Morocco - Defense Budget

Morocco has established a five-year plan (2017-2022) for a "regional supremacy" through the modernization of all equipment military of its different bodies (land, air, sea). An envelope of 20 billion dollars would be devoted to this strategic objective, knowing that the annual defense budget in Morocco will reach 4 billion dollars in 2022, against 3.5 currently.

Algeria's Algeriepatriotique, referring to the financial crisis hitting the kingdom of the Shereefian, raised the question in 2018 of the origin of the funds that made it possible to pay for these expensive American weapons. "Morocco does not have the means to equip its army with sophisticated equipment, which is more American-made, so excessively expensive, the question arises to know who put their hand in the pocket," wrote the newspaper in its edition of July 10th. "It is all the more acute since the main financier of the monarchy of Rabat [Saudi Arabia, Ed] has changed his mind and dropped Mohammed VI," he said. added. According to the news website, "Qatar seems to have taken over by assuring Mohammed VI of his support", as long as Rabat will continue to support Doha in its conflict with Saudi Arabia and the United Arab Emirates.

Morocco was projectedas of 2019 to increase its defense budget from US$3.7 billion in 2019 to US$4.7 billion in 2024, at a CAGR of 4.24%. Moroccan homeland security (HLS) expenditure increased from US$2.1 billion in 2015 to US$3 billion in 2019, registering a CAGR of 8.56%. On a cumulative basis, Morocco is expected to spend a total of US$21.4 billion on its armed forces over the forecast period, compared to US$17.5 billion over 2015-2019. The country's capital expenditure is expected to increase from US$1.2 billion in 2020 to US$1.4 billion in 2024, growing at a robust CAGR of 4.31% over the forecast period.

The Moroccan government is expected to procure transport aircraft, multirole fighters, submarines, missile defense system, and armored vehicles, among others. Additionally, opportunities in security systems and platforms such as military IT networking, wireless systems, motion sensors, alarms, and radar systems are expected to arise as a result of the country's focus on strengthening border security.

The increased threat of terrorism from internal and external terrorist groups and the ongoing modernization of its armed forces are the key factors expected to drive military expenditure. The country also faces insurgency in the Western Sahara region, where the local insurgent outfit Polisario Front is engaged in a violent struggle with the Moroccan regime for territory. The threat posed by the prospect of prolonged insurgency within the Western Sahara region makes it imperative for Morocco to allocate substantial expenditure to counter-terrorism and counter-insurgency efforts.

Defense costs, which constituted a serious drain on the Moroccan economy during the Western Sahara war, have been closely monitored by the king. The military budget was prepared annually by the National Defense Administration on the basis of the needs of the armed forces as interpreted by the palace. The palace also coordinated discussions on the budget between the National Defense Administration, the Ministry of Finance, elements of the General Staff, and the commander of the Southern Zone, who was responsible for nearly all of the FAR's fighting units. Since the reestablishment of democratic institutions in 1977, adoption of the defense budget had been subject to the approval of the parliament. In reality, however, the king has been the key actor in formulating the defense budget by virtue of his de facto control of the relevant institutions.

In the period after Morocco's 1976 annexation of two-thirds of the Western Sahara, defense spending and other costs associated with the war grew astronomically. In 1975, according to figures supplied by the International Monetary Fund, total spending classified as defense, which included all security forces, was DH1.7 billion. This accounted for 13.5 percent of total central government expenditures. By 1983 Moroccan government figures indicated that allocations in the budget earmarked for defense administration had grown to some DH4.24 billion, which made up 21 percent of the current budget.

Additionally, the capital budget included DH2.77 billion — some 15 percent of the total — that was devoted to the military. The DH7.01 billion in total military spending amounted to some 18 percent of the government is capital and current budget and 7.4 percent of the estimated gross domestic product. In comparison, the Ministry of National Education, which spent DH7.05 billion in 1983, was the only government ministry that spent more than the National Defense Administration. Central government expenditures on health, by contrast, amounted to DH1.2 million in 1983, only 2.7 percent of the total budget.

Official figures on military spending, however, must be viewed with caution. Estimates by local observers, which are generally given more credence by analysts, put spending on the security forces at 35 percent to 40 percent of the national budget during the early 1980s. Neither the official figures nor the higher unofficial estimates include considerable expenditures for arms financed by other states. Nor do they include investment in civilian infrastructure projects in the Western Sahara, which themselves were estimated to account for about 7 percent of central government spending.

Defense costs weighed heavily on the Moroccan economy in the 1970s and early 1980s. Hassan cited costs related to the war when in 1978 he put aside Morocco's 1978-82 development plan in favor of a three-year austerity plan. The military adversely affected the civilian economy mainly because scarce foreign exchange was spent to purchase fuel, ammunition, and equipment abroad. Despite significant foreign financial grants for military purchases — mainly from Saudi Arabia and the Arab monarchies of the Persian Gulf — military purchases contributed an unknown but significant amount to the country's foreign debt.

Weapons purchases from the United States had, to a large extent, been bankrolled by financial assistance from Saudi Arabia and, to a lesser extent, by Kuwait. Although exact amounts were unknown, it was estimated that Saudi Arabia provided between US$500 million and US$1 billion annually to Morocco between 1975 and 1982. United States military credits, which varied between US$30 million and US$45 million annually from 1976 to 1982, were insufficient to cover payments on all new equipment acquisitions. During this period no American assistance was provided on a grant basis. In the mid-1980s Saudi financial assistance was reduced somewhat as a consequence of the declining world price of oil—that country's major export. As a result, it appeared in early 1985 that any further Moroccan purchases of military equipment from the United States beyond those classed as munitions or spare parts would be greatly limited.

Paris demonstrated a willingness to provide substantial credits in spite of Morocco's record of not making on payments on prior loans. France, unlike the United States, has received little in payment from Morocco for the arms it has supplied. The United States, in an amendment to the Foreign Military Assistance Act of 1961, was required by law to stop all economic assistance if a recipient country went into arrears on payments to the United States government for military purchases. Thus Morocco, concerned about a complete cutoff of American aid, paid the United States with its scarce foreign exchange and has not paid France.

In the early 1980s defense costs appeared to level off after the construction of the berm stabilized the front in the Western Sahara. The prospects for a significant near-term decrease, however, appeared to be slight. Although purchases of new military equipment declined between, 1982 and 1985, foreign exchange outlays to replace aging equipment and otherwise supply an army that had ballooned to more than three times its prewar size would likely remain high unless the government ordered large-scale demobilizations, which could have dangerous security implications.

Increased military spending had few demonstrably positive effects on the economy. Because Morocco had no military-related industries, production was not directly stimulated by government spending related to the war. The increased size of the military, however, did not constitute a drain on the labor force. To the contrary, it was asserted that any significant reduction in the manned strength of the FAR would only exacerbate the country's acute unemployment problem. The spending patterns of the 120,000 soldiers in the Southern Zone were thought to be a major factor in stimulating development of the Western Sahara economy, complementing other government investment in the region.

Before the Western Sahara war escalated in the mid-1970s, the costs of defense had been eased somewhat by a coordinated policy to involve FAR units in civic action projects. This policy began in the late 1960s at a time when the king was appointing large numbers of FAR officers to civilian administrative positions.

The program was launched in order to make the military less of a burden on the economy, as well as to provide civilian job skills to recruits. In addition, FAR units had been active in relief and rescue work in times of natural disaster and in various aspects of public works, such as roadbuilding, bridge construction, assistance on irrigation projects, and similar activities. Later, after the attempted coups, the program was intensified, presumably to divert unarmed units to isolated areas and to discourage further plotting. As more and more units and military resources were committed to the Western Sahara war, however, military involvement in civilian projects practically ceased. In the mid-1980s it appeared that FAR units might again be called upon to engage in civic action, particularly construction in the Western Sahara.

Morocco's defense budget doubled in size between 2005 and 2009. This development came as the government supported a series of new arms acquisitions that will allow the country to maintain a balance of power with neighboring Algeria. Over the previous three years, Morocco had ordered the F-16 multi-role fighter and T-6A air trainer from the United States as well frigates from the Netherlands.

The conflict over the Western Sahara complicated U.S. relations with all the states in the region. The United States consistently supported an end to the war through negotiation between all the concemed parties that would lead to a cease-fire and an eventual referendum of the inhabitants of the Western Sahara as to its future status. While the United States recognized Morocco's administrative control over the Western Sahara, it did not endorse Morocco's claim of sovereignty over the area. From 1976 to 1978, Moroccan use of U.S.~supplied arms and equipment in the Western Sahara brought official U.S. protests and a partial arms embargo. Congressional criticism further exacerbated US relations with Morocco. However, when the Polisario launched small scale attacks into Morocco proper in 1979, President Carter made a determination that permitted the sale of arms "that could find use in the Western Sahara." Fol1owing this Presidential determiination, US arms sales to Morocco were approved to help maintain the balance in the region and to counter the increasing sophistication of weapons that were finding their way into the hands of the Polisario.

Although it appears that there has been some progress towards finding a peaceful resolution to the war, there continued to be a significant requirement for U.S. security assistance to Morocco for some time to come. Except for the purchase of M48A5 tanks, TOW anti-tank missile systems, and additional F-5 fighters, the largest portion of U.S. security assistance in the 1980s was used to sustain the operational readiness of U.S.-origin equipment. As this equipment started to succumb to age and continues to operate in the harsh desert environment of the Western Sahara, the Royal Moroccan Armed Forces had to replace and modernize its materiel.

Each Moroccan military service, in conjunction with its own budget development, prepares a Five-Year Plan for utilization of estimated security assistance funding levels. These plans focus on U.S.-origin equipment sustainment requirements, ammunition needs, and desired acquisitions for force development and/or modernization. Each service's budget request is approved by the King. After the Government of Morocco is informed of the level of U.S. security assistance funds appropriated by the U.S. Congress, each Service reprioritizes and resubmits its Five-Year Plan requirements.