Interview: Abdelilah Benkirane
What main reforms should be put in place in 2014 to further reduce the public deficit?
ABDELILAH BENKIRANE: The government has made it a key priority to reduce the fiscal deficit in a sustainable manner and has adopted clear and strong measures towards this objective, including rationalising expenditures and optimising tax revenues. In this regard, several reforms have been initiated, including, most notably, the subsidies reform, the tax reform and several measures aimed at improving the governance of public entities and state-owned companies.
Regarding the subsidies reform, after the related expenditures reached a peak of Dh57bn (€5.06bn) or 6% of GDP in 2012, initial steps were taken in 2013 and continued into 2014, resulting in a 25% decline in subsidies spending. With the same objective of keeping budget expenditures under control, the government took action to rationalise the public administration’s operating costs, to control the payroll and to improve governance of state-owned companies’ through multi-annual contracts constructed around clear objectives and conditional government support. Finally, the tax reform is being implemented with a participative and progressive approach aimed at increasing the tax system’s efficiency, improving tax fairness, supporting the private sector’s competitiveness, and building confidence between tax payers and the tax administration. The combined result has been a reduction in the fiscal deficit, which dropped by nearly 2% of GDP, from 7.2% in 2012 to 5.4% in 2013. The overall objective is to further cut the deficit to 3.5% of GDP by 2016.
What additional measures should be implemented to better tackle mass unemployment?
BENKIRANE: Morocco is going through a series of political, economic and social transitions, which are directly impacting the labour market. These changes bring along new challenges, mainly in terms of creating enough jobs to absorb the massive inflows into the labour market, but they also create new opportunities as well. Employment represents one of the key priorities of the government’s agenda, and a significant underlying objective of each of the sectoral strategies.
In this regard, the government considers the private sector as the main source of growth and employment, and has put a special emphasis on improving the business environment. That said, the government is also focusing its efforts in three key dimensions.
The first one is creating more job opportunities through the modernisation of traditional sectors and the development of innovative sectors. The second one is undertaking structural reforms regarding education and vocational training, and providing job seekers with orientation and support in order to improve their employability. The third one is promoting self-employment and a solidarity-based economy.
How can investment in remote areas be increased?
BENKIRANE: The government is making a special effort to stimulate private investment in every region and in different sectors. To this end, the government is committed to continually improving the business climate by easing access to land, simplifying procedures and improving the operation of regional investment centres, as well as monitoring this improvement at the national and regional levels.
However, it is also true that some regions are more attractive for investors than others, and that there are imbalances between regions in terms of infrastructure and overall development. These imbalances call for urgent territorial planning in order to make growth as inclusive and as equally beneficial as possible for the populations in different areas. In this regard, the government considers the regionalisation project as a key point of entry towards remedying the imbalances between regions in terms of infrastructure and social services. This goal can be achieved by rehabilitating and upgrading regions, as well as by encouraging solidarity and complementarity in a way that will allow any region to become an engine for investment and growth.
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