Morocco: Emerging Economy of the Mediterranean

Morocco: Emerging Economy of the Mediterranean. Jonathan Reuvid [Jonathan Reuvid] on leondumoulin.nl *FREE* shipping on qualifying offers. The Moroccan.
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Do you have a question? A finely meshed international network Coface Country Risk Conference. The emerging market challenge. Refine your search By Type Corporate news. Country risk and economic studies. Growth in the Moroccan economy is being bolstered by domestic demand and has proven resilient The international and regional context highlights a number of structural weaknesses. With its diversification into high added value technological industries, such as the automotive and aeronautical sectors, Morocco aims to join the club of new emerging countries soon.

Contact Do you have a question? Worldwide Presence A finely meshed international network Over the long term, Morocco will have to diversify its economy away from [agriculture] to develop a more stable economic basis for growth. The government introduced a series of structural reforms in recent years. The most promising reforms have been in the liberalization of the telecommunications sector. Morocco announced plans to sell two fixed licenses in Morocco also has liberalized rules for oil and gas exploration and has granted concessions for many public services in major cities.

The tender process in Morocco is becoming increasingly transparent. Morocco's sound economic management in recent years has yielded strong growth and investment grade status and it is weathering the negative impacts of the global crisis impressively well. Morocco is now addressing persistent social problems by reducing absolute poverty rates, investing in human capital through quality education, expanding access to drinking water, and linking rural areas to markets through investment in roads.

Morocco faces challenges on human development outcomes despite progress over the past decade, in particular. Overall illiteracy rates and gender disparity in access to secondary education remain high and the country continues to suffer poor outcomes on infant and maternal mortality. It also needs to diversify its economy, become more competitive, and integrate further into the global economy if it is to reach higher growth levels.

The government has recognized this challenge and has put in place an ambitious process of legal, policy, and institutional modernization that has far-reaching political, economic, and social dimensions.

A Walk Around Tangiers, Morocco

It has designed and is now implementing a comprehensive set of new sector strategies that respond to the overall national vision and that target development challenges with clear, measurable goals and indicators. In a statement, released in July , the IMF called Morocco "a pillar of development in the region " and congratulated King Mohammed VI and the Central Bank on Morocco's continued strong economic progress and effective management of monetary policy.

Morocco's economy is expected to grow by 6.

While the forecast is slightly lower than the earlier 6. GDP growth in was only 2. Inflation is expected to reach 2. The global financial crisis affected the Moroccan economy in only a limited way. Morocco may be affected, by the slowdown of international economy, stirred by the global financial crisis, and whose maximum impact on national economy could decrease the GDP growth rate by at least one point in , according to the Bank Al-Maghrib [23]. In a report issued in July , the IMF noted that Morocco's financial sector is sound and resilient to shocks, and that the remarkable fiscal consolidation efforts of recent years have allowed the Moroccan economy to absorb the impact of difficult international economic conditions and increasing global prices for essential commodities such as petroleum and energy.

International economic experts recognize that Morocco's exemplary economic performance is beneficial not only to Moroccans, but also for the nearly 90 million people who live the Maghreb.

MOROCCO: EMERGING ECONOMY OF THE MEDITERRANEAN

At the end of November , the state's budget registered a surplus of MAD 3. The diversification of the Economy includes a multi-disciplinary approach to the development of non-agricultural sector, including the creation of special sectorial zones in industry, tourism and services outsourcing. In addition, reforms to the higher educational system and business law are also planified in the new program-contract signed in between the government, the banking sector and some zone-development companies.

The approach also include a better sustaining of small-business development and prospection of external markets. The objective is to become an emerging industrial country of the likes of Vietnam by The economy has remained insulated from the worst effects of the world crisis. Due in part to the rebounding of the agricultural sector, which had suffered from a drought, the economy expanded 5. Morocco's economy is the 61st largest in the world, according to the IMF, though its per-capita GDP is low compared to similarly ranked nations.

King Mohammed VI has recently launched two national economic strategies: Plan Maroc Vert and Plan Emergence. The first seeks to create 1. Additionally, phosphates production, which accounted for more than a third of exports, is being restructured for greater value. Morocco's economy is expected to achieve a 6. This surplus has benefited to all agricultural regions and increased the water stored in dams destined for agriculture to In these conditions and taking into consideration a cereal campaign nearing 70 million quintals, the agricultural value added could increase by Morocco is a fairly stable economy with continuous growth over the past half-a-century.

Real GDP growth is expected to average 5. Economic growth will also be intermittently hindered by the impact of periodic droughts on the rain-fed agricultural sector, the country's largest employer. In the rainy sections of the northeast, barley , wheat , and other cereals can be raised without irrigation. On the Atlantic coast, where there are extensive plains, olives, citrus fruits, and wine grapes are grown, largely with water supplied by artesian wells. Morocco also produces a significant amount of illicit hashish , much of which is shipped to Western Europe.

Livestock are raised and forests yield cork, cabinet wood, and building materials. Part of the maritime population fishes for its livelihood. Agadir , Essaouira , El Jadida , and Larache are among the important fishing harbors. Morocco is endowed with numerous exploitable resources.

It is one of the few Arab countries that has the potential to achieve self-sufficiency in food production. In a normal year, Morocco produces two-thirds of the grains chiefly wheat, barley, and corn [maize] needed for domestic consumption. Morocco exports citrus fruits and early vegetables to the European market. Its wine industry is developed, and the production of commercial crops cotton, sugarcane, sugar beets, and sunflowers is expanding.

Newer crops such as tea, tobacco, and soybeans have passed the experimental stage, the fertile Gharb plain being favourable for their cultivation. Morocco is actively developing its irrigation potential that ultimately will irrigate more than 2. Unreliable rainfall is a chronic problem that produces drought or sudden floods. In , Morocco's worst drought in 30 years forced Morocco to import grain and adversely affected the economy. Another drought occurred in , and one in — Reduced incomes due to drought caused GDP to fall by 7. During the years between drought, good rains brought bumper crops to market.

The danger of drought is ever present and still dramatically affects the Moroccan economy, even though Moroccan decisionmakers have recently [ when? Cereals constitute the essential of the agricultural value added and their production is very sensitive to rain falls. More important is that cereal yields determine not only the aggregate value added in the agricultural sector but also economic growth in general. Egypt, Morocco and Tunisia Compared, UNECA, , when drought, measured as a dummy variable computed on the basis of the rate of growth of cereal yield, endangers extremely, the growth rate of real GDP would fall by 10 percent see also, Mansouri's articles in fr: Morocco consistently ranks among the world's largest producers and exporters of cannabis , and its cultivation and sale provide the economic base for much of northern Morocco.

The cannabis is typically processed into hashish. This activity represents 0. Morocco is a party to the UN Drug Convention and in Morocco passed legislation designed to implement it and its new national strategy against drugs formulated by its National Committee on Narcotics was adopted in That same year, the International Narcotics Control Board commended the Government of Morocco for its efforts to eradicate cannabis plant cultivation on its territory, which has resulted in the total potential production of cannabis resin in the Rif region decreasing by 10 per cent over the previous year.

At the same time the board called upon the international community to support its efforts where possible. Since the early s a growing debate is taking place in Morocco about decriminalization of Cannabis. For a long time the industry has been an economic pillar for the country.

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The Moroccan industrial sector looks set to continue the strong growth it has enjoyed in recent years. Industrial activity recorded a 5. Added value in the sector increased by 5. The industrial sector accounted for about The sector also attracts high levels of FDI and authorities have announced initiatives to improve the investment climate, with particular attention to off-shoring activities, automotive, aeronautics, electronics, food processing activities, products from the sea and textiles. Other important industrial sectors include mining, chemicals, construction materials and pharmaceuticals.

The future of Morocco's industrial segment looks bright, particularly as new initiatives make it more globally competitive in a variety of sectors. Manufacturing accounts for about one-sixth of GDP and is steadily growing in importance in the economy. Two particularly important components of Morocco's industrial makeup are processing raw materials for export and manufacturing consumer goods for the domestic market. Many operations date to the colonial period. Until the early s, government involvement was dominant and the major focus was on import substitution. Since then the emphasis has shifted to privatizing state operations and attracting new private investment , including foreign sources.

Processing phosphate ore into fertilizers and phosphoric acid for export is a major economic activity. Food processing for export canning fish, fresh vegetables, and fruit as well as for domestic needs flour milling and sugar refining is also important, and the manufacture of textiles and clothes using domestically produced cotton and wool is a major source of foreign exchange. Morocco's iron and steel manufacturing industry is small but provides a significant share of the country's domestic needs.

The manufacturing sector produces light consumer goods, especially foodstuffs, beverages, textiles, matches, and metal and leather products. Heavy industry is largely limited to petroleum refining , chemical fertilizers, automobile and tractor assembly, foundry work, asphalt, and cement.

MOROCCO: EMERGING ECONOMY OF THE MEDITERRANEAN • Books • Legend Business • Legend Press

Many of the processed agricultural products and consumer goods are primarily for local consumption, but Morocco exports canned fish and fruit, wine, leather goods, and textiles, as well as such traditional Moroccan handicrafts as carpets and brass, copper, silver, and wood implements.

Ownership in the manufacturing sector is largely private. The government owns the phosphate-chemical fertilizer industry and much of the sugar-milling capacity, through either partnership or joint financing. It is also a major participant in the car and truck assembly industry and in tire manufacturing. Textiles form a major industry in Morocco. In the European market, the share of Chinese products was The mining sector is one of the pillars of Morocco's economy. It represented a turnover of USD 2. It also employs about 39, people with an estimated MAD million in salaries The Kingdom produces a number of minerals and metals, most importantly, phosphates, silver and lead.

Morocco possesses 75 percent of the world's phosphate reserves. In , Morocco produced The construction and real estate sectors are also a part of the investment boom in the country.

Morocco: the challenge of becoming an emerging economy

Increasing public investment in ports, housing development projects, and roads as well as the boom in the tourism sector have been a big shot in the arm for the construction sector. The rise in construction activities and efforts to improve infrastructure are creating many opportunities for public-private partnerships. The real estate sector has also been seeing record investments.


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In fact, Morocco is being touted as the most popular retirement destination among Europeans because it is inexpensive compared to other European tourist destinations. Most of the demand in Morocco is for moderate housing, and a decrease in lending rates has made home-ownership easier. Services , including government and military expenditures , account for about one-fourth of Morocco's GDP. Government spending accounts for fully half of the service economy, despite an ongoing effort on the part of the government to sell much of its assets to private concerns.

Since the mids tourism and associated services have been an increasingly significant sector of the Moroccan economy and by the late s had become Morocco's largest source of foreign currency. During that time the Moroccan government committed significant resources — by way of loans and tax exemptions — to the development of the tourist industry and associated services.

The government also made direct capital investments in the development of the service sector, but since the early s it has begun to divest itself of these properties. Several million visitors enter Morocco yearly, most of them from Europe. Morocco is a major touristic destination. Tourism is thus a major contributor to both the economic output and the current account balance , as well as a main job provider. In 8 million tourists have visited the kingdom. Morocco has developed an ambitious strategy, dubbed "Vision ", aimed at attracting 10 million tourists by This strategy provides for creating , beds, thus bringing the national capacity to , beds.

It also aims to create some , new jobs. Like other regions, Fez has its Centre Regional du Tourisme CRT , a local tourism body which coordinates the local industry and the authorities. Fez's plan involves a substantial restructuring of the old city and an upgrading of hotel capacity. Improved transport has brought the city into more direct contact with potential visitors.

There are now direct flights from France , where previously it was necessary to change plane in Casablanca. The plan provides for creating six coastal resorts for holiday-home owners and tourists: The plan also includes other large-scale development projects such as upgrading regional airports to attract budget airlines, and building new train and road links.

Morocco, which is close to Europe, has a mix of culture and the exotic that makes it popular with Europeans buying holiday homes. The number of Moroccan internet subscribers in amounted to ,, representing an increase of The national penetration for internet subscription remains low, even though it increased from 0. The future of the Moroccan IT sector was laid out in Maroc — In addition, the number of employees should increase from 40, to , The government hopes that adding more local content to the internet will increase usage.

There have also been efforts to add more computers to schools and universities. E-commerce is likely to take off in the next few years, especially as the use of credit cards is gaining more ground in Morocco. Although computer and internet use have made a great leap forward in the past five years, the IT market still finds itself in infancy and offers great potential for further development. The retail industry represents Organised retail, however, represents only a fraction of domestic trade, as shoppers rely on the country's souks, markets and approximately , independent groceries and shops.

Still average purchasing power remains low overall, forcing retailers to cater to a broad section of the population and to keep prices low. Despite the challenges, the retail sector has strong growth potential. The franchising segment will continue to grow, and while strong local brands are emerging, international brand names will continue to account for the biggest percentage increase in the sector's turnover. Changing consumption habits, increasing purchasing power and the growing number of tourists should boost the development of malls and luxury shopping.

However, independent stores and markets should continue to account for most domestic trade in the foreseeable future. In Morocco was ranked among the top thirty countries [43] [44] [45] [46] in the offshoring sector. Morocco opened its doors to offshoring in July , as one component of the development initiative Plan Emergence, and has so far attracted roughly half of the French-speaking call centres that have gone offshore so far and a number of the Spanish ones.

In the country had about call centres, including 30 of significant size, that employ a total of over 18, people. In the economic environment remained conducive to further growth of banking activity in Morocco following a very good year for the sector in In macroeconomic growth, excluding the agricultural sector , remained quite robust, providing the background for dynamic growth in banking credits. Total assets of the banking sector increased by The structure of the domestic sector has remained steady in the past two years, with the landscape dominated by three major local banks.

The state has started to remove itself from the domestic sector by surrendering part of its share capital in public banks. At end public capital still held controlling stakes in five banks and four financing companies. Meanwhile, foreign ownership in the local financial sector continues to grow, with foreign institutions controlling five banks and eight financing companies as well as holding significant stakes in four banks and three financing companies. The financial system, though robust, has to take on excessive quantities of low risk-low return government debt at the expense of riskier, but more productive private sector lending.

This crowding—out of private sector investment reduces the profitability and growth incentives of the financial sector. The credit rating agency attributed its classification in part to the "relative resilience of Morocco's economy to the global economic downturn. The insurance sector in Morocco is witnessing dynamic growth, driven foremost by developments in life insurance, which has superseded motor insurance in the past two years as the leading segment of the market with around one-third of total premiums.

Behind life and auto insurance, accident, work-related accident, fire and transport insurance were the largest contributors. Total premiums reached Dh The insurance penetration rate is 2. More broadly, the Moroccan insurance sector is already consolidated, with five large players controlling the market. The sector is set to be opened up to foreign competition from onward, and the consolidation of insurance companies into larger entities should strengthen the local players to better compete with eventual competition from foreign insurers.

There is also the possibility that new insurance niches such as takaful Islamic insurance and microinsurance products will become part of the Moroccan market in the medium-term, but they are unlikely to appear in the near future. According to the Moroccan Advertisers Group, Dh3. There is still room for growth, as the market remains underdeveloped by international standards. Advertising expenditure represented just over 0.

The potential for expansion is huge, and while telecoms should remain the largest advertising segment, fast-growing sectors of the economy such as retail, automobile and real estate are providing advertising companies with new opportunities. The telecoms sector increased in value from Dh With the penetration rates of The call centre industry — partially as a result of offshore initiatives, such as Casanearshore and Rabat Technoplis — will continue to expand.

However, the worldwide call centre industry is highly competitive and education is the key to success if Morocco truly intends to become a leading international player in this industry. In the late s and early '90s the government undertook a major expansion and modernization of the telecommunications system. This nearly quadrupled the number of internal telephone lines and greatly improved international communications. In the state-owned telecommunications industry was opened up to privatization by a new law that allowed private investment in the retail sector, while the state retained control of fixed assets.

Satellite dishes are found on the roofs of houses in even the poorest neighbourhoods, suggesting that Moroccans at every social and economic level have access to the global telecommunications network. Morocco has a good system composed of open-wire lines, cables, and microwave radio relay links. The internet is available. The principal switching centers are Casablanca and Rabat. An improved rural service employs microwave radio relay. The international system has seven submarine cables, three satellite earth stations, two Intelsat over the Atlantic Ocean and one Arabsat.

There is a microwave radio relay to Gibraltar , Spain and the Western Sahara. Coaxial cables and microwave radio relays exist to Algeria. Morocco is a participant in Medarabtel and a fiber-optic cable links from Agadir to Algeria and Tunisia. Operated by Maroc Telecom. The service started as a test in November before it was launched in October The service is offered by the subsidiary Menara. As well as Inwi also known as Wana Co. Privatization has stimulated activity on the Casablanca Stock Exchange Bourse de Casablanca notably through trade in shares of large former state-owned operation.

Founded in , it is one of the oldest stock exchanges in Africa , but it came into reckoning after financial reforms in , [52] making it the third largest in Africa. Having weathered the global financial meltdown, the Casablanca Stock Exchange is stepping up to its central role of financing the Moroccan economy. Over the next few years, it seeks to double its number of listed companies and more than quadruple its number of investors.


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Morocco has made great progress toward fiscal consolidation in recent years, under the combined effect of a strong revenue performance and efforts to tackle expenditure rigidities, notably the wage bill. The overall fiscal deficit shrank by more than 4 percentage points of GDP during the last four years, [30] bringing the budget close to balance in However, the overall deficit is projected to widen to 3. Fiscal policy decisions so far have been mostly discretionary, as there is no explicit goal for fiscal policy.

Looking forward, the question of a possible anchor for medium-term fiscal policy is worth exploring. Morocco's low social indicators and large infrastructure needs could justify an increase in social spending and public investment. Further, some nominal tax rates remain high by international standards, possibly warranting a lowering of some rates. At the same time, the relatively high level of public debt remains a constraining factor, particularly as heightened attractiveness to investors is a key component of Morocco's strategy of deepening its integration in the global economy.

Morocco has made major progress in recent years to increase economic growth and strengthen the economy's resilience to shocks. The gains reflect sound macroeconomic policies and sustained structural reforms, and are reflected in the gradual improvement in livingstandards and per capita income. The turnaround in the fiscal performance is particularly noteworthy. Around the start of the 21st century, Morocco's overall deficit stood at 5. In , reflecting a strong improvement in revenue performance and moderate growth in expenditure, the budget was close to balance.

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Under the combined effect of a prudent fiscal policy and sizeable privatization receipts, the total debt stock had shrunk by 20 percentage points, [30] and now stands at a little over half of GDP. As a result, perceptions of Morocco's creditworthiness have improved. Tax revenues provide the largest part of the general budget.

Taxes are levied on individuals, corporations, goods and services, and tobacco and petroleum products. In recent years, Morocco has reduced its dependence on phosphate exports, emerging as an exporter of manufactured and agricultural products, and as a growing tourism destination. However, its competitiveness in basic manufactured goods, such as textiles, is hampered by low labour productivity and high wages. Morocco is dependent on imported fuel and its food import requirement can rise substantially in drought years, as in Although Morocco runs a structural trade deficit, this is typically offset by substantial services earnings from tourism and large remittance inflows from the diaspora, and the country normally runs a small current-account surplus.


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    5. Morocco signed in an agreement of association with the European Union which came into effect in This agreement, which lies within the scope of the Barcelona Process euro-Mediterranean partnership started in and envisages the progressive implementation of a free trade area planned for Morocco's trade imbalance rose from 86 billion to billion dirhams between and — a Morocco was granted an "advanced status" from the EU in , [39] shoring up bilateral trade relations with Europe.

    Among the various free trade agreements that Morocco has ratified with its principal economic partners, are The Euro-Mediterranean free trade area agreement with the European Union with the objective of integrating the European Free Trade Association at the horizons of ; the Agadir Agreement , signed with Egypt, Jordan, and Tunisia, within the framework of the installation of the Greater Arab Free Trade Area ; the US-Morocco Free Trade Agreement with United States which came into force on 1 January , and lately [ when?

    Morocco has become an attractive destination for European investors thanks to its relocation sites "Casashore" and "Rabatshore", and to the very rapid cost escalation in Eastern Europe. Noting however that human resources remain the major concern for companies seeking to gain a foothold in Morocco. In this regard, it has been deemed an important decision of the Moroccan government to accelerate training in the required disciplines. In a bid to promote foreign investments, Morocco in adopted a series of measures and legal provisions to simplify procedures and secure appropriate conditions for projects launching and completing.