How to accelerate Morocco's economic emergence?
19 December 2013
Read by 2745 persons
In the Arab world, Morocco stands out in many ways. In recent years, it has not experienced violent revolutions like Egypt, civil wars like Syria, or the stagnation of power like Algeria. On the contrary, this so-called "Arab" country – more precisely Arabo-Berber – has been evolving in an orderly manner towards institutional maturity, the rule of law and democracy for the past fifteen years. The constitutional referendum of July 1, 2011, with a 70% participation rate, validated this long-term reform strategy.
The Moroccan economic contrast
Economically, the situation is more contrasted. On the one hand, there is a certain willingness and determination on the part of the authorities to "emerge" the country, through sectoral plans for agriculture, industry and tourism, as well as major structural reforms such as the generalization of primary and increasingly secondary education, the introduction of universal health coverage, and the development of infrastructure. On the other hand, the weight of the informal economy and dependence on agriculture remain strong for a large part of the population that is not yet integrated into the organized market economy. Morocco is a country where one can find both the most advanced technology, with the highest Internet access rate in the Arab world, and ancestral subsistence farming practices.
In view of this, the coherence of a long-term strategic vision and the capacity to implement this vision are crucial, as is clearly shown in the collective work recently published on the initiative of the AMIE-Center. Its title –Strategic Morocco: Ruptures and Permanences of a Kingdom in Motion– summarizes the nature of the challenges. It is indeed a question of building on the country's strengths (a young population, strong national cohesion and a privileged geostrategic location) to overcome structural constraints (insufficient human and physical capital, weight of the informal economy), and to identify levers of action capable of accelerating the country's development and making it a model of prosperity and stability in the Euro-Mediterranean region.
Based on a long-term analysis, the mixed assessment of Morocco's economic performance is explained by the weight of these structural constraints and the tremendous demographic explosion that the country has faced in half a century, with a tripling of the population that has heavily weighed on infrastructure, capital accumulation and growth. The situation has improved somewhat in the last ten years, in connection with the major structural reforms undertaken and under the effect of a more buoyant global economic situation. However, the alignment with a trajectory of higher potential growth and convergence with advanced economies has not yet been achieved.
Strategic imperatives: Modernization of agriculture, absorption of the informal economy and transition to a knowledge economy
To do so, as I suggest in the chapter devoted to this theme, it will be necessary first to complete the modernization of the agricultural and rural sector and the transition from agriculture to industry and services. The duality of agriculture in Morocco is well known, with on the one hand a modern and productive agro-export sector, and on the other hand more than a million small, fragmented family farms that do not have the critical size. The Green Morocco Plan was designed with this in mind, but it will probably need to be coupled with income transfer mechanisms similar to the Bolsa Familia program in Brazil, to encourage children's schooling, as well as an extension of credit to rural families to encourage diversification of activities and retain populations, as has been done in other emerging countries.
It will also be necessary to define an effective strategy to absorb the informal economy, which fuels corruption and traps the economy in a low-productivity trap, and which prevents the diffusion of positive externalities in terms of know-how, training and skills. Here again, the example of Brazil shows that it is possible to bring millions of jobs into the organized economy, by combining both an incentive-based approach – access to training and shared resources in terms of economic intelligence and R&D at the sectoral level – and a repressive approach aimed at combating tax and social evasion.
Finally, these classic reforms must go hand in hand with an acceleration of the transition to a knowledge economy, through massive investment in higher education and research, possibly in the form of public-private partnerships backed by appropriate regulation. Indeed, both theory and practice show that development is not a linear process. It is possible to skip steps by integrating globally available technologies. In an increasingly competitive world, this leapfrogging logic is the only way to guarantee – through upgrading and a dynamic of continuous improvement – the competitiveness of Made in Morocco products, and ultimately the increase in productivity and income. That is to say, convergence with advanced economies.
Alexandre Kateb.
Huffpostmaghreb.com
Published on December 13, 2013.
Posted online on December 19, 2013.
The Moroccan economic contrast
Economically, the situation is more contrasted. On the one hand, there is a certain willingness and determination on the part of the authorities to "emerge" the country, through sectoral plans for agriculture, industry and tourism, as well as major structural reforms such as the generalization of primary and increasingly secondary education, the introduction of universal health coverage, and the development of infrastructure. On the other hand, the weight of the informal economy and dependence on agriculture remain strong for a large part of the population that is not yet integrated into the organized market economy. Morocco is a country where one can find both the most advanced technology, with the highest Internet access rate in the Arab world, and ancestral subsistence farming practices.
In view of this, the coherence of a long-term strategic vision and the capacity to implement this vision are crucial, as is clearly shown in the collective work recently published on the initiative of the AMIE-Center. Its title –Strategic Morocco: Ruptures and Permanences of a Kingdom in Motion– summarizes the nature of the challenges. It is indeed a question of building on the country's strengths (a young population, strong national cohesion and a privileged geostrategic location) to overcome structural constraints (insufficient human and physical capital, weight of the informal economy), and to identify levers of action capable of accelerating the country's development and making it a model of prosperity and stability in the Euro-Mediterranean region.
Based on a long-term analysis, the mixed assessment of Morocco's economic performance is explained by the weight of these structural constraints and the tremendous demographic explosion that the country has faced in half a century, with a tripling of the population that has heavily weighed on infrastructure, capital accumulation and growth. The situation has improved somewhat in the last ten years, in connection with the major structural reforms undertaken and under the effect of a more buoyant global economic situation. However, the alignment with a trajectory of higher potential growth and convergence with advanced economies has not yet been achieved.
Strategic imperatives: Modernization of agriculture, absorption of the informal economy and transition to a knowledge economy
To do so, as I suggest in the chapter devoted to this theme, it will be necessary first to complete the modernization of the agricultural and rural sector and the transition from agriculture to industry and services. The duality of agriculture in Morocco is well known, with on the one hand a modern and productive agro-export sector, and on the other hand more than a million small, fragmented family farms that do not have the critical size. The Green Morocco Plan was designed with this in mind, but it will probably need to be coupled with income transfer mechanisms similar to the Bolsa Familia program in Brazil, to encourage children's schooling, as well as an extension of credit to rural families to encourage diversification of activities and retain populations, as has been done in other emerging countries.
It will also be necessary to define an effective strategy to absorb the informal economy, which fuels corruption and traps the economy in a low-productivity trap, and which prevents the diffusion of positive externalities in terms of know-how, training and skills. Here again, the example of Brazil shows that it is possible to bring millions of jobs into the organized economy, by combining both an incentive-based approach – access to training and shared resources in terms of economic intelligence and R&D at the sectoral level – and a repressive approach aimed at combating tax and social evasion.
Finally, these classic reforms must go hand in hand with an acceleration of the transition to a knowledge economy, through massive investment in higher education and research, possibly in the form of public-private partnerships backed by appropriate regulation. Indeed, both theory and practice show that development is not a linear process. It is possible to skip steps by integrating globally available technologies. In an increasingly competitive world, this leapfrogging logic is the only way to guarantee – through upgrading and a dynamic of continuous improvement – the competitiveness of Made in Morocco products, and ultimately the increase in productivity and income. That is to say, convergence with advanced economies.
Alexandre Kateb.
Huffpostmaghreb.com
Published on December 13, 2013.
Posted online on December 19, 2013.
