Morocco needs more and better infrastructure to take advantage of its potential as an export and manufacturing gateway to Europe and Africa – and the Gulf is in an excellent position to provide it, said Aziz Rabbah, the country’s minister of equipment, transport and logistics, at a private meeting in Dubai last month.
“[Morocco] must build more railways and airports, and upgrade infrastructure,” he said. Asked by reporters last month whether his visits were intended to drum up Gulf investors’ interest in the country, he replied simply: “Of course” .
The GCC’s infrastructure is great,” he told The National. “Abu Dhabi’s ports and airports are stunning. The railways in the works in Qatar and Saudi Arabia are extraordinary.”
Morocco needs investment in infrastructure, agriculture, industry and industrial zoning projects, said Hamid Ben Elfadil, the chief executive of the Moroccan Investment Development Agency at the Annual Investment Meeting which concluded in Dubai this month.
The Gulf can be especially helpful to Morocco in terms of infrastructure, because of its experience of building infrastructure quickly, its expertise in infrastructure design and execution, he said.
“We are not Singapore or Dubai,” Mr Ben Elfadil said. “But we have an action plan, and there are many decisions we have to take to improve the business climate.
“We still have lots of things to do.”
Last month, Sheikh Mohammed bin Zayed, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the Armed Forces, met King Mohammed VI of Morocco, in Casablanca to discuss “social, political, and economic cooperation” between the two countries.
The two leaders signed 11 agreements in areas including security, politics, energy, education, sports, culture, customs, Islamic affairs, health, communications, tourism and infrastructure, according to the state news agency Wam.
Morocco will need all the help it can get, as it seeks to inject dynamism into its economy. For years, entrenched corruption, bureaucratic hurdles and shortages both of skills and opportunities have depressed the Moroccan economy, analysts said.
The rate of growth slowed to 1.8 per cent year on year in the final three months of last year, from 2.4 per cent in the third quarter, on a softening of the agriculture, hotel and restaurant sectors, according to London-based Capital Economics.
However, it expects growth to rebound this year. Government data last week showed an expansion of 4.4 per cent in the first quarter compared to a year earlier.
An economic reform programme introduced following the 2011 Arab Spring is “paying off”, according to the IMF.
It included the removal of subsidies on liquid petroleum, a new banking law, reforms to pensions, a range of measures to improve the business climate, including attempts to make it easier to start a business, and introducing a new legal framework for the self-employed.
Mohammed Dairi, country director for Morocco at the IMF, said in January that “the authorities’ bold and comprehensive reform agenda … is paying off.”
The accompanying IMF report nonetheless called on the country to “aim higher and try harder” on fiscal, business environment, and labour market reforms.
“I believe we have started a real battle called ‘business climate reform’,” Mr Rabbah said. “[We] aim to make Morocco an investment hub and doorway to other markets, [to] Africa and other markets with whom we have signed free trade agreements, including the European Union and the United States.”
Morocco has made some progress on the World Bank’s Ease of Doing Business index. The country’s ranking rose to 71st in 2014, up from 94th two years earlier.
In March last year, the Moroccan government established the National Commission of Business Environment, to which the World Bank has promised part of a US$200 million development loan. The commission aims to make it easier to start a business, introduce a legal framework for self-employed workers, and make it easier to register a property and pay taxes.
Constitutional changes have also played a role in the reform drive.
Legal changes in 2011 concentrated executive authority in the council of ministers – essentially a ministerial cabinet presided over by King Mohammed VI.
This body sets the direction of policy, and encourages long-term economic planning, Mr Rabbah said.
The journalist Abdellah Tourabi says that the king’s presidency over the council of ministers gives him “broad prerogatives to control the exercise of executive power.”
This interpretation is largely supported by Mr Rabbah, who regards this as helpful for economic policymaking.
“A government can handle the form and the details [of policymaking], but not the big ideas,” Mr Rabbah said. “Morocco has its constraints, institutions, and a setting that brings us all together.”
“The country is no longer being run according to the inconsistent initiatives of consecutive governments,” he said. “There are key priorities and strategies in place. It does not matter that much what party is in government.”
Much more work remains for Morocco. Corruption remains a particular challenge, with the country standing 80th worldwide in the Corruption Perceptions Index. A recent UN report described corruption as “endemic”, citing the judiciary’s systematic failure to pursue allegations as a major obstacle to progress.
Mr Ben Elfadil is willing to admit that Morocco has a problem with corruption.
“We have a perception for bureaucracy and corruption,” he said. “We say it’s a perception, and that the reality is different. If Sumitomo, a Japanese company, can invest in Moroccan industry day after day – then investors should come and try Morocco out.”
Mr Ben Elfadil urged investors to look at the trend towards reform, and the advantages Morocco has as a low-cost destination for manufacturing firms.
A network of free trade agreements means that Morocco has access to a market of 1 billion customers, he said. “If you want to sell products in Africa, the best way is from Morocco.”
Morocco is also the only North African state to have concluded a free trade agreement with the US, he said.