From Cairo to Casablanca, informal workers suffer

Morocco was among the first African countries to start shutting down borders and economic activity in recent weeks to stem the spread of the coranavirus. (AFP)
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Updated 26 March 2020

From Cairo to Casablanca, informal workers suffer

  • The poor in North Africa have been hard hit by virus-induced downturn

RABAT: Earlier this month, Soukaina Rgragui, her one-year-old daughter and diabetic mother lived modestly on the money brought back home by Soukaina’s husband, a vendor of used furniture in the streets of Morocco’s capital Rabat.

Now that virus containment measures have shut down his informal business, Rgragui finds herself among many vulnerable Moroccans begging strangers on the Internet for help.

Morocco was among the first African countries to start shutting down borders and economic activity in recent weeks to stem the spread of the virus, and other African governments are watching the fallout in Morocco as they adopt similar measures.

Rgragui’s husband is among some 2 billion people the International Labor Organization (ILO) estimates work in the “informal economy,” without official contracts or worker protections. Such work is especially widespread in Africa, where informal workers make up as much as 85 percent of the labor force, according to the ILO.

These are already among society’s poorest and most vulnerable, and their troubles resonate widely. In Tunisia, a unregistered fruit vendor set himself on fire in 2010 out of desperation, unleashing the Arab Spring uprisings that overthrew governments and changed the face of the region.

In Morocco, such workers are not eligible for government handouts to those who are now jobless because of restrictions on businesses and movement meant to stem the spread of the virus.

After Morocco started shutting down “non-essential” business activity, the little savings the Rgraguis had were depleted after buying a week’s worth of food, milk for the baby and medicine for the grandmother, Rgragui said.

“Please help with whatever you can,” she pleaded on a coronavirus support group on Facebook. “We don’t have money to buy diapers for the baby.”

Since late February, the Moroccan government has been steadily introducing virus control measures that gradually turned Morocco’s vibrant cities into ghost towns.

Borders, schools, shops, companies, cafes and mosques have closed. Movement between cities is restricted. Only one member of each family is allowed to go out shopping for necessities, and those who still work must have permission papers to show to the authorities or else face up to three months of prison time.

“Morocco chose to prioritize the collective good of its people at the expense of the economy and commerce. The measures our country took are essential to limit the spread of the virus,” Health Ministry communications official, Hafid Ezzahiri, said.

FASTFACT

$1.45

One in three Egyptians is living in poverty, or what is about $1.45 per day.

Morocco has so far recorded 122 confirmed cases of the new coronavirus and four deaths.

“Economic problems are inevitable, as it is the case in the rest of the world. We hope to recover soon,” he added.

The government is offering a $200 monthly stipend through June to registered workers who have lost their jobs. But that does not apply to Mohammed, who worked unofficially for a gardening company before the virus crisis hit. He and his brother picked up garbage, used tissues and masks from the gardens of Marrakech, for $9 a day.

“I would rather starve than have the coronavirus,” said Mohammed, who spoke on condition his last name be withheld because they are not registered workers, and because of the shame he feels about his current condition. “But why must I choose between two ills?”

He and his brother are isolating themselves from their father who is battling cancer. “It hurts me that I can’t get close to my father,” he said. “I am afraid for his fragile health.” Before letting him go, Mohammed’s employer gave him $100 to “help with the hard times.” But now, he said, “I am running out. My father’s treatment costs $50 every ten days.”

A government Economic Watch Committee created in response to the coronavirus said on Monday that it is studying proposals to assist Moroccan workers in the informal sector.

In recent years, Morocco diversified social services to help people in rural areas, the elderly and widows, but services are still not sufficient to help all in need. According to a study by Morocco’s Planning Agency last year, half of Moroccans are unaware of the existence of social programs for poverty, medical coverage or even pension funds.

In the Arab world’s most populous country, Egypt, millions work without contracts or official salaries, and will be hard-hit now that the government announced a curfew on Tuesday and restrictions on movement. One in three Egyptians is living in poverty, or what is about $1.45 per day.

Egypt’s government has discussed setting up a crisis fund to support informal workers, but the fund would face the monumental task of registering them and finding a way to ensure help reaches them quickly.

In Morocco’s coastal city of Casablanca, the country’s economic capital, phone repairer Mohamed Boulekhlaf has been allowed to keep his small shop open, but business has collapsed as people are ordered to stay inside. He is increasingly worried about getting the virus from customers.

“We are very afraid of what may happen in the future,” he said.

Individuals and celebrities have shown support for poor families and are encouraging well-off Moroccans to donate.

Teacher Meriem El Ghazi decided to take charge of her neighbor’s family in Marrakech for as long as this crisis continues after the family breadwinner lost his job to virus measures. 

“We must stand with one another,” she said. “We are each other’s only safety net,” she said.


Saudi Arabia raises more than SR15bn in bond sale

Updated 28 March 2020

Saudi Arabia raises more than SR15bn in bond sale

  • Gulf oil exporters are increasingly turning to debt sales to help fund spending in a low oil price environment

JEDDAH: Saudi Arabia has sold more than SR15 billion in Islamic bonds, as the Kingdom seeks to develop its local debt market.

The Kingdom’s Finance Ministry said on Friday that it had closed the book to investors on its March 2020 riyal-denominated sukuk program.

The total amount raised by the sukuk sale was SR15.568 billion, divided into three tranches that mature in five, 10 and 30 years.

Gulf oil exporters are increasingly turning to debt sales to help fund spending in a low oil price environment while at the same time developing their own capital markets as part of ongoing diversification reforms.

“The closure of the issuance of government bonds exceeding 15 billion riyals shows many positive elements,” said Abdullah Ahmad Al-Maghlouth, a member of the Saudi Economic Society. 

“Such as confirming the robustness of the Kingdom’s credit rating and the strength of the Saudi economy; that the Kingdom’s debt-to-GDP ratio is still far lower than many other G20 countries; the Finance Ministry’s ability to deal with the requirements of asset and liability management; as well as the Kingdom’s strong foreign-exchange reserves in dollars, among others.”

The Kingdom’s strong credit rating means it can borrow more cheaply than many other Mideast economies despite a weaker oil price.

Economic analyst Fahd Al-Thunayan said: “The Ministry of Finance, represented by the National Debt Management Center, continued its efforts in developing local debt markets and providing the required balance in financing public-budget expenditures, through the optimal mixture of the use of reserves and borrowing within the upper limits, like a percentage of the GDP, where the local issuances reached 65 percent of the total debt in the year 2019.”