Morocco’s ambitious economic reforms 'still not enough'

[sbs]

Morocco’s ambitious economic reforms 'still not enough'


Rabat – High unemployment and poverty levels have shown that the implementation of an ambitious reform program, that has allowed Morocco to achieve macroeconomic stability with low inflation and comfortable external position, has not gone far enough.

Significant progress in the areas of price and trade liberalisation, financial sector reform, and privatisation has laid the foundations for robust economic growth, IMF deputy managing director, Agustín Carstens told Moroccan authorities in Rabat.

He predicted that these reforms are bearing fruit: economic activity has become more resilient to the fluctuations of agricultural production, investment and domestic demand are picking up, and productivity is on the rise.

"However, the high incidence of poverty and unemployment clearly demonstrate that this is not enough. I agreed with the authorities that a significant acceleration of growth is required in order to enable a more rapid job creation and improvement in the standard of living," an IMF press statement quoted Carstens as saying at the end of his Moroccan visit.

He, therefore, welcomed King Mohammed VI's decision to put human development issues at the centre of the government's policy agenda, as reflected by the National Human Development Initiative (Initiative Nationale pour le Dévelopment Humain), launched in May 2005.

Accelerating growth to levels compatible with poverty reduction and unemployment calls for a multi-pronged strategy, including reduction in the fiscal deficit in order to boost private sector confidence, increase investment, provide fiscal flexibility that allows smoothening of external shocks, fight poverty, and increase productive government expenditures, said Carstens.

He also cited trade liberalisation as key to achieving Morocco's growth objective, and pointed out that the recent coming into effect of the free-trade agreement with the United States is an important step in this area.

As "an efficient and healthy financial sector is another important pillar of Morocco's growth strategy,” he commended the authorities for recently strengthening the legal, regulatory and supervisory framework of the financial industry and increased autonomy of the central bank in the conduct of monetary policy and the broadening of its supervisory authority to modernise the financial sector.

Carstens held discussions with Prime Minister Driss Jettou, Minister of Finance and Privatisation Fathallah Oualalou, Central Bank Governor, Abdellatif Jouahri, the President of the Finance and Economic Development Commission of Parliament, Mustapha Hanine and representatives from the Moroccan business association. -panapress