IMF Austerity Measures Cause Food Riot in Morocco

The International Monetary Fund and its "free market" economic prescriptions sparked a food riot in Morocco on June 20 that cost the lives of hundreds of Casablanca residents.

The Moroccan government, under pressure from IMF officials, lifted subsidies on vital consumer goods in late May. As a result, the price of sugar rose 37%, flour 40%, butter 76%, vegetable oil 26%, and milk 45%. "The IMF imposed these conditions on Morocco," reported the Paris-based weekly, Jeune Afrique.

The lifting of subsidies is a central part of IMF austerity measures. The Fund sees cutting back on government expenditures-no matter how socially important-as necessary if a government is to pay back its foreign creditors.

The IMF can exert great leverage in Morocco, since that nation, with its budget drained by military campaigns in Western Sahara, relies on IMF funds to keep afloat. Before signing an enormous three-year, $1.1 billion loan with the Fund last year, for instance, the Moroccan economy had only enough foreign exchange reserves to last six weeks. The IMF, as it typically does, set conditions on the loan: if Morocco doesn't remedy its balance-of-payments conditions to the satisfaction of the Fund during the life of the loan, the IMF will suspend it.

The resulting hike in food prices created an uproar, so much so that the government cut the price increases in half. But that move did not calm the trouble. On June 18 and 20, Moroccan labor unions called general strikes. On the 20th, popular discontent erupted in the streets of Casablanca: 12 pharmacies, 23 local branches of banks, 75 private vehicles, 47 buses and two factories were damaged, the Moroccan government claimed.

The Moroccan military reacted violently, and according to opposition parties and the labor unions, the death toll was 637; the government placed it at 66. Hundreds were wounded; hundreds more arrested. The IMF's "`austerity measures' caused the popular reactions and encouraged practically a dictatorship to put down the riots," said Jejune Afrique.

The IMF denies responsibility for the riots. "It is not true that the Fund imposed on Morocco an elimination of subsidies for consumer goods," a Fund spokesman said. But whether the IMF "imposed" such policies-as the Financial Times of London also reported-or whether the Moroccan government simply followed general IMF guidelines, the result in Casablanca is the same; many have died and those that remain will find it much more difficult to pay for basic food items.