Against the backdrop of the historic events that swept through the Middle East and North Africa region in early 2011, Morocco initiated important political and social changes of its own, with King Mohammed VI spearheading the drafting of a new constitution and a broad range of reforms to respond to popular demands for more democratic governance and better opportunities. The new constitution presented a revised governance framework, strengthened the separation of powers and granted greater human and social rights to the people of Morocco.
The coalition government formed thereafter in January 2012 started the implementation of an ambitious plan governed by the spirit of a new constitution. While popular expectations were running high, the government failed to agree on strategic reforms, thereby leading to its premature dissolution and the formation a new government coalition in October 2013.
The new government has a busy agenda ahead and is expected to deliver on key economic reforms to cut down on subsidies, reform the pensions system, spur competitiveness, create jobs and improve quality of services in key sectors. Encouraging steps have been taken over the past few months to reduce the subsidies envelop, through the adoption of an indexation mechanism that will eventually help cut subsidies by almost 2 percentage point of GDP. The legislative agenda is ambitious and the government is expected to deliver on 20 “organic” laws before the end of the current parliamentary legislature.
Despite regional political unrest, Morocco has done remarkably well in keeping a fine political balance and smoothly addressing the population’s need for broader reforms and better governance. While reforms are being implemented gradually, the performance of key public sectors, namely education and health, and the bridging of social and human development gaps are perceived as a priority.
Morocco’s economy has been performing relatively well with an average growth rate of 5% over the past few years, despite successive external shocks due notably to the Eurozone crisis and a highly volatile global market. This economic growth has greatly contributed to reducing poverty and boosting shared prosperity. Extreme poverty (estimated at under 0.3% ) has almost been eradicated while it is estimated that the wellbeing of the bottom 40% of the population grew both in absolute terms and relative terms.
However, inequality, poverty and vulnerability remain important challenges. Morocco’s Gini coefficient of 0.41 reflects stubbornly high level of inequality in incomes and access to services. With 13.3% of the population still living just above the poverty line, it also means that a fifth of Morocco’s population (6.3 million people) still live either in poverty or just above the poverty line. In the context of an economy remaining largely dependent on the performance of the agricultural sector, rural populations make up two-thirds of the poor, largely employed in informal agricultural (including fisheries and forestry). In addition, overall unemployment remains stubbornly high at around 9% , with urban youth unemployment reaching 35.4% , and labor participation rates among the lowest among emerging economies, with less than half of the population economically active.
In the long term, Morocco needs to achieve higher growth rates that will lead to sustainable job creation and generate wealth, while prove to be more inclusive. The business environment needs to be more competitive and dynamic. The quality and governance of public services, including for youth and women, must be strengthened and the development model needs to be environmentally sustainable.
Last Updated: Mar 20, 2014