Saying “surprised by the content of the 2020 corrective finance law”, the alliance of Istiqlaliens economists (AEI), set out 10 measures inviting the executive to “make up for the shortcomings, in accordance with the expectations of economic operators and to the aspirations of citizens ”.
In a press release made public, the AEI calls, in fact, for “a more rational use of debt and better targeting of directly productive projects for inclusive local development, sustainable and creator of wealth and jobs in the various territories. of the Kingdom “.
While affirming to closely follow the evolution of the effects of the Covid 19 pandemic on Moroccan society and economy, the AEI indicates that it has examined the assumptions, priorities and figures presented by the government in its amending finance bill for the year 2020.
The Alliance takes note of the government decision to rectify the assumptions and data used to build the initial version of the 2020 finance law, as the Alliance suggested in its press release of March 7. The objective of this new framework is to take into account the major economic and social changes resulting from the implementation of the state of health emergency, the ensuing containment and the effects of the drought on the agricultural campaign 2019/2020, she says.
He added that after examining the LFR project, submitted for parliamentary approval, the AEI notes that this project is characterized by a lack of clarity and consistency in its vision. ” This project is neither an austerity tool, nor an instrument to stimulate supply, or support demand, and it does not reflect, either, the new social and economic priorities imposed by this crisis and expected. everyone, to support the resumption of activities, after more than 3 months of general confinement“, Notes the alliance.
This project does not include significant provisions to preserve existing jobs and generate new ones, nor the means to achieve the growth rate (or recession) projected by the government, in order to limit the socioeconomic damage of the health crisis or to take advantage of the investment and job creation opportunities brought about by the crisis or to preserve the economic fabric and existing jobs, continues the text.
In view of these elements, the AEI underlines the following points of vigilance characterizing this project:
- Lack of clear and proactive measures to contain the expected recession, limit the substantial decline in the purchasing power of citizens, particularly the middle classes, secure a minimum income for employees, the self-employed and autoentrepreneurs who have lost their income following this crisis, save businesses, especially small businesses, and preserve jobs.
- Through its LFR project, the government declares to maintain the same priorities as those of the initial finance law. However, the current context is marked by the shutdown of activities for nearly 100 days, costing a billion dirhams of GDP per day, according to government estimates. The LFR project does not show the government’s desire to ensure a rational use of public resources, nor to better targeting of expenditure, in particular through a substantial reduction in the administrative standard of living.
The AEI thus expresses its astonishment at the following facts:
- Through this PLFR, the government was content to regularize certain decisions taken by the economic watch committee, to update certain assumptions, and to integrate some modifications in the budgets of certain ministerial departments. The so-called priority sectors have not seen their resources increase as might be expected;
- While the HCP highlights a decline of nearly 14% of GDP during the confinement period, compared to the same period of the year 2019, the PLFR does not bring significant measures to support the economic sectors most affected by the crisis, whether at the level of the general budget, the budgets of services managed independently, or special treasury accounts. The AEI recalls that it has made concrete proposals through its press releases over the past three months, for the protection of businesses and jobs in general and for the housing, tourism, crafts and digital sectors, in particular. particular;
- Lack of concrete measures encouraging companies and public establishments to participate voluntarily in the efforts made to boost economic activities and support national companies, in particular through better targeting of their expenditure and the effective application of national preference.
Regarding the quantified data of the LFR 2020 project, the alliance emphasizes that some of these data do not reflect the reality of the impact of the health crisis on the macroeconomic framework of our Country. Indeed ;
- the evolution of economic activities during the first and second quarters of 2020, clearly indicates that the rate of recession this year would exceed 6% of GDP instead of the 5% projected by the government;
- data relating to the execution of the finance law at the end of May 2020, in particular the obvious decline in tax revenue, show that the budget deficit for the year 2020 would reach 8% of GDP, and that it would exceed 9%, if the balance of the “COVID 19” trust account is not taken into account.
In addition, the AEI underlines the authorization to increase the debt threshold to 76 billion dirhams for the internal debt and to 60 billion for the external debt, which would result in the worsening of the public debt ratio. to more than 90% of GDP.
In this context, and in order to preserve our economic sovereignty, the alliance calls on the government to make more rational use of these debts and to better target directly productive projects for inclusive local development, sustainable and creator of wealth and jobs. in the different territories of the Kingdom.
This particularly involves promoting the launch of projects to open up remote areas by equipping them with roads, water and electricity and generalizing the country’s equipment with renewable energies and its connection to the Internet.
At the same time, and given the deterioration of our balance of payments due to the continuous declines in external demand addressed to our country, FDI, tourism and remittances from MRE, the alliance strongly urges the government to put in place intelligent, non-tariff mechanisms aimed at importing only strictly necessary products and services and promoting local “Made in Morocco” production.
Finally, the AEI invites the government to be receptive to the proposed amendments from the representatives of the nation, with a view to improving this LFR 2020 project and safeguarding our productive fabric, preserving employment and supporting the power of purchase of Moroccan households.