Morocco - a deregulated economy that's on the move and full of promise

The presentation event for Maroc Hexagone 2007 is an opportunity for many of us to rediscover a country with which our relations have always been marked by cooperation. However, the Morocco we have such fond memories of and the Morocco of today have little or nothing in common, particularly when it comes to the economic sphere.

By JR Lorne

Morocco's all encompassing social and economic development programs have had a major impact on the country, although it's quite difficult to pin down what's changed since so many economic domains are involved; and so only a partial account can be offered here. It's easier to get a handle on this phenomenon if you think of Morocco as consisting of five distinct regions comprising a socioeconomic map. First come the regions with highly concentrated economic and governmental activity, consisting of metropolitan Casablanca and the conurbation of Rabat-Salé-Zemmour-Zaer. Metropolitan Casablanca is Morocco's most developed region, constituting as it does the nation's industrial heartland. Its economic potency also radiates outward to the surrounding regions; it accounts for 49 % of the country's GDP, more than half of its industrial output, and 35.3 % of Morocco's industrial exports. The agricultural regions of Souss-Massa-Draa and Marrakesh-Tensift-Alhaouz are the country's breadbasket and its most important sources of mineral ore. Food processing and tourism are also major sources of revenue in these regions.

Then come the less developed regions of Tanger-Tétouan, Fès-Boulemane, and Meknes-Tofilalet and L'Oriental. The proximity to Europe has always been highly profitable for the Tanger-Tétouan region. Moreover, projects involving the harbor infrastructure and the region's logistics facilities have enabled Tanger-Tétouan to position itself as an appealing location for manufacturing companies. Morocco's least economically developed regions are Doukala-Abda, Chaoua-Ouardigha, Tadla-Azilal, Taza-Alhoceima-Touamate, and Ghourb-Chrarda-Benihssen. These regions have little in the way of an industrial infrastructure, except of course for Douklala-Abda, a prime example of successful interregional resource deployment in that the region's industrial activity has benefited from its proximity to the Casablanca area, and specifically from the economic liberalization there that has rubbed off on Douklala-Abda, thus enabling it to maintain its position as Morocco's second largest industrial region. In addition, thanks to the chemical plants at the port of Jorf Lasfar, the region has one of the highest import rates in Morocco (55.9 %)

Privatization, a spur to industrial development

The King's 1988 speech set the stage for the achievement of Morocco's economic and social objectives. In addition to economic modernization, reducing government spending, and developing international exchanges, privatization also aims to promote job creation, expand the scope of social groups that are able to purchase securities, and above all catalyze the emergence of a new generation of entrepreneurs. A 1989 law on the transfer of state owned companies to the private sector allowed for the launch of a privatization program that implemented the market deregulation laws that were already on the books, particularly the liberalization of foreign trade and prices, and opened Morocco's economy to foreign investment; the tax reform has had a major impact as well. Since the public to private sector transfers begin in 1993, more than 45 companies and 26 hotels have been transitioned to the private sector by means of 104 privatization operations that have generated revenue amounting to nearly 81.6 billion dirhams. This evolution has been going strong ever since, recently culminating in the privatization of Comanav, the world's third largest shipping company, which was purchased by CMA-CGM in May 2007. This 220 million euro deal, which was brought to completion in 14 months, is regarded as one of the most expeditious operations in Morocco's history. When the transaction was completed, Comanav CEO Taoufiq Ibrahimi observed that the privatization will enable Comanav to leverage its resources and sales force in Morocco and Europe more efficiently, and will breathe new life into the company's capitalization and development capacities, as well as its human resource management policies. In addition, this fresh influx of funds will enable the new owner to modernize the company's infrastructure and boost its container traffic, and will be a much needed shot in the arm for a region that is in the midst of an intensive development phase.

At a conference held at MFP headquarters on 17 May 2007, the company's public sector companies and privatization chief Abdelaziz Talbi stated that "these operations have had a positive impact on direct foreign investment, the liberalization of the sectors involved, and the revitalization of the financial market. This positive impact is embodied by a number of projects that have recently been brought to a successful conclusion, namely those realized by Maroc Télécom, Altadis Maroc and Comanav."
Mr. Talbi noted during his talk that the government's portfolio is composed of 687 public sector companies, many of which operate in strategic sectors and thus constitute a veritable constellation of vitality for the Moroccan economy. Morocco is now positioning itself as a future and development oriented nation with respect to Europe. It is high time that we Europeans saw Morocco in this light as well, so that our companies become aware of the new Moroccan dynamism and establish robust partnerships with a country that has always been a friend, and where it's easy to do business since French is still spoken there.