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Business Brief: International media praise Morocco’s development, while economy slows in 2Q due to lagging agricultural production hit by lack of rain – Jean R. AbiNader

Jean R. AbiNader
April 16, 2018

Jean R. AbiNader, Moroccan American Center

Jean R. AbiNader, Moroccan American Center

Both the International Policy Digest and the MediTelegraph recently published articles praising the advances of the Moroccan economy and future prospects. In a post “Is The ‘Moroccan Exception’ Myth or Reality,” the International Policy Digest described the key factors in Morocco’s current success, going so far as to say “Morocco is unique in the region in its governance and culture.” In contrast to many countries in the region that are autocratic and corrupt with underdeveloped economies largely controlled by state institutions, “Morocco has a much more open society and has a history of progressive ideals.”

It does point out that Morocco’s economy “has a lot of missed potential, but is growing steadily in diverse sectors and doesn’t suffer from the resource curse.” While decision-making is still largely centralized, it is “arguably on the path to democracy. The Arab Spring, while destructive in many countries, has led to meaningful reforms in Morocco with very little unrest. And finally, Morocco has virtually no serious threat of Islamist groups.”

In the region, security and stability concerns are as critical for international investors as the quality of the labor force and the regulatory environment. The article looks at the roots of Morocco’s values to better understand why it is different from its neighbors and able to move progressively on economic development and social reforms.

Interestingly, the “The first root cause, and the oldest, is the influence of Jewish and Amazigh culture …the strongest historical influence on Morocco’s culture.” After the first Jewish Diaspora in the first century, Jewish tribes found a home in Morocco. “The Jewish people and Amazigh were both tribal, nomadic, matrilineal, and had democratically elected ruling bodies. Because of these similarities in tribal structures and the Jewish people’s ability to adapt to different cultures while holding onto their religious and cultural identity, the two groups flourished together.”

Among the benefits of this collaboration was the artisanship brought by the Jews who in return adopted agricultural techniques from the Amazigh. With the arrival of the Arabs, some significant changes occurred since Arab tribes were patrilineal, leadership accrued on the basis on strength and wealth, and decision-making was centralized.

The next most significant root shaping Morocco’s unique system is its monarchy, the “one main thing that unites the people and provides a sense of national identity is the king. But what sets the Moroccan Monarchy apart from other Middle Eastern monarchies is that the king has more than just historical legitimacy, but also religious legitimacy.” As Commander of the Faithful, there is no tension between the country and the religion “because the king, the nation, and religion are all virtually the same thing, there is simply no room for radical Islamist groups to form.”

The article then poses the question of why Morocco is “on its way to democracy through progressive devolution of power since the Constitution of 2011,” and not in other countries?” It points out that the legitimacy of the monarchy reflects a principle of power-sharing that prefers “cooptation over coercion when dealing with the opposition.” In fact they make the claim that “Morocco is lucky to have a ruler with the foresight to avoid this particular fate,” of a country ruined by civil discord rather than adopting reforms

The article concludes with the assertion that, because it lacks income from oil resources, “Morocco’s government hasn’t been able to pacify opposition with generous handouts from oil rents…so Morocco’s government has had to be much more responsive to popular opinion. Be it luck, cultural heritage, the actions of a few intelligent leaders, or the voices of many; Morocco has pursued a unique path through history.”

Focusing on the economy, The Meditelegraph.com post commends Morocco’s development, calling it “a kind of happy island within the African continent, particularly in North Africa.” It credits the lion’s share of its development to the vision of King Mohammed VI which “has profoundly transformed its economy, while continuing to post very high rates of growth. Currently, industry, trade and services represent three developed and solid national sectors, standing alongside the more traditional agricultural sector.”

It cites several examples of Morocco as “the preferred destination for foreign capital entering the African continent, attracted by a favorable environment for entrepreneurship, as well as opportunities offered by its strategic geographical location, overlooking the Atlantic on one side, and very close to the European Union on the other.” These include Italian Automotive component maker Magneti Marelli, which has announced that it will build a plant in the Tangier area for the production of automotive components. Renault has been present in Morocco since 2012, with a factory located in Dacia, which last year reached its million-vehicle mark, and the French carmaker recently decided to invest almost a billion euros there with the creation of a global supply-chain platform.”

Its commitment to attracting its supply chain encouraged Valeo (car components) to open a new integrated industrial center within the TangerMed port. “Also noteworthy, in the energy sector, another cornerstone of the Moroccan economy was the acquisition of a 48% stake in Masdar Energy, a company that deals with energy efficiency, on behalf of Italy’s Green Power Group, a company listed on the AIM Italia index.” The article notes that the implementation of planned wind projects slated to be completed by 2020, will absorb some 1 billion euro in overall investment.

Meanwhile, Morocco’s High Planning Commission issued a report that once again, agriculture has an important role in the overall economy. According to a report from Reuters and others, “Morocco’s economy grew 2.9 percent year-on-year in the first quarter of 2018, down from 3.8 percent in same period last year, after a drop in agricultural output.”

Other sectors will continue satisfactory growth as phosphate prices strengthen, the service sector, including banking, insurance, and tourism, improve over last year’s showing, and manufacturing edges upwards. Even agriculture is expected to improve as abundant though late rainfall is widespread in agricultural regions. Morocco’s exports rose by 5.2%, with cars taking the lead in increased demand from the Eurozone countries, followed by the products of the aeronautical sector, textiles, and agri-food.

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