The Prime Minister’s intervention before the House of Representatives on 10 May, within the framework of Article 100 of the Constitution, on the issue of investment and employment should not go unnoticed. It requires a real debate given the multiple issues it has raised. This is a crucial issue in terms of touching on various issues.
We hoped that it would get the attention of political actors, the majority and the opposition, to develop the arguments put forward by some and to suggest alternatives by others. But that was unfortunately not the case. Instead of engaging in an actual conversation in accordance with what the topic requires, we pursued derogatory exchanges based on “animal language” that in no way interested the citizens. On the contrary, such practices will only lead to Moroccans being alienated from politics, widening the gap between them and the political parties, and perpetuating their resentment and disgust with those who despise “empty talk.”
Let us forget this “political homelessness” and focus on the issues that have been raised that weigh on the present and future of our country. The topic addressed by the Head of Government and accepted by the Wali of Bank Al-Maghrib (see his intervention before the two parliamentary committees on 15 February 2022) is a challenge for us and deserves our attention. Our aim is not to discuss the Prime Minister’s speech and address each point separately, just as we would like to raise some inconsistencies and point out some inaccuracies and shortcomings in the accepted approach.
To begin with, the figures presented by the Prime Minister regarding the distribution of investments between the public and private sectors confuse the uninformed reader. To say that public investment represents 65% of investment (compared to a world average of 20%) and thus private investment represents only 35%, based on an investment rate of 30% of GDP (compared to a world average of 25%). This logically leads us to the conclusion that the first, which is public investment, represents 20% of GDP, and the second is private investment, which represents 10%. Contrary to all logic, however, the editors of the Prime Minister’s intervention did not place the figures in this format. This led to a stark contradiction that was evident on the next page when it was indicated that public investment represents 16% of the gross domestic product, with an estimate of private investment of 100 billion dirhams (ie less than 10% of the gross domestic product) product). Such a discrepancy in an official document is, to say the least, unacceptable, as it could cast doubt on the reliability of our statistical system.
Perhaps the point should have been made, as the Governor of Bank Al-Maghrib wisely did in his above presentation, when he noted that “information regarding private investment in Morocco remains fragmentary and available, but often after a certain period, which does not provide for an assessment suitable in time for its development.
Moreover, while welcoming the improvement of the business climate and the resumption of foreign direct investment, the Prime Minister truly deplores the lack of efficiency and profitability of investment in general. However, he did not bother to explain the reasons for this weakness and the measures that need to be taken to overcome it. This is the missing link. It should be remembered that the return on capital is measured by the ICOR (Incremental Capital Ratio) index, which means the link between investment and economic growth. The lower the percentage of this indicator, the better the return on investment. Specifically, with an investment rate of 30% and an ICOR index of 9.4, as in Morocco, we get a growth rate of 3.2%. (This is exactly the rate set out in the Financial Act of 2022.) Of course, this result is more an observation than an explanation.
We will have to go further in the explanation to explain why. To achieve this, several explanatory factors can be brought forward: First, public investment, by its nature, focuses on infrastructure and social sectors, as it is produced indirectly, and therefore its profitability appears only in the medium and long term. The second factor lies in the poor management of the public facility, which suffers from poor management, and multiple problems (see the various reports of the Supreme Board of Accounts).
Finally, such a weakness lies in profitability in the nature and orientation of private capital. The latter are attracted to rent-seeking speculative activities at the expense of productive activities and job creation. Under these circumstances, the focus on private investment and increasing its share to two-thirds of total investment by 2035, as provided for in the new development model and the new investment charter that is nearing completion, is a real challenge. It requires a real cultural revolution that involves the elimination of rents, the establishment of the rule of law in the field of business, and the respect of the rules of fair competition that guarantee equal opportunities, and value talent and merit.
In addition, other statements made by the head of government deserve further explanation. In terms of replacing imports with national production, there have already been 918 projects with a total investment of 39.4 billion dirhams, which will create almost 200,000 direct and indirect jobs. This is good news, but we’re waiting for his boldness on the ground. The same note applies to the investments approved by the National Committee for Private Investment, identified in 46 projects, with an estimated value of 33.3 billion dirhams, which will contribute to the creation of more than 14,200 direct and indirect jobs. These investments, in turn, are distributed sectorally to higher education and health, which are among the sectors that have become important, in addition to tourism, logistics and industry. The fact that the industry came last is significant. It highlights the speculative nature of private capital and its aversion to risk. Another note relates to wage earners registered with the National Social Security Fund. The Prime Minister viewed the increase in the number of workers registered with the fund with 100,000 people in one year with satisfaction, and then their number increased from 2.6 million in February 2020 to 2.7 million in February 2021. But if we compare these numbers with the figures before the Corona pandemic, i.e. 3.54 Two million in 2019, there really is nothing to be proud of! On the contrary, it is a retreat from the goal of universal social coverage to which our country is committed.
Finally, we hope that these observations will find a positive response from the officials. The goal is to serve our country and contribute to this path by increasing the level of democratic debate that the country desperately needs. This is a serious discussion that shines light.
Translated into Arabic by Professor Abdelaziz Boudra