Rabat – In a November 2 feature, global business and market news outlet Bloomberg identified five standout nations in a global trading system that is undergoing major post-pandemic changes.
Morocco, Vietnam, Poland, Mexico and Indonesia are these five so-called “connectors,” selling manufactured goods and attracting investment from all sides of the geopolitical divide.
They are also developing deep supply chain infrastructure and, importantly, successfully navigating the tumultuous nature of geopolitics, its accompanying rival trading blocks, and the concomitant diplomatic turbulence that often arises.
“Despite their very different politics and pasts, they share an opportunistic desire to seize the economic windfall to be had by positioning themselves as new links between the US and China — or China, Europe and other Asian economies,” Bloomberg noted.
In Morocco’s case, the country has diplomatic and economic engagements working together with diverse partners from the G7 to BRICS to the African Continental Free Trade Area (AfCFTA).
For Morocco, Bloomberg’s analysis is an acknowledgement of the decades-long effort to harness the power of place (a bridge connecting Europe to Africa, for example) while taking advantage of key domestic resources, from robust agricultural production (Green Morocco Plan) to best-in-class transportation infrastructure.
The Bloomberg analysis may be a snapshot in time, but Morocco’s work to expand and diversify its economy goes back decades. Since the late 1970s, Morocco has tied economic development and modernization with human development and social welfare.
The five connectors that Bloomberg identified represent just 4% of global gross domestic product, but they’ve attracted more than 10% ($550 billion) of all greenfield investment since 2017, Bloomberg’s analysis noted.
The term greenfield investment refers to corporations setting up new business operations or facilities abroad, more or less from scratch. This foreign direct investment (FDI) creates new jobs, wealth, new markets and likely new and expanded supply chains for manufactured goods like automobiles and airplanes or their key components like electric batteries.
Bloomberg’s analysis indicated that Morocco’s manufacturing export performance since 2017 has grown 25% above the global trend for that time period. This progress is shown in the value of Morocco’s automobile exports: The country is set to export over $8 billion in automobiles and auto parts this year.
Importantly, Morocco’s ongoing expansion of automotive supply chain infrastructure, often in collaboration with American part suppliers, equates to more stability in the sector’s export value.
Bloomberg noted that Morocco has secured $15 billion in new greenfield factory projects in 2022, nearly as much as the five previous years combined. This includes manufacturing for burgeoning technologies like lithium-iron-phosphate (LFP) batteries — a foreign investment priority for China in Morocco.
For these five connectors, the geopolitical mantra of “you’re either with us or against us” is tempered by the need for thoughtful diplomatic engagement in a complex world facing significant transnational threats like climate change, water scarcity and global debt burden.
Challenges like these were the focus of the recent International Monetary Fund’s annual meeting in Marrakech where new models of development, investment and problem-solving were discussed.
Though the sky is not falling on the key foundations of global trade, current challenges for its two principal traders, the United States and China, have given impetus to the trends that are outlined in the Bloomberg feature on the five nations.
China is wrestling with enormous internal debt: its debt-to-GDP ratio is about 280%. The United States is still the world’s largest economy but the fiscal and budgetary drama in Washington continues: Congress enacted another continuing resolution to keep the government running only through Nov. 17.
For the five connectors and many other nations, it’s not all good news. The Bloomberg analysis also noted that shifting and uprooted supply chains will likely mean higher production costs for many items, at least in the short term. But the analysis highlights an important simple reality: location and strategy is being at the right place at the right time.
