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168 CHAPTER 7


The results of these policies did not meet expectations. Furthermore, the fiscal burden of the agricultural and consumer subsidies increased over time. While the world prices of basic products (grains, oil, meat, and milk) decreased, producer prices in Morocco rose, and consumer prices remained stable. These budgetary imbalances were the main cause of a crisis in Moroc- can public finances in the middle of the 1980s and the subsequent adoption of a structural adjustment plan under the supervision of the World Bank and the International Monetary Fund.


The Structural Adjustment Period


In the middle of the 1980s, Morocco undertook a wide-reaching program of economic reform aimed at stabilizing the national economy and laying the groundwork for greater growth in the medium and long terms. As in many developing countries, the adjustment program was adopted in Morocco to escape a situation of crisis and insolvency and to gain access to international credit. The worsening fiscal deficits and mounting debt were the main results of the costly and inefficient policies. The structural adjustment program aimed to reduce the budget deficit, establish a coherent pricing policy, move the real exchange rate closer to equilibrium, and correct the country’s trade imbalance. One of the main elements of this effort to reconstruct the national economy was the Sectoral Adjustment Program for Agriculture. In the medium term, the objectives of this sectoral adjustment program were to stimulate the agricultural sector to raise economic growth, reduce the trade deficit, and create employment. This was to be achieved by liber- alizing agricultural markets and encouraging private investment. Within this framework, priority was given to increasing the production of agricultural products in which Morocco had a comparative advantage. The components of the program included • adjusting and liberalizing producer prices and progressively eliminating subsidies to create a favorable environment for the participation of the private sector and the liberalization of activities;


• rationalizing state intervention, progressively disengaging the state from trade activities that could be adequately run by the private sector, and consolidating the state’s main role as a regulator; and


• improving the efficiency of public expenditures and investment in line with development objectives and the priorities in agricultural policy.


Specific policies included the concession of some state land to the private sector, the redefinition of the role of public enterprises, the elimination of barriers to internal and foreign trade (namely, monopolies, quotas, and mar- keting regulations), the elimination of most subsidies for agricultural inputs


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