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Country Rankings - Morocco

  • Nov 07, 2013   Morocco: hiring more bureaucrats

    Hopping across to Northern Africa via "Play It Again, Sam" Casablanca brings us to Morocco, which has also just recently published its budget for 2014 (it's that time of year) and it makes no nicer reading, unfortunately; in fact the Government is blatantly increasing taxation, driven at least partly by the World Bank and the IMF, which have been lending it money. The IMF will approve of the country's intention to reduce unemployment, running at 17 percent, but certainly won't approve of the Government's plan to do so by hiring a further 18,000 civil servants. This won't do much for the deficit, which the Government claims improbably will fall from 5.5 percent this year to 4.9 percent next year. Perversely, the World Bank has spent most of the last ten years helping the country to cut its public sector work-force. Morocco's main problem however is its bloated agricultural sector, which employs 45 percent of the workforce, and which the Government has encouraged with subsidies and tax breaks; but the only result of that will have been to discourage mechanization – why bother to work for a degree in engineering when your paymasters will shower you with cash for digging the fields? Presumably there is a major element of electoral calculation here, as is the case in Japan, and even in France, Morocco's ex-colonial ruler. Pressured by the IMF and the World Bank, the Government is now finally biting the bullet and cutting back on agricultural subsidies, which will of course simply increase unemployment – hence the 18,000 unnecessary new bureaucrats. FDI in 2012 was a paltry USD2.8bn, for a population of 32 million (per head, that is 60 times less than in Ireland). That's more than any other North African country, amazingly, and most of it came from France, as you would expect, which is hardly in a position to increase its assistance to the Maghreb when it can't even help itself out of its debt morass.
    Source: www.lowtax.net/asp/story/front/Moroccan_Budget_Minister_Defends_Tax_Reform_Plans____62556.html


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