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Morocco Notes: Morocco Again Shows Leadership on Global Climate Issues; Banks Take Lead in Building Markets in Africa – Jean R. AbiNader

Jean R. AbiNader
January 17, 2019

Jean R. AbiNader, Moroccan American Center

Morocco’s leading environmental role has been recognized in the IPC-2019 Climate Change Performance Index where it is ranked 5thin the world, as well as the 2nd best performing country. These rankings reflect the enormous investments made by the kingdom in renewable energies over the past decade, and its leadership in Africa and internationally to build targets for combating climate change.

The IPC takes into consideration climate protection and performance in 56 countries and the EU, taking into account 14 indicators in 4 categories: greenhouse gas emissions, renewable energy, energy consumption, and climate policy.“ In this year’s ranking, Sweden is top performer followed by Morocco and Lithuania. Countries such as France or Germany are ranked among the middle-performing countries, while the United States is among the lowest with the worst scores,” according to the report.

 

Moroccan firms benefit from the experience of Moroccan banks in Africa. Building on the experience and contacts of their country’s banking and telecoms companies, Moroccan companies have been “quietly building [their] influence across Africa through enhanced economic, political, and security ties,” according to an article in Stratfor. It notes that “As Moroccan banks integrate themselves more deeply across Africa, they are serving as pioneers for the large and medium-sized Moroccan companies also pursuing opportunities in promising African markets,” including telecoms, energy pipelines, and fertilizer production facilities.

Since the international financial crisis of 2008, Morocco recognized the drawbacks of relying on the EU as its principle market. “Since then, Morocco has been reshaping its financial policy in order to diversify its income. Sub-Saharan Africa, with its exploding population, growing middle class and geographical proximity, presents an ideal opportunity,” according to the article. However, the economic road has not been without challenges as Morocco has had to sidestep its disagreement with the African Union over the Western Sahara and faces opposition in its bid for full membership in ECOWAS. It is clear that “Despite disagreements with the African Union on the status of the disputed Western Sahara, Morocco’s recent return shows that the government in Rabat, the capital, is making a strategic shift, looking beyond securing its geopolitical interests while focusing on economic influence in Africa.”

 

Morocco’s partnerships and economic diplomacy underpin strong future prospects. An article posted on Global Risk Insightnoted that Morocco has both opportunities and challenges in its efforts to strengthen its overseas markets and political relations. Although it was named the #1 investment destination in Africa in 2017, “the country will need to grapple with some deeply rooted challenges before reaching its full potential as a regional powerhouse and premiere African hub for international investment.”

Morocco’s efforts to build robust global partnerships both maintain strong relations with European countries while extending its influence and activities in Africa. On the political side as well, through its leadership on issues of migration and counterterrorism, Morocco has built strong links to combat problems on both sides of the Mediterranean. The article points out that “Morocco also has the distinct advantage of sitting upon the majority of the world’s phosphate rock, a natural resource that Europe is critically dependent on for its agricultural sector. In a September meeting in Rabat, EU Commissioner Junker remarked, “for the EU, Morocco is a major strategic partner in North Africa and the entire continent. We share many common challenges and opportunities.”

The article went on to say that while Morocco is criticized for human rights concerns by the EU, the kingdom continues to broaden its economic ties with Africa and assume leadership on such sensitive issues as migration.  “The agenda has revitalized Morocco’s presence on the continent, prescribing cohesion and “unity of action,” and making Morocco the second biggest African investor in Africa.” During the King’s 2017 tour to promote economic diplomacy in Africa, he signed 80 bilateral agreements with the Mali, Guinea, Gabon, and the Ivory Coast, covering trade and investment issues.

Regarding “persistent, fundamental challenges,” the article noted that economic diversification, inclusive growth, lower corporate taxes, improved management of public investment, and a more regularized and enforced tax regime are among improvements needed based on World Bank reports. Its regional vice-president, Ferid Belhaj, said: “over the years, there have been serious efforts in terms of reforms and infrastructure. That is why I see Morocco full of potential. But there is another Morocco that is facing enormous difficulties, namely of resource redistribution and social cohesion. There is something a bit upsetting: there are so many possibilities and achievements that make Morocco a regional exception, but there are also some lapses.”

Without substantive, internal economic reforms, the article concludes, it will be more difficult to stabilize the economy and achieve more inclusive development. Over the medium to long-term, “positive economic trends in the country outweigh some of the ongoing structural risks. Morocco is in fact taking steps towards sustainable growth. However, certain key social and economic issues, including treatment of vulnerable populations, will present an important test as to whether Morocco will emerge in the future as a strong, inclusive economy and move beyond its corrupt tendencies, or ossify into its old ways. In order to secure its place as a regional hub for growth and progress, internal reforms will be absolutely critical.”

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