Framework Law No. 09.21 proposes a new concept of social protection. However, funding this project requires the removal of the compensation fund and the fiscal financing for social policy, affecting precarious social groups.

 

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Executive Summary

Framework Law No. 09.21 proposes a new concept of social protection to include new categories, which would expand the social insurance beneficiaries’ circle. However, funding this project requires the removal of the compensation fund and the fiscal financing for social policy, which means comprehensive liberalization of essential goods prices according to market logic, affecting precarious social groups.

 

Foreword

Morocco’s social policies over the past decades have been marked by a piecemeal and circumstantial nature. The measures taken have not been incorporated within an integrated strategy, with regard to either improving social protectionindicators or expanding access to social support, which has inherited the deficit accumulation and vulnerability amonglarge segments of the population to the extent of affecting social peace at some periods.

To alleviate the widening social gap following the COVID-19 pandemic and in order to institutionalize social safety networks, the State has begun formulating a new concept of social protection through the framework law No. 09.21, which was voted on at the Parliament in March 2021 with the aim of  improving access to social security services, alongwith other related reforms, including the codification of social intervention through developing targeting system.

Based on these updates, it seems that the situational influence of the social protection project entails the coming-back of the Welfare State through the expansion of beneficiaries’ circle in this program. Yet, the long term impacts opt for deepening the minimal intervention of the state with new approaches for funding and targeting, instilling practically the withdrawal of the State from the social sector. In light of these developments, this paper aims to analyze whether the social protection law heralds to strengthen the interventionism of the State to protect vulnerable social classes or it is a threat to remove what has been left from the indications of the Welfare State.

1- The Limit of the Social Protection System

The applied social systems since the independence, have not produced any new integrated vision for social protection amid the poor legislative framework, that is specified to assurances of governance, targeting, and the efficiency of social policies management. Correspondingly, to overcome this oscillatory approach in addressing a serious social problem, the framework law no. 09.21 related to social protection has been issued, which serves as an indicator of reconsidering the social role of the State.

In the past decades, the state’s treatment towards this social dilemma oscillates between triage policies aiming at fixing social inequalities due to mal-distribution of wealth, services[1], and among a posteriori remedial policies to palliate the negative effects of structural adjustment programs during the 1980s, which minimized the government investment in social sectors. As a case in point, the health and education sectors, where it has become clear and imperative to cut ties with the policies of abandonment, which has relatively enabled the control of the macroeconomic equilibrium as well as the networks of the social protection of citizens[2].

At the onset of the millennium, the State embarked on a new path aimed at achieving a certain complementarity between social assistance and social security. At the primary level, the Social Development Agency and the Mohamed V Foundation for solidarity were founded in 1999, and the National Initiative for Human Development was launched in 2005 to improve the socio-economic status of precarious and vulnerable social categories in Morocco[3]. In proportion to social security, the Labor Code was passed in 2003.The Fundamental Health Coverage Code, which introduced the Medical Assistance Plan for poor categories was circulated since 2012 after a trial period in Tadalah Azilal in  2008. These measures were strengthened by the 2011 Constitution’s affirmation of the role of the State in facilitating access of all citizens to the right to social protection. Moreover, Morocco signed the sustainable development goals adopted by the United Nations General Assembly in 2015 as a shared commitment among states to generalize social protection for the benefit of all on the 2030 horizon.[4]

However, the results of the above-mentioned reforms were limited because of the predominance of the non-structured sector over the economy and the lack of access to social protection programs by a wide range of social categories. The rate of workers employed in non-structured sector is 28.7% of the total labor force[5], which makes this group excluded of social protection services. It should be noted that the number of beneficiaries of health coverage does not exceed 40% and only about 42.5% of active working [6]population benefit from the right to retirement. This situation emerged more acutely following the Covid-19 pandemic, with about 62% of citizens were in need of direct support provided by the State during this period through an assigned fund. The pandemic has caused the loss of some 712 000 jobs in the public sector and at least 4 million jobs in the non-governmental sector. This is also coupled with a rising percentage of precarious and poor citizens reaching 19.87% in 2020, which stands in a stark contrast to 17.5% in 2019 with a growth that exceeds a million [7]citizen.

These challenges pushed the country to come up with urgent solutions, as the royal speech on the occasion of the Throne Day in July 2020 requested to review the social protection system, which is characterized by disruption, lack of coverage and[8] inefficiency. On the occasion of the Autumn’s session of Parliament opening in October 2020 [9], his majesty the King urged to enlarge the social protection systems so that services cover different segments of society. The orientations included in the framework law No 09.21 focuses on intensifying the public effort during the next five years in order to disseminate protection from the threats related to disease, childhood, old age and losing jobs.[10]

 

2- Social Manifestations of the State in Light of the Orientations of the Framework Law No 09.21.

The House of Representatives endorsed unanimously the framework law No 09.21 in March 2021 related to social protection, as a structured workshop of public intervention in the social field, according to a new perception that deals with social protection in its general definition as it was stipulated by the constitutional and international acts endorsed by Morocco. The preamble of the framework law focused on the importance of intensifying the efforts in order to build a social protection system capable of ending the economic and social risks, under the light of the repercussions caused by the pandemic of Covid-19.

The framework law came with the aspiration to disseminate the social protection depending on essential principles presented in solidarity, pro-activity, non-discrimination and participation. The framework law is applied through reviewing legislations concerning health coverage, social security, health system and treatments offer as well as  producing the necessary implementing regulations to execute its requirements, while it is expected in to set the constitutional vision and the international standards for social protection. In addition, the law has devoted special interest to the requirements of governance by including both management tools as a unified committee of administration and command charged with controlling the implementation of the taken measures and coordination among various actors. This demonstrates the willingness of the State to regain its role in leading initiatives in matters of social politics.

The framework law is marked by a primary and clear dimension that consists of implementing this law provisions step by step within five years and up to the year 2025, in which, the Compulsory Health Insurance will be generalized to include 22 million people to benefit from, and in consecutive periods starting from this year. In accordance with the finance law of 2021,groups affiliated to the Unified Professional Contributions known as “ Cotisation Professionnelle Unique” have been integrated including 800 thousand merchants and manufacturers of the single public service pension scheme and so 1.2 million of farmers, 500.000 man crafters, 220.000 drivers and 80.000 self-employment people ; with the aim of fully integrating 11 million people in need of help in 2022[11]

Source: Ministry of Economy and Finance, February 2021.

 

and who are meanwhile benefiting from a free healthcare system related to childhood by 2024. The third aspect of the social protection aims at extending access to the right to retirement to include labor workers as well as informal job suppliers through a new promising approach, allowing 5 million of the reproductive age population to integrate in the retirement system by 2025. By the same year, the generalization of access to the compensation for loss of employment will include anyone occupying a permanent job. The plan is launched with an aim to gain the upper hand over the prior situation, where the number of those who benefited from the job loss compensation was limited to 74 thousand between [12] 2016 and 2020, not least due to the intricate conditions imposed by the regulatory Dahir of social security narrowing down [the scope of] the compensation service to a paltry of cases under such miraculous conditions making access to this [13]service hopeless.

The total annual budget to generalize the benefit to social protection systems is 51 billion MAD: 28 billion of which generates from the subscription mechanism for those who can contribute[14]; while the rest, roughly 45% of the assigned budget, will be collected from solidarity-based sources for those who cannot afford the contribution. The nature of such finance, in this regard, casts a shadow over the durability of the pecuniary framework of social protection systems, and over the State’s visions as to its position in the management of social policies.

3- How Will the New Social Protection Program be Managed and Financed?

Notwithstanding the political will formally expressed in the framework-law, numerous indicators signal a heightening of [ the medical assistance plan RAMED] abandonment policies, through extending solidarity sources of finance at the expense of dismantling the ‘compensation fund’. Activating the national population register, in addition, might form a flexible frame to overcome the idea of the welfare State, where public support will be restrained within certain technical measures that result in reducing the number of beneficiaries of social programs.

The combination of the subscription and solidarity system will trigger many problems when it is implemented. In the absence of a solid standard ground to identify the poverty indicators, the fiscal financing of social policies will lose its significance and may lead to the opposite results. For instance, we refer to the government’s imposition, under the Finance Act 2021[15], of a monthly social contribution of profits and income on each employee or laborer, whose salary is equal to or more than 20 thousand dirhams in the range of 1.5% of the net salary. The legislative proposal was planning to impose this contribution on everyone whose salary exceeds 10 thousand dirhams before it has been amended following strong criticism in and out of the Parliament, which implies the absence of an integrated conception of the justifications and the ends of the solidarity funding for social protection.

It is important that financing social protection measures should be embedded within an integrated perspective of social justice, instead of remaining either confined to a piecemeal insight, which may contribute to the protection of some categories in return of the impoverishment of others or a clasp for justifying the State’s withdrawal from the social sphere and consecrating the policies of abandonment through the compensation fund’s reforming access [16] without accompanying proceedings.

The government intends to steer the compensation fund costs to integrated mechanisms of the social protection as well as the consolidated social registry, and particularly to financing the health costs[17], which indicates the allocation of the resources resulting from the phased withdrawal of the state subsidy for foodstuffs and energy in order to fund the social protection measures. Hence, the phase-out of the compensation fund.

Perhaps this explains the World Bank’s support for this reform. It has committed to allocate 400 million dollars to support the government in making systematic reforms of the social protection system by creating the national population registry, and the unified social registry besides establishing the national records agency[18].  There are concerns as well as worries about this project’s side effects as it was the case with the outcomes of some projects monitored by the World Bank such as using social protection as a soft entrance to steer the general budget to serve debts at the expense of social priorities, as Mexico did. However, some of its applications are beginning to emerge in the Moroccan experience, given the weak implementation of the measures in line to prevent some reforms from harming the purchasing power of citizens, as with the “Tayseer” programme, whose budget is covered due to the omission of food and energy subsidies. This would not only serve to expand social protection coverage across the country but would also primarily serve to balance the budget[19].

 

4. Is the Unified Social Registry a Tool for Consolidating or Decreasing the State’s Social Role?

The gradual reduction of public support for basic materials is part of the curtailment of the interventionist role of the state, following a new targeting methodology that aimed at reducing the resources allocated to social policies and based on the Unified Social Register[20] as a tool for targeting social groups eligible for assistance[21]. The National Registry Agency will monitor the electronic processing of data related to families and refine it according to economic and social indicators that measure living standards; then, the preparation of lists for the families that includes the results of each household as well as their data, to benefit from social support programs based on the specific threshold of each program.

Notwithstanding that the support and social protection are linked to the creation of the Unified Social Register, its full establishment will not be achieved until 2025 as the government has not yet issued the specific edicts for registry entry and the computational formats for determining conditions to benefit from support programs; not to mention the delay in the development of the information system for the management of social databases, which has been in progress since 2018 in partnership with the International Institute of Information Technology within the Indian experience transfer framework. Although the experience has not been able to generalize the public system for the definition of “Adhar “[22]not to mention imbalances that continue to plague it, the liquidation has resulted in the denial of broad categories of citizens the enjoyment of social rights and free services guaranteed by the Constitution [23].

In addition to the risks of imprecision targeting, there are other pitfalls related to the construction of databases that are unable to capture the economic and social status of broad groups operating in the informal economy, which according to the estimates of the International Labor Organization is about 60% of the total workforce [24]. In the sense that the drip operations will be virtually impossible for unstructured sectors of the economy in the absence of work and performance evidence of the status of the head of household. The continuation of unstructured activities does not allow to gain a constructed picture on the reality of the economic and social situation of the country. This necessitates the elaboration of detailed measures to integrate this sector into the national economy, such as the granting of professional cards that allows its employees access to vocational training, and some public orders and tax facilities, in exchange for expanded access to the social protection system[25].

 

Conclusion

In contrast to the real-time gains expected to be accumulated over the next five years, the social protection standardization workshops have far-reaching implications on the State’s position in social policy-making. By the imposition of “forced solidarity”, the State will terminate its subsidies for material supplies and public services through a gradual dissolution of the compensation trust, which has always constituted the last remnants of the Welfare State that will inevitably deepen the social cleavages leading to the corroboration of a soft entry into the politics of relinquishment. It is an attempt that continue to receive the support of the donor agencies within the framework of a “seamless structural adjustment” and a strategic empowerment for a reduced inclusion on the part of the State.

The current challenges have shown the necessity of restoring the social function of the State with an inclusive vision of “the Welfare State” model, which seeks to guarantee the equitable distribution of wealth in a manner that deals with the automatic remedial of social disparities as well as the eradication of the absence of protection instead of merely tackling its symptoms. At this juncture, it is useful to set an all-inclusive approach to enable the kingdom of Morocco to meet the world-class standards and to implement the constitutional and legislative provisions related to the social security and protection systems[26] together with orienting social protection programs to realize social cohesion as an essential condition to achieve political stability as well as integrated development. This should be done with an awareness of the risks of deploying the solidarity financing to widen the abandonment politics and the imposition on the middle class of bearing the burden that may jeopardize the required equilibrium among all social segments as well as any repercussions that may not lend themselves to control amid “a post Covid-19 world”.

 

 

 

 

References

• Will COVID-19 lead to health sector reform in Morocco?”, viewed on the website of the Moroccan Institute for Policy Analysis on May 27, 2021, in:” https://mipa.institute/7859
• Strengthening social protection and support for vulnerable groups, Government Work Achievements 2017-2021, Head of Government, 2021.
• Report on the activities of the Social Insurance and Reserve Monitoring Authority, Rabat, 2019.
• Report of the Committee on Social Sectors of the Chamber of Deputies Draft Framework Law No. 09.21 on Social Protection, Special Session marking the fifth legislative year of the tenth legislative term 2012.
• Report of the Thematic Working Group on the Health System, Chamber of Deputies, April 2021.
• Social Protection in Morocco, Outcome and Means of Strengthening Social Security and Assistance Systems, Report of the Economic, Social and Environmental Council, Self-Referral No. 2018/34.
• The Minister of Economy, Finance and Administration Reform presented before the House of Representatives on the occasion of the vote on the draft Framework Law No. 09.21 on Social Protection, 15 March 2021, p. 5, seen on 2 May 2021 in: https://bit.ly/3c4a8nq
• Framework Law No. 09.21 on Social Protection, implemented by Dahir Sharif No. 1.21.30, issued on 9 Sha’ban 1442 (23 March 2021), Official Gazette No. 6975-22 Shaaban 1442 (5 April 2021).
• Article 25 of Law No. 72.18 on the system of targeting beneficiaries of social support programs and the creation of the National Agency for Records, promulgated by Dahir Al-Sharif No. 1.20.77 on 18 Dhu al-Hijjah 1441 (8 August 2020). Official Gazette No. 6908 of 23 Dhu al-Hijjah 1441 (13 August 2020).
• Article 272 of the Finance Act No. 65.20 of the Fiscal Year 2021, promulgated by Dahir Al-Sharif No. 1.20.90 of Fatih Jumada I (December 16, 2020), Official Gazette No. 6944 bis-3 Jumada Al-Awwal 1442 (December 18, 2020).
• Max Gallen, understanding the informal economies of North Africa: From law and order to social justice, Friedrich Ebert Foundation, Tunisia, 2018.
• Social Protection Project for Emergency Response to the Coronavirus Pandemic in Morocco, World Bank, 2020.
• Relevance and compatibility of protection programs and social support policies, Parliamentary Studies and Research Center, House of Councilors, 2019.
• New development model: Unleashing Energy and Restoring Confidence to Accelerate Progress and Achieve Well-being for All, Public Report, Special Committee on the Development Model, April 2021.  Christophe Jaffrelot And Nicolas Belorgey, the biometric identification of 1.3 billion Indians in business, state and civil society, CERI studies – n° 251, 2020.
• Social & economic impact of the covid-19 crisis in Morocco, High Commission for Planning, United Nations System in Morocco and World Bank, 2020.
• Jaidi, Larbi. Economic and Social Change in Morocco: Civil Society’s Contributions and Limits. The Arab transitions in a changing world: building democracies in light of international experiences. Ed. Senén Florensa. Barcelona: Institut Europeu de la Medditerrània, 2016.
• Mario Györi, Fábio Veras Soares And Alexis Lefèvre, tayssir: the first conditional cash transfer program in the region mena, policy in focus magazine, volume 14, number 3, 2017.
• Mohamed Mouaquit, economic and social rights, in “democratic development and associative action in Morocco”, publications of associative space, Rabat, 2004.
• World Social Protection Report: Universal social protection to achieve the Sustainable Development Goals, International Labor Organization, Geneva, 2017.

 

Endnotes

[1]  Jaidi, Larbi. Economic and Social Change in Morocco: Civil Society’s Contributions and Limits. The Arab transitions in a changing world: building democracies in light of international experiences. Ed. Senén Florensa. Barcelona: Institut Europeu de la Medditerrània, 2016, p.145.

[2] Mohamed Mouaquit, Economic and Social Rights, in “Democratic Development and Civil Society Movements in Morocco”, Inhouse Civil Society Publications, Rabat, 2004, P.86

[3] Anna Jaiquies, Will COVID-19 Reform the Health Sector in Morocco? Viewed on the website of the Moroccan Institute for Policy Analysis on May 27, 2021 at the following link: https://mipa.institute/7859

[4] World Social Protection Report: Universal social protection to achieve the Sustainable Development Goals, International Labor Organization, Geneva, 2017, p.3

[5] Lamia Gas, the unorganized sector: main characteristics and pace, summaries of the High Commission for Planning, No. 16, March 2, 2021, p. 1.

[6] Report of the Activities of the Insurance and Social Reserve Control Authority, Rabat, 2019, p. 28

[7] Social and economic impact of the covid-19 crisis in Morocco, High Commission for Planning, United Nations System in Morocco and World Bank, 2020, p.6.

[8] Text of the royal speech on the occasion of the 21st anniversary of Throne Day on July 29, 2020, viewed on April 18, 2021, at: https://bit.ly/3CcEdMB

[9] Text of the royal speech on the occasion of the opening of the first session of the fifth legislative year of the tenth legislative term, seen on April 18, 2021, at: https://bit.ly/3BgE3SW

[10] Article 2 of Framework Law No. 09.21 related to social protection promulgated by Dahir No. 1.21.30 promulgated on Shaaban 9, 1442 (March 23, 2021), Official Gazette No. 6975-22 Shaban 1442 (April 5, 2021).

[11] Report of the Social Sectors Committee of the House of Representatives, Draft Framework Law No. 09.21 on Social Protection, Extraordinary Session for the Fifth Legislative Year of the Tenth Legislature 2021, p. 17.

[12]Strengthening social protection and supporting vulnerable groups, Governmental Work Achievements 2017-2021, Prime Minister, 2021, p. 11.

[13] Adequacy and Compatibility of Protection Programs and Social Support Policies, Center for Studies and Research in Parliamentary Affairs, House of Councilors, 2019, p.15.

[14] Report of the Social Sectors Committee, previous reference, p. 5

[15] Article 272 of Finance Law No. 65.20 for the fiscal year 2021 promulgated by Dahir No. 1.20.90 promulgated on Jumada I 1 (December 16, 2020), Official Gazette No. 6944 bis-3 Jumada I 1442 (December 18, 2020).

[16] Presentation of the Minister of Economy, Finance and Administration Reform before the House of Representatives on the occasion of the vote on the draft Law Framework No. 09.21 related to social protection, March 15, 2021, p. 5, seen on May 2, 2021 at: https://bit.ly/3c4a8nq

[17] Report of the thematic working group in charge of the health system, Parliament, April 2021, p. 117.

[18] Social Protection Project for Emergency Response to the Coronavirus Pandemic in Morocco, World Bank, 2020, pp. 6-7.

[19] Mario Györi, Fábio Veras Soares et Alexis Lefèvre, tayssir : le premier program de transfers monétaires conditionnels de la région mena, la revue policy in focus, volume 14, numéro 3, 2017, p.67.

[20] A database that will be devoted to registering families eligible to benefit from social support programs supervised by public administrations, territorial collectivities and public bodies.

[21] Article 25 of Law No. 72.18 related to the system of targeting beneficiaries of social support programs and the creation of the National Records Agency, issued by the Honorable Dahir No. 1.20.77 on Dhu al-Hijjah 18, 1441 (August 8, 2020). Official Gazette No. 6908 dated Dhu al-Hijjah 23 1441 (August 13, 2020).

[22] Unified Identification System “ADHAR” is an electronic database established in India in 2009 that includes biometric information about citizens in terms of personal data and socioeconomic status, as a basis for targeting those involved in social programs.

[23] Christophe Jaffrelot And Nicolas Belorgey, biometric identification of 1.3 billion Indians in business, state and civil society, CERI studies – n° 251, 2020, p.34.

[24] Max Galen, Understanding Informal Economies in North Africa: From Law and Order to Social Justice, Friedrich-Ebert-Stiftung, Tunisia, 2018, p. 3.

[25] The new development model: liberating energies and restoring confidence to accelerate progress and achieve prosperity for all, General Report, Committee on the Development Model, April 2021, p. 82.

[26] Social protection in Morocco, reality, outcome and ways to strengthen social security and assistance systems, report of the Economic, Social and Environmental Council, self-referral No. 34/2018, p. 15.