labor Moroccan Unions Call National Strike To Protest Economic Reforms

Moroccan unions call for a 24 hour national strike on October 29 to protest cuts in pensions and subsidies for gasoline and fuel oil. These cuts have been demanded by the International Monetary Fund.

Aziz El Yaakoubi Reuters
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 Morocco’s three largest labour unions have called for a 24-hour national strike in the public and private sectors on Oct. 29 to protest against government reforms of pensions, subsidies and other areas, they said on Tuesday.

The North African kingdom is under pressure from international lenders to cut public spending — and reform its subsidy and pension systems — to mend state finances.

“It is a warning for a 24-hour strike in the public, private and agricultural sectors on Oct. 29,” the Moroccan Labour Union (UMT), Democratic Labour Confederation (CDT) and Democratic Federation of Labour (FDT) said in a statement.

They have joined forces this year to protest at government policies.

The planned strike would put pressure on the government’s plans to carry out more reforms, such as on its costly pension system, which were expected to be included in the 2015 national budget.

Government officials could not immediately be reached for comment.

Unions accuse the government of undermining Moroccan living standards by ending some subsidies, and planning a pension system reform that would hit workers’ earnings and savings.

Morocco spent heavily in 2011 by increasing salaries and subsidies to calm pro-democracy unrest triggered by the Arab Spring uprisings that toppled autocrats in other countries, including neighbouring Tunisia, Libya and Egypt.

But since 2013, the Islamist-led government has been cutting spending mainly by reducing subsidies, public investment and the public sector payroll.

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Still, it agreed in April to increase the minimum wage by 10 percent in 2014 and 2015.

CHIPPING AWAY AT SUBSIDIES

Under pressure from the International Monetary Fund to reform its subsidy system to make its public finances more sustainable over the long term, it has ended subsidies of gasoline and fuel oil and reduced diesel subsidies in recent months, but has kept more sensitive cooking gas, wheat and sugar subsidies.

Morocco expects its budget deficit to fall to 4.9 pct of gross domestic product (GDP) in 2014 after it hit 7.3 percent in 2012, and 5.4 percent in 2013.

The deficit of the Moroccan Pension Fund (CMR) for public sector workers is currently on track to reach 750 million Moroccan dirhams ($85.82 million) in 2014, 2.8 billion dirhams in 2015 and 14.4 billion dirhams in 2017, according to government figures. The accumulated deficit would reach 135 billion dirhams in 2030 if there are no reforms.

The government is seeking to increase the retirement age to 65 and expand the number of years of contributions for pensions, as part of its drive to overhaul the pension system.

“We have been the first to want reforms, but it is up to the government to support the costs as workers should not have to pay for the manager’s mistakes,” Miloudi Moukharik, leader of the biggest Moroccan labour union, UMT, said.

Morocco’s plan to reform its public sector pension fund will cost the state around 5 billion dirhams during an initial phase and workers will also pay in more, the finance minister told Reuters earlier this year. ($1 = 8.7390 Moroccan dirhams)

(Editing by Patrick Markey/Mark Heinrich/Susan Fenton)