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| Volume VIII, June 2001, Number 2 |
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| ABSTRACT: Morocco’s Economic Prospects: Daunting Challenges Ahead |
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| Guilain Denoeux |
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Dr. Denoeux is associate professor of government at Colby
College in Waterville, Maine. This article draws on interviews conducted in Morocco in June 2000 and January 2001.
December 2000 and January 2001 brought much-needed
good news for Morocco's economy. First,
on December 20, the French conglomerate Vivendi bought a 35-percent stake in
Maroc Télécom, Morocco's state telecommunications company. This partial privatization brought a
considerable 23.3 billion dirhams (approximately $2.2 billion) into the state
coffers. Then there was the abundant
rainfall of mid-to-late December, which continued through January. The international economic environment, too,
suddenly appeared far more favorable to the kingdom, as reflected in particular
through lower oil prices and a rising euro.
Unfortunately, Morocco's economic future
presents many pitfalls not reflected in these recent developments. For one, the Youssoufi government's failure
to design and implement a clear economic strategy has prevented Morocco from
making progress toward overcoming its deficits in social and economic
areas. Indeed, some of the kingdom's
major problems -- poverty unemployment, social disparities -- seem to have
worsened in the past several years. Meanwhile, not enough has been accomplished toward creating a more
favorable environment for business activity. Consequently, private investment, both domestic and foreign, has lagged,
thus thwarting Morocco's only chance to jump-start its economy and place itself
on the path toward sustainable growth.
Meanwhile, no genuine program of
industrial modernization and restructuring appears to be under way. Known in Morocco as mise à niveau--raising
productivity standards within companies to make them competitive on
international markets -- such a program is critical to the kingdom's ability to
withstand the shock of increased foreign competition as the free-trade agreement
with Europe is being gradually implemented. For their part, Morocco's public finances look precarious, especially in
light of the significant wage and benefits concessions made by the government
during the summer of 2000. The weakness
of long-term capital investment, combined with the government's tendency to
seek to buy social peace, raises serious questions about Morocco's financial
situation in the years ahead.
Finally, 1999 and 2000 witnessed
unprecedented and dangerously high levels of labor unrest, a breakdown in the
dialogue between employers and unions, as well as mutual recriminations between
the government and business circles. This situation will have to be addressed if Morocco is to resolve the problems
that have been identified above. Increased private investment, mise
à niveau, and a stabilization of the country's public finances all depend,
to a large extent, on rekindling the country's much-vaunted social dialogue of
years past.
This is not to say that all the news
about the economy is negative. Macroeconomic indicators are generally good, certainly far better than two
decades ago. For all the administrative
constraints that continue to hinder investment and business transactions, the country today presents an environment far
more conducive to entrepreneurship than it used to be. The cumulative impact of the reforms
implemented during the decade of structural adjustment (1983-1993) has been
considerable, and has fostered private initiative and risk-taking, as reflected
in a new generation of internationally oriented businesspersons eager to try
their chance on world markets. Meanwhile, at the highest levels of government, a new group of highly
trained, energetic decision makers is asserting itself. Graduates from France's most prestigious
schools (grandes écoles)
and, increasingly, from American universities, these individuals have a
powerful and compelling vision of Morocco's future. In trying circumstances, they struggle every day to turn that vision
into a reality, and their efforts help explain why Morocco gives of itself the
image of a country that is not afraid of globalization.
In short,
Morocco remains a country with substantial economic assets. But it also cries out for a genuine economic
strategy, further economic restructuring, and a business culture that is more
conducive to national development. As
things currently stand, the economy lacks clear stewardship. Private investment is stagnating, while
privatization and economic liberalization are not proceeding with the urgency
required. Long-term capital investment
is insufficient, and recent government decisions have cast a shadow over public
finances. Industrial modernization and
restructuring are lagging, while labor relations remain troubled. And in social areas that are vital to
economic development, such as health and education, indicators are not
improving fast and significantly enough. Such a situation calls for a more
proactive approach than has prevailed thus far. Indeed, if Morocco does not take the initiative to bring about,
on its own, the transformations that are required, it runs the risk of seeing
these changes being imposed from the outside, as was the case in 1983, when
near-bankrupcy placed the kingdom at the mercy of the World Bank. The next couple of years will be decisive in
this respect.
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