Large projects can alleviate the economic crisis in the Maghreb
By: Abdelaziz Karraky
Similarly to the 1929 global crisis that had crawled all over the world and destroyed the economies of many countries, the current global economic crisis has repercussions on every corner of the world. While the direct negative impacts emerged first in the United States, and in Europe that is closely linked to the U.S. economy which is the cradle of the crisis; the Maghreb region will not remain totally immune from the crisis, even if many officials are trying to alleviate it. It is important to outline the three main sectors that are, in my opinion, directly affected by the crisis.
Firstly: The Great Maghreb region attracts remarkable numbers of tourists, and competes with the Mediterranean countries on this front, offering diverse appealing options for holidays. High hopes were thus put on the tourism sector, which is employing an important labor force. However, the sector is currently suffering from a decrease in the number of tourists due to the crisis. If this situation persists, the sector will succumb to the unemployment threat.
Secondly: One of the primary sources of foreign currency for the Maghreb countries comes from the savings transferred by its large community living in Europe. However, some sectors where Maghreb people are employed in Europe have been hit hard by the crisis, thus making certain categories of immigrants unable to transfer funds to their home countries. Some can’t even travel to their homeland to spend the summer vacation, which could have activated a number of seasonal sectors whose workers are now suffering from the scarcity of resources.
Thirdly: Some industrial sectors in Western countries have partially transferred their activities to the Maghreb countries, in order to benefit from lower production costs, but the damages caused to the parent companies in Europe and the U.S. made them cancel some investments that were planned for the region; labor force was the primary victim of this.
When former U.S. President Roosevelt decided to face the crisis in the twenties of the last century, he came up with a new economic plan that involved the State in economic and social fields, by applying a set of reforms, and carrying investments to help launch major projects in order to attract job seekers, and restore the economy’s balance. This was probably a re-consideration of the ideology of the German economist Adolph Wagner, who considered public expenditure an important mechanism to revive the economy, since each public expense has an effect that is larger than its size.
Some Maghreb countries, such as Morocco, have followed the same path, and large projects – such as highways, large ports, airports, and creating whole new towns – had an important effect on the economic and social levels, and helped absorb the impact of the economic crisis, and mitigate its multiple consequences on the job market.
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Your Comments
commentsAnonymous About about 1 year ago
In parallel with the policy of large construction projects – which will undoubtedly absorb tremendous numbers of jobless people -, we must establish a mechanism to cope with, and rehabilitate, manpower. We also ought to seriously reconsider our educational system to keep pace with the needs of this policy, as the focus must be put primarily on human resources.
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Anonymous About about 1 year ago
Roosevelt’s expenses in 1929 led to re-launching the existing industrial machine, which was paralyzed because of the declining demand following the Great Depression. It was therefore a maneuver against domestic recession. In Algeria’s case, the only positive outcome of the government’s expenses was the creation of necessary and useful infrastructure, and sometimes useless infrastructure like luxury projects, and reckless military expenses made with no clear defense doctrine nor hazard priority. In return, engaging in outrageous expenses with no local capacity to the extent of even assuming the public proposals, can’t be assumed neither by local businesses or local materials. The latest recovery plan has mainly rehabilitated foreign companies that went bankrupt, as well as local corrupt bureaucracy with their overestimated and poorly studied projects, whose delays, revisions and other malfeasances generated financial needs of 130 billion dollars to finish them, whereas they were initially estimated at 100 billion dollars. I cannot comment on Morocco and Tunisia, but for my country Algeria, I can say that the country is suffering from a visual navigation without a clear economic strategy or a social project, let alone a State project. We can spend the American GDP without leaving the third world as long as incompetence and incoherence will emerge as the power system and will claim to be legit by favoritism for a minority, and bluff and punishment for a majority. We still hope that what will be achieved will benefit even a little the future generations, since the current ones are being badly blocked.
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Anonymous About about 1 year ago
Among the solutions suggested by experts in the economic crisis is the use of public expenditure. I even think that the English Keynes had emphasized the importance of that in setting off an economic process that helps contain economic hardships. But this is not valid for all countries, since some have the ability to face difficulties, while others do not, and I think that is the case for the Maghreb countries that are facing many economic and social barriers. The 80s are not far away, and everyone remembers the adjustment programs developed by the IMF, and which left unfortunate consequences on human development in the Maghreb. I totally support the use of public expenditure, while staying very alert.
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Anonymous About about 1 year ago
Large projects absorb the unemployment of the unqualified only, while we are suffering from the unemployment of the qualified manpower, and others. When you see engineers, computer specialists, physicians, biologists, geologists, as well as PhD holders in law, history, geography, and literature, all unemployed, then you should look for the problem in the system of laws as well as education and the political and social concepts in circulation. You should also look at the greatest scourge in Morocco in particular, which is bribery that is affecting even the private sector, as well as the gap between what is said and what is applied. How do you expect societies that encourage the private sector to hire while they are setting bureaucratic obstacles in its way, and how do you expect young people to work there while all the systems of values encourage working in banks, from the publicity in the streets about loans for employees, to the opportunities of owning a house if you’re working in a private sector that is not regulated. I have a lot to say regarding this topic.
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Anonymous About about 1 year ago
The Maghreb countries were not affected by the crisis for three reasons. The first reason is that banks – despite their important role in the economy – are still controlled by the State, and most of the economy is managed separately from the banking system. The second reason is that the stock market has not been rooted in the economic and financial management yet. The third reason is that a large part of the economy in the Maghreb is bound to private incomes.
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Anonymous About about 1 year ago
Firstly, we must note that in the Maghreb countries, the deterioration of the labor market has not only a cyclical dimension with regard to the international economic crisis. It is primarily a structural problem that stems from the different dynamics of supply and demand of manpower, the inadequate institutions governing the labor market, the distortions of the economic policies, and the deficiencies of the human capital, among others. We must act to overcome this crisis at all levels. This means activating the Global Jobs Pact adopted by the International Labor Conference at its 98th session (June 2009, Geneva), as an ILO contribution to the recovery process, through effective policies and programs at the national, sub-regional and regional levels. Solutions at the national level may vary, depending on each of the Maghreb countries, like this for example: – Deepening human development programs. – Strengthening social dialogue. – Improving the governance of public policies, especially in terms of social protection. – Coordinating between social and economic strategic programs at the local and regional levels. – Developing a powerful domestic market, etc……… But this cannot be an obstacle, in the Maghreb region and even at the international level, in front of exchanging experiences, sharing knowledge, and pursuing common goals for a better world where social equity, equality and good governance prevail. MAYA
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Anonymous About about 1 year ago
I think that the job market in the Great Maghreb will not be greatly affected by the economic crisis for several reasons. The first reason is that the Maghreb economy is still dominated by the informal sector, meaning that a lot of money does not go through banking channels, and is thus immune from catching infection. The second reason is that the nature of companies in the Maghreb countries is different from that in developed countries. If we exclude the businesses that are subsidiaries of European or American companies and which were indeed affected by the crisis, the majority of Maghreb businesses are family ones that give little importance to the economic competition, despite the existence of laws regulating that, and they often depend on the deals of the public sector where there is no transparency. Therefore, I personally think that the problem is mainly structural. Al-Makki ibn al-Shaykh.
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