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Mixed Messages on the Moroccan Economy; Bye Bye to Immigration Cards – Jean R. AbiNader

Jean R. AbiNader
September 20, 2019

Jean R. AbiNader, Moroccan American Center

Reading tea leaves, even great Moroccan mint tea, is always challenging, especially with data that doesn’t always seem to match up. So, depending on what you’re measuring and where you gather your statistics, the message can vary from so bad to almost great, when it comes to economic performance. So let’s look at some of the recent stories about the Moroccan economy and see how they link to the progress that is always the government’s goal.

In The Arab Weekly, there was an interesting assessment of why Foreign Direct Investment (FDI) has recently declined in Morocco. The chief culprit seems to be that it is a symptom of the general economic malaise in the EU, which has long been the top investor in the country. Overall, FDI declined some 17.2% at the end of July compared to the same period in 2018. “Experts said the Moroccan government must significantly improve the country’s international attractiveness and competitiveness and offer a favorable business environment to foreign companies to be the leading destination for FDI in the MENA region.” The article also points to bureaucratic snafus and “meagre tax benefits” as impeding FDI.

Another, maybe not so surprising factor, is that Moroccans abroad are not investing as much in Morocco due to the high real estate prices in tourism areas, long a favorite investment destination. Similar properties in Spain and Portugal are more competitively priced. As noted in a previous blog, last year the EU and Morocco set up a program to improve the business environment and promote economic development. “The European External Investment Plan will help leverage significant private funds into key sectors of Morocco’s economy. The plan will in turn empower local entrepreneurs and create jobs in the country,” said Johannes Hahn, commissioner for Enlargement Negotiations and European Neighborhood Policy.

Some good news. The 2019 International Franchise Attractiveness Index ranked Morocco 39 out of 131 states. This made it the #1 attractive business hub for US-based franchises in Africa and the 2nd in the MENA after the UAE. This ranking shows it competing with some of the international powers, including France, Spain, Germany, and Australia, according to an analysis by Morocco World News. The index combines peer-reviewed research and a survey of franchise executives to produce two rankings, Balanced Growth and Aggressive Growth.

These results support the 2019 Investment Climate appraisal from the US State Department that said “Morocco’s political stability, geographical location, and efforts to build a robust infrastructure, contribute “to its emergence as a regional manufacturing and export base for companies.” That report also mentioned Morocco’s strategy for attracting investors, with several measures in place, including facilitating foreign investment in export-oriented sectors like manufacturing (think cars…).

Another area drawing attention is, of course, tourism. “Morocco boasts the MENA region’s top TTCI scores on natural resources, North Africa’s best enabling environment, infrastructure, and tourist service infrastructure,” says the Travel & Tourism Competitiveness Report 2019. Criteria include “the set of factors and policies that enable the sustainable developmentof the Travel & Tourism (T&T) sector, which in turn, contributes to the development and competitiveness of a country.” This includes: government support for the tourism sector, natural attractions, ease of access, tourism infrastructure, marketing, and security and stability.

Dakhla port moves ahead. In line with the country’s 2030 National Ports Strategy, the government has given the go ahead for the formation of a Dakhla Atlantic Port committee to oversee the construction of the port project that includes a broad range of infrastructure projects with a value in excess of $1 billion.

“The committee is expected to launch a tender for the project, which is expected to take some seven years, in the last three months of 2019, according to a report in Morocco World NewsKing Mohammed VI has mentioned that the port will make Dakhla a significant link in Morocco’s outreach to business in Africa.

Relief for the traveler. Another bit of good news. It’s time to say good-bye to the immigration cards that have to be filled out at immigration. Currently, the traveler must fill out the details and hand to the border police before going on to baggage or customs. Just another great step forward in promoting travel to Moroco!

One final piece is a commentary on the King’s directive to appoint a committee to come up with a new development model for the country. An article from Menas.com pointed out that the failure to achieve sufficient progress in past efforts was not due to the absence of plans, from INDH to the CESE recommendations for the South.  While much has been achieved, full implementation has not always occurred.

“This is due to various reasons, including: the lack of follow up; the absence of real expertise; a lack of finance; and perhaps most important of all, the pervasive corruption that has seen funds that have been earmarked for development projects being siphoned off or wasted. There is also the problem of the government’s hands being tied with those around the King still holding the real reins of power.” It hopes that the government will have a higher degree of success than past efforts to combat the unrest and protests that regularly occur and make a qualitative difference in the lives of Moroccans.

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