Today Morocco presents the world with a picture of vibrant economic health that holds substantial investment opportunities.

he political and economic reforms of the 1990s have helped transform Morocco into a modern and diversified industrial state. Though agricultural activity remains dominant, in terms of employment, there is an increasing emphasis on new export-based industries, such as electronics and automobile components, servicing the vast European marketplace just across the Mediterranean Sea.

Granted independence from France in 1956, it has not always been an easy ride, but the country has worked diligently on structural reforms with the IMF and the World Bank to address imbalances and achieve sustainable growth.

Despite a high external debt stock and an over-dependence on an agricultural sector vulnerable to drought, the economy is flourishing. In 2001, GDP growth posted a healthy 6.5 percent. According to Moroccan government statistics it will grow again by 4.6 percent this year, then to 5.8 percent in 2003.
There are positive signals throughout the economy with robust growth predictions for the industrial sector, mining, transport and communication and the non-commercial sector.

The reform process has been wide-ranging. Large swathes of public companies have been sold off to the private sector and foreign direct investment is on the rise.
According to Fathalah Oualallou, Minister of Economy, Finance, Privatization and Tourism, macro-economic stability is critical for the ongoing success of the country. “I think we have achieved that in the last four years,” he says.

There is a real commitment to fiscal discipline from Morocco’s new breed of politicians and managers. The budget deficit, inflation and the balance of payments situation, have all been reined in, which sends out a positive signal to investors. The external debt has been slashed from $29 billion four years ago, down to $11 billion.
There is also a commitment to improve educational facilities and social welfare, in a country where many people remain poor and without basic services such as clean water and electricity. The introduction of private management concessions to run utilities in the major urban centers has transformed the provision of these services for city-dwellers, however.

HASSAN BERNOUSSI Director of the Foreign Investment Department

Hassan Bernoussi, Director of the Foreign Investment Department, a division of the finance ministry, is responsible for promoting the new face of Morocco to outsiders. He believes foreign investment is vital for the country to reach its potential. With the aid of foreign capital and know-how, areas such as food processing could be transformed.

“I find it frustrating to see Morocco, with all the fish products that it has, able to process only sardines and fish cereal,” he says. “It’s the same thing for agriculture as we can only process tomatoes. With the help of foreign investors we can process many other products.”

Certainly, Morocco is receiving interest in a number of non-traditional areas. In the automobiles sector there is General Motors and Volkswagen; in the electronics sector, there is Siemens. There are clear opportunities in more traditional businesses such as tourism and textiles. The government has made growth of the tourism sector its top priority and wants to attract 10 million visitors a year by 2010, up from the current 2.3 million figure.

Many foreign companies regard Morocco as a bridge to Europe, given its close proximity, cheaper costs and good relations with the EU. The Morocco-EU free trade agreement became effective in March 2000 and now almost three quarters of the country’s exports go to the EU.

The government has put in place a strong package of incentives to attract more business. Among the assistance available is the Hassan II Fund for Economic and Social Development, which can assist with investment costs associated with land purchases and the construction of buildings. Priority sectors include tourism, electronics, IT, telecommunications, car components, textiles, aeronautics and food processing.

HASSAN CHAMI President of CGEM

Hassan Chami, President of the General Confederation of Moroccan Enterprises, the representative body for the private sector, says that the country’s democratic political system is another selling point. “We are the certainly the most democratic in the south of the Mediterranean,” he says. “This is an extremely important advantage.”

Mr. Chami believes huge strides have been taken, not only in terms of political reform, but also in the advancement of the industrial and commercial sectors, which are now more diverse and productive than before. There is still plenty of room for improvement, however. He believes U.S. investors can play a meaningful role in the long-term development of the country. “I believe that there are certainly links to be developed between the two countries,” he says.