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Morocco’s middle class feeling the squeeze of rising prices

Abdelilah Benkirane, Morocco's Prime Minister, says that raising prices on fuel and staple goods is necessary to support the government.

Abdelilah Benkirane, Morocco’s Prime Minister, says that raising prices on fuel and staple goods is necessary to support the government.

By Safae El Herraz

In today’s Morocco, it is common to hear complaints about the rising costs of fuel and food staples like milk and bread. The country’s economy has reached the point where it is becoming difficult for even middle class Moroccans to afford these items.

Many say recent measures undertaken by the ruling Justice and Development Party to alleviate the hurt coming from a suffering economy is doing little to help the situation. Vital parts of everyday life, such as putting food on the table and getting from place to place now constitute a drain on monthly salaries and create a mental burden.

Morocco faces a tough task in balancing efforts to optimize politics and the economy. Making both a priority is a promise the government has made in the past, but since it has failed to deliver, many Moroccans have lost faith in the Justice and Development Party.

It is worth noting that in 2012, Morocco’s GDP was worth $96.73 billion. The GDP value of Morocco also represents 0.16 percent of the world economy. Still, this is a shortfall from the country’s all-time high GDP of $99.2 billion in 2011, according to 2012 World Bank figures.

In a recent television speech, Morocco’s Prime Minister, Abdelilah Benkirane, said the rise in prices is directly related to the behavior of Moroccan society. Benkirane also defended the decision to raise prices, saying that Moroccans are aware that the rise in prices is occurring to keep the government financially secure. The country’s citizens, he added, should contribute to the country’s progress and embrace a sense of duty that entails passing more money to the government.

Most Moroccans describe the move as seeking sympathy for the government or as a type of begging. Others say Benkirane is playing on people’s nationalist sentiments and their fears that not contributing to the government will eventually spell catastrophe in one form or another.

Just as some protesters see the need to revolt for the purpose of changing the political climate, others see the need to revolt out of economic strife. In contrast, many countries in the Gulf lack democracy in politics, but overall, economies are strong and most people are content with the course of their day-to-day lives as long as they are able to pay for things as needed.

For many politicians, the ability to stay in office over the long term is determined by the strength of the economy, the presence of jobs that pay well, accessible health insurance and strong purchasing power.

Ahmed Shaath, who works as a media consultant, said Morocco, like many developing countries, has yet to realize its potential. In Morocco, he said, the wealthy stand at the helm of the economy, and their participation in financial dealings may increase the gap between the rich and poor, but it also keeps the country afloat and allows money to trickle down to the lower classes.

Still, an economic model such as this is unsustainable, Shaath said, and in many cases it is only a matter of time before people revolt after not having enough money in pocket. Economic growth, he added, is largely dependent on those who work in service sectors. Heavy government interference and a top-down economic model is inefficient, as any successful economy requires input from the citizens who are affected by economic policies, even if they don’t have the biggest say in how they function. In recent years, Morocco’s economy has been stable and has avoided allying with predatory investors like Dubai and Qatar, Shaath said.

According to Fatima Rhorchi, an assistant professor at the Moulay Ismail University in Meknes, Moroccans’ financial capabilities are becoming increasingly limited with the rising costs of basic products and services. “As a citizen who commutes to Meknes three times a week,” she said, “I pay 130 dirhams [$16] every day just for gas, so 130 times three is 390 [$48]. Rhorchi said her budget for gas takes a large chunk out of her paycheck. “All this raising of the prices hurts those with high salaries, [not including] the poor,” she said.

The poor, Rhorchi said, are hit especially hard by the Moroccan government’s price increases, as they cannot absorb the cost of more expensive goods as easily as Morocco’s wealthy. “Solutions should not be at the expense of the poor,” she said. “The government is required to seek donors and stop pushing Moroccans to the edge. This stability that we are enjoying these days depends on how mature the government is.”

Abderrahim Agnaou, a professor at Al Akhawayn University in Ifrane, said it seems that the increase in oil prices will ultimately affect the purchasing power of citizens, “given the fact that transportation of basic goods such as wheat, greens, eggs, fish and meat across the national territory incurs more expenses that producers, wholesalers and retailers may not be ready to assume.”

It is likely that due to the rising cost of fuel, sales of gasoline-operated cars may also drop. Currently, there is a huge differential in the price of diesel and gasoline. Since diesel-operated vehicles are those most currently driven on Morocco’s streets, the government has put most of its efforts into curbing the price of diesel fuel.

The resulting effect could be that many owners of gasoline-operated vehicles stop using their cars or try to get rid of them. Even still, the cost of diesel fuel in Morocco is even higher than in Europe.

Prime Minister Benkirane has said that Moroccans have a gift for surviving rough conditions, rough financial patches included. Still, there is no reason why the state should not be able to provide some of the most crucial goods and services to its citizens from all walks of life at an affordable price. Until this happens, Moroccans will not tolerate rising prices any time soon.

Safae El Herraz is The Atlantic Post’s Morocco Correspondent in Agadir, Morocco.

 

Posted on October 28, 2013

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