Global Competitiveness

Global Competitiveness: is considered a relatively liberal economy governed by the law of supply and demand. Since 1993, the country has followed a policy of privatization of certain economic sectors which used to be in the hands of the government.
Where does Morocco Stand?
Low level of product and market diversity, technological level also limited and a low adaptation dynamic. In a word, the specialisation profile of Morocco prevents it from benefitting from its policy of commercial openness. The Royal Institute of Strategic Studies (IRES) reviews Morocco’s weaknesses, weaknesses which have alarming proportions for the balance of payments situation.
The last study of the IRES on “The global competitiveness of Morocco: Challenges and Prospects”, of which the Moroccan daily newspaper l’Économiste obtained a copy, looks into the factors that help build an active role in regional and international treasury. It also evaluates the country’s performances and looks into the different dimensions of its global competitiveness.
The study lingers on the phenomenon of the supply quality of the country’s exports. It is concentrated on a few products, primarily phosphates and clothing textiles. Add to that the low level of diversification of the export markets, which depend significantly on the economic evolution of France and Spain. From 2000 to 2008, 80% of Morocco’s external demand came from the countries of the European Union.

Neither on the technological side has the country managed to get out while the going is good. So, nearly two thirds of manufacturing exports are low level technology products and are highly natural resource and labor intensive, and only 10% of manufacturing exports are considered high technology, a situation which refers to insufficient expenditure in research and development which is no more than 0.79% of the GDP. This is due, amongst other things “to low corporate commitment to innovation and to research and development”.

Morocco also remains focused on less dynamic sectors of global commerce. Three product groups provide nearly 80% of revenue from exportation of goods, as it happens: agricultural and fishing products, clothing textiles and phosphates and their derivatives, products which, according to the IRES, saw the slowest growth in global trading markets.

Other shortcomings to tackle relate to institutional competitiveness. The observation made by the Institute is that Morocco is classed, according to “the 2009 institutional profiles” in the category of countries where social regulations are determined by traditional societal norms (such as family for example) rather that by the State and modern institutions. In addition, social organization focuses on collective safety instead of individual liberties.

The IRES, which charts the issues for Morocco in terms of global competitiveness, also makes some suggestions. So the institute suggests permanently adapting the specialization profile climb higher up the chain of goods values, to promote exports to dynamic markets, the traditional ones but also Brazil, Russia, India and China (BRIC). The country could also focus on regional integration thus maximizing the effects of advanced status. In a global context in which change accelerates under the effect of economic and financial crisis, a new competitive order and new economic balance will emerge. For instance, see the acceleration of the rise of Brazil, Russia, India and China and the relative decline of the influence of Europe. We also see the emergence of new arrangements of spheres of influence: energetic alliances and the intensification of international competition with a greater role for innovation and human capital in construction of competitive advantages.

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Interview with Mohamed Horani, President of CGEM

We are working to strengthen small businesses (SME's), trying to enable them to achieve a critical size which in turn will enable them to improve their competitiveness. They need support to build strategic development, to improve their management of human resources, and to have efficient marketing . This will help them to position themselves in the global configuration.

Interview with Mohamed Horani, President of CGEM  According to the Ministry of Economy and Finance, a growth rate of 5% is predicted which is an increase of one point compared to the year 2010. This leads to a budget deficit of 3.25% this year. What is your opinion on the current economic state of the big companies in Morocco? I believe that during the last decade, the performance of the Moroccan economy was much improved compared to 2 decades ago. In fact, the average growth rate during the last decade was 4.8% versus the 3.8% average growth during the nineties . An increase of 1%. The most significant achievement was noted during the financial crisis of 2008-2009, as Morocco managed to achieve a growth rate of more than 5%, while all the other economic indicators were stable. The rate of inflation, the level of budget deficit, and the level of international debt were all under control. While we note that the economic performance this decade was satisfactory, our plan for the next decade is to accelerate economic growth.  Our intention is to publish a study which defines the Confederation's Vision for 2020 and which fits in with the various strategies presented by the Moroccan government for a number of economic sectors . Our ambition is to increase economic growth to an average annual rate of 6 to 7%. This is a necessary target to enable Morocco to create at least 2.5 million jobs by 2020 while keeping unemployment at the present level of 9%. Compared to double digit unemployment figures that Morocco experienced in the past, this rate is not too high. But we need to take into consideration the increasing number of young women and men coming into the labor market and in order to reduce the unemployment rate to7 to 8%, we need to be able to create 3 million jobs by 2020. We believe this target to be within our reach and we have made concrete recommendations towards it. "The most significant achievement was noted during the financial crisis of 2008-2009, as Morocco managed to achieve a growth rate of more than 5%." How do What are the main recommendations for Morocco? Cooperation between the Private sector and the government is well established and there is constant consultation on major economic decisions. All the government strategies for various sectors as they exist today have been set up in collaboration with our confederation as the representative of the private sector. We are not only involved in the design of different sector strategies but also in their implementation. What we propose is to improve the implementation phase of the strategies at the national level and the adaptation of the plans at the regional level. This is to be conducted in accordance with the advanced regionalization plan initiated by His Majesty the King a year ago. We expressed our opinion on this plan and proposed that the determination of the regions be entirely based on economic criteria. We have also recommended that each region should evolve around a major city which will be its economic pole and play an important economic role for regional development . Today, we have 16 economic regions which, in our opinion, are too many. So we will need to reduce this number of regions and try to construct regions that are economically sound. In that way, an important degree of solidarity in the whole of the kingdom can be guaranteed. We are trying our best to promote free trade with our neighbor countries. We would like the Maghreb to be perceived as business entity to facilitate our proceeding. We have also suggested a number of new business opportunity sectors to be developed in Morocco despite the fact that their impact will be limited  during the decade 2011-2020. What other countries have you strong ties with? We have created the Confederation of the Maghreb Employers 3 years ago. The Maghreb Union of Entrepreneurs groups together the 5 employers' confederations of the 5 Maghreb countries: Mauritania, Morocco, Algeria, Tunisia and Libya. Other partners include Europe. We consider our relation with Europe to be more of a responsibility than an advantage. We believe in regional integration, if we want our country to hold a position in the new global configuration, we need to reinforce our region, the Maghreb, as well as that of the Mediterranean basin with southern Europe. We are convinced that the fate of Morocco is linked to that of the whole region. What are the macroeconomic fundamentals to attract investment in Morocco? Strategically, the choice of Morocco can be summarized in 2 points: a production platform, and an export platform. Creating a production platform is supported by the development strategies facilitating and promoting production in Morocco. Creating an export platform is to take advantage of the free trade agreements enjoyed by Morocco with Europe, the USA and the four Arab partners of the Agadir Agreement. Another free trade partner is Turkey. More free trade agreements being finalized with West Africa, Central Africa and Canada. Therefore, we would like to build on these two platforms, production and exports. The other assets of Morocco are its geographical situation, its political stability, and its qualified human resources. They are the backbone of our planned strategies. In addition, Morocco is a continuous building site with the numerous large infrastructure projects being implemented in Morocco such as motorways, railways, ports and airports as well as integrated industrial platforms and large housing projects which are being built to improve the life of the citizens. What do you think can be done to accelerate or improve exports of goods from Morocco? While the balance of payments is stable, the problem is our trade deficit and more specifically in the exchanges of goods. Increasing exports is one of the main targets set up in our strategy " Vision 2020", In fact our plan relies heavily on our performance in improving exports. So we suggest the following: 1) Rationalizing imports and 2) reinforcing and developing the exports of goods and services.

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Morocco Improved its Economic Competitiveness

Morocco Improved its Economic Competitiveness

Morocco has jumped markedly high from the 73th rank in 2011 to the 70th rank in 2012. This noticeable advancement is ascribed to the creation of the national committee for business environment in 2010.

The World Economic Forum (WEF) published it annual Global Competitiveness Report that measures the economic performance of more than 140 economies. The report offers a wealth of valuable data about the progress of world economies.

Morocco has jumped markedly high from the 73th rank in 2011 to the 70th rank in 2012. This noticeable advancement is ascribed to the creation of the national committee for business environment in 2010. In the span of three years, Morocco gradually moved upward from the 75th rank in 2010 to the 73th rank in 2011 and 70 in 2012.

The WEF defines national competitiveness as the set of institutions, policies, factors that determine the productivity level of a country.  There are various factors at play in the discernment of competitiveness. The Global Competitiveness Report measures 12 parameters   ranging from institutions and infrastructure to business sophistication.

For the fourth consecutive year, Switzerland tops the overall rankings followed by Singapore, Finland and Sweden in the fourth position. The three last ranks are occupied respectively by Haiti, Sierra Leone and Burundi.

Morocco ranks the eight Arab country in terms of competitiveness, after  the State of Qatar which tops the list of Arab countries, as it ranked in 11th rank, Saudi Arabia (18th), United Arab Emirates (24th), Oman (32th ), Bahrain (35th), Kuwait (37th) and Jordan (64th)

The first pillar considered in the measurement of competitiveness pertains to the legal and administrative context in which firms and government interact to create wealth. It includes national institutions, infrastructure, the Macroeconomic environment in addition to health and primary education.

The Global Competitiveness Report revealed that economic prosperity in Morocco is significantly impeded by corruption, bureaucracy and lack of financing.

On the other hand, Morocco ranked 101 in the assessment of higher education and training and the 63rd rank for the financial market development.

Morocco needs to boost its private sector that still falls short from being a counterweight to a feeble public sector.

The results related to the labor market in Morocco were not surprising.  Morocco is ranked in the 122nd position for labor market facility. Among the most problematic factors for business initiatives in Morocco figure also the inadequacy of the workforce and high tax rates.


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