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Economy of Morocco

The Moroccan economy has been characterized by macroeconomic stability, with generally low inflation and sustained, moderately high growth rates over the past several years. Morocco's primary economic challenge is to accelerate growth and sustain that improved performance in order to reduce high levels of unemployment and underemployment. While overall unemployment stands at 8.6% (2010 est.), this figure masks significantly higher urban unemployment, as high as 31% among young urban males. Recent governments have pursued reform, liberalization, and modernization aimed at stimulating growth and creating jobs. Since early in his reign, King Mohammed VI has called for expanded employment opportunities, economic development, meaningful education, and increased housing availability. The government has pursued an ambitious program of reforms to increase productivity and competitiveness of the national economy through sectoral strategies targeting energy, fisheries, industry, commerce, agriculture, tourism, and logistics. Promising reforms have occurred in the financial sector. Privatizations have reduced the size of the public sector. Morocco has liberalized rules for oil and gas exploration and has granted concessions for public services in major cities. The tender process in Morocco is becoming increasingly transparent. The government has invested considerably in infrastructure development, in particular Tanger-Med Port at the Strait of Gibraltar. When completed in 2014, Tanger-Med will be Africa’s largest port. Many believe, however, that the process of economic reform must be accelerated. While economic growth has historically been hampered by volatility in the rainfall-dependent agriculture sector, diversification has made the economy more resilient. Despite an unfavorable international economic environment, Morocco’s economy grew by 4.9% in 2009, aided by an exceptional agricultural harvest. GDP was expected to grow at a 4% rate in 2010 and is projected to expand by 5% in 2011. Through a foreign exchange rate pegged to a basket of important currencies and well-managed monetary policy, Morocco has held inflation rates to industrial country levels over the past decade. Inflation fell from 3.9% in 2008 to 1% in 2009, mainly due to the fall of world and local food prices. Inflation was projected to hover around 1% for 2010 and to reach 2% in 2011. The persistent merchandise trade deficit driven by the country’s need for imported energy has been largely offset by inflows including transfers from Moroccans resident abroad, tourism revenue, and foreign investment. Since 2007, Morocco has run a current account deficit, mainly driven by a negative trade balance. In 2009, the current account deficit stood at 4.5% of GDP. Foreign exchange reserves somewhat declined in 2009 but remained adequate, making up nearly 7.6 months' worth of goods and services imports ($23.5 million). These reserves and active external debt management policies give Morocco ample capacity to service its debt. Current external debt stood at $19.3 billion at the end of 2009. As the country significantly reduced both its internal and external public debt, in March 2010, Standard and Poor's raised Morocco's foreign and local currency ratings by one notch (to BBB- from BB+ and to BBB+ from BBB, respectively). In January 2006, the bilateral Free Trade Agreement (FTA) between the United States and Morocco went into effect. The U.S.-Morocco FTA eliminated tariffs on 95% of bilateral trade in consumer and industrial products with all remaining tariffs to be eliminated within 9 years. The negotiations produced a comprehensive agreement covering not only market access, but also intellectual property rights protection, transparency in government procurement, investment, services, and e-commerce. Other chapters spell out consultation and assistance mechanisms in the areas of labor and environmental protection. The FTA provides new trade and investment opportunities for both countries and has encouraged economic reforms and liberalization. Since its entry into force, bilateral trade between the two countries has increased 112% (2009 est.) GDP (2009): $91.11 billion. GDP growth rate: 4.9% (2009); 4% (2010 projection). Per capita GDP (PPP, 2009): $4,552. Natural resources: Phosphates, fish, manganese, lead, silver, and copper. Agriculture: Products --barley, citrus fruits, vegetables, olives, wine, livestock, and fishing. Industry: Types --phosphate mining, manufacturing and handicrafts, construction and public works, energy. Sector information as percentage of GDP (2007): Agriculture 12.4%, industry 29%, services 58.5%. Monetary unit: Moroccan dirham. Exchange rate per U.S. dollar = 8.08 (2009 average). Trade: Exports (2009)--$13.86 billion f.o.b. Major partners (2009)--France 24.5%, Spain 21.2%, India 5.3%, Italy 4.6%, United States 3.3%, and United Kingdom 3.3%. Imports (2009)--$32.82 billion c.a.f. Major partners (2009)--France 15.7%, Spain 12.1%, China 7.8%, United States 7.1%, Italy 6.5%, and Saudi Arabia 4.4%. Budget (2009): Revenues --$25.9 billion; expenditures --$28 billion. Budget deficit: 2.2% of GDP (2009 est.); 3.5% of GDP (2010 proj.). Debt, public external (2009): $19.36 billion.

Geography of Morocco

Cities: Capital--Rabat (pop. 1.2 million in urban prefecture of Rabat- Sale). Other cities--Casablanca (3 million), Marrakech, Fez, Tangier. Terrain: Coastal plain, mountains, desert. Climate: Mediterranean, becoming more extreme in the interior. Location: Northern Africa, bordering the North Atlantic Ocean and the Mediterranean Sea, between Algeria and Western Sahara
Map references: Africa
Area: total area: 446,550 sq km land area: 446,300 sq km comparative area: slightly larger than California Land boundaries: total 2,002 km, Algeria 1,559 km, Western Sahara 443 km Coastline: 1,835 km Maritime claims: contiguous zone: 24 nm continental shelf: 200-m depth or to the depth of exploitation exclusive economic zone: 200 nm territorial sea: 12 nm
International disputes: claims and administers Western Sahara, but sovereignty is unresolved; the UN is attempting to hold a referendum; the UN-administered cease-fire has been currently in effect since September 1991; Spain controls five places of sovereignty (plazas de soberania) on and off the coast of Morocco - the coastal enclaves of Ceuta and Melilla which Morocco contests as well as the islands of Penon de Alhucemas, Penon de Velez de la Gomera, and Islas Chafarinas Climate: Mediterranean, becoming more extreme in the interior Terrain: northern coast and interior are mountainous with large areas of bordering plateaus, intermontane valleys, and rich coastal plains Natural resources: phosphates, iron ore, manganese, lead, zinc, fish, salt Land use: arable land: 18% permanent crops: 1% meadows and pastures: 28% forest and woodland: 12% other: 41% Irrigated land: 12,650 sq km (1989 est.) Environment: current issues: land degradation/desertification (soil erosion resulting from farming of marginal areas, overgrazing, destruction of vegetation); water supplies contaminated by raw sewage; siltation of reservoirs; oil pollution of coastal waters natural hazards: northern mountains geologically unstable and subject to earthquakes; periodic droughts international agreements: party to - Endangered Species, Marine Dumping, Nuclear Test Ban, Ship Pollution, Wetlands; signed, but not ratified - Biodiversity, Climate Change, Desertification, Environmental Modification, Law of the Sea, Ozone Layer Protection Note: strategic location along Strait of Gibraltar

Government of Morocco

Morocco is divided into 16 administrative regions (further broken into provinces and prefectures); the regions are administered by walis (governors) appointed by the king. The Moroccan constitution provides for a strong monarchy but a weak Parliament and judicial branch. Dominant authority rests with the king. The king presides over the Council of Ministers; appoints the prime minister following legislative elections; appoints all members of the government taking into account the prime minister's recommendations; and may, at his discretion, terminate the tenure of any minister, dissolve the Parliament, call for new elections, or rule by decree. The king is the commander in chief of the military and holds the title of Amir al-Mou’minin, or Commander of the Faithful, the country's religious leader. Since the constitutional reform of 1996, the bicameral legislature consists of a lower chamber called the Chamber of Representatives, which is directly elected, and an upper chamber, the Chamber of Counselors, whose members are indirectly elected through various regional, local, and professional councils. The councils' members themselves are directly elected. Parliament's powers are limited, but were expanded under the 1992 and 1996 constitutional revisions to include some budgetary matters, approval authority, and establishment of commissions of inquiry to investigate the government's actions. Though never used, the lower chamber of Parliament may dissolve the government through a majority vote of no confidence. The most recent parliamentary elections were held in September 2007 and were regarded by international observers as free and fair. However, voter turnout was disappointing, with only 37% of registered voters casting ballots. The Islamist Party of Justice and Development (PJD) won the popular vote, but came in second behind the Istiqlal Party in the number of parliamentary seats. Abbas El Fassi of Istiqlal was appointed to be Prime Minister by the King. El Fassi formed a government based on a minority coalition composed of Istiqlal, the leftist Socialist Union of Popular Forces (USFP) and Party of Progress and Socialism (PPS), and the centrist National Rally of Independents (RNI). A special election to fill eight seats in Morocco’s lower house of parliament was held in September 2008. Under Mohammed VI, the Moroccan Government has undertaken a number of economic, social, and political reforms, including the 2003 Moudawana, a reform of the family status code, and the 2006 Equity and Reconciliation Commission, which investigated allegations of human rights abuse from 1956 to 1999. In 2005, the King launched the National Initiative for Human Development (INDH), a project to address poverty in rural areas and combat social exclusion in urban areas. The government initiated a number of other important reforms, upgrading the national education system, overhauling the health care regime, broadening the scope of medical insurance, and facilitating access to housing to achieve its human development goals. As an “Arab Spring” swept the Middle East and North Africa in late 2010 and early 2011, Moroccan officials and the general public watched closely as neighboring countries sustained massive, sometimes violent, protests leading to significant regime change. Protests in Morocco have been smaller, more subdued, and generally peaceful, but continued into spring 2011. The King has taken steps to address some demonstrator demands, and on March 9, 2011, gave a major address calling for constitutional reforms that, if implemented, could have the potential to alter significantly the distribution of power among the monarchy, government, and Parliament. Principal Government Officials Head of State--King Mohammed VI Prime Minister--Abbas El Fassi Minister of Foreign Affairs and Cooperation--Taieb Fassi Fihri Ambassador to the United States--Aziz Mekouar Ambassador to the United Nations--Mohammed Loulichki Morocco maintains an embassy in the United States at 1601 - 21st Street NW, Washington, DC 20009 (tel. 202-462-7979). Government Type: Constitutional monarchy. Constitution: March 1972, revised September 1992 and September 1996 (creating a bicameral legislature). Independence: March 2, 1956. Branches: Executive--king (head of state), prime minister (head of government). Legislative--Bicameral parliament. Judicial--Supreme Court. Political parties: Socialist Union of Popular Forces (USFP), Istiqlal (independence) Party (PI), Popular Movement (MP), National Popular Movement (MNP), National Rally of Independents (RNI), Constitutional Union Party (UC), National Democratic Party (PND), Party of Progress and Socialism (PPS), Organization for Democratic and Popular Action (OADP), Party of Justice and Development (PJD), Democratic and Social Movement (MDS), Democratic Forces Front (FFD), Democratic Union (UD), Citizen Forces (FC), Liberal Party (PL), National Socialist Congress Party (CNI), Party of Reform and Development (PRD) Social Democratic Party (PSD), National Union of Popular Forces (UNFP), Action Party (PA), Avant-Garde Democratic Socialist Party (PADS). Suffrage: Universal starting at 21 years of age.

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History of Morocco

Morocco's strategic location has shaped its history. Beginning with the Phoenicians, many foreigners were drawn to this area. Romans, Visigoths, Vandals and Byzantine Greeks ruled successively. Arab forces began occupying Morocco in the seventh century A.D., bringing their civilization and Islam. The Alaouite dynasty, which has ruled Morocco since 1649, claims descent from the Prophet Muhammad. Morocco's location and resources led to early competition among European powers in Africa, beginning with successful Portuguese efforts to control the Atlantic coast in the 15th century. France showed a strong interest in Morocco as early as 1830. Following recognition by the United Kingdom in 1904 of France's "sphere of influence" in Morocco, the Algeciras Conference (1906) formalized France's "special position" and entrusted policing of Morocco to France and Spain jointly. The Treaty of Fes (1912) made Morocco a protectorate of France. By the same treaty, Spain assumed the role of protecting power over the northern and southern (Saharan) zones. Nationalist political parties, which took shape under the French protectorate, began a strong campaign for independence after World War II. Declarations such as the Atlantic Charter (a joint U.S.-British statement set forth, among other things, the right of all people to choose the form of government under which they live), served as a base for the independence movement. A manifesto of the Istiqlal (Independence) Party in 1944 was one of the earliest public demands for independence. That party subsequently provided most of the leadership for the nationalist movement and remains a dominant political force. In 1953, France exiled the highly respected Sultan Mohammed V and replaced him with the unpopular Mohammed Ben Aarafa. Ben Aarafa's reign was widely perceived as illegitimate, and sparked active opposition to French rule. France allowed Mohammed V to return in 1955, and by 1956, Morocco had regained its independence. In the year 2006, Moroccans celebrated their 50th year of independence from France. After gaining independence on March 2, 1956, Morocco regained control over certain Spanish-ruled areas through agreements with Spain in 1956 and 1958. The internationalized city of Tangier was reintegrated with the signing of the Tangier Protocol on October 29, 1956. The Spanish enclave of Ifni in the south became part of Morocco in 1969. Spain, however, retains control over the small coastal enclaves of Ceuta and Melilla in the north. During the 1990s, King Hassan made great strides toward economic and political liberalization. King Hassan died on July 23, 1999, and was succeeded by his son, Mohammed VI, who pledged to continue these reforms. Under Mohammed VI, the Moroccan Government has undertaken a number of economic, political, and social reforms, including the 2003 Moudawana, a reform of the family status code, and the 2006 Equity and Reconciliation Commission, which investigated allegations of human rights abuse from 1956 to 1999.

People of Morocco

Moroccans are predominantly Sunni Muslims of Arab, Berber, or mixed Arab-Berber ancestry. The Arabs brought Islam, along with Arabic language and culture, to the region from the Arabian Peninsula during the Muslim conquests of the 7th century. Today, a small Jewish community remains as well as a largely expatriate Christian population; both enjoy religious freedom and full civil rights. Morocco is also home to a 300-500-person Baha’i community which, in recent years, has been able to worship free from government interference. Arabic is Morocco's official language, but French is widely taught and serves as the primary language of commerce and government. Moroccan colloquial Arabic, Darija, is composed of a unique combination of Arabic, Berber, and French dialects. Along with Arabic, about 10 million Moroccans, predominantly in rural areas, also speak one of the three Moroccan Berber dialects (Tarifit, Tashelhit, and Tamazight). Spanish is also used in the northern part of the country. English is increasingly becoming the foreign language of choice among educated youth and is offered in many public schools from the fourth year on. Most people live west of the Atlas Mountains, a range that insulates the country from the Sahara Desert. Casablanca is the center of commerce and industry and the leading port; Rabat is the seat of government; Tangier is the gateway to Spain and also a major port; "Arab" Fes is the cultural and religious center; and "Berber" Marrakech is a major tourist center. Education in Morocco is free and compulsory through primary school (age 15). Nevertheless, many children--particularly girls in rural areas--do not attend school, and most of those who do drop out after elementary school. The country's literacy rate reveals sharp gaps in education, both in terms of gender and location; while country-wide literacy rates are estimated at 39.6% among women and 65.7% among men, the female literacy rate in rural areas is estimated only at 10%. Morocco is home to 14 public universities. Mohammed V University in Rabat is one of the country’s most famous schools, with faculties of law, sciences, liberal arts, and medicine. Founded over 1,000 years ago, Karaouine University, in Fes, is the oldest center for Islamic studies in the Maghreb. Morocco’s most prestigious private English-language university, Al-Akhawayn, was founded in 1993 by King Hassan II and King Fahd of Saudi Arabia in Ifrane. Its curriculum is based on an American model. Nationality: Noun and adjective --Moroccan(s). Population (July 2009 est.): 34,859,364. (The population of disputed territory Western Sahara is 385,000.) Annual population growth rate (2009 est.): 1.479%. Birth rate (2009 est.)--20.96 births/1,000 population. Death rate (2009 est.)--5.45 deaths/1,000 population. Ethnic groups: Arab-Berber 99.1%, other 0.7%, Jewish 0.2%. Religions: Muslim 98.7%, Christian 1.1%, Jewish 0.2%. Languages: Arabic (official), several Berber dialects; French functions as the language of business, government, and diplomacy. Education: Years compulsory --9. Literacy (definition--age 15 and over can read and write)--total population 52.3%; male 65.7%; female 39.6% (2004 census). Health: Infant mortality rate (2009 est.)--36.88/1,000. Life expectancy at birth (2009 est.)--71.8 yrs. total population; 69.42 yrs. male; 74.3 yrs. female. Work force (2010 est.): 11.62 million. Unemployment rate (July 2010 est.): 8.6%.