By: Said Temsamani
On February 4 the International Monetary Fund (IMF) has reaffirmed the “continuous qualification” of Morocco to benefit from the Line of Precaution and Liquidity (LPL), approved in August under an agreement of 24 months for an amount total of 6.3 billion dollars.
The Board of Trustees has concluded that “the first performance review of Morocco under an economic program supported by a two-year agreement under the TPA, and reaffirmed the continued qualification of the Kingdom to benefit from the resources” this line of precaution and liquidity, said the Washington-based institution in a statement.
The agreement provides for equal access to $ 3.6 billion during the first year, and a cumulative value of up to 6.3 billion during the second year.
The Line of precaution and liquidity, says the same source, “continue to support local reform agenda of the Moroccan authorities to greater economic growth and more inclusive by providing protection against external shocks.”
LPL has indeed been introduced in 2011 to provide liquidity to countries pursuing sound economic policies but that might be adversely affected by economic and financial stress at regional or global level.
The Board of Directors of the IMF welcomed in this regard, “the Moroccan authorities’ intention to continue to use this agreement as a preventive measure.”
The Deputy Executive Director of the IMF, Ms. Nemat Shafik, noted on this occasion, that macroeconomic policies are “solid” and Morocco during the last decade has generated a “robust growth, low inflation and a reduction in poverty, despite a persistently high unemployment rate among young people. ”
It also welcomed the fact that the agreement under the TPA provided in Morocco “insurance against external hazards and helped sustain the economic strategy of the authorities.”
Ms. Shafik said that the fiscal strategy of Morocco “including the 2013 budget remains in conformity” with the country’s commitments to maintain fiscal sustainability and support external adjustment, while stressing the importance of “forward within the framework of this strategy for reform of compensation and retirement, and better targeting of social protection. ”
“Efforts to strengthen competitiveness and to better prepare the economy to external shocks remain a priority,” estimated the Deputy Director General of the IMF, who also encouraged the Moroccan authorities to “move forward towards greater exchange rate flexibility “to strengthen external competitiveness and the ability of the economy to absorb shocks.
It has also noted that “significant progress” has been made by Morocco during the last decade in improving social indicators, but stressed the need for “further efforts for a higher growth and more inclusive, particularly through the promotion of employment, especially young people, reducing income inequality, and greater access to health and education. “
Said Temsamani is a Moroccan political observer and consultant, who follows events in his country and across North Africa. He is a Senior Fellow, Merdian International Center Washington DC, Founder and CEO “Public Initiatives” Consulting firm and Former Senior Political Advisor, US Embassy Rabat, Morocco.
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