Morocco may have collected investors’ plaudits and confidence over the years, but the country could still face troubles in the coming years.
Rabat – Despite an overall stable economy and positive scores in a number of international reports on economic performance, Morocco is still in need of “more decisive structural reforms” to ensure sustainable and inclusive growth.
The lukewarm assessment comes from a recent Global Risk Insights report.
Compiling a number of recent reports—including from the World Bank—the Global Risk Insights article considered Morocco as taking considerable steps in the right direction but in need of internal reforms to avoid derailing.
From pioneering a more inclusive education system to investing more in improving the lot of scores of unemployed young Moroccans, the North African kingdom “will need to grapple with some deeply rooted challenges before reaching its full potential as a regional powerhouse and premiere African hub for international investment,” according to the report.
Morocco’s strengths include its robust presence in international affairs, especially its assertive and growing presence in African affairs, its trade and security partnerships with Europe, its new but promising partnership with China, and its longstanding alliance with the US.
While indispensable for the EU (on migration, for example) and strategic for the US (on counterterrorism efforts), Rabat is “becoming a media darling in China,” enticing Chinese investors and tourists.
Continuing setbacks include poor public investment management, corruption, human and minority rights, poor record on tax payments, and economic dependence on the external world.
Flashy infrastructure can’t replace real reforms
“Despite spending on flashy infrastructure projects, like deals on bullet trains and founding new cities, many basic infrastructure and development needs around the country are not being met,” the report said.
The suggestion, as many critics of Morocco’s new high speed train have recently pointed out, is that the majority of the country’s high scale investments have been aimed at collecting “national prestige” or pride rather than practically impacting the socio-economic outcomes of millions of poor and low-income Moroccan families.
While foreign investments fly into the country and infrastructure projects proliferate, sizable local needs remain unmet, keeping internal economic dynamics in a “fragile” and “vulnerable” state.
As Morocco improves its global outreach and diversifies its trade and strategic partnerships, the report suggested, “certain key social and economic issues, including treatment of vulnerable populations, will present an important test as to whether Morocco will emerge in the future as a strong, inclusive economy.” It concluded, “In order to secure its place as a regional hub for growth and progress, internal reforms will be absolutely critical.”