By Hamza El Mounhi
Morocco World News
Casablanca, August 1, 2013
I have been hearing these last years that Morocco is going through many structural changes and that everything is moving crazily fast. That’s what politicians and economic players, backed by a strong army of stubborn media (especially TV), try to make us believe. I am not a radical skeptic and have no doubt that some of the realities defended are indeed true.
Our country’s politicians, ministers and administrators have done a great job drafting strategies for every existing sector. We can count over 15 strategic plans for agriculture, industry, high technology, tourism, education or energy. There is however a clear difference between drafting a set of documents with ambitious and sexy objectives in terms of wealth and employment creation and really implementing these plans.
This brief introduction is in contrast with one frightening figure. In Morocco, 30% of youth are unemployed. Phrased differently, if you are graduating this year and have two other close friends, one of you might not get a job. This rate is among the highest in the World (in the MENA region, it’s 27%). I did not want to say also that 42% of our youth want to emigrate from the country, other alarming statement.
Everyone nowadays is talking about the crisis; our economy doesn’t seem to be in its perfect shape (as compared to 3 years ago-enough to show how vulnerable we are). The state and the private sector are striving to sort out the youth unemployment situation, but the challenge is tremendous. The main constraint is that there is no failure option and the matter is very urgent. One of the options remaining is to promote job creation through innovation and entrepreneurship.
Talking about the role of the state, ours has done terrible mistakes in this field. Our officials have understood this reality back in 2006 when they launched a program called Moukawalati (arab word for “my venture”). 7 years later, we call it a complete disaster. The objective of this program was to alleviate unemployment through self-employment by providing interest-free loans guaranteed by the state: banks provide the cash and the state takes in charge the repayment in case of default.
The state is so generous to become the warrant of loans provided to future entrepreneurs; taxpayers that work hard every day are “obliged” to pay for the failures of the others. The second nonsense is that these loans are only given to unemployed people, i.e students and active workers while new innovative ideas are not allowed to benefit from the program.
The third limit is however in my eyes the most important, and it’s here where the failure came. Moukawalati program only links individuals with banks. It’s up to the bank to decide whether or not to provide the loan. We all know that banks are positively cowards (it’s normal, they have to take care of people’s money) and are usually reluctant to finance new innovative ideas. They want to invest in proven concepts where the risk is relatively low. Nowadays, with all these crises coming from everywhere, Morocco is in desperate need of innovation to have high value added activities.
This brings me to the core issue in entrepreneurship in Morocco; financing. Seed money is the most problematic in Morocco. While we have a bunch of Venture Capital funds that prefer to invest in existing companies at an advanced stage (which have a proven concept, reliable history of figures and performance etc.), there is no entity that provides start-up money.
What about our rich then?
All my life, I defended and will defend the principles of freedom. However, I would like to recall to Moroccan wealthy that the money spent to buy a Porsche (or whatever luxurious item) could have been invested in a 3 to 4 start ups, create up to 20 direct jobs (assume that each start up will employ 5 people), participate in the dynamics of development, ensure stability and hence preserve the property right because without it, your Porsche is worthless.