublin and Madrid.

Oversight of the Casablanca bourse proved weak, however, when shares of Compagnie Générale Immobilière were withdrawn in October 2014 after a corruption scandal.

In 2015, the government's infrastructure investment will target the development of six new marinas on the northern coast to boost tourism.

Morocco is also due to add 160MW of concentrated solar power in August 2015 from the Noor Ouarzazate I project, which is part of a programme to produce 2,000MW from solar power by 2020.

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