Moroccan Businesses: What Limits Their Performance
16 April 2015
Read by 2077 persons
Tarik El Malki, an economist known for his criticism of government policy, has written a book examining the impact of business climate reforms on business performance. He partially excuses the banks and blames the informal economy.
Early this week, at the Institute of Commerce and Business Administration (ISCAE), Tarik El Malki presented his book analyzing the business climate. This Thursday, April 16, 2015, the newspaper *L'Economiste* reviewed the book's main points, which rely on "empirical literature to assess the extent to which different business climate variables affect the profitability of Moroccan and foreign firms operating in the Kingdom," explains the daily newspaper.
El Malki bases his work on two sources: the annual business census from 1997 to 2008, and World Bank surveys on the investment climate in Morocco. It should be noted that the annual business censuses are conducted by the Ministry of Commerce and cover all firms operating in processing industries such as textiles and leather, agri-food, chemicals and parachemicals, mechanics and metallurgy, etc. In 2008, their number amounted to 7,700. The choice of the period 1997-2008 is not accidental, since during these years the state implemented several reforms and regulatory bodies, including the Anti-Corruption Agency and the Competition Council.
The economist-author reviews variables such as labor, land or access to financing, justice, taxation, the fight against corruption, etc. Unusually, El Malki gives credit to banks and other financing organizations. According to him, financing is not the main problem encountered by businesses. This is especially true since interest rates have fallen in recent years, even if banks haven't fully passed on the decrease in the central bank's key rate. Nevertheless, credit institutions continue to demand personal guarantees, which remains a problem for SMEs and excludes a large part of the productive sector. El Malki proposes "the creation of a public bank dedicated to SMEs, similar to the French experience."
In addition to financing, there are also competition rules, which are distorted by the presence of non-transparent businesses in the informal economy. The informal economy accounts for 20% of GDP and 30% of jobs created. No incentive or repressive measure has been sufficiently effective to reduce the share of the parallel economy in the national productive sector. Furthermore, the termination of employment contracts, which is too difficult for structured companies, does not promote employment. Employers still face a double penalty: statutory indemnities and indemnities for unfair dismissal.
Ndiaye Mar Bassine.
Published on 16/04/15
Posted online on 16/04/15.
Le360.ma
Early this week, at the Institute of Commerce and Business Administration (ISCAE), Tarik El Malki presented his book analyzing the business climate. This Thursday, April 16, 2015, the newspaper *L'Economiste* reviewed the book's main points, which rely on "empirical literature to assess the extent to which different business climate variables affect the profitability of Moroccan and foreign firms operating in the Kingdom," explains the daily newspaper.
El Malki bases his work on two sources: the annual business census from 1997 to 2008, and World Bank surveys on the investment climate in Morocco. It should be noted that the annual business censuses are conducted by the Ministry of Commerce and cover all firms operating in processing industries such as textiles and leather, agri-food, chemicals and parachemicals, mechanics and metallurgy, etc. In 2008, their number amounted to 7,700. The choice of the period 1997-2008 is not accidental, since during these years the state implemented several reforms and regulatory bodies, including the Anti-Corruption Agency and the Competition Council.
The economist-author reviews variables such as labor, land or access to financing, justice, taxation, the fight against corruption, etc. Unusually, El Malki gives credit to banks and other financing organizations. According to him, financing is not the main problem encountered by businesses. This is especially true since interest rates have fallen in recent years, even if banks haven't fully passed on the decrease in the central bank's key rate. Nevertheless, credit institutions continue to demand personal guarantees, which remains a problem for SMEs and excludes a large part of the productive sector. El Malki proposes "the creation of a public bank dedicated to SMEs, similar to the French experience."
In addition to financing, there are also competition rules, which are distorted by the presence of non-transparent businesses in the informal economy. The informal economy accounts for 20% of GDP and 30% of jobs created. No incentive or repressive measure has been sufficiently effective to reduce the share of the parallel economy in the national productive sector. Furthermore, the termination of employment contracts, which is too difficult for structured companies, does not promote employment. Employers still face a double penalty: statutory indemnities and indemnities for unfair dismissal.
Ndiaye Mar Bassine.
Published on 16/04/15
Posted online on 16/04/15.
Le360.ma
