New World Bank Strategic Paper on Targeting and Social Protection
Rabat, May 30th, 2012 – A quarter of the Moroccan population, 8.5 million, is vulnerable to absolute poverty. “Major geographical disparities exist when it comes to poverty in Morocco. Rural poverty remains over three times higher than urban poverty,” said Nadine Poupart, World Bank Senior Economist and Human Development Coordinator for Morocco. “Eighty percent of the rural population are either self-employed or in unpaid work. Social protection, if carried out effectively, can improve equity by reducing poverty and destitution. It can help build resilience to shocks by helping people insure against different types of risks.”
The World Bank’s Strategic Framework Paper on Targeting and Social Protection in Morocco, released today, outlines an approach to help the poor and vulnerable fully participate in the economy and manage the risks they face. It provides options for the development of a comprehensive and well-targeted social protection system, which would articulate social assistance and insurance.
Morocco has made some achievements in reducing poverty over the last ten years but these are not sufficient to overcome the challenges and risks people are facing, especially the poor. Current social assistance programs do not provide adequate coverage and are generally poorly targeted. In addition, many institutions run similar programs directed towards the same potential beneficiaries, with no coordination. The universal food and fuel subsidies are very costly and end up benefiting mostly the non-poor.
Social insurance programs cover only a third of the economically active population and exclude most of those who work in the informal sector. They are also very fragmented and result in unequal protection of formal sector workers and their families, and a lack of labor mobility between sectors.
The note delineates several options to go from the present limited and fragmented programs to a household-centered system, building on potential synergies between health, nutrition, education and employment. The first step would consist in reforming targeting practices, building on existing geographical targeting and strengthening household-level targeting. This would lead to the creation of a unified beneficiary registry.
Another step is the reform of the consumption subsidy, to free resources that could be invested in poverty targeted programs. A third step would be to unify and open the social insurance system to offer adequate incentives and specific instruments, notably to informal workers . All these require the clarification of roles and responsibilities of the different institutions responsible for the design, implementation and regulation of social protection programs.
Social protection can promote opportunity by building human capital, assets, and access to jobs and by encouraging families to make productive investments because of their greater sense of security. It also contributes to social stability. Morocco has started several reform endeavors and can build further on these to strengthen its social protection system.