THE IMPACT OF COVID-19 ON THE MOROCCAN ECONOMY

ВЛИЯНИЕ COVID-19 НА ЭКОНОМИКУ МАРОККО

Научная статья

Итри Ханаа*

ORCID: 0000-0003-2042-7928,

Санкт-Петербургский политехнический университет Петра Великого (СПбПУ), Санкт-Петербург, Россия

* Корреспондирующий автор (hanaaitri1995[at]gmail.com)

Аннотация

В данной статье рассматриваются экономические последствия пандемии COVID-19, а также освещаются различные сценарии экономической политики, а также их социальные и геополитические последствия для марокканской экономики. В качестве ответных мер против пандемии COVID-19 в Марокко был разработан трехэтапный план действий, затрагивающий здравоохранение, экономику и социальный порядок. На данный момент участие правительственных учреждений, частного сектора и членов гражданского общества в каждой из этих областей успешно способствовало уменьшению ущерба и попытками поддержания контроля над пандемией. Данное исследование позволит лучше охарактеризовать то, как Его Величество король Мохаммед VI с самого начала пандемии использовал упреждающий подход для борьбы с распространением вируса и борьбы с социальными и экономическими последствиями, которые могут возникнуть в её результате.

Ключевые слова: COVID-19, последствия пандемии, Марокко, финансовый кризис, налогово-бюджетная политика, национальная экономика, экономический рост.

THE IMPACT OF COVID-19 ON THE MOROCCAN ECONOMY

Research article

Itri Hanaa*

ORCID: 0000-0003-2042-7928,

Peter the Great St. Petersburg Polytechnic University (SPbPU), St. Petersburg, Russia

* Corresponding author (hanaaitri1995[at]gmail.com)

Abstract

This article examines the economic consequences of the COVID-19 pandemic and highlights various economic policy scenarios, as well as their social and geopolitical implications for the Moroccan economy. In response to the COVID-19 pandemic, a three-stage action plan was developed: health, economy, and social order. In each of these areas, the involvement of government agencies, the private sector and members of civil society has so far helped to limit the damage and establish some control over the pandemic. This study provides a better understanding of how His Majesty King Mohammed VI, from the very beginning of Covid-19, used a proactive approach to combat the spread of the virus and deal with the social and economic consequences that could result from it.

Keywords: Covid-19, consequences of the pandemic, Morocco, financial crisis, fiscal policy, national economy, economic growth.

Introduction

The Covid-19 pandemic has caused a major global health crisis. Unlike previous pandemics and often compared to the" Spanish flu", the latter is unique in terms of the speed of spread. To combat the pandemic, Governments had no choice but to ensure the normal functioning of all sectors.

In connection with this global epidemic context and to combat this pandemic, Morocco, like other countries, took decisive measures, ordered several measures to be stopped on March 16, 2020, called for travel restrictions and sanitary isolation, and on March 20, 2020, the Ministry of the Interior of the Kingdom of Morocco declared a sanitary emergency. In parallel, the government, to limit the negative consequences of the Covid-19 pandemic, has taken a number of related measures at the economic and social level.

In this context, Moroccan and international economic actors have faced economic problems arising from this new situation and its impact on contractual obligations arising from existing contracts, labor relations and management rules, and are forced to take urgent decisions to ensure continuity, and sometimes to suspend or terminate their activities, minimizing possible risks.

Purpose and methodology

The purpose of the article is to analyze the changes that are taking place and have occurred in various sectors of the Moroccan economy. For the analysis, we used text analysis and statistical information from the report on monitoring the economic situation in Morocco for July 2020. The source of the research information base is the Office of the High Commissioner for Planning (HCP) [3], the main source of economic, demographic, and social statistics.

Results

Morocco was one of the first countries to declare a public health emergency and introduce measures to contain the spread of the pandemic. This quick decision is explained by the fact that Morocco has learned from the experience of its neighboring countries and the limited infrastructure capacity (only 670 hospital beds at the time of the announcement of the 1st case). According to data related to the Office of Financial Research and Forecasts (DEPF), which depends on the Ministry of Finance, Morocco is on the 4th merengue? In the world in terms of resources mobilized as a percentage of GDP. Morocco has mobilized almost 2.7 % of GDP and Morocco is ahead of only three countries: Sweden (6% of GDP), Chile (4.7% of GDP) and New Zealand (4% of GDP). Note that the eurozone is, according to these data, at the level of 1% of GDP.

Economic measure

As for monetary policy, on March 17, the Moroccan Central Bank decided to reduce the key rate by 25 basis points to 2% to support economic activity. A Committee of Economic Supervision was also established. Its chairman is the Ministry of Economy, Finance and administrative reform, which includes the Ministries of the Interior, Foreign Affairs, Agriculture and Fisheries, Health, Industry, Tourism and Labor, the Central Bank, (the professional group of Moroccan banks), (the General Confederation of Moroccan Enterprises), (the Federation of Industrial Chambers of Trade and Services) and (the Federation of Chambers of Crafts).

Companies can also impose a moratorium on the repayment of bank and leasing loans until June 30, 2020 without paying fees and penalties. Small enterprises, small and medium-sized enterprises and employed enterprises can apply for deferred bank loans until the end of June 2020, and an additional line of operational credit provided by banks and guaranteed by the central guarantee fund has also been activated. At the beginning of April, almost 142,000 entrepreneurs, or 57% of the total number, said that they had temporarily or permanently suspended their activities, with more than 135,000 forced to suspend their activities, and 6,300 were permanently closed. By category, the share of enterprises that have temporarily or permanently suspended their activities includes 72% of very small enterprises, 26% of small and medium-sized enterprises and 2% of large enterprises [3, P.2]. Below in Fig. 1 is the status of the company's activity.

Fig. 1 – Status of companies’ activity (2020)

 

As for the companies that continued their work (43% of the total number of enterprises), despite the health crisis, half of them may be forced to reduce their production in order to adapt to the situational flow. At the same time, 81% of these entrepreneurs may have reduced their production by 50% or more. By company category, 49% of very small, small and medium-sized enterprises operating during the study period said that their production could be reduced due to the current health crisis. (A decrease of 50% or more for 40% of these companies). Below in Fig. 2 Percent of companies that have reduced their production by category.

Fig. 2 – Percentage of companies that reduced their production by category (2020)

Social measure

In the period from March 15 to June 30, 2020, employees who are in difficult conditions are unemployed. In the State Social Security Fund, a monthly monetary compensation in the amount of 2000 net dirhams will be paid in addition to payments for mandatory medical insurance and family benefits. This allowance will be paid from a special fund to combat the coronavirus pandemic. These employees will also be able to take advantage of the deferred repayment of bank loans, namely consumer and consumer loans until June 30, 2020. In addition, the committee decided to include a mobile payment mechanism to transfer assistance to workers working in the informal sector (in Morocco, the level of mobile phone use exceeds 100 percent) [3].

Financial measures

Companies with an annual turnover of less than 20 million dirhams in 2019 can, if they want, get a delay in filing tax returns until the end of June with the suspension of tax audits and notifications of a third-party owner until June 30, 2020 [7].

On March 15, King Mohammed VI ordered the creation of a special fund to combat the coronavirus pandemic. The fund, which has an initial amount of funds in the amount of 10 billion rubles. It is financed from the general budget and is financed by private and corporate subsidies, it is aimed at mitigating the economic and social consequences of preventive measures (in particular, by financing the proposals of the Economic Monitoring Committee), as well as at restoring and mobilizing the health system to combat the spread of the pandemic (purchase of equipment, modernization of infrastructure and emergency treatment). As of March 23, 2020 the Fund had more than 23.5 billion dirhams of contributions [4].

Conclusion 

Morocco is mentioned today as an example of its dexterity, leadership under the leadership of His Majesty King Mohammed VI and, above all, its consistency in decision-making and involving the population through the special Covid-19 fund and the media to maintain public trust. Indeed, the safety of Moroccans was preferable to any other considerations, which allowed for faster control of events and created a framework for caring for infected people. This analysis describes various aspects of the scale of the coronavirus crisis in Morocco. Whether it is society, the economy, the environment. It demonstrates a creative approach and careful use of innovations in the country. It also positions the crisis in relation to the new economic model and the United Nations Sustainable Development Goals, while supporting the important role of international financial institutions in maintaining the macroeconomic, financial, and social stability of Morocco and Africa.

In conclusion, it should be noted that this crisis, although it has immediate financial consequences for countries, businesses, and families, has allowed us to re-establish priorities. We realized that health is crucial, and education is the role of the family and school. Healthcare and education, which were abandoned by a number of countries to give preference to an impressive infrastructure, the greatness of industries.

Конфликт интересов Не указан.

Conflict of Interest None declared.

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