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Closing the Development Gap – What Morocco Can Do – Jean R. AbiNader

Thu, 05/25/2017 - 21:48

Jean R. AbiNader, MATIC
May 25, 2017

Jean R. AbiNader, Exec. Dir., Moroccan American Trade and Investment Center

We have written recently on IMF and World Bank reports assessing Morocco’s progress on economic and fiscal policies and human and social development indicators. A new analysis from the North Africa Report reinforces the positive aspects of Morocco’s development while noting continuing challenges identified in the earlier reports as well as other concerns that impede the country’s growth.

Morocco is justifiably proud of its rapid expansion in serving its people, as witnessed in the early achievement of its Millennium Development Goals, bringing power, water, and primary education to most of the country. Its human resources are often mentioned as a key factor in attracting external investment, which requires qualified workers for such industries as call centers, automobile and aeronautical manufacturing, pharmaceuticals, and logistics and supply management. Its national planning vision provides guidance for managing a broad diversification of its economy beyond agriculture and phosphates. And King Mohammed VI’s economic diplomacy in Africa has strengthened its commercial ties through growing market penetration on the continent.

As the article points out, Morocco has avoided the trap of other African (and Middle Eastern) countries of excessive economic dependence on commodity exports (in Morocco’s case, phosphates and agriculture) by building a world-class infrastructure in locations such as Tanger-Med port, and opening new opportunities for products manufactured in the country. And the article cautions, “Now it must build on this foundation, investing in education and sharing the wealth.”

The author takes the reader on a tour along the highway from Marrakech to Casablanca, pointing out the widespread development that can be seen and communities that have benefited from the highway, which is constantly being extended to points southward along the Atlantic and eastward along the Mediterranean.

While marveling about the rapid and beneficial growth in less than 15 years, he notes, “But Morocco remains an outlier. Many other African countries are struggling to meet the levels of growth recorded earlier in the decade. As their commodity dependence has been laid bare, Morocco has continued to build a liberal economy underpinned by strong state structures… So what is the secret sauce? Where Morocco has played to its strengths, it has outperformed its neighbours – often with ‘champion’ corporations directed by the state. The country has success stories, from its leadership in developing renewable energy to the expansion of its banks and major industrial companies into ever more markets.”

Now Morocco faces a period of transition, a point raised by the World Bank report as well. How does the country move from a top-down driven model of development to one that is more inclusive, enables small and medium sized enterprises to thrive, and provide the types of education that continually produce market-ready labor?

This is a critical challenge for Morocco as it has benefited greatly by having, in many ways, its development driven by the King’s overarching vision and state-owned entities that have the assets and expertise to implement broad-scale projects that are beyond the financial capabilities of the private sector. Now that this infrastructure and economic framework are in place, from high-speed rail service coming on line in 2018, to the tramways growing in Rabat and Casablanca, to well-performing financial institutions, air and sea transportation networks, and a world-class corporation overseeing the phosphates industry and moving it downstream in Morocco and elsewhere, what comes next – what does Morocco need to do to continue and even expand its growth?

Allied with this is the thorny challenge of how to realize social and human development goals within the context of an evolving parliamentary democracy that is still formulating its identity atop myriad political parties and traditions. The article notes the recent difficulty in forming a new government as an example.

The Hard Truths

Progress does not come without challenges, and Morocco is no exception. The article says it this way: “Back home, another Morocco ­exists, peopled by poor farmers and an ­increasingly urbanised underclass whose development indicators fall well short of international norms. The education system has created some impressive talents for the banks and corporations driving the ‘modern’ economy, but public education is seen by many to have failed the majority. In turn, this is undermining economic progress and building up a well of social discontent.”

Similar to the World Bank report, the article emphasizes the need to build a high-performing education sector as a critical priority moving forward. Many initiatives have been tried over the past decade but too often education is caught up in political debates from languages of instruction to STEM content for school and university curricula. A recent study found that teachers were on average absent for a third of their working hours. It is no wonder that parents have opted for private education, if they can afford it. In disadvantaged areas, illiteracy levels remain shockingly high – pointing to severe urban-rural and gender divides,” says the report.

Morocco is working hard to change the overall environment for education. One strategy is exemplified by the public-private partnerships that feed skilled workers into the manufacturing sector, as the article points out, “A strong and focused state can play a critical role in driving policy, supported by a profitable and job-creating private sector.” As Morocco continues to engage companies in specific sectors, it must also raise the overall quality of its educational system, reduce the drop-out rates among middle school students in rural and marginalized urban areas, encourage a higher rate of acquisition of vocational and technical skills, and enable small and medium size enterprises to create jobs that attract young men and women to look for opportunities to prosper in the new Morocco.

Morocco is committed to meeting these challenges, through the second National Initiative for Human Development, focusing on raising employment and education among rural and marginalized communities; its pursuit of the Sustainable Development Goals to benefit the quality of life for Moroccans; and upgrading its services and agricultural sectors to keep up with technology advances that will generate more employment and prosperity. While it may not have all the answers, the King has make it clear that Morocco will continue to place its citizens at the nexus of its economic and social development.

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Categories: The moroccan press

Biz Brief: New Partnerships, from China to Detroit, Form Win-Win Projects – Jean R. AbiNader

Thu, 05/25/2017 - 15:30

Jean R. AbiNader, MATIC
May 25, 2017

Morocco’s largest skyscraper will be built with a Chinese company. The African Development Bank extends its efforts in the water sector. A US company starts testing solar power cooling systems while another draws inspiration from Moroccan architecture in a Detroit redevelopment effort. And a Canadian company sets up a joint venture for mineral exploitation. Also, Casablanca does well in poll of African urban centers

Reaching Up. Several sources report that Morocco’s leading construction company, Travaux Generaux de Construction de Casablanca, has entered into a joint venture with the China Railway Construction Corporation (CRCC)  to build what will be Africa’s largest skyscraper in Rabat. Tagged at some $375 million, the 45-story tower, built to ecological and sustainable design concepts, will include offices, hotels, and luxury apartments and be a key element in the country’s development of the Bouregreg Valley captured in the 2014-2018 development program dubbed “Rabat, City of Light, Moroccan Cultural Capital.” The project also involves building several innovative facilities, including the Grand Theater of Rabat, the Arts and Culture House, the National Archives of the Kingdom of Morocco and a business center. According to the CRCC’s headquarters in Beijing, the total designed floor space is 86,000 square meters. “The project, CRCC’s first skyscraper in Morocco, will accelerate the development of infrastructure and engineering projects not only in North Africa, but also in other markets related to the Belt and Road Initiative,” said the CRCC, which will own 60% of the tower.Casablanca Does Well in Measures of Urban Business Environment. The Fraym Urban Markets Index ranks Africa’s 169 largest urban clusters in 35 countries in terms of business environment, accessibility, and connectedness to markets. Casablanca placed 6th, which was cited as a “highly connected” gateway to its sub-regions and beyond. Given the diversity of the top 20 cities, Fraym CEO Ben Leo said that well-connected hubs have an “outsized influence despite having a smaller GDP that many other African cities.”

African Development Bank Zeroes in on Water Sector. As the leading donor in Morocco’s water sector, the African Development Bank (AfDB) has acquired extensive experience in the country. It has funded water treatment installations and distribution systems in 30 cities, providing supplies of sustainable drinking water to more than two thirds of the population, reaching as high as 100% in many urban areas. In a recent report it noted that “In rural areas, the access to drinking water has improved from 14 per cent in 1990 to 94 per cent now.” At a cost of some $350 million, projects include improving the quantity and quality of drinking water on the Rabat-Casablanca access for some five million residents, and a further 2 million people in the Marrakech, Al Haouz, and Al Kelaa areas. The Moroccan partner for these projects is ONEE, the National Office for Electricity and Potable Water. In the upcoming planning period of 2017-2021, AfDB will continue its work in the water sector.

Morocco-US Projects Worth Noting. A Boston start-up is now field testing its “evaptainer” in Morocco to assess its ability to provide cooling for foods, medicines, and other perishables using only the sun and science to power the unit. Resembling a large ice chest, the patented technology is called PhaseTek and is activated when users fill the reservoir “with any source of water (e.g. tap, well, river, lake). The walls of the device then begin to draw out heat from the interior of the device through evaporative cooling. The EV-8 can cool its internal storage space by 15-20 degrees Celsius from ambient conditions.” The first results, from the 300 Moroccan households using the evaptainer, are expected in fall 2017.

In Detroit, where sections of the city have yet to experience any significant re-development, a company has turned to Morocco for inspiration on how to repurpose buildings that broadly benefit the community. In the city’s North End, the group Ghana ThinkTank, a coalition of artists from Ghana, Morocco, Indonesia, and more, is working on a concept called American Riad. “A typical home style in Morocco, a riad has a courtyard where family and friends gather. There may be beautiful tiles, a small pool or fountain, and lush foliage. In the North End, where unemployment is about 23 percent and an estimated 43 percent of residents live in poverty, this concept will be adapted to be the centerpiece of an inclusive arts colony that organizers hope will also be an economic engine.”

A section of the city that has long been marginalized, despite once being home to many Motown artists, the North End is benefiting from a new streetcar line that promises to enable greater economic activity for residents. The first step was securing an underused 12-unit, mixed-use building and the grassy lot that will one day be the American Riad courtyard. “Beyond a community arts center, the renovation plans include six affordable housing rentals and commercial space for businesses that serve the needs of the North End.”

Canadian Company Inks Manganese Partnership. Vancouver-based Maxtech has formed a joint venture with Green Energy Resources (GER) of Morocco “to evaluate established mineral and mining concessions in Morocco for potential acquisition or joint ventures,” according to the company’s press release. Several manganese assets are in advanced stages of development, and the firm would seek to garner fully permitted mining concessions from the government.

Peter Wilson, CEO of Maxtech, said, “This partnership provides a unique opportunity for Maxtech to expand into Morocco with a goal to eventually supply manganese into the European marketplace. It is an excellent jurisdiction in which to operate and with the help of Green Energy’s in-country presence we will be able to evaluate new manganese claims efficiently.”

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Categories: The moroccan press

New Report Shows US-Morocco Free Trade Agreement Far Exceeded ITA Expectations

Mon, 05/22/2017 - 21:42

Washington, DC, May 22, 2017, Moroccan American Center for Policy (MACP) – In the twelve years since its implementation, the US-Morocco Free Trade Agreement (FTA) has dramatically exceeded the predictions initially set by the United States International Trade Commission (ITA), according to a new report published today by the Moroccan American Center for Policy chronicling the origins and impact of the deal.

“In broad terms, the ITA… predicted that US exports were ‘likely to increase by $740.0 million, and US imports from Morocco [were] likely to increase by $198.6 million,’” stated the report, titled “Exceeding Expectations: The US-Morocco FTA.” “US exports were able to hit this target by 2007, in just its second year of implementation. Through mostly sustained improvement up to 2016, US exports to Morocco have actually increased by about $1.4 billion, amounting to a 286 percent boost.” Meanwhile, “Moroccan exports to the US reached their target in 2008,” and since 2010 “have seen consistent improvement,” growing by about $560 million overall.

The report notes that of the six US free trade agreements implemented between 2004 and 2010 (Chile and Singapore in 2004, Bahrain and Morocco in 2006, and Oman and Peru in 2009), “Morocco’s success stands out among this group. In the first two years following implementation, US exports to Morocco shot up by 118 percent, nearly double the percentage of the next most successful over a similar time period . Moroccan exports to the US grew by 18 percent as total bilateral trade grew by 68 percent—the highest among this group of FTA partners. In terms of jobs, the Morocco FTA was again the top performer, with an estimated 101 percent increase in US jobs supported by exports to Morocco over the same period.”

In addition to generating economic benefits for both countries, the FTA kicked off a series of initiatives further strengthening the US-Morocco bilateral relationship and Morocco’s reform trajectory, “one of the US’s primary goals” for the deal. Indeed the report offers an overview of the largely political impetus behind the FTA— the US’s first in Africa — noting that it was seen by President George W. Bush’s Administration as a reward for Morocco’s support in the war on terror and as recognition of the two countries’ centuries-old friendship. Congressional support for this view and for the possibility of opening new markets for US exports was overwhelming. In July 2004, the US Senate voted 85-13 in favor of the United States-Morocco Free Trade Implementation Act; and the House of Representatives followed suit with a 323-99 vote in favor. The momentum continued, and in 2007 and again in 2013, Morocco signed two consecutive Millennium Challenge Corporation Compacts; and in 2012, the US and Morocco launched a bilateral Strategic Dialogue—one of about two dozen such agreements in existence.

“From both a political and economic standpoint, the US-Morocco Free Trade Agreement is a prime example of trade policy done right, where both sides benefit, and where the United States strengthens a relationship with a critical friend and ally,” said report author and MACP Director of Research & Policy Analysis David S. Bloom.

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Contact: Jordana Merran, 202.470.2049

The Moroccan American Center for Policy (MACP) is a non-profit organization whose principal mission is to inform opinion makers, government officials, and interested publics in the United States about political and social developments in Morocco and the role being played by the Kingdom of Morocco in broader strategic developments in North Africa, the Mediterranean, and the Middle East.

This material is distributed by the Moroccan American Center for Policy on behalf of the Government of Morocco. Additional information is available at the Department of Justice in Washington, DC.

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Categories: The moroccan press

EXCEEDING EXPECTATIONS: THE US-MOROCCO FTA

Mon, 05/22/2017 - 18:17
EXCEEDING EXPECTATIONS:  THE US-MOROCCO FTA

Report abstract:

On January 1st, 2017, the US-Morocco FTA (Free Trade Agreement) began its 12th year enforcing liberalized commercial exchange between two historic allies. The FTA has surpassed moderate expectations for its economic impact, and has been a success story for both sides. This paper will describe how Morocco became the US’s first free-trade partner in Africa, and evaluate its economic and political impact compared to expectations. Finally, avenues for improving the FTA and general US-Morocco economic cooperation will be evaluated.

Click the image below to view the report:

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Categories: The moroccan press

Morocco’s Scorecards from IMF and World Bank Detail Growth Challenges – Jean R. AbiNader

Fri, 05/19/2017 - 17:07

Jean R. AbiNader, MATIC
May 19, 2017

Jean R. AbiNader, Exec. Dir., Moroccan American Trade and Investment Center

In 2016, Morocco was granted a third two-year Precautionary and Liquidity Line (PLL)—a provisionary line of credit from the IMF—which Morocco uses as an insurance instrument against external risks such as severe trade imbalances while supporting its efforts to promote higher and more inclusive growth. During its annual review conducted recently, Mitsuhiro Furasawa, IMF Deputy Managing Director and Acting Chair, said, “Morocco’s sound economic fundamentals and overall strong record of policy implementation have contributed to a solid macroeconomic performance in recent years. The external position remained strong in 2016, as international reserves further increased despite a higher-than-expected current account deficit. While fiscal developments were less favorable than expected, this was due in part to slower growth and accelerated value-added tax reimbursements. Growth is expected to rebound in 2017 and accelerate gradually over the medium term, subject to improved external conditions and steadfast reform implementation.”

So, on both fronts—external trade and domestic reforms—Morocco is making progress, but not without continuing challenges. Mr. Furasawa pointed out, “This outlook remains subject to significant downside risks, including from weak growth in Morocco’s main trading partners, geopolitical risks, and global policy uncertainty. In this context, Morocco’s PLL Arrangement with the IMF continues to serve as valuable insurance against external risks and supports the authorities’ economic policies.”

This comes against a backdrop of a broad program to stimulate economic growth, encourage greater participation in the economy by women, and several investment stimulus measures waiting for action in Parliament. Mr. Furasawa noted that “The authorities are committed to further reducing fiscal and external vulnerabilities while strengthening the foundations for higher and more inclusive growth. Building on progress made in recent years, further fiscal consolidation is needed… Finally, improving the business climate and governance, competitiveness, access to finance, and labor market policies is essential to raise potential growth, reduce persistently high unemployment levels, especially among the youth, and increase female labor participation.”

Similar recommendations were included in the World Bank’s Country Economic Memorandum (CEM), which focused on these issues and quoted King Mohammed VI’s call to better develop Morocco’s “intangible capital” to identify other recommended policy priorities. The report notes, “Morocco stands out as an exception in a turbulent Arab world. It has considerable assets to be able to drive up its distinctiveness and become the first non–oil-producing North African country to join the ranks of upper-middle-income countries by the next generation. To achieve this goal, Morocco can take up real drivers for change on both the political level (the stability of its leadership), the institutional level (the values and principles endorsed by the 2011 Constitution), and the economic, social and environmental levels (normative convergence with the European Union) to build its intangible capital, the main source of any future shared prosperity.”

The CEM acknowledges the great progress that Morocco has made through a series of reforms that have moved sectors of the economy forward, improved the quality of life for most Moroccans, generated more jobs, and supported a range of “significant social and economic achievements over the past fifteen years.” It cautions that “Bringing Morocco’s improved development outcomes to the next level and achieving economic convergence with Southern European countries will require it to further deepen and integrate sector and governance reforms.”

So, what is this “intangible capital” to which the King referred? It refers to enhancing the productivity of the Moroccan economy through strengthening the quality of the institutional, human, and social capital of the country; in short, an advanced social contract based on more efficient and inclusive institutions, better and healthier options for individual growth, and a society that provides opportunities for better health and work outcomes.

Jean-Pierre Chauffour, World Bank Lead Economist and author of the report, believes that Morocco’s youth bulge can be turned into a long-term asset by reforms that remove obstacles to business development; an overhaul of the educational system to produce a qualified workforce of men and women operating in a mobile labor market; and a progressive market-oriented economy that eschews obstacles to trade in order to boost productivity and promote conditions that support fair market conditions for investors small and large, domestic and foreign.

Specific measures related to education and health are proposed “to achieve an ‘education miracle’ and give Moroccan students the needed skills to integrate into a more competitive job market.” According to the CEM, “Morocco’s ability to empower and mobilize greater economic opportunities for women will be instrumental to significantly enhance economic growth.” Finally, the CEM views the strengthening of institutions and the country’s governance model as key preconditions to reinforce the rule of law and place the Moroccan citizen at the heart of its development model. This ranges from more accountable and efficient public services to giving voice to citizens and enhancing respect, interpersonal trust and civic duty.

Among challenges highlighted in the report are the following:

  • Although barely 15 kilometers separate the kingdoms of Morocco and Spain, the average Moroccan’s purchasing power stood at only 22.5% of its immediate European neighbor in 2015.
  • The country is ranked 126th worldwide out of 187 countries on the Human Development Index and 91st of 157 countries on the World Happiness Index, a more subjective index measuring well-being, trust in society, solidarity, and the feeling of freedom.
  • Whereas the unemployment rate for unskilled young people is 4.5%, the rate is 21.7% for young technical college graduates and 24.6% for young university graduates, even as growing numbers of young people are entering university. Moreover, approximately 90% of young people who do have a job do not have an employment contract and work in the informal economy, indicative of the insecurity of their employment situation.
  • On average, over the last five years (2012–2016), only 26,400 net new jobs were created per year for a working-age population (15–65 years old) that grew by a net 270,000 people on average per year, according to Morocco’s High Commission for Planning (HCP).
  • All in all, the Moroccan economy has not managed to make any significant efficiency gains despite its structural reforms, economic openness, improved business environment, imported technologies and increase in school enrollment rates.
  • With regard to raising the level of social capital, the report calls for ensuring greater respect for, and improved application of, the rule of law; promoting a sense of civic duty and exemplarity in all decision-making spheres; encouraging engagement in associations and the development of civil society; and supporting a change in attitudes and sociocultural norms through targeted information campaigns.

While someone unfamiliar with Morocco may think these remarks and others in the report reflect a “tough love” perspective, the recommendations actually echo many of the points made by the King in his speeches going back to Throne Day 2014, if not before. It is remarkable that a sovereign has the vision to measure what has been accomplished without hesitating to spell out what needs to be done. The recommendations highlighted by the CEM require a comprehensive strategy to advance Morocco’s future growth. There may be no better starting point than the King’s own words.

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Categories: The moroccan press

Mixed Economic News as Morocco Moves Forward in Key Sectors – Jean R. AbiNader

Wed, 05/17/2017 - 15:11

Jean R. AbiNader, MATIC
May 17, 2017

Jean R. AbiNader, Exec. Dir., Moroccan American Trade and Investment Center

Fitch Ratings issued a cautionary assessment of Morocco’s banking exposure in Africa. Fez takes center stage in business and economic news with several initiatives announced. The aeronautics sector gets new public-private partnership to boost capacity. And a government agency issues updated statistics on the role of technology in the Moroccan economy.

Looks good on paper. According to a recent bulletin released by Fitch Ratings, Moroccan banks must be careful not to be over-exposed in acquiring assets in Africa. Both the recent acquisition of Barclays Bank in Egypt and greater activity in sub-Saharan Africa were included in the assessment. According to the bulletin, “Moroccan banks that establish or acquire banks in markets with lower sovereign ratings are exposed to the large portfolios of local government bonds that these subsidiaries will typically hold.”

The concern, most recently tied to Attijariwafa Bank’s purchase of Barclays, reflects the quality of domestic sovereign bonds in most African markets, which are below the quality of similar bonds in Morocco, exposing the banks’ bottom lines to greater asset risk as well as to regulatory standards that may be less developed than Morocco’s.

Attijariwafa paid almost three times the book value for the Barclays operations, justified by the value that its African subsidiaries generate: 32% of 2016 net income for BMCE (Banque Marocaine du Commerce Extérieur), 29% for Attijariwafa, and 12% for GBPC (Groupe Banque Populaire Centrale), offsetting weak earnings in the Moroccan market. Profits are also threatened by weak loan portfolios if the assets were to decline in value, or in the case of government bonds, fail to maintain their face valuation. Currently, BMCE has operations in 19 African countries, Attijariwafa in 13, and GBPC in eight.

Fez takes center stage in economic spotlight. As part of the country’s continuing effort to geographically diversify its economic growth, the First Economic Forum of the Fez-Meknes Chambers of Commerce and Services (CCIS) featured an address by Moulay Hafid Alalamy, Minister of Industry, Trade, Investment, and the Digital Economy, in which he reminded the audience that the government had instituted a series of mechanisms to support local industrial development and balanced geographic growth.

The Minister highlighted the country’s success in industrial manufacturing and pointed out that traditional sectors such as textiles and leatherwork are important in adding jobs to the economy. “Thanks to the Industrial Acceleration Plan,” the Minister explained, “Morocco is committed to an integrated and inclusive approach and an irreversible and mastered insertion in global value chains.” He added that “world leaders are opting for Morocco and are developing major projects here. With the integrated and innovative system put in place, these operators will now have more visibility and will be able to carry out their projects under more advantageous conditions.”

While in Fez, the Minister attended the announcement by ALTEN Group, a French company prominent in technology engineering in the ITC sector, that it was moving ahead with expanding its operations in Morocco. According to a story in Morocco World News, the company currently has more than 200 engineers and technicians working on information technology and telecommunications projects for a number of European clients. Its newest project, “The Embedded Systems Automotive and Aeronautics,” will provide outsourcing of engineering services that will create more than 300 engineering positions, mainly in automotive and aeronautical embedded systems.

The ultimate goal is to set up “a competence center of 500 engineers in Fes by 2020, with the goal of reaching 1,000 full-time employees in Morocco.” Pascal Amore, member of the Executive Committee of the ALTEN Group, stressed the importance of the group’s presence in Morocco and the strategic nature of its activities initiated at the Fes Shore Park. “ALTEN, as a global leader in engineering and technology consulting, develops design and engineering projects for major global companies in the fields of information technology, telecommunications, aeronautics, space and the automobile industry,” he said.

Auto sector receives financing boost. At the automobile value chain fair held in Tangier, Minister Alalamy signed an agreement with Société Générale du Maroc and AMICA, the trade association for the automobile sector, which would provide specific financing services for value chain supply companies in the sector.

As the Minister put it, “Our ambition through the signing of this agreement is to enable the automotive sector to pursue the exceptional dynamics it shows, through financing offers adapted to the actors of the automotive ecosystems.” This financial support is essential to meet or exceed the goal of 65% of locally produced materials for the industry. “Through this agreement,” according to the Morocco World News story, “Société Générale du Maroc says that it is committed to supporting the automotive industry throughout the value chain of financial and banking services dedicated to companies: financing offers in the form of operating loans, investment credits, industry DEVcredits (tailored financing), currency financing, leasing, factoring, long-term leasing of vehicles, cash management solutions and also offers dedicated to the employees of companies in the automotive sector.”

Aeronautics sector finds new partners to build workforce competency. Casablanca recently hosted a national conference on “Developing Aeronautical Skills: A New Approach to a New Vision.” The central theme of the program was the need for initiatives to boost the number of qualified workers and how to provide sustainable training efforts in the sector. The event was organized by Mundiapolis University, which signed two partnership agreements with Bombardier and the Moroccan Aeronautics and Space Industries Group (GIMAS). Both agreements focus on developing certification programs for employees in the aeronautics sector and upgrading the support for engineering students at the University through internships, case studies, apprenticeships, and final projects.

The growth of the sector has been quite rapid, with more than 12,000 jobs created and 120 companies generating a turnover of nearly USD 1 billion each year, according to a press release from Mundiapolis. With growing interest from international investors, it is incumbent that the sector has a robust training regime to meet industry needs. Mundiapolis President Amine Bensaid said that, through this partnership, the university’s ambition is to be the best companion for both students and companies by continuously adapting their training programs to the expectations of the job market and the needs of companies.

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Categories: The moroccan press

Morocco Confronts Difficulty of Workforce Development – Jean R. AbiNader

Fri, 05/12/2017 - 16:42

Jean R. AbiNader, MATIC
May 12, 2017

Jean R. AbiNader, Exec. Dir., Moroccan American Trade and Investment Center

It has become a nostrum in international development, especially in Africa and the Middle East, that job creation is the number one goal for ensuring greater domestic stability. For example, the latest reports from the World Economic Forum and Ernst and Young strongly emphasize the critical need for employment opportunities for the burgeoning youth population, including women. Having spent time on workforce development last year in Jordan, and having met this month with consultants in Jordan and Lebanon who deal with youth employment and related issues, it was useful to compare their insights with those on youth employment in Morocco as described in a recent article by the Oxford Business Group (OBG).

That there has been limited success, despite the various initiatives being launched, is hardly the fault of the agencies and companies hard at work to generate more employment opportunities. First of all, there are just too many unemployed university, secondary school, and primary school graduates for any single solution or group of solutions to provide the needed jobs. Creating jobs requires domestic and foreign investments in diversified sectors, so that while the employment base for university graduates grows (assuming there is a match between their studies and the available jobs – a big assumption), you are also addressing opportunities for the vocational-technical (vo-tech) and unskilled worker pools. This is quite a challenge in Morocco, where around 40% of the workforce is seasonal and employed in agriculture, while another 40% fills service sector jobs that have high turnover, low wages, and few benefits for retaining and upgrading workers.

What’s left? The article begins with a case study of what Peugeot is doing as part of its commitment to workforce development in Morocco: using a public-private partnership (PPPs), consistent with Morocco’s 15-year strategy to reform the education sector. According to OBG, “PSA Peugeot Citroën (PSA) entered into an agreement with higher education institutions to open a series of design labs called OpenLabs,” in partnership with five Moroccan universities, including an engineering school, two US universities based in Morocco and a technology transfer center at the quasi-public International University of Rabat (UIR). This is not PSA’s first innovative effort to bring together the best brains available to promote skills acquisition for the new economy. “The OpenLabs are part of Science Technologies Exploratory Lean Laboratory (StelLab) – an international network of academic chairs and research laboratories launched by PSA in 2010 to develop more innovative collaboration with the global academic community.”

In Morocco, the program is called Sustainable Mobility for Africa, a four-year effort to develop mobility systems with “a focus on renewable energy, electric cars and logistics.” Focusing on future trends in the automotive sector reflects PSA’s commitment to the industry in Africa. It has launched a $90 million investment in the Kenitra region focused on the African markets. “By drawing on the professional and scientific experience of PSA and the expertise of the educational institutions involved, the initiative also targets the development of a labour force that has the skill set required by the automotive industry.”

It is not surprising that “Morocco’s expanding automotive segment posted record levels of exports for the third straight year in 2016, with the 316,712 units shipped abroad representing a 22.4% rise on the previous year.” This is the largest export category by value for Morocco. It is projected that the total number of employees will reach approximately 200,000 by 2020. All of this is good news, but is dwarfed by the reality of 1.3 million unemployed men and women of varying skills, ages, and education. Last year’s WEF human capital index noted that Morocco declined three spots to 98th out of 130 economies.

Helpful Initiatives Fall Short of Meeting Needs

It is expected that the number of students in Morocco will peak at 1.23 million by 2021. This poses structural as well as resources issues for the country. According to US government figures, “Although more than 95 percent of school-aged children in Morocco are now enrolled in primary school, the education system in Morocco faces significant challenges. Drop-out rates are still high and only 53 percent of students enrolled in middle school continue on to high school and less than 15 percent of first grade students are likely to graduate from high school.”

USAID is doing its part by opening vo-tech training centers in six locations. Known as Career Centers, the institutes provide soft skills and job preparation workshops. These are linked to an online platform for career services that has high hopes of improving the employability of its clients.

The national authority for vocational training, OFPPT, is setting up training centers in regions around the country to promote entrepreneurship and diversify the available vocational training. Morocco realizes that it lags in innovation and entrepreneurship, as highlighted by the “Global Entrepreneurship Monitor Global Report 2016/17,” which ranked Morocco 59th of 65 economies for early-stage entrepreneurial activity.

Morocco’s efforts have yet to achieve the level of coordination called for in the Strategic Vision 2015-2030 announced in May 2015. Lack of experienced leadership at all levels of the education system, the need for coordination among various international donors, training for NGO and civil society groups supporting educational reform, and the incremental nature of changes encompassing teacher training, curriculum development, the continuing conflict over languages of instruction, and adequate resources allocated to rural and urban areas, are some of the more obvious issues to be resolved. King Mohammed VI has made education for jobs a key priority for the country, which needs steady, progressive, and proactive professionals guiding education for his goals to be realized.

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Categories: The moroccan press

US Energy Coalition Honors Morocco’s King Mohammed VI with Energy Efficiency Visionary Award

Thu, 05/11/2017 - 22:51

Washington, DC, May 11, 2017, Moroccan American Center for Policy (MACP) — Earlier this week, the Alliance to Save Energy honored Morocco’s King Mohammed VI with the Energy Efficiency (EE) Visionary Award, which recognizes “pioneering leadership in energy efficiency.” US Senators Jeanne Shaheen (D-NH) and Rob Portman (R-OH) were also awarded.

“Morocco’s leadership in adopting ambitious efficiency policies sets an example for other countries and will pay tremendous dividends for the Kingdom,” said Alliance President Kateri Callahan in a statement. “His Majesty and the entire Moroccan government are truly energy efficiency visionaries and we are thrilled to present them with this award.”

Her Highness Princess Lalla Joumala Alaoui, Ambassador of the Kingdom of Morocco to the United States, accepted the Award and delivered remarks on behalf of the King at the Alliance’s 10th Annual EE Global Forum on May 8.

“In my vision for socio-economic development, energy efficiency plays an important part in enhancing the fundamental rights of citizens, in environmental protection, in the preservation of public health, in curbing dependence of energy and in rationalizing public spending,” read the King’s statement.

“The pressing challenge for our world today is not so much to confront the lack of energy resources as to mobilize the investment needed in this field,” he said. “It is, therefore, necessary to build the energy infrastructure required and to develop alternative technologies… The security of energy supply, energy availability, energy efficiency and environmental protection are the bedrock of my country’s energy strategy.”

The King noted his country’s commitment to generate 42% of its energy needs from renewable sources by 2020 and 52% by 2030; as well as Morocco’s role as President of the 22nd Conference of the Parties to the UN Framework Convention on Climate Change (COP 22) last November.

“Our commitment in this field does not stop at Morocco’s borders,” he explained. “I pledge to keep up efforts at the national, regional and continental levels and do all I can to promote an environment conducive to the sustainable development of energy efficiency, renewable energy, technological innovation and green jobs in general.”

Morocco has long been a climate advocate, and was recognized last year as among the top five countries doing the most to combat climate change by the Climate Change Performance Index—landing among the top 10 three years in a row. The country’s NOOR solar power complex is the largest in the world – so large it is visible from space; and by completion, will be capable of producing 2,000 megawatts of energy.

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 Contact: Jordana Merran, 202.470.2049

The Moroccan American Center for Policy (MACP) is a non-profit organization whose principal mission is to inform opinion makers, government officials, and interested publics in the United States about political and social developments in Morocco and the role being played by the Kingdom of Morocco in broader strategic developments in North Africa, the Mediterranean, and the Middle East.

This material is distributed by the Moroccan American Center for Policy on behalf of the Government of Morocco. Additional information is available at the Department of Justice in Washington, DC.

The post US Energy Coalition Honors Morocco’s King Mohammed VI with Energy Efficiency Visionary Award appeared first on Morocco On The Move.

Categories: The moroccan press

Morocco Continues to Lead Economic Growth in the Region – Jean R. AbiNader

Thu, 05/11/2017 - 20:05

Jean R. AbiNader, MATIC
May 11, 2017

Jean R. AbiNader, Exec. Dir., Moroccan American Trade and Investment Center

Two major studies released this month, the African Competitiveness Report published by the World Economic Forum, and the Africa Attractiveness Report from Ernst and Young (EY), point out that Morocco leads the other members of the Arab Maghreb Union (AMU) in many indicators of economic resilience. Unlike Algeria, Libya, Mauritania, and Tunisia, perhaps the most singular factor contributing to its success is Morocco’s stability, which allows it to grow without risking inflation and massive debt from overspending, or overreliance on select sectors resulting in unbalanced growth. This does not mean that there is an easy way forward. Challenges remain, including high unemployment and the mismatch between educational outputs and market needs to the need to balance economic growth among different regions of the country.

In the World Economic Forum Report focusing on Africa, data from the World Bank, the African Development Bank, the UN, Moroccan public and private sector sources, and extensive interviews with company executives are used to rank countries along 12 indicators of the Global Competitiveness Index. These are: institutional performance, infrastructure, macroeconomic environment, health and primary education, higher education and training, goods market efficiency, labor market efficiency, financial market development, technological readiness, market size, business sophistication, and capacity for innovation. The focus of this edition of the biennial report is Addressing Africa’s Demographic Dividend, highlighting the policies that need to be implemented to take full advantage of the burgeoning youth population.

Morocco has several bright results. It places fourth overall in Africa and number one in North Africa. In specific categories, it placed sixth in institutional performance in all of Africa. In North Africa, it is above the average in health and primary education as well as higher education and training, and second only to Egypt in market size. Of the challenges to economic growth identified through company surveys, the top six are: access to financing, inadequately educated workforce, inefficient government bureaucracy, tax rates, insufficient capacity to innovate, and corruption. While the country can measure its progress with some satisfaction, there is still a long way to go in terms of facing its toughest tests of creating jobs for well-trained workers in an economy that supports and nurtures innovation and utilizes extensive broadband capacity.

The WEF report also makes special note of Morocco’s innovative approach to eradicating slum housing. “In Morocco, a small tax on cement is used to constitute a guarantee fund for low-income housing and to support the program of slums elimination (‘Villes sans bidonvilles’). This fund has been successful in increasing mortgage access for households in the informal sector and reducing the number of slums in the country.” It is this capacity for innovation outside traditional economic boundaries that will enable Morocco to achieve even better results in the future.

The EY report “highlights areas requiring policy action and investment to ensure that Africa lays a solid foundation for sustained and inclusive growth.” It spends the first part of the report looking at Foreign Direct Investment (FDI) and how it reflects the confidence that investors have in each country’s capability to manage its future.

Regarding Morocco, it points out that there were 81 FDI driven projects in 2016, up 9.5% from the previous year, garnering 12% of the overall projects in the Kingdom. As the report notes, “Aided by a stable administration, even during the Arab Spring, Morocco has increasingly marketed itself as an export base for Europe, Africa and the Middle East. The country’s automotive sector has especially attracted investor interest, with FDI projects increasing from 5 in 2014 and 10 in 2015 to 14 in 2016.”

To date, this has created more than 19,000 jobs, critical to overall stability. Additionally, Morocco does well on what is called the Africa Attractiveness Index (AAI), which details the strengths and weaknesses perceived by international investors. Morocco placed first out of 35 countries in 2017’s ranking, with strong showings in business enabling (3rd place), investment in business (4th), economic development (5th), governance (8th), market size (9th), and macroeconomic indicators (18th). It also came in second in amount of US investment with 14 projects—a figure that should go higher as Boeing ramps up its supply chain in Morocco.

In terms of target sectors for FDI in Morocco, four areas dominated with #1 rankings: transportation and logistics, real estate and hospitality, clean tech, and automotive; while business services come in at #2. What is important about this diversity is that there are both capital and labor intensive industries. This means that the workforce must also be diverse, from large numbers of semi-skilled service workers to smaller numbers of high tech IT and industrial workers. Jobs in FDI industries are well-paying, thus boosting the overall economy, and moving Morocco towards the level of economic growth required to ensure its long-term market stability.

While all of this is good news, both reports point out that Morocco must do much more to equip its youth with market-centered skills through greater emphasis on vocational and technical training, less emphasis on university degrees unrelated to the job market, increased support for special economic zones outside the Tangier-Casablanca corridor to help reduce negative environmental consequences, and greater support for entrepreneurship, competency training, and transitioning the informal sector to boost economic growth and job creation.

 

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Categories: The moroccan press

Latest Appropriations Bill Continues US Support for Morocco’s Autonomy Plan for Western Sahara

Fri, 05/05/2017 - 20:50

Washington, DC, May 5, 2017, Moroccan American Center for Policy (MACP) — The FY 2017 Appropriations Bill passed by Congress and signed Friday by President Trump requires that “funds appropriated under title III of this Act” for Morocco “shall be made available for assistance for the Western Sahara,” thereby reinforcing longstanding US policy to support a negotiated solution to the dispute over the region based on autonomy under Moroccan sovereignty.

As was the case last year, the final report accompanying the bill noted this policy and gave further clarification to the provision of the law:

[The Morocco subsection] is similar to language in prior years requiring that funds made available for assistance for Morocco shall also be made available for any region or territory administered by Morocco, including the Western Sahara. The Committee recommendation includes not less than the request for Morocco in title III of this Act and makes funds available for assistance for any region or territory administered by Morocco, including the Western Sahara. The Committee expects funds to support democratic reforms and economic development. The Committee remains concerned by the failure to resolve the longstanding dispute over the Western Sahara and the protracted refugee situation in the Polisario-run camps near Tindouf, Algeria. The Committee believes that the Secretary of State should pursue a negotiated settlement to the dispute, consistent with United States policy to support a solution to the issue based on a formula of autonomy under Moroccan sovereignty. These redoubled diplomatic efforts can lead to a realistic and lasting settlement, the completion of a UN Peacekeeping mission that has existed for more than twenty years, and a more stable region. The Committee also encourages the Administration to support private sector investment in the Western Sahara. The Committee recommendation includes a requirement to consult with the Committees on Appropriations on all of these issues not later than 45 days after enactment of this Act.

The past three US administrations – Clinton, Bush, and Obama – and strong bipartisan majorities in Congress have supported autonomy under Moroccan sovereignty for Western Sahara. In a Joint Statement after King Mohammed VI’s 2013 visit to Washington DC, the King and President Obama pledged a “shared commitment to the improvement of the lives of the people of the Western Sahara,” and over the past several decades, Morocco has invested billions of dollars in economic and social development in the area.

The 2017 bill also calls for the Secretary of State to consult with the United Nations High Commissioner for Refugees and the Executive Director of the World Food Programme and, within 45 days, “submit a report to the Committees on Appropriations describing steps taken to strengthen monitoring of the delivery of humanitarian assistance provided for refugees in North Africa, including any steps taken to ensure that all vulnerable refugees are receiving such assistance.”

Tens of thousands of Sahrawi refugees are currently living in abject conditions in Polisario-run refugee camps in southwestern Algeria. Though the UN and other organizations have repeatedly called on Algeria and the Polisario to conduct a refugee registration in the camps to better ensure accountability and delivery of humanitarian aid, Algeria and the Polisario have refused, and in 2014 Agence France-Presse revealed that the European Union’s Anti-Fraud Office (OLAF) had documented “well-organized, years-long” embezzlement by the Polisario of humanitarian aid designated for Sahrawi refugees. On April 28, the UN Security Council voted to renew for another year the UN peacekeeping mission in Western Sahara (MINURSO), again “reiterating its request for consideration of a refugee registration in the Tindouf refugee camps and emphasizing efforts be made in this regard.”

“The 2017 Appropriations Bill unequivocally enforces longstanding US policy on the Western Sahara issue, and helps to ensure that the humanitarian aid we provide benefits the people living in the camps rather than lines the pockets of the Polisario leadership,” said Executive Director of the Moroccan American Center for Policy Jordan Paul. “But as importantly, it supports Morocco—our oldest ally, and sets the stage for finally reaching resolution on a conflict that has gone on for far too long.”

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 Contact: Jordana Merran, 202.470.2049

The Moroccan American Center for Policy (MACP) is a non-profit organization whose principal mission is to inform opinion makers, government officials, and interested publics in the United States about political and social developments in Morocco and the role being played by the Kingdom of Morocco in broader strategic developments in North Africa, the Mediterranean, and the Middle East.

This material is distributed by the Moroccan American Center for Policy on behalf of the Government of Morocco. Additional information is available at the Department of Justice in Washington, DC.

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Categories: The moroccan press

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