Gouverneur Abdellatif Jouahri sur les réformes qui ont mis le Maroc sur la bonne voie

So, obviously, this needs to be put into the context of the international situation. These are the years following the second oil shock of 1979, with external factors such as interest rates, oil prices, and all that was very strong. And from the moment I arrived in the finance department, I could already see the vulnerabilities we were going to face. I was part of a government that was still political, where there were very strong traditional political parties. I started to test the waters a little, but I saw that there was a certain reluctance to follow me, even in the painful solutions I was calling for. So time has proven me a little bit right.

In early February 1983, I remember very well, I was in my office and I had with me the vice-governor of the central bank and my assistant told me the director of the foreign department who is in charge of managing the kingdom's foreign exchange reserves wants to see you both. In fact, he was a former colleague since I spent part of my professional life there, I knew him very well. He came into my office, looked miserable, and told me we had no more foreign currency. It was for me, I say, more currency. I have more currency available at the moment. I told the vice-governor, listen, everyone, we're going to think about this from our own perspective. I started to think a little bit, I said to myself, well obviously such news must be brought to the highest level, to the head of state. I called the governor and said, 'Listen, you and I need to have an appointment with His Majesty right away so we can talk to him a little about the situation we are experiencing. We are heading to Fez and obviously we will speak to the director of protocol and say it is urgent.' And he was a general I knew. But when he arrived in his suite at the hotel, he said to me, 'What's going on? Urgent wanted to see His Majesty.' I told him, 'Listen, maybe tomorrow the light you have in this suite won't work anymore.' 'What? The light won't be there anymore?' 'Yes, yes, yes, yes, we're in a situation where maybe tomorrow you won't have your light.' And so the next day, he called me back and said, 'His Majesty, on time, but all alone, without the governor.' So I went very quickly the next day, I was received by the king, I remember, I have this image of myself in a shirt sitting behind him, there was a wrought iron window. He said 'But what the heck is going on?' I said 'Majesty, here I am in my office, and the woman told me we have no more quotes,' and she said, 'What do you propose?' I'm saying this is a completely new situation for me, you know. Now what I propose is that you give me 48 hours, I will ask the team at the International Monetary Fund and obviously through my interlocutor who was the one with whom I was already negotiating in the background usually under Article 4. Indeed, I arrive in Washington but it was at that moment that I understood what the Paris Club, the London Club, the program with the International Monetary Fund and so on were. This is the starting point. You can see that it was with the back team. It's with the back team. Well, I came back and explained all of this to His Majesty. So, what do you recommend in terms of operations? So what I am proposing is a commission that will consider an amending finance law. What do you suggest? I said the sovereign budget, national defense. He told me, 'That's between you and me, I'm the head of the defense, it's between you and me.' And he told me, 'I'm going to put you in conclave for two days.' While comfortably at my secondary residence in Fez, I will send you lunch and dinner, and as with the election of the Pope, you will only speak when you have finalized what you are going to propose as a corrective law. And that's how it happened. And I remember, it was April 30th and May 1st. We'll finalize that, I'll come back to His Majesty and say the program is ready. He told me about the cabinet meeting that same evening, which I was chairing, and I'm going to tell you a little bit in French about what he said in his introduction to the cabinet meeting. He said, 'My ancestors of the dynasty, when the country was in difficulty, they would, I would say, go on conquest. Harka in Arabic. Well, me too, in these circumstances that Morocco is experiencing, which are obviously very difficult, well, I myself am going to go into battle a little bit. Those who want to follow me will obviously be welcome. But those who don't want to follow me and who feel that the situation is too difficult, well, I won't hold it against them. Well, we'll leave them alone.' Obviously, around the table, everyone started saying, 'Not at all, Your Majesty, we are behind you, we will follow you, and so on.' Then, he turns to me. 'So now, tell them what's in store for them.' So, that's how we got into the structural adjustment program.

Listen, I'll tell you now about how the program unfolded. I admit they showed intelligence and relative flexibility because at the time the rules were very strict, you know. I remember we had a double ceiling, a ceiling for government spending, a ceiling for bank credit, and so on. But as I recall, we never met the criteria 100%. We were always around 95%. And that's where I found that the Fund and its structures, that is, the Council, demonstrated both intelligence and, I would say, understanding within the framework of what we were doing.

That is to say, when it was convinced of the arguments, it didn't have a dogmatic position, even if it was, let's say, both from partners like the World Bank, which is on the other side, but also the London club, which still represented private sector players, but who are developed countries, and so on. He didn't have a dogmatic position. When he was convinced of the argument, well, he took the side that he could help as much as possible. Well, I remember these two cases that I wanted to mention briefly during this somewhat difficult period when we entered into negotiations with the International Monetary Fund. Yes, that was in the 80s. Well, later.

Listen, I'll tell you first, I think there is a fundamental point to remember is, first and foremost, the de facto independence of the central bank, because it has always been under the authority of the Head of State, His Majesty. His Majesty appointed individuals, whether moral authorities, or simply figures of authority or technical expertise, whom he knew and trusted. This was almost the case initially, and later, this independence was formally enshrined in law. This gave the central bank, I would say, a completely objective and influential standing because it wasn't tied to any political parties. Governments have come and gone with different political leanings, but the central bank, with its independence, rigor, and credibility, was there, contributing to the entire program. Many things have been put forward regarding reforms. We have always emphasized fundamental elements, with a certain educational approach, raising awareness by saying, 'Don't forget the macroeconomic balances.' Macroeconomic balances are part of national sovereignty. When you talk about national sovereignty, always keep in mind that these macroeconomic balances must be safeguarded. And I think that this educational effort, this effort, I would say of awareness, this permanent dialogue between bank and government has allowed Morocco, which took almost 20 years to get back on its feet from the structural adjustment program, to be able to benefit and be recognized at the level of the monetary fund in 2012 with the PLL, that is to say the precautionary and liquidity line and very recently with the flexible line. But we always had a constructive attitude regarding other reforms.

Let me give you an example, it's very simple. We are on the exchange rate regime. We believe this is a very important reform that we have carried out with the support of the International Monetary Fund. And I will tell you that the teams we had when we undertook the reform of the exchange rate regime were very high-quality teams. Very high quality. I choose my words carefully. Not only did they allow us to build our own teams, but at the same time they were very available and responded very quickly to the various questions that arose and especially I would say to the changes that took place with Covid. Well, with the change in Covid models, which were supposed to be there too, it must be said. Okay, I'll go further into article 4 and that will bring us back to what I said in your first question. Under Article 4, we often see the monetary fund telling me 'Listen, uh, the precious ones who are here, there is a good window, shouldn't we move to the 2nd stage?' Uh, I'm saying, be careful, be careful, uh, it's not that yes, we have the prerequisites, but I'm not very sure that the operators are prepared or are totally prepared, and I must admit that they have taken it up twice, but the last 3rd time, at the level of article 4, they did not take up this requirement again. And here again I find the underlying intelligence. The fact that, on the point of argument, he is sensitive to the argument and that there too there is not that dogmatic spirit which is often attributed to the International Monetary Fund, but that I have seen that in the context of the relations which I have had with him on the contrary, I am an old negotiator with him and that he trusts me a little bit, but in any case, we always move forward intelligently and there too these are things which we will have to prepare as we go along and which are terribly important reforms. But here, we say be careful, one of the prerequisites is budgetary sustainability. And even at the modular level, we are happy, the fundamentals are very solid. But in the discussion, the core issue was very clear. He told us, if you want to get it, there are three essential conditions. You are leaving the FATF, your medium-term budgetary sustainability is there, it is affirmed and your field reserves are at a level that agrees with us. Once we've said that, what's essential is there. But we reached the negotiation stage very quickly in order to finalize it under the best conditions.

I believe the evolution has been enormous. Quite honestly. I remember that in the 80s, it was an à la carte menu. I believe that now things are evolving according to the assessment that is made of the situation of each country with I would say an in-depth analysis of the specificity that is there the developments that are at stake the fact of seeing whether the commitments or promises made by the country are kept or not. All of these are developments that I have felt. In addition, and this is very very important, there were taboo subjects in the 80s that the Fund never addressed. For example, the issue of corruption was never addressed by the Fund. When you discuss the distribution of the fruits of growth, the Fund issue wasn't addressed; it was growth, and then it wasn't discussed. Now we're talking about corruption. Now we're talking about sustainable, inclusive growth. So, we are talking about targeting aid, and also about the fact that in terms of relations with the fund, well, there too, when I see the transparency code of the fund to which we subscribed, and we were among the first in this region to subscribe, I find that there are huge developments that have been made between the 80s and now, and I am convinced that now it is a dynamic that is, on the contrary, developing more and more when I see what has been done with regard to Covid and the attitude of the fund and the bank towards developed countries with regard to access to the vaccine for poor populations and that they have put their foot down at the G20, I see that these are huge developments. Very important. When I see what they have put on the table by saying for poor countries regarding debt, their debt is to what they are doing to bring together all the creditors together private, public and so on, these are all developments that we did not see. And now with the paradigm shift we are seeing, well, the underlying issue is there. Because we will be meeting with the Director General on Monday upon her arrival to discuss central bank digital currency. Wow, that's huge. I told him, well, in a country where cash is huge because we are already working on that with the support of the fund's technical team and the bank. I have also just received the latest report from the technical mission, which is also of very high quality. I see that there have been enormous developments and that is intelligence and that is what needs to be developed and that is what in my opinion will also have to reconcile our populations who, when you talk to them about the Fund, the Fund was seen as the one who imposed its dictates. The one that represented the most developed countries that have influence on the decision, but now it's starting to evolve differently.

First, I think what worries me now is the domination of politics. There is now a huge geopolitical fragmentation. And who is it about whom we don't see a solution? I could still hear Russia today setting conditions for peace. I wonder how, on the other side, we're going to be able to accept conditions like that. Where are we going? That's the problem. Where are we going? Are we going to return to a Cold War? Is this a clash of civilizations, since we are starting to talk about the West and what is not the West? Then what I see is that now everyone is looking for themselves. When I say 'is searching,' I mean 'which side am I going to choose?' Do I choose this clan or that clan, or will I position myself somewhat in the middle while waiting? And all this when you want to go into the economic sphere, into the development sphere, there is nothing worse than uncertainty. There's nothing worse than a lack of visibility. When you lack visibility, when there is uncertainty, these are preconditions, these are an environment that is not at all conducive to economic and financial development. Obviously, we as a country are in the same situation because it affects everyone to some extent. What I am saying, and I hope that on the other side in this situation which arose with the war in Ukraine, the second element is that quite a few populations have not seen their situation improve with globalization, multilateralism, and openness. Whereas we were saying it would instead bring wealth, more wealth, more well-being. People are saying this, and it must be said, that across the world there is a breakdown at the level of political elites. We see it, we see it, we see it all over the world, whether in developed countries, emerging countries or developing countries. And this breakdown means that the population no longer trusts anything political or public. And actually, that ties in a little bit with what we were saying earlier. Central banks are becoming centers. Well, I would say to tell the truth, to tell the truth. And we have more confidence in what the central bank says than in what politicians say. That said, we should still remain optimistic. Otherwise, well, we'll just go home and lock ourselves in. No, going home and locking myself in. No, we must remain optimistic. I think we need to remain optimistic. And that is where international organizations, and indeed where I find there is intelligence, also need to put back on the table the reflection on their own mission. How are they to fulfill their new mission? In which direction, what should they prioritize? And that's where, well, what I'm saying is, we also need to think about what the world is providing for these future generations. These are the younger generations. What will we bring them because there will be a lot of job losses, but what new jobs will there be? And all of this is a little frightening, and that's where assistance in the design of policies, priorities to be implemented, and obviously the convergence between what the State does and what the private sector should do, the convergence of being able to capitalize on the efforts of each to achieve convincing results, seems to be perhaps for the future now what we need to think about together. Of course I don't have a miracle solution, he certainly doesn't, but it's about the overall thinking, the general thinking. And that is why the reflection that we are already going to carry out at the level of central bank digital currency is part of this paradigm shift and these exchanges of experience with developed and developing countries so that we can reduce or avoid this digital divide.

Well, listen, it's obviously the problem is more complex now than at the assembly level that I experienced, huh. I've been to Bali, uh, I've been there in 20 years, I've been to Dubai, I've been to the IMF. No, I avoided it, I was absent from the IMF, you know, but the rest, I didn't. But now, yes, Istanbul. Of course, I was in Istanbul. But now it is this complexity of geopolitical and geoeconomic fragmentation which is added to paradigm changes which are happening very, very fast which have their opportunities but which also have all the risks which they entail and which are essential and important risks. So what should be prioritized? What message should we convey and how can we subsequently ensure follow-up and evaluation of what we have done. If we made the declaration on fintech in Bali, then it is difficult to imagine what the Marrakech declaration will be like. What is it, huh? It's what? A bit difficult, huh? It's a bit difficult to summarize all of that. What should be prioritized? What should be prioritized? Of course, we're going to say we're not going to bury multilateralism, are we? We mustn't bury multilateralism, otherwise it's every man for himself. Well, I think we're going to go back decades. On the contrary, perhaps we need to look at the results, look at what caused the weaknesses in all of this or what contributed to the negative results or the negative point of this evolution, try to build something positive for the future but based on stronger institutions, on institutions with more reliable resources, obviously with much stronger and more developed groups and human resources that can meet needs that will be increasingly diverse, increasingly demanding and increasingly heavy and costly. So that's what needs to be done. We need to do a little bit of this together. Attention. Well, what I said, uh, we need to keep the optimism, we need to reconnect with multilateralism, but we need to operationalize it, prioritize doing things together. Well, by trying to say that we rely on what is more positive in humans than what is negative in them. So.