RABAT: Morocco’s ruling Islamists are pushing ahead with much-needed reforms, notably of an unsustainable subsidies system and pension fund, to plug the hole in its budget, at the risk of alienating key supporters.
A year after coming to power, the moderate Justice and Development Party (PJD) of Prime Minister Abdelilah Benkirane is battling sharp inflation and deteriorating public finances.
Benkirane told parliament this week that the pension system was not working, that the pension fund had dipped into the red, and that it would not be viable by the end of the decade unless drastic measures were taken.
With the number of people benefiting from the fund now outweighing contributions, the government’s plan to raise the retirement age, from 60 to 67, is seen as the only way out.
Weighing more heavily than the problem of pensions, however, is the pressing issue of subsidy reform, described by the International Monetary Fund as urgent during a recent visit.