Behind closed doors
As the Moroccan Monarchy negotiates a free trade agreement with the US, dissidents argue the deal will aggravate inequality and call for political before economic reform, writes Jeremy Landor
Opponents of the free trade agreement currently under negotiation between the US and Morocco say that the poor may be deprived of affordable medicine and that local farming could collapse under the weight of US multinationals. They are critical of the Moroccan king's secretive approach to talks with the US which could have a major impact on Moroccans. For many it is another sign that Mohammad VI is reluctant to give up the absolute power enjoyed by his father Hassan II. Meanwhile, the monarchy is tightening its grip on the Moroccan economy.
"The negotiators have a mandate from the palace and are not overseen by parliament. Democracy implies at least some control by members of parliament and more openness towards public opinion," said Najib Akesbi, professor of economics at Hassan II University in Rabat. The result is a negotiating team which is ill- prepared to face the American side and is controlled only by the king. "Civil society and industry are discovering absurd commitments after agreements have been ratified," said Akesbi. Moroccans are mostly being kept in the dark about the agreement, having to rely on American sources for their information.
One target for the US negotiators has been Morocco's pharmaceuticals industry, which has been successful in recent years in producing generic medicines. Increasing poverty and social inequality in Morocco meant that the richest 20 per cent of the population spent 13.6 times as much on medicines as the poorest 20 per cent in 1997-1998. It was a measure of worsening social conditions that this inequality had doubled since 1990-1991, when the well-off spent 5.7 times more. Consumption of medicines by the poorest fifth had fallen by one third in seven years.
The production of generic drugs, which are between 10 and 80 per cent cheaper than name brand drugs, has helped to address this problem -- particularly for the rural poor. Because there was no law limiting production of these cheaper medicines, the drugs bill for public hospitals was cut by five per cent in 1999. In 2000 the drugs industry of Morocco -- a country which currently has the second largest national pharmaceutical sector in the continent, after South Africa -- produced 80 per cent of the country's needs.
US pharmaceuticals corporations want to limit Morocco's production of generic drugs and open the market to their own name brand drugs, this by changing local legislation on intellectual property rights. Since the World Trade Organisation (WTO) caved in to developing countries' demands to allow production of generic medicines, the US government has set about negotiating bilateral free trade agreements. These carry a commitment to change legislation in developing countries in order to protect pharmaceuticals multinationals from competition. Extending the life of patents on medicines beyond the standard 20 years is one strategy.
For a growing movement of Moroccan health professionals, independent drugs companies and NGOs, the free trade agreement, far from offering opportunities to reduce poverty, is a threat to the health of the population.
The free trade agreement would bring about wide-ranging changes in Morocco, where US investment has fallen by two thirds since 11 September 2001. Comprehensive negotiations have covered the labour market, services and public contracts, agriculture, intellectual property and customs duties. The stated aims are to change labour laws and the justice system and to reshape the education system so that, as spelt out by the American Chamber of Commerce, "it responds more specifically to the needs of companies". Many Moroccans fear that the result will be the same as in Mexico where the free trade agreement with the US has lowered wages, weakened labour rights and resulted in environmental degradation as companies take advantage of lack of regulation.
The free trade talks faltered in January over US demands that all barriers to agricultural imports be dismantled. If this happens, the fear is that many small farmers will be forced out of business, agriculture currently providing 40 per cent of Morocco's employment and 20 per cent of GDP. Migration of the landless to the urban shanty towns will increase and create more fertile recruiting grounds for Islamist groups -- similar to those which carried out last May's bombings.
"The Americans are demanding too much," said Professor Akesbi. "In spite of the well-known problems of agriculture, I think that the Moroccan government is ready to move towards the American demands. But to accept these demands in the way that they are formulated would be suicidal."
The king has also been criticised for failing to introduce measures which allow a competitive market to develop. The monarchy is the major shareholder in the massive conglomerate, ONA, which dominates key sectors of the Moroccan economy, benefiting the king and his close collaborators. Many economists believe the company to be so powerful that competition is impossible. The resulting weakness of the private sector makes Morocco vulnerable in an open markets agreement with the US.
The shadow of the monarchy has led many Moroccans to call for political reform as the prerequisite for economic development. The influence of the EU, and France in particular, has pushed forward economic liberalisation -- the privatisation of the Moroccan national telecommunications company, Maroc Telecom, handed it to French conglomerate Vivendi. The takeover of SNI (Société Nationale d'Investissement) in 1995 by ONA is a frequently cited example, while the recent acquisition of Wafabank by ONA has given the company a controlling position in the financial sector.
It is for this reason that calls for political reform have become more desperate. The justice system is not independent, say critics, and corruption goes unpunished. Professor Akesbi summed up this view: "Morocco's most serious problem today is political rather than economic. The problem is basically one of confidence which is not there because the political system still operates according to the logic of rent rather than healthy competition in the market. The real decision-makers are not those who are elected by the people and can be sanctioned by them in elections. The most urgent reform for Morocco today has to be constitutional."
The European Union has pressured Maghreb countries into economic liberalisation to create opportunities for European business, but these have not improved the lives of the majority. Moreover, after the invasion of Iraq, the US is having little trouble convincing Arab leaders that they need to accept US dominance. The proposed free trade agreement with the US is "the result of the failure of the Euro-Mediterranean project to solve economic and social problems," said Akesbi. However, he believes that the main reason for the agreement is political. "The Moroccan government has convinced itself that current circumstances mean that more than ever it is better to remain in the good books of the superpower of the moment, even if the price it pays is sometimes a heavy one."