Morocco\'s Islamist govt faces delicate balancing act

Morocco\'s Islamist government, formed in January after winning snap polls aimed at defusing Arab Spring-style protests, faces a tough task tackling social problems, a sluggish economy and political divisions. In response to popular discontent, Prime Minister Abdelilah Benkirane has arranged to hold talks with various trade union groups, after meeting last Friday with the four political parties in the ruling coalition. The secretaries general of those parties, which include Benkirane\'s moderate Islamist Party of Justice and Development (PJD), emphasised the need to rein in Morocco\'s budget deficit, according to the official MAP news agency. Less than 12 months after its historic election victory, the PJD is grappling with a deteriorating economic situation that contrasts with healthy growth rates in recent years of around 4.0 to 5.0 percent. Benkirane himself forecast 5.5 percent growth in 2012. But such targets now look sorely out of date. Central bank Governor Abdellatif al-Jouahri in June predicted less than 3.0 percent growth, and speculation about the budget shortfall abounds. MAP on Friday quoted Finance Minister Nizar Baraka as denying rumours that the deficit could reach 9 percent of GDP this year, saying instead that the government hoped to bring it down to just 5 percent. And at the end of August, in a letter to his ministers on the new budget, Benkirane stressed the need for \"vigilant management\" of the public debt. \"The preparation of the 2013 budget comes at a difficult time,\" he said, mentioning in particular the problem of the \"compensation fund,\" which is linked to the costly subsidy of essential goods, as well as to pension reform. The International Monetary Fund announced early last month that it was opening a \"precautionary\" $6.2-billion line of credit for Morocco to protect its economy from external shocks. And touching on the broader social implications of the country\'s economic woes, the World Bank\'s regional vice president Inger Andersen described the problem of youth unemployment, estimated at around 30 percent, as \"very serious.\" In the capital Rabat, evidence of this simmering source of discontent is easily found, with nearly 1,000 jobless graduates marching in the streets on Tuesday. Calls for nationwide protests to denounce the high cost of living recurred throughout the summer, after the government moved to slash fuel subsidies, driving the price of petrol up by 20 percent. The ruling party is keen to engage in dialogue on a range of other sensitive subjects, including education, tourism and regionalisation, and Benkirane has tabled talks with Morocco\'s business confederation, as well as trade unions. Meriem Bensalah Chaqroun, president of the General Confederation of Moroccan Businesses (CGEM), in an interview with Moroccan daily L\'Economiste on Tuesday, voiced the need for \"a clear, coherent and proactive economic policy.\" \"Since coming to power, the prime minister has received good press coverage and has done quite well so far, despite the various thorny issues that he faces,\" a diplomat in Rabat told AFP. But those issues, which include political divisions within the ruling coalition, remain potential stumbling blocks as the government gets back to business after the summer break. Political tensions appeared to surface late last month, when Interior Minister Mohand Laenser, who is in a separate coalition party, banned the closing ceremony of a PJD youth conference in Tangier at which the premier was due to speak. During their conference, young Islamists had condemned the relationship between Benkirane and King Mohammed VI\'s entourage, which is accused of overshadowing the government.