World Bank Group and Millennium Challenge Corporation Stay the Course

Jean R. AbiNader, MATIC
October 29, 2015

Jean R. AbiNader, Exec. Dir., Moroccan American Trade and Investment Center

As Morocco moves ahead with implementing the results of its historic regionalization elections held in September, international organizations continue to support measures to increase government accountability and capacity to manage. This is particularly critical at this time, when a massive transition is underway to redefine how local government and regional bodies will interact to better serve the needs of their constituents. Not only are regional bodies now directly elected, but Morocco has also reduced the number of regions from 16 to 12 provinces in an effort to focus decision-making at the regional level with support from the central government for national projects.

This is matched on the national level by the geographic redistribution of new economic development zones to bring more balance to the overall growth of the country, decentralizing overextended industrial urban areas such as Casablanca while creating incentives for greater mobility to populate these new areas. It is a comprehensive and multifaceted strategy that will take years to implement, yet Morocco shows no signs of weakening its resolve to make it happen.

I have often wondered how multilateral organizations such as the World Bank Group and bilateral assistance program such as the Millennium Challenge Corporation (MCC) undertake their program formulations in specific sectors, especially if the goal is some years in the future. Two recent cases give some insights into their processes for building a suite of project recommendations with funding parameters unique to each country’s conditions.

World Bank Sustains Accountability Projects

It was recently announced that the World Bank would provide a $200 million loan to Morocco to promote government efficiency, transparency, and accountability. It is called the Transparency and Accountability Policy Loan (DPL) and is the second segment in a longer-term program to enable the government of Morocco to achieve its governance goals as outlined in the 2011 Constitution. What is not explained in the press release on the program is how the World Bank, working with the government of Morocco, decided that this project was a priority over others that might have a more immediate impact, such as drafting new health policies, or developing higher standards for teachers in the public school systems.

Going back over the World Bank’s regional “Reading Room,” I found two studies highlighted in this blog. The first, “Trust, Voice, and Incentives: Learning from Local Success Stories in Service Delivery in the Middle East and North Africa,” concluded “that a cycle of poor performance has emerged in much of the region as a result of state institutions lacking both internal and external accountability mechanisms.” Thus the seed was sown for initiating projects focused on improved government accountability both in terms of internal functions and staffing, and mechanisms for delivering services.

This is of particular concern to King Mohammed VI, who consistently calls for a government responsive to its citizens and encourages increased efforts on behalf of constituent services. The initial emphasis in the DPL program was a set of reforms to heighten citizen awareness of and access to government services. This included greater on-line access to government ministries and information on services provided, increased openness on the national budget and budgeting process, and more details of the operations of Parliament in drafting and discussing bills.

According to the World Bank, “The second DPL provides further momentum through deepened support to policies for fiscal transparency and citizens’ access to information and the right to petition. The new operation also promotes increased efficiency in the overall handling of public funds, with a focus on better financial management at the central and local government, as well as state owned enterprises.”

A critical feature of the program, dubbed “Governance,” or “Hakama” in Arabic, is capacity building for administrators, managers, and information centers to make sure that staff acquires the skills needed to implement the reform protocols. As Marie Francoise Marie-Nelly, World Bank Country Director for the Maghreb commented, “What matters now, however, is that Moroccans see the results of change, and that reforms lead to greater participation of citizens in public life.”

The World Bank is joined in this effort by the EU and the African Development Bank, which  together have invested a further $250 million in support of the program and its reform agenda. Training and technical assistance is being provided to the central and local governments, and to parliament, in the areas of performance budgeting, monitoring and evaluation, fiscal decentralization, and citizen engagement.

MCC Initials Second Compact with Morocco

The second World Bank report, “Jobs or Privileges: Unleashing the Employment Potential of the Middle East and North Africa,” feeds directly into its programs in support of workforce development in Morocco and complements the recently announced second MCC compact with Morocco in the amount of close to $450 million.

According to the report’s editor, “This report argues that Middle East and North Africa (MENA) countries face a critical choice in their quest for higher private sector growth and more jobs: promote competition, equal opportunities for all entrepreneurs and dismantle existing privileges to specific firms or risk perpetuating the current equilibrium of low job creation.” It is this nexus that is addressed in part by the MCC compact.

Recently released results of the “Call for Ideas” regarding the Morocco Private Sector Engagement Work Stream section of the second compact emphasize the need for equitable access to workforce development programs. It promotes public-private partnerships as the most efficient way to meet the goals of the program. The overall goal is two-fold – to improve the delivery of training services, especially in technical and vocational training, and to increase the effectiveness of intermediary services that link workers to jobs in the marketplace. It is anticipated that requests for proposals will be released in 2016.

Morocco is marshalling impressive national and international support for its economic growth and job creation strategies. Adapting lessons learned in other countries and utilizing a broad range of creative options are valuable mechanisms for accelerating the investments in people, training, and projects that will advance Morocco’s efforts.