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Morocco: The state responsible for territorial inequalities?

In its latest report of April 29, 2019, Oxfam describes Morocco as the most unequal country in North Africa. The income inequalities noted echo the territorial level (3 out of 12 regions account for almost 60% of GDP, and six regions account for 74% of the poor), with very marked imbalances between the urban and rural world, the centers and their peripheries, the coastline and the interior of the country, to the point of having the impression of being in the continuity of “useful” Morocco and “useless” Morocco.

According to figures from the Office of the High Commissioner for Planning, it would take us a quarter of a century to halve current territorial inequalities. If Oxfam and others call for state intervention to speed up the process of territorial convergence, can we for a moment consider that the state is free from reproach? Not sure !

Limits of state equalization

While successive governments have attempted to reduce inequalities by activating several levers (public investment, subsidies, development agencies, the INDH human development initiative, etc.), it is clear that the results are very disappointing. Gini index measuring inequalities in a synthetic way has remained around 0.4 since the 1990s. This is due to the lack of deconcentration and the rate of implementation of public investments, which has consolidated disparities in infrastructure between the different regions.

National development agencies lack transparency and their governance is weak because of the vagueness over the definition of their attributions. As for the INDH (National Initiative for Human Development), it was penalized by the lack of competence of local committees, the lack of monitoring and accountability, leading to aberrations in the allocation of resources between regions.

From this observation it is clear that the vertical redistribution (inspired by the theory of J. Rawls) aiming at territorial equalization (taking on the rich territories to give to the poorest), can not make it possible to meet the challenge of reduction of the inequalities, essentially for two reasons :

On the one hand, the failure of state governance (diversion, lack of targeting, no accountability, etc.), squandering scarce resources especially in a context of limited state budget margins.

On the other hand, as Amartya Sen (1998 Nobel Prize) has made clear, territorial justice is not just about redistributing funds; the territories must have the capacity to use them, hence the need to allow regions to become autonomous in the creation of wealth and jobs.

The state generating inequalities

By its laws, its policies and its mode of governance the Moroccan State is a source of inequalities. First, despite the slogans of regionalization, most of the decisions are still centralized, so that the more a region is far from the center, the less it will be served in terms of budget allocations. When you add to that the regionalism of some ministers, each of whom gets the coverage for their region of origin or their electoral stronghold, the budgetary division between territories often widens inequalities because guided by a political logic.

Second, the regulatory uniformity adopted by the Moroccan state does not take into account the specificities of territories, it also creates inequalities. For example, in terms of labor law, it is unfair to want to apply the same minimum wage to Casablanca as it is to the south, since it is neither the same cost of living nor the same productivity.

In the tax area, applying the same high VAT rate (20%) to all Moroccans regardless of their place of residence or income is a great injustice. In addition, Moroccan municipalities do not all have the same financial resources and human skills (legal services) to enforce the same regulations.

Thus, imposing regulatory uniformity in the name of justice on all regions without any relaxation becomes a serious injustice. If the state is fussy in imposing the same laws on all regions, it is less so when it comes to their application. Thus, respect for the rule of law and judicial performance in Casablanca are not the same as in other regions.

This inequality in the judicial quality amplifies the handicaps of the regions because by increasing the uncertainty on the execution of the contracts and the protection of the property rights, their attractiveness for the investors is reduced, which amplifies their handicaps of departure. A real vicious circle!

Finally, some protectionist policies only reinforce inequalities in the name of the country’s economic sovereignty. First between cross-border regions and the rest of the country, since the former benefit from lower prices than others due to smuggling. Secondly, protectionism imposes an additional cost (disguised tax) which further penalizes the purchasing power of the middle class and the poor. This only widens the inequalities between the inhabitants of different Moroccan regions.

Thus, when the Moroccan government taxes import of construction materials, medical equipment, it reinforces the territorial inequalities in housing and health, since the increase of these materials and equipment will deprive the poorest of access to basic services in the different territories.

All in all, before begging the state to intervene to reduce inequalities, it may be necessary to think of asking it to stop first creating and/or amplifying inequalities because of its mode of intervention, governance or its laws and policies. It is essential to move away from the redistributive logic in order to move towards equality in terms of rights and freedoms while removing all the obstacles creating gaps in capabilities between the different territories. Thus, before the state thinks of doing good, it must first stop harming.

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