Morocco on the verge of winning the growth bet
13 January 2011
Read by 1472 persons
• To fight unemployment, focus on structural reforms
• A GDP based on significant growth reserves
"When I look at myself, I despair; when I compare myself, I console myself." This saying sums up the feelings of many decision-makers in Morocco when they observe the social unrest in Tunisia and Algeria. Unemployment among young people and difficulties for higher education graduates to find employment are known in Morocco. The unemployment rate for this population, 24%, is twice as high as the national average, which, according to the HCP, stands at 9.8%. In comparison, the unemployment rate in Tunisia is 14 points; that of graduates, at the forefront of the current protests, would be much higher (one in two graduates would be unemployed, according to some independent sources).
After being tempted by the easy solution in the 1990s through the famous National Council for Youth and the Future (CNJA) by artificially creating jobs in local communities, the Moroccan authorities changed their approach. Everything is not perfect, of course, but they were intelligent enough to focus on structural reforms (liberalization, privatization, infrastructure upgrading, etc.) and the development of the tourism industry, by far the country's most important growth reserve. Tourism has also been the main showcase for foreign investment. In one decade, the entire face of the economy has been transformed. Between 2000 and 2009, the gross domestic product increased by 50%, bringing in its wake new urban middle classes who support consumption.
Probably underestimated, according to international experts, the Moroccan GDP is much more diversified than that of Algeria, which is almost exclusively based on hydrocarbon exports. While still important, the weight of the agricultural sector in the economy is decreasing, and gradually, growth is becoming more autonomous from agriculture. Services account for 55% of the structure of wealth produced annually in Morocco. Unlike neighboring Algeria and Tunisia, Morocco can also rely on a much denser network of SMEs and entrepreneurs.
In terms of the business environment, the international rankings that fuel the complex of Moroccan business leaders regarding Tunisia do not reflect the reality on the ground. For example, it is not possible for a multinational company to have a distribution subsidiary on site; it must necessarily allow a Tunisian operator to be the majority shareholder. Otherwise, it is obliged to set up industrial activity.
From Morocco's point of view, this means, for example, that the major home appliance brands present through distribution subsidiaries (LG, Samsung, Bosch, Whirlpool, etc.) would have no choice but to partner with Moroccans. The same applies to the commercial franchise sector, a sector that has literally exploded in recent years. Regulations formally prohibit the establishment of franchise businesses in Tunisia. Overall, it is much easier to invest in Morocco than in Tunisia, where it is often advisable to have the umbrella of relatives of the presidential family. In the next ten years, growth reserves will be found in the various sectoral plans launched by the government, to which must be added the phosphate industry, where Morocco holds world leadership, and renewable energies. The Maroc Vert, Halieutis, Industrial Emergence, and Tourism Vision 2020 plans are the main growth areas.
Published on January 12, 2011
Posted online on January 13, 2011
marpresse.com
• A GDP based on significant growth reserves
"When I look at myself, I despair; when I compare myself, I console myself." This saying sums up the feelings of many decision-makers in Morocco when they observe the social unrest in Tunisia and Algeria. Unemployment among young people and difficulties for higher education graduates to find employment are known in Morocco. The unemployment rate for this population, 24%, is twice as high as the national average, which, according to the HCP, stands at 9.8%. In comparison, the unemployment rate in Tunisia is 14 points; that of graduates, at the forefront of the current protests, would be much higher (one in two graduates would be unemployed, according to some independent sources).
After being tempted by the easy solution in the 1990s through the famous National Council for Youth and the Future (CNJA) by artificially creating jobs in local communities, the Moroccan authorities changed their approach. Everything is not perfect, of course, but they were intelligent enough to focus on structural reforms (liberalization, privatization, infrastructure upgrading, etc.) and the development of the tourism industry, by far the country's most important growth reserve. Tourism has also been the main showcase for foreign investment. In one decade, the entire face of the economy has been transformed. Between 2000 and 2009, the gross domestic product increased by 50%, bringing in its wake new urban middle classes who support consumption.
Probably underestimated, according to international experts, the Moroccan GDP is much more diversified than that of Algeria, which is almost exclusively based on hydrocarbon exports. While still important, the weight of the agricultural sector in the economy is decreasing, and gradually, growth is becoming more autonomous from agriculture. Services account for 55% of the structure of wealth produced annually in Morocco. Unlike neighboring Algeria and Tunisia, Morocco can also rely on a much denser network of SMEs and entrepreneurs.
In terms of the business environment, the international rankings that fuel the complex of Moroccan business leaders regarding Tunisia do not reflect the reality on the ground. For example, it is not possible for a multinational company to have a distribution subsidiary on site; it must necessarily allow a Tunisian operator to be the majority shareholder. Otherwise, it is obliged to set up industrial activity.
From Morocco's point of view, this means, for example, that the major home appliance brands present through distribution subsidiaries (LG, Samsung, Bosch, Whirlpool, etc.) would have no choice but to partner with Moroccans. The same applies to the commercial franchise sector, a sector that has literally exploded in recent years. Regulations formally prohibit the establishment of franchise businesses in Tunisia. Overall, it is much easier to invest in Morocco than in Tunisia, where it is often advisable to have the umbrella of relatives of the presidential family. In the next ten years, growth reserves will be found in the various sectoral plans launched by the government, to which must be added the phosphate industry, where Morocco holds world leadership, and renewable energies. The Maroc Vert, Halieutis, Industrial Emergence, and Tourism Vision 2020 plans are the main growth areas.
Published on January 12, 2011
Posted online on January 13, 2011
marpresse.com
