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Morocco: Morocco Economy Profile


Leather tanneries in Fes,Morocco


 Growth picked up in 2013, but is likely to slow down

After economic growth fell to 2.7% in 2012, it accelerated to 4.4 % in 2013. This can largely be attributed to an exceptionally large crop, as agricultural output grew by about 14 % in 2013 thanks to favourable weather conditions. This partially explains why inflation remained firmly anchored below 3 %, even as the government started to reduce food and energy subsidies. Meanwhile, growth in the non-agricultural sector slowed down to 2.5% in 2013, down from 4.6% in 2012. This was partially due to weak performance of the phosphates industry, which declined 18.7% owing to falling prices and weakened global demand. On the demand side, private consumption was the largest contributor to economic growth with 2.6% of GDP. Private consumption was underpinned by the good harvest.

Looking forward, growth is likely to fall to roughly 3% in 2014, owing tighter fiscal policies, weather conditions that are unlikely to be as favourable to agricultural production as in 2013, and a sluggish international recovery. Morocco's significant dependence on economic activities in Europe, in particular trade, tourism and remittances leaves, its economy thereby susceptible to developments in the eurozone.



2. Morocco’s large twin deficits have narrowed somewhat, but remain a vulnerability

Morocco’s fiscal deficit fell slightly to 6.0% of GDP in 2013 after it had reached a record 8.3 % of GDP in 2012 due to a strong increase of government expenditure on wages and subsidies. The government aims to reduce the deficit further to 3.8% of GDP in 2014 by pulling back its food and fuel subsidies of food and fuel to USD 4.3bn (compared with USD 5.2bn in 2013 and USD 6.5bn in 2012). In 2013, under pressure of the IMF the government already started to phase out these subsidies to increase its creditworthiness and create fiscal space to invest in infrastructure and human capital. Additionally, to reduce the deficit, the government introduced a new fuel price indexation in September 2013 in order to shield the budget from international fuel price increases. Under this new pricing system the fuel prices will be reviewed on a monthly basis and altered if the international prices change more than 2.5 percent within two months. However, despite these structural reforms, an increase of government expenditure on job creation and wages prevented the deficit from declining further.

Likewise, Morocco’s sizeable current account deficit that is mainly driven by a large trade deficit fell slightly to 9.0% of GDP in 2013, down from 10.2% of GDP in 2012. The narrowing of the deficit was largely accounted for by a remarkable decrease of the import bill of food by 18% to USD 1.0bn reflecting the strong growth of the domestic agricultural output. Meanwhile, exports declined by 1.8%, mainly attributable to a drop in phosphate exports of 23 % resulting from a sharp decline in world prices. As imports declined by 2.8%, the current account improved slightly. Nevertheless, the current account deficit remained very large. Part of the current account deficit was financed by net direct investment inflows, which reached USD 3.2bn (3 % of GDP). Meanwhile, Morocco managed to increase its foreign-exchange reserves from USD 16bn in 2012 to almost USD 18.4bn in 2013, although the import cover of 4.7 months is still not extremely high. Morocco’s external liquidity improved somewhat though when the country concluded an agreement with the IMF for a USD 6.2bna Precautionary Liquidity Line (PLL) in August 2013. In conclusion, Morocco’s twin deficits remain a vulnerability.

3. Reaping benefits of political and economic stability

According to the UNCTAD World Investment Report, Morocco ranked first in North Africa in terms of the nominal amount of foreign direct investment (FDI) it received in 2013. The kingdom lured investment inflows worth USD 3.6bn in 2013. This good performance can partially be explained its relatively political and economic stability during the Arab Spring as well as the diversification of its export base. Furthermore, there are signs that Morocco improved its business climate, as it moved up 10 places from 97 in 2012 to 87 in 2013 on the Ease of Doing Business Index, as starting a business, paying taxes payments and registering property was made easier. Furthermore, a Deep and Comprehensive Free Trade Agreement (DCFTA) was launched in April 2013 in order to deepen and strengthen the trade relationship with the EU. Though Morocco’s competitiveness and import dependency, things remain to be done, for example combating the level of corruption.


  1. The Moroccan economy displayed a degree of resilience in a particularly difficult economic context, growing by 3.2% in 2012, driven by internal consumption and public investment. However this growth cut into foreign exchange reserves and deepened the fiscal deficit.
  2. Funding the economy remains a major challenge if the country is to maintain its momentum, and continuing reform is essential to check the rise in public spending, particularly of the compensation fund (Caisse de compensation), that pays subsidies for oil and basic goods.
  3. Morocco has a coherent strategy in place since the early 2000s to achieve its medium-term vision and has made a good start on structural change, with Morocco's phosphate industry – the world's biggest producer and exporter – playing a key role both from a financial point of view and as a source of growth for other sectors of the economy, though the textile industry is among those needing to reposition quickly in the face of international competition.


Recent Developments & Prospects


Table 2: GDP by Sector (percentage of GDP)

  2007 2011
Agriculture, forestry & fishing - -
Agriculture, hunting, forestry, fishing 13.7 15.5
Construction 6.8 6.5
Electricity, gas and water 2.9 2.6
Electricity, water and sanitation - -
Extractions - -
Finance, insurance and social solidarity - -
Finance, real estate and business services 15.1 13.5
General government services - -
Gross domestic product at basic prices / factor cost 100 100
Manufacturing 15.2 15.7
Mining 2.4 5.6
Other services 11.5 11.6
Public Administration & Personal Services - -
Public Administration, Education, Health & Social Work, Community, Social & Personal Services 9.5 9.4
Public administration, education, health & social work, community, social & personal services - -
Social services - -
Transport, storage and communication 7.9 6.9
Transportation, communication & information - -
Wholesale and retail trade, hotels and restaurants 14.9 12.9
Wholesale, retail trade and real estate ownership - -




At 3.2% GDP increase was below the estimate 5.0% owing to sluggish world request and a below-average performance in agriculture, but should pick up in 2013 to reach 4.6%, driven by a rise of 4.8% in non-agricultural GDP and a increase in agricultural added price of around 5.0%.

Increase in the agricultural sector was hit by inadequate rainfall in the 2011/12 season but prospects for 2013 are brighter because of better weather conditions and the entry into service of two agropôles focusing on agricultural production, agri-food (processing and distribution), technological innovation and scientific research in the Meknès and Oriental regions. The establishment of communal farmland managers (agrégateurs) in various sectors of the industry, as part of the Green Morocco Plan, should be a driving force. The process consists of a voluntary coming together of farmers around an operator responsible for optimising production and getting the best price from agricultural output inclunding marketing it. Furthermore the agreement on liberalising trade in agricultural produce reached between Morocco and the European Union (EU) in 2012 should as well have positive consequences for the country. It provides for a rise in export quotas, an increase in the number of products enjoying quota-free access and continuing protection of sensitive Moroccan sectors.

Exports and landings of fish rose but the sector continues to suffer from major problems along the price chain. The ambitious Plan Halieutis, launched in 2009, has brought some relief in three significant aspects: i) evolution in the sustainable management of fisheries resources; ii) the completion of a competitiveness centre at Agadir; and iii) the development of fish-farming. In this area the national aquaculture development agency (Agence nationale de développement de l’aquaculture) has formulated a number of initiatives covering regulation, legislation and coastal planning for aquaculture and training in the Nord region.

Non-agricultural activities half compensated for the poor performance of the agricultural sector and grew by 4.5%, split between the secondary sector (3.7%) and the tertiary sector (4.6%). This trend should continue in 2013, with increase estimate at 4.1% and 4.6% respectively.

Extractive activities, 94.0% of which are accounted for by phosphates, represent 5.6% of the added price of the secondary sector, almost 3.5% of GDP and additional than a quarter of exports. They grew by 4.0% in 2012, which should rise to 6.0% in 2013 thanks to vigorous international request from Brazil and India and to strategic targets decided by the the national phosphates agency (Office chérifien des phosphates, OCO): to consolidate the country’s position as world market leader, diversify markets and reposition itself on markets with high potential, particularly in Africa.

Processing industries account for almost 15.0% of added price in the industrial sector and in 2012 benefited from the good performance of several activities aimed at export or the domestic market. The added price of processing industries rose by 2.3% and should grow by 2.8% in 2013.

Regarded as an engine of national industry the automotive sector benefited from the start of production at the Renault car plant in Tangier in February 2012. This project has by presently increased the sector’s exports by additional than 20% compared with 2011.

The aeronautics sector has as well recorded sustained increase since the implementation of the PNEI in 2009. This includes the aéropôle at Nouceur and the MidParc integrated industrial platform (Plateforme industrielle intégrée MidParc), which is dedicated to aeronautics, the space industry and electronics. An institute for aeronautical professions (Institut des métiers de l’aéronautique) as well came into service in 2011 with the aim of from presently on training 800 professionals a year. Increase in the sector was reinforced by the installation of operators such as EADS, Boeing, Safran and Bombardier. Bombardier has announced plans to invest USD 200 million with activities due to begin in 2013. As a result of the measures put in place since 2008 and the investments made, export turnover in the sector has risen by an average 18.3% a year.

Electronics industries have benefited from a number of developments in the PNEI, but have made only modest evolution. The gloomy world economic context saw a 14.4% drop in the price of electronic component exports. Nevertheless the sector should benefit in the medium term from Alstom’s plans to build an industrial unit for the manufacture of cables and components for the railway industry. The plan should from presently on generate almost EUR 310 million in export earnings and create 5 000 jobs over 10 years.

An extra key sector of the national economy is agribusiness which accounts for almost a quarter of exports, 8% of GDP and 19% of industrial employment. But it suffers from a number of handicaps, particularly inadequate levels of investment , poor competitiveness arising from weaknesses in research and innovation, and an irregular and low-quality supply of raw materials to processing plants. It as well suffers from a high concentration of exports to the EU and a specialisation in products with low added price. In the initial 10 months of 2012 only exports of canned and fresh fish recorded double-digit increases, while all other products showed falls.

The construction sector maintained its strong performance with a increase rate of 5.2%. The renewal of activities linked to social housing, which accounts for 60.0% of building, means that the upward trend should continue with a increase rate of 5.5% expected in 2013.

The tertiary sector accounts for additional than 50% of total added price. It was buoyed by the good performance of primary and secondary activities and by vigorous trade, transport and telecommunications activity. Increase in 2012 was 4.6% and should be maintained at that level in 2013. Tourism should increase by 4% in 2013, next a lower rise of 2% in 2012, benefiting from the relative instability in Tunisia and Egypt. Trade should benefit from the completion of the 2008-12 Plan Rawaj for the modernisation of internal commerce. Postal and telecommunications services should maintain their increase thanks to the 2013 digital Morocco programme (Maroc Numérique 2013) for public access to broadband Internet, computerisation of SMEs and development of online government services.

Increase continued to be driven by domestic request: household consumption rose by 3.2% in 2012 and should rise to 4.2% in 2013, thanks to measures to support the middle classes and to extend social protection such as health coverage and pensions, and to the support fund for social cohesion (Fonds d’appui à la cohésion sociale) to help the majority disadvantaged. Next increasing by 5.5% in 2012 investment should continue to rise by 5.9% in 2013, driven by accelerating public investment and the creation of an investment monitoring committee (Commission de suivi des investissements) seeking to identify barriers to their implementation.

Macroeconomic Policy

Fiscal Policy

In a difficult economic context, mainly related to the international crisis, Morocco has chosen an expansionist fiscal policy to support domestic request. Since 2002 the fiscal balance has been through three phases: a reduction of the deficit up to 2006, followed by two years with a small surplus and again a countercyclical period since 2009. At the end of 2012, the budget deficit reached 7.5% of GDP but should be reined back to 5.3% in 2013. To meet the macroeconomic stability commitment set out in the June 2011 constitution, the government has pledged to reduce the deficit to 3.0% by 2016, an aim which will largely depend on the swift implementation of compensation fund reform.

To this end a number of steps are planned to increase public revenues. The tax reforms embarked upon several years ago should be continued. These include widening the tax base, strengthening tax government and elimination of non-productive tax breaks, to improve the net contribution of public institutions and businesses and to get better price from the national’s private domain. The implementation of some of these measures has by presently begun. In addition, with a view to containing public spending, the government plans to pursue its programme to rationalise the national’s life style, strengthen public-private partnerships, reform the Organic Law relating to Finance Law, and speed up reform of public procurement. Above all, it intends to continue the reform of the compensation fund, which costs around 6% of GDP.

Public spending was burdened in 2012 by major spending linked to transfers and subsidies, compensation, social dialogue and anti-drought programmes aimed at alleviating unfavourable economic conditions. Recurrent spending, price support funding excepted, was due to rise by 8.6% to reach 25.5% of GDP in 2013 because of the creation of 24 000 budgeted jobs and the rise in spending on equipment. Spending on compensation should all to 4.4% of GDP. National investment should continue in 2013, reflecting the determination of the authorities to maintain their backing for economic activity.

Excluding privatisation, recurrent gain should rise by around 11% in 2013 compared with 2012, as a result of the increase in both fiscal and non-fiscal revenues. All types of gain should therefore see a positive trend, thanks to the revival of economic activity and internal request estimate for 2013.

Table 3: Public Finances (% of GDP)

  2009 2010 2011 2012 2013 2014
Total revenue and grants 27.3 25.4 26.4 26 26.2 25.7
Tax revenue 22.9 22.7 23 22.9 22.5 22.3
Oil revenue - - - - - -
Grants 0.5 0 0.6 0.3 0.9 0.6
Total spending and net lending (a) 29.4 29.8 33.2 33.6 31.5 30.5
Current expenditure 23.1 23.8 26.7 26.9 25.5 24.2
Excluding interest 20.7 21.5 24.5 25.4 24.1 22.9
Wages and salaries 10.3 10.3 11 10.9 10.2 9.6
Interest 2.4 2.3 2.2 1.5 1.3 1.3
Primary balance 0.2 -2.1 -4.6 -6 -4 -3.5
Overall balance -2.2 -4.4 -6.8 -7.5 -5.3 -4.7

Figures for 2012 are estimates; for 2013 and later are projections.

Monetary Policy

Inflation, measured by changes in the consumer price index (CPI), remained at a relatively moderate level in 2012, rising to 1.8% at the end of October. Prices of food and non-food products rose respectively by 2.6% and 1.1%. For the whole of 2012 forecasters predict inflation slightly above 1.3%. This inflationary control is the result of a monetary policy that targets inflation and of government intervention through the compensation fund. So, in the absence of any real inflationary pressures the Central Bank of Morocco (Bank Al Maghrib, BAM) decided to maintain its major rate at 3.0% at its last conference in September 2012.

The annual rate of increase of the money supply, as measured by the M3 accumulation, slowed at the end of October, increasing by 3.6% compared with 5.0% the previous year. This reflects a fall in short-term deposits and a lower rate of increase of current accounts, together with a better fall in the monetary assets of private non-financial companies, inclunding a slower rate of increase of household assets. The annual increase rate of bank loans as well slowed slightly, from 7.0% in 2011 to 5.4% at the end of October 2012. Small- and medium-sized enterprises (SMEs) still have problems gaining access to bank financing, chiefly because most of them do not meet the financial conditions required by the banks. As a result, bank lending to SMEs accounts for less than 30.0% of bank lending on the domestic market. The Moroccan dirham (MAD) is pegged to a basket of currencies dominated by the euro (EUR) and had appreciated against the euro by 1.0% and fallen by 4.6% against the US dollar (USD) at the end of October 2012 compared with same period in 2011.

Economic Cooperation, Regional Integration & Trade

Morocco is committed to regional integration with the Mediterranean region and the Union of the Arab Maghreb (Union du Maghreb Arabe, UMA), and in sub-Saharan Africa. The country has signed several bilateral and multilateral free-trade agreements to link its economy to the Euro-Mediterranean and Arab context and to consolidate its relations with the major centres of increase in the world economy. These various agreements have given Morocco a favourable environment for the increase of foreign direct investment (FDI) and access to a market of 55 nations with additional than a billion potential consumers. Nevertheless trade with the UMA is very low and the benefits of integration in this sub-region still face political constraints.

Some of these agreements have helped boost exports but the worsening trade balance is becoming a source of worry and is beginning to weigh upon the financing capacity of the economy. It is authentic that in the development context a steep rise in imports of capital and intermediate goods and energy (the price of which has soared on the world market), reflects sustained investment . But for some years the balance of finished consumer goods has as well shown a growing deficit. The sharp rise in imports of some products, such as vehicles or general purpose equipment, reflects the country’s inability to meet some of its consumer needs through domestic production. The surpluses in services and current transfers made it possible until 2006 to offset the deficit in the trade balance but today they can only limit the result of this deficit on the current account, which has been in structural deficit since 2007.

In 2012 the current account deficit amounted to 8.6% of GDP. The rate of coverage of imports by exports fell to 48%, 1% lower than in 2011. If services are included the rate was 70%.

Table 4: Current Account (% of GDP)

  2004 2009 2010 2011 2012 2013 2014
Trade balance -11.4 -17.9 -19.4 -22.9 -24.6 -23.2 -22.4
Exports of goods (f.o.b.) 17.4 15.4 19.6 21.7 21.7 21.9 22.5
Imports of goods (f.o.b.) 28.8 33.3 39 44.6 46.3 45.1 44.9
Services 5.8 5.9 9.6 9.8 10.2 12.1 12.3
Factor income -1.2 -1.6 -1.6 -2.1 -1.7 -1.9 -2.4
Current transfers 8.5 8.1 7.4 7.2 7.5 7.5 6.9
Current account balance 1.8 -5.4 -4.1 -8 -8.6 -5.5 -5.7

Figures for 2012 are estimates; for 2013 and later are projections.


Debt Policy

For additional than a decade Morocco has conducted a policy of active external deficit management, with early repayments and the conversion of deficit into investment . The country’s public deficit was, as a result, on a downwards trajectory until 2011, at the same time as the rising price of raw materials on the world market made it necessary to adopt a policy of active support for domestic request to counter the result on the country’s increase of the decline in request from abroad. This led to a worsening of the budget deficit and recourse to foreign deficit.

By the beginning of 2013 treasury deficit had deepened to 58.0% of GDP. At the end of August 2012 internal financing of the national, chiefly made up of treasury bills issued by auction, amounted to four times the volume borrowed during the equivalent period in 2011. As a result outstanding internal deficit rose by 10.7% compared with the level at the end of December 2011.

The worsening of the budget deficit, estimated at 7.5% for 2012, and the balance of payments current account deficit (8.6% in 2012), as a result of the rise in oil prices and the increase in subsidies, led the agency Standard and Poor\\\'s (S&P) to downgrade its rating of the country’s long-term deficit from stable to negative. But the agency did keep Morocco at the level of Investment Grade which it had awarded in 2010.

Prospects for treasury deficit for 2012/13 suggest a slight increase with the result that it should be around 60% of GDP. This is attributed to a December 2012 international bond issue worth MAD 1.5 billion. But the country plans to cut treasury deficit to a targeted 50% of GDP from 2014 onwards.

Debt service charges should rise in 2013 by 10.6% over their 2012 level to account for 2.5% of GDP. The increase can be attributed to higher domestic and external deficit interest charges, expected to grow by 8.2% and 25.6% respectively.

Economic & Political Governance

Private Sector

The legislative, regulatory and institutional reforms that Morocco has embarked upon were continued in 2011 and 2012 with the aim of improving the business climate and laying foundations additional likely to attract foreign and domestic investors. Further evolution has been made in this area, particularly in promoting investment . Furthermore Morocco emerges as the country in the Middle East and North Africa that has most improved its business regulations. Since 2005 the country has implemented 15 reforms in this field. Nevertheless, having risen 21 places in the World Bank statement Doing Business 2012, rising from 115th place to 94th out of 185 nations, Morocco fell back four places in the rankings in the 2013 statement.

This drop was chiefly due to a relapse in the areas of registering property, obtaining credit and dealing with construction permits, although its performance in the category of starting a business showed a clear development.

In the 2012 Heritage Foundation Index of Economic Freedom (IEF), Morocco scores 77.2 out of 100 in respect of business freedom, 1.5 points up on the 2011 ranking. But the statement says that while the procedures for setting up and registering private enterprises have been streamlined there has been no real development in eliminating the bureaucratic obstacles to private investment . The country still faces major challenges in improving its business climate in the long term.

Financial Sector

The country’s economy plays a key role in economic increase and has shown a degree of resilience in the context of the world financial crisis. The banking sector is one of major, perhaps the major, in the region and represents 110% of GDP. Financial intermediation has grown progressively, with efforts made by the banking sector to foster financial inclusiveness having raised the bank account penetration rate to additional than 50%. In addition the authorities have taken a number of steps to promote better access to banking services and encourage saving, particularly in rural areas. In addition the Basel III financial standards, in particular those concerning capital and liquidity, are being progressively implemented. In this context the central bank has raised the equity ratio to 12% and the mandatory level of core capital to 9%, with result from June 2013.

Nevertheless the sector is having some trouble in conference the funding needs of the economy with the resources raised, in the light of the booming investment the country has experienced since 2007, the explosion in request for credit and a slowdown in clients’ deposits. The banking sector has accordingly been in recurrent deficit since 2007 and the country’s central bank (Bank Al-Maghrib, BAM) has had to intervene regularly and significantly in the market to meet the cash flow needs of the banks. To this end at the same time as the country’s banks’ liquidity requirements reached almost MAD 74.8 billion for the month of October 2012 alone (compared with MAD 72.3 billion in September) the bank intervened chiefly through seven-day scheduled transactions, the outstanding amounts of which reached MAD 61 billion by the end of October 2012, to ensure the funding of the economy and stabilise monetary interest rates. The BAM says that there are no perceptible signs of difficulty at the level of indicators such as the rate of rejection of credit applications, but the sector needs to intensify its efforts to mobilise household savings to avoid an eventual rationing of credit in sectors that provide jobs, such as construction, SMEs and SMIs.

The capital market is still limited and it makes an inadequate contribution to financing the economy, in particular in the production sector and promising sectors of activity. The indices on the Casablanca Stock Exchange, its capitalisation and volume of trading, all showed significant drops in 2012. The operators in the SME sector and the ministry of the economy and finance should in a little while be holding discussions with a view to making it easier for SMEs to gain access to the capital market, the aim being to create a specific stock market for them.

Public Sector Management, Institutions & Reform

Administrative reforms are being actively pursued with the aim of implementing the good governance principles endorsed by the new 2011 constitution. These include in particular Articles 156 and 157 which transaction with the functioning of government, regional and local authorities and other public bodies. Three priorities underpin the action plan of the ministry of public service and modernisation of the government: improve the quality and effectiveness of public services; pay better attention to public opinion; and modernise the management of human resources.

To address the quality and effectiveness of public services, the priority is to have clear, simplified procedures that are harmonised nationally. Until presently procedures have been over-complicated and varied too much from one jurisdiction to an extra for there to be an effective claims or complaints system. This has minimised the impact of initiatives such as “Stop Corruption”, which was launched at the end of 2010 by the central body for the prevention of corruption (Instance centrale de prévention de la corruption), active since 2007. In the management of public affairs a government programme for 2012-16 provides for the gradual introduction of a system of contracts between the national and public institutions and enterprises (Établissements et entreprises publics, EPP), combined with audits of performance objectives. Human resources management policy promises a progressive overhaul of the status of the civil service, which dates back to 1958, and the modernisation of training. In 2013 the process of merging the National School of Government (École nationale d\\\'administration) and the Higher Institute of Government (Institut supérieur de l’administration) should be speeded up.

Meanwhile, the government wants to establish a additional local system of government, additional responsive to the voices of ordinary people, in line with its decentralisation process. Beyond the development of electronic government to improve response times, the action plan for the next two years provides for the establishment of opinion polls on key areas of people’s lives and open government based on better transparency. Much remains to be done to make this political will a reality however. Regional bodies have hitherto not had the means, the human resources nor the delegated power needed to entirely represent central government at regional level.

Natural Resource Management & Environment

Morocco has an active development strategy for renewable energies (sun and wind), and an extra for water production and management. The country is heavily dependent on imports for its energy needs which represent 95% of its supply. Its water resources are by presently low (730m3 per inhabitant per year) and could drop by a quarter by 2030, with request exacerbated by recurrent droughts and a downward trend in rainfall.

The implementation of the energy strategy launched in November 2009 accelerated in 2012. The arrangement for the initial phase of the solar park at Ouarzazate was awarded in September 2012 to the Acwa Power group. Worth around USD 9 billion the strategy aims to build five solar parks with a capacity of 2 000 megawatts by 2020 at Ouarzazate, Ain Bni Mathar, Foum Al Oued, Boujdour and Sebkhat Tah. This is expected to make annual savings equivalent to 1 million tonnes of oil and 3.7 million tonnes of CO2. In this context the World Bank has made two loans totalling USD 297 million, repayable over 30 to 40 years. The African Development Bank (AfDB) has made a loan of EUR 359 million to finance a wind energy and rural electrification programme which has as well attracted USD 125 million from the Clean Technology Fund. The integrated wind power programme aims to generate 2 000 megawatts (MW). Morocco’s coastline is believed to have the capacity to produce 6 000 MW from wind farms. Five projects of 720 MW should be fully operational in 2013.

A number of schemes have been initiated to promote energy efficiency, covering energy efficiency codes in construction, additional widespread energy audits in industry and the introduction of a “20-20”social tariff system with incentives to save energy.¹ The time zone was shifted to GMT+1.

The national water strategy envisages building 50 large dams and 1 000 smaller constructions by 2030, the reforestation of additional than 1.5 million hectares and stronger incentives to save water.

Political Context

The Islamist Justice and Development Party (Parti de la justice et du développement, PJD) took office on 3 January 2012 next its victory in the November 2011 elections and faces expectations not only in the social domain but as well on such major political issues as reform of the judicial system and the fight against corruption, its major campaign theme.

Protests in the large cities against unemployment and the cost of living, called by the trade unions and again the 20 February Movement, were a feature of 2012. There were further demonstrations in the interior, in regions such as Taza (Rif) and Imiter (High Atlas), where local people staged demonstrations lasting several months against the company Société métallurgique, which exploits one of Africa’s major silver deposits.

The government is attracting criticism for the lack of evolution in the fight against corruption in public services. Morocco dropped eight places to 88th out of 176 nations surveyed in the 2012 Transparency International ratings. A judicial inquiry opened in August at the request of King Mohammed VI in response to complaints from Moroccans living abroad that revealed “fraudulent behaviour of corruption and harassment” on the part of some members of the security service assigned to border posts. About 40 were arrested. There were as well calls for the reforms promised by the new constitution and the modernisation of the judiciary to be implemented. Next a petition was signed by 1 800 magistrates the government launched national dialogue on 28 May 2012, overseen by a high court which is preparing a national conference on justice system reform in early 2013.

In the area of security the authorities seized additional than 250 tonnes of drugs and broke up several terrorist cells responsible for recruiting for Al-Qaeda in the Islamic Maghreb (Al-Qaida au Maghreb islamique, AQMI) and the Movement for Unity and Jihad in Western Africa (Mouvement pour l\\\'unicité et le djihad en Afrique de l\\\'Ouest, MUJAO) which have invaded the north of Mali. Talks with the Algerian-backed Polisario Front were suspended on 29 November 2012 next nine fruitless sessions since August 2009. The mandate of the United Nations mission for a referendum in Western Sahara (Mission des Nations Unies pour l\\\'organisation d\\\'un référendum au Sahara Occidental, Minurso) expires on 30 April 2013 and the mission presently plans to undertake shuttle diplomacy with the interested parties and neighbouring states. Since 1 January 2012, Morocco has been a non-permanent member of the UN Security Council with a two-year mandate.

Social Context & Human Development

Building Human Resources

Between 2000 and 2009, education and training were identified as national priorities. Measures undertaken included improving infrastructure and teacher training, the organisation of school transport in rural areas and social help for disadvantaged families through direct financial aid or provision of equipment. The education budget has risen progressively to reach 6% of GDP in 2012.

School enrolment for the 6-11 age group rose to 90.5% in 2009 against 52.4% in 1990. The biggest development was seen in rural areas where the rate rose from 35.9% to 90.6%, and particularly part girls, whose enrolment rate almost quadrupled during the period. Morocco is on the way to achieving the second of the Millennium Development Goals (MDGs) which relates to primary schooling. The 2008-12 emergency plan saw the enrolment rate reach 97.9% in 2012. Presently a new strategic plan covering the period 2013-16 aims to make primary education universal. A law creating a national agency to combat illiteracy (Agence nationale de la lutte contre l’analphabétisme) is due to be implemented in 2013.

Nevertheless efforts need to be intensified to counter the problem of school drop-outs. UNESCO says that the number of years of education which a child in Morocco can expect is still the lowest in the Maghreb. In secondary education the net rate of enrolment was only about 44% in 2009. The Najah programme devoted to schooling and educational success seeks to achieve a target high school completion rate of 60% for students in the 2010 cohort.

Efforts should as well continue in the field of adult literacy where the rate of 60.1% contrasts with the 77.5% in Tunisia. This, combined with high school drop-out rates, reinforces the problem of child labour. A study by the High Commission for Planning, (Haut commissariat au plan, HCP) showed that while there has been a marked fall since 1999 there were still 123 000 children aged between 7 and 15, mostly boys, working in Morocco in 2011. In 90% of cases in rural areas they are family workers, while in the urban areas they are mainly employed in the service sector (54.3%) and industry and crafts (26.5%). The HCP as well reports a further 30 000 minors employed as domestic workers.

Several basic health indicators have shown major improvements, the result of sustained efforts in public provision since 1990. The level of per capita public spending on health has risen fourfold to reach MAD 314 in 2009, while the number of doctors has grown at a rate of 6.6% a year and the number of institutions offering health care by 2.4% a year. The rate of infant mortality (deaths part those aged under a year) fell in 2011 to 30.2 per thousand live births. The rate of deaths part children aged under five was 36.3 per thousand live births in 2010. The level of maternal mortality has fallen by half in five years, and stood at 112 per one hundred thousand live births in 2010. The prevalence of HIV/AIDS part adults aged 15 to 49 was stable at around 0.1%. However obesity is beginning to become a public health challenge in Morocco. A study by the HCP revealed that the problem of “critical and morbid” obesity has been growing in the last 10 years and presently affects one adult in five, or 3.6 million people, while an extra 6.7 million are in a national of pre-obesity. Finally, at a time at the same time as there are very large numbers of people retiring, adapting the health infrastructure and medical and paramedical services poses additional challenges.

Poverty Reduction, Social Protection & Labour

The policy implemented to combat poverty has had positive results. Even so pockets of poverty and inequality, both rural-urban and gender specific, remain a major challenge that the government is trying to meet through the second phase of its national initiative for human improvment(INDH2) programme.

The INDH was launched in 2005 and the country succeeded in targeting socially vulnerable groups additional accurately, with the government using a new approach to aid them economically, targeting gain-generating activities and social protection measures such as health coverage for the majority disadvantaged. Morocco has thereby by presently completed the initial MDG relating to poverty reduction. The poverty rate, defined by a threshold of USD 1 per person per day, fell from 3.5% in 1990 to 0.6% in 2008. Using the government’s threshold (of MAD 3 834 in urban areas and MAD 3 569 in rural areas), poverty fell from 15.3% in 2001 to 8.9% in 2007 and vulnerability from 22.8% to 17.5%.² The initial phase of the INDH (2006-10) succeeded in building on evolution combating rural poverty and social exclusion and vulnerability in towns and cities. It targeted 403 rural districts and 264 urban neighbourhoods benefiting additional than 5.2 million people, or around 40% of the poor, through 2 000 projects in various fields.

The second (2011-15) phase of the programme draws on previous experience and targets its budget of additional than MAD 17 billion at mountainous areas and rural communes with a poverty rate above 14%, compared with a rate of 30% in INDH1. Health, education, roads, water, sanitation and electricity are the priority sectors. The current programme aims to speed up the implementation of the “towns without slums” projects and build 440 000 new social housing units by 2016, to reduce the deficit in this type of housing, currently put at 840 000 units.

In the field of health, the system of medical aid to the very poor, known as Ramed, was extended to the whole of the country in April 2012. Ramed was launched in 2008 and provides free or half-free health care in public hospitals to people living below the poverty line or in vulnerable conditions. It is estimated that 8.5 million people qualify, of whom 4 million are deemed to live in total poverty. At the end of August 2012 around 366 281 households had by presently been registered; just over 1 million potential beneficiaries. Other measures concern the regular upgrading of the minimum wage (Salaire moyen interprofessionnel garanti; Smig) and retirement pensions. Finally, an improved employment arrangement provides for two new measures, inclunding social coverage for those taking part in the Idmaj jobs programme, which is aimed at the long-term unemployed.

Gender Equality

Despite the creation of an authority for equality and the fight against all forms of discrimination, much still remains to be done to adapt the country’s legislation and promote gender equality. The penal code still includes articles which are incompatible with the international conventions that Morocco has ratified. Several demonstrations calling for revision of the law on women’s rights followed the suicide in March 2012 of a 16 year old woman who had been compelled to marry a man who had raped her so the offender could escape a jail term. There were repeated calls from non-governmental organisations (NGOs) and associations for the withdrawal or amendment of certain articles of the penal code, in particular article 490 dealing with rape, and provisions governing sexual harassment. The campaign as well proposed the amendment of a number of discriminatory dispositions in the family code. The law entirely sanctions sexual harassment since it requires a witness, which means that it is difficult to apply in practice.

Structural inequalities remain in access to jobs and executive positions in the absence of a government strategy to combat them. Women make up only 21.7% of workers in the non-farm sector and the new government has only one woman minister. In these circumstances the targets relating to gender equality will not be completed by 2015. The majority significant evolution is limited to the educational sector and measures of positive discrimination such as the proportion of women in the parliament (16.7% in November 2011 compared with 0.7% in 1997).