Morocco: A two-speed country

Morocco’s business community is profiting from “new” industries but they do not generate enough employment.

Railway construction morocco
More than a fifth of young people are out of work in Morocco [Reuters/Stringer]

While Morocco takes pride in its pro-market, macroeconomic reforms, which spur competition and foreign direct investment, the economy’s progress as a whole – which still depends on agriculture – falls short of sizzling growth.

The kingdom’s major infrastructure projects include modern highways, tourism, a growing manufacturing sector, a nascent aeronautics industry, a new port and free trade zone near the city of Tangier in the north, and a massive solar plant in the country’s remote southern desert with a renewable electricity goal of 40 percent by 2020.

Such projects, however, are not generating enough employment in a country where – according to the World Bank – more than a fifth of young people are out of work.

This has created a two-speed Morocco.

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The country’s business community is gaining higher exports from the “new” industries [cars, aeronautics, and electronics], while this year’s poor harvest drags down total GDP growth below two percent in 2016.

“Morocco’s economic model, based on attracting foreign investment in carefully selected sectors and building major infrastructure projects, is not really sustainable in the long term,” Riccardo Fabiani, a senior analyst of Eurasia, told Al Jazeera.

The kingdom’s major infrastructure projects include a massive solar plant in the country’s remote southern desert [Refael Marchante/Reuters]
The kingdom’s major infrastructure projects include a massive solar plant in the country’s remote southern desert [Refael Marchante/Reuters]

Corruption in Morocco remains widespread in both the public and business spheres, Fabiani said, leading the country to slide backwards in terms of high unemployment, poverty, illiteracy and stalling living standards.

“The mega projects are rarely supported by a buoyant, local business environment. Their impact is limited by these structural weaknesses,” Fabiani added.

“In addition, in the past five years the government has reduced spending by cutting public sector jobs and subsidies. This has pushed many young Moroccans to look for precarious jobs in the informal sector, despite having university degrees.”

To the detriment of Moroccans, improving access to health and education are considered low priority compared with the push to build mega projects, said Omar Hyani, a Rabat-based financial analyst and city councilor.

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In 2014, Morocco spent 5.9 percent of GDP on health, according to the World Health Organization. To compare, nearby Algeria spent 7.2 percent in the same year, while Tunisia spent 7 percent.

“While some of these [mega] projects have been genuine development accelerators, others are real money pits with no real contribution to the country,” Hyani told Al Jazeera.

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“I am thinking of the high-speed train project, which is eating up more than 25 billion dirhams ($2.5bn) for the construction of a high-speed line of 180km, which is already a few years delayed.”

The government would have spurred more economic growth by investing in education, he said, noting that the United Nations ranks Morocco as 126th out of 188 countries in terms of human development.

“The budget for this project is equivalent to the construction of 25,000 schools or 25 academic health centres,” Hyani added.

“One wonders seriously about the usefulness of some of these projects. We urgently need to conduct an overall assessment of the policy.”

Morocco plans further investment into its strategy, with the help of foreign loans.

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In July, Industry Minister Moulay Hafid Elalamy presented the king with an ambitious investment plan for more than 30 projects to the tune of 7.5bn Moroccan dirhams ($768m), claiming it would “create the conditions for sustainable economic growth where private investment plays the leading role and the support of the state will be the accelerator”.

However, there are fears that such measures fail to address social challenges.

Sarah Bentahar, 25, is a graduate from the Faculte de Science in Rabat with a degree in energy engineering. She said that infrastructure projects only exist to please foreign investors. She hasn’t seen much impact in her life.

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“We, in Morocco, are a market,” she added. “The engineers in Morocco are very competent, of course, but it’s not a question of competence. It’s a question of politics.”

There are also concerns that foreign companies are exploiting the wealth of human resources.

“If you want to work in the domain of renewable energy, you should work with private companies. But these private companies take advantages of interns – for example, [by offering] a six-month internship with no salary,” said Said Chabe, a 21-year-old searching for a paid position in the environmental energy sector.

While the push for massive investment is supposed to create a more inclusive economy, many Moroccans feel left out and are apathetic in terms of trying to participate in the country’s decision-making process.

Danielle Douglas also contributed to this report

Source: Al Jazeera