TradeArabia website is reporting that Morocco may need to grant new benefits to public sector workers worth 43 billion dirhams ($5.4 billion), a government source said on Wednesday, as it hopes to to defuse social tensions that have led to revolt elsewhere.
'The cost of what the trade unions are demanding for public sector employees is 43 billion dirhams. We are talking about wage increases, pension reform, benefits such as the schooling of children and rebates on income tax,' the source told Reuters.
The government met with union leaders on Tuesday under a new round of industrial talks that include the private sector, amid a spate of strikes.
The government will 'not necessarily agree to all of those demands and any agreement will need to spread over at least a three-year period given the state of public finances,' the source added.
The talks are set to resume next week, the source said.
The negotiations coincide with some of the largest anti-government protests the North African state has witnessed for decades.
The unrest has unsettled a political elite desperate to prevent any spillover of popular revolts from Tunisia, Libya and Egypt.
Last month, King Mohammed sent an adviser, Mohamed Moatassim, to meet the leaders of five trade unions in what seemed to be an effort to defuse an escalation mounting public sector frustrations. One of the Unions, CDT, has boycotted the talks.
Morocco, which unlike other Arab monarchies has no oil and gas of its own, almost doubled funds allocated to state subsidies in February to counter an increase in global commodity prices and rising food costs.
The government has also promised jobs in the public sector for 4,300 graduates, a move set to cost at least 500 million dirhams per year, according to independent estimates.
Finance and Economy Minister Salaheddine Mezouar told Reuters in March that Morocco would keep the budget deficit in 2011 at a maximum 3.5 percent of Gross Domestic Product which would spare it the need to tap international debt markets.
The government plans to achieve that by clamping down on the running costs of its administration and by showing greater rigour in tax collection.
"The commitment of all Moroccans, that of HM King Mohammed VI in particular, to democracy is very impressive" - The Hon Peter Slipper MP
The Vice-President of the Australian Parliament, Peter Slipper, on a flying visit to Morocco, went on the record about the Australian view of Morocco's reforms.
"I commend Morocco's reforms to promote democracy and modernity," Slipper said while on a courtesy visit to the headquarters of Rabat's city council where he was received by the mayor of the capital, Fathallah Oualalou.
"Morocco and Australia share common values of democracy and freedom," he said, adding that "HM King Mohammed VI plays a leadership role in promoting and strengthening democracy in Morocco."
Earlier, Oualalou briefed the Australian official on major large-scale projects undertaken in the capital and around Morocco.