Oil price hike prompts Morocco to mull finance law change

2008-04-15

Parliamentarians are calling for finance law revisions to alleviate the pressure on citizens caused by higher oil and food costs. Some Moroccan citizens, however, remain sceptical about whether discussions on the socio-economic situation can achieve any results.

By Sarah Touahri for Magharebia in Rabat – 15/04/08

[Sarah Touahri] Moroccan parliamentarians are expected to discuss measures to reduce the negative impact of skyrocketing oil prices. Some MPs and citizens are sceptical about the effectiveness of such talks.

Only a few days into the Moroccan Parliament's spring session, legislators already anticipate lively debate on revising the finance law, thanks to the economic impact of rising prices for oil, food and other products on the international and domestic market.

"The situation has to change," said parliamentarian Lahcen Daoudi of the Justice and Development Party. His group has already prepared several proposals concerning the finance law to cope with the spiralling cost of raw materials and property prices. His party's draft law includes "a reduction in VAT for basic products, the adjustment of income tax thresholds [and] an increase in tax on luxury products and vacant housing," he explained.

Popular Movement party chief Said Ameskane agrees that urgent action is needed, telling Magharebia, "It’s time for the government to amend the finance law." Government forecasts used for budget planning are now inaccurate, he said, particularly regarding the cost of oil.

"The government predicted that oil would be $75 a barrel, whereas it has now gone beyond $100. As for the compensation fund, there is already talk of 36 million dirhams, while the finance law forecast it to be just 20 million dirhams. We cannot reach the growth rate of 6.8% which was announced," he said.

Meanwhile, the president of the lower house of parliament, Mustapha Mansouri, said MPs will work alongside the government to minimise the negative impact of "a difficult international economic situation [caused] by the hike in oil prices, raw products and food" on Morocco's "economic and social balance".

Parliament is waiting for the government to conclude discussions with unions on strengthening the purchasing power of low-income citizens and improving social conditions in general, Mansouri said. Politicians will then "open up a frank dialogue with the government... to express in an open and democratic way the preoccupations, demands and aspirations of the people and to defend their cause."

Parliamentarians are also calling for Prime Minister Abbas El Fassi to attend legislative sessions in order to reassure the public. "We want the head of the executive body to attend Parliament at least once a month," Mansouri said.

Lahcen Daoudi agrees that the government needs to participate: "We expect the prime minister to come and answer questions in parliament, particularly concerning issues affecting people’s everyday lives," he said. "We shall give him the time he needs to respond."

Moroccan citizens remain sceptical about whether discussions between the government and parliament on the socio-economic situation can achieve any results. "They’re just fruitless debates which don’t get us anywhere," IT worker Lamiaa Farkhani told Magharebia. "I followed the debates on the finance law back in the October session. The opposition didn’t manage to get its amendments through," he added.

Student Aymed Idrissi said that while citizens "would really have liked to see a strong legislative institution imposing its decisions, particularly with the current situation with all its social tension," he expects that "as always, it will be another set piece display between the executive and legislative bodies".

To lighten the pressure on the Moroccan public, he said, "We need things to be different."