Morocco's Experience in Fight Against Poverty: Strengths and Limitations Lahcen Achy, Jawad Kerdoudi Thursday, September 16,

2010 Casab anca !orocco has made notab e pro"ress in #i"htin" po$erty o$er the ast decade% &n a seminar hosted by the Carne"ie !idd e 'ast Center and the !oroccan &nstitute #or &nternationa A##airs (&!)&* in Casab anca, Carne"ie+s Lahcen Achy compared !oroccan e##orts to reduce po$erty with the e,periences o# '"ypt and Syria% -e hi"h i"hted the main #actors contributin" to !orocco+s success, assessed the imits o# this achie$ement, and o##ered po icy recommendations on how to bui d a sustainab e strate"y #or po$erty reduction% Explaining the Decline of Poverty in Morocco !orocco, i.e '"ypt and Syria, has seen hi"her "ross domestic product (/01* "rowth in the ast decade compared to the pre$ious one% 2n i.e '"ypt and Syria, howe$er, its po$erty rate has #a en si"ni#icant y% Achy cited se$era #actors critica to reducin" !orocco+s po$erty e$e s3 Demographic Behavior: The number o# chi dren per adu t woman has decreased o$er the past decades, droppin" #rom an a$era"e o# 4%5 chi dren per woman in 167081674 to 2%5 in 200482010% This rapid demo"raphic transition has reduced the pressure on househo d bud"ets and pub ic in$estments, as we as on abor mar.ets% As a resu t, !orocco has been ab e to in$est more money in in#rastructure, such as roads #or rura areas, impro$ed e ectricity, and c ean water, whi e '"ypt and Syria had to #ocus their spendin" on .eepin" up with the needs o# their "rowin" popu ations% Fiscal eso!rces: 9ithout a ar"e pub ic de#icit, !orocco has more #isca space and more abi ity to in$est in pub ic pro:ects than '"ypt and Syria% &ts stab e #isca resources and hi"her ta, re$enues "i$e it the abi ity to en"a"e in wide8 reachin" #isca po icies% "redit Extensions: !orocco has emphasi;ed stron" support #or the pri$ate sector% <ne way it has done this is throu"h credit e,tensions% !orocco a ocated 70 percent o# its tota credit to the pri$ate sector in 2006, whi e Syria o##ered on y 17 percent and '"ypt 56 percent% Microcredit Associations: !icrocredit associations ha$e p ayed a ar"e ro e in i#tin" the i=uidity constraints on poor househo ds and sma #irms in !orocco% Achy pointed out that !orocco recei$es 46 percent o# tota microcredit oans "ranted in the !idd e 'ast and >orth A#rica, whereas Syria ho ds :ust 1 percent o# tota oans and '"ypt 15 percent% emittances: )emittances p ay a .ey ro e in income redistribution, as !oroccans i$in" abroad #ee responsib e #or sendin" #unds bac. to support their #ami ies and pro$ide #inancia resources #or socia pro:ects% ole of #$%s: >/<s ha$e p ayed an increasin" ro e in !orocco, in partnership with state and oca "o$ernments% Since 2002, when a aw was passed to a ow domestic >/<s to recei$e #orei"n #unds, they ha$e been ab e to e,pand their acti$ities at the oca and nationa e$e % ?orei"n >/<s ha$e a so p ayed a ar"er ro e, as a resu t o# !orocco+s hi"her "o$ernance indicators, which "i$e #orei"n >/<s con#idence in its eadership%

&he %ngoing Pro'lems and (ey Economic Policy

ecommendations

Accordin" to Achy, whi e !orocco has made "reat strides toward reducin" po$erty, its successes ha$e not been enou"h to sustainab y reduce nationa po$erty e$e s% -e pointed out #i$e main obstac es that pre$ent !orocco #rom reachin" a sustainab e ow e$e o# po$erty3 Poor )!man "apital: The dec ine in po$erty thus #ar has not been matched by an impro$ement in human capita % !orocco sti a"s behind '"ypt and Syria in i iteracy rates, which were at 54%5 percent in !orocco, compared to @@%6 percent in '"ypt and 16%6 percent in Syria, in 200A% !orocco a so a"s in "o$ernment e##orts to #i"ht i iteracy% Achy ar"ued there is an ur"ent need to #i"ht i iteracy by a ocatin" more resources to education and creatin" incenti$es #or poor #ami ies to send their chi dren to schoo % Economic *ne+!ality: The "ap between rich and poor has increased in the past decade, despite e##orts to reduce po$erty% Achy recommended de$e opin" more ade=uate pub ic redistribution po icies that better tar"et the poor and most $u nerab e members o# !oroccan society% Lac, of *nvestment in Alternative *nd!stries: The !oroccan economy re ies ar"e y on the a"ricu tura sector, which is hi"h y $u nerab e to c imate conditions% This e,poses poor and $u nerab e househo ds to se$ere economic shoc.s with no #orma protection mechanismsB "o$ernmenta support is restricted to ar"e #armers instead o# sma ones who need it most% Poor -o' .!ality: Job =ua ity in !orocco is dan"erous y ow, with too many :obs ca in" on y #or uns.i ed abor and o##erin" ow pay% ?urthermore, many wor.ers are emp oyed in the in#orma sector% This ma.es emp oyment precarious and increases wor.er $u nerabi ity to economic shoc.s% Achy ar"ued that po icy ma.ers shou d create incenti$es #or in#orma entrepreneurs to #orma y estab ish themse $es in the pri$ate sector% $ro/ing $overnment "ontrol %ver #$%s: The contribution o# >/<s to oca de$e opment has ost momentum o$er the ast #ew years in the wa.e o# increased "o$ernment super$ision% &n spite o# "reater access to #orei"n #unds, the "o$ernment maintains a c ose, i# imp icit, contro o$er >/< acti$ities, which imits the scope o# their wor.% Achy recommended a owin" ci$i society and particu ar y >/<s to participate more open y and independent y in shapin" and imp ementin" socia po icies%