October 29th, 2010
10:58 AM GMT
If vibrant colors, sights and sounds were rated as indicators to attract business and foreign direct investment, Marrakech and Morocco in general would win that competition hands down. Entering the giant market square Jemaa El Fna a half hour before sunset takes one to a bygone era. Traders, craftsmen and the odd purveyor of black magic potions are all too willing to do a deal.
Thirty minutes outside the central square, we all gathered for the World Economic Forum regional meeting on the Middle East. The distance from the Gulf - a full nine hours from Dubai before a transfer from Casablanca - served as a deterrent for many. In fact, not one political leader decided to make the journey to a place where caravans would spend weeks crossing the Sahara to sell their goods.
Even the King of the host country, Mohammed VI decided to leave this global event to others, which many attending saw as a sizable mistake.
While Morocco is not new ground for European tourists - especially the French, English and Italians - it is less familiar to businessmen of the Gulf and broader Middle East and North Africa. In discussions with all the King’s men at WEF, you get a sense what the 48-year-old monarch is out to get done. One advisor to the Prime Minister approached me after my panel on “Building a Middle Class for the Middle East” to share a tea and talk through in detail some of the projects on the planning board and, more impressively, some already up and running.
This western frontier of the Middle East and North Africa territory (MENA) is forging new ground in logistics, solar technology, chip manufacturing and desalination. While the 2008 economic crisis has quashed the political ambitions of French President Nicolas Sarkozy’s Euro Med designs, don’t tell that to the Moroccans who see the policy architecture as a means to build their future fortunes upon.
One of the more eye-catching efforts is the giant Tangier-Med Project, which plans to be the largest port facility in Africa. Renault-Nissan was an early mover and has invested nearly $1 billion to produce 200,000 vehicles a year.
The young King, who took the reins of power back in 1999, and is trying to accelerate the pace of change in a country where mules pulling carts of vegetables fight for space with scores of mopeds and small cars. His track record is a solid one. According to Nizar Baraka, his respected Minister for Economic and Social Affairs, the government is working from top to bottom - even with elementary school children he noted - to change the mindset of the average Moroccan. Big Brother - the government - will help set the vision, define what the country can offer to the world and even train you to work in one of its new, high-tech, private-sector ventures, but don’t expect it to provide you a job. Only 10 percent, according to Minister Baraka, work in the public administration, but by Middle East standards, that is more than impressive - it is nearly unheard of.
For the past five years, Morocco has averaged five percent growth. Unemployment has dropped two percentage points down to eight percent; but youth unemployment remains stubbornly high at double that rate. In the ranks of per capita income, Morocco does not score as well. At $4,500 it comes in 116th place according to the IMF.
But the regional businessmen I spoke with take these factors as a net positive. High inflation has not reached this far west just yet. There is an ample supply of young workers to educate and train and no one argues that it is a hop, skip and a jump into the vast European market.
While its geographical location will pay dividends in the future; it is being hampered by a sluggish recovery. Europe’s general slowdown during the crisis - and collapse on the Mediterranean perimeter has cut growth according to the government by one to two percentage points in the past few years.
That scenario will hopefully improve and the King and his cabinet need to turn their attention to improving relations with their neighbours, especially Algeria - despite overarching agreements, border challenges, non-tariff barriers and old rivalries that are keeping this vibrant, colorful and unique destination a little too far off the region’s business radar.
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