Can Community Colleges Play a Role in Closing the Skills Gap in the Maghreb?

Specialists’ Delegations Find Similar Issues in US and Maghreb

In December 2010, as part of its program Partners for a New Beginning (PNB), The Aspen Institute, with State Department funding, launched the North Africa Partnership for Economic Opportunity (NAPEO). One of its core efforts is a focus on youth employment and related issues of leadership and entrepreneurism. Over the past three years, delegations have visited Algeria, Libya, Morocco, and Tunisia to have a first-hand look at conditions on the ground, where they were teamed with local partner organizations to assess what “best practices” might be shared to encourage job growth. A goal of NAPEO is to foster the growth of private-public-NGO partnerships to advance economic and human development.


NAPEO – building private-public-civil society partnerships for economic growth

The latest delegation consisted of US community college leaders who met with their counterparts in higher education, vocational and technical training, and business communities. Last week, delegation members met in Washington, DC to discuss their findings and continue a dialogue on options for collaboration and sustainable solutions. In addition, two members wrote blogs in The Aspen Institute space on the HuffPost (Huffington Post) recounting their experiences.

What was particularly striking about the comments of these skilled educators, who were visiting the Maghreb for the first time, were the similar challenges faced by the Americans and their counterparts. For example, the mismatch between education and workplace skills and the need to integrate soft and content/technical skills within programs were consistent themes for both Americans and Arabs. It was pointed out that 60 percent of Americans attend higher education institutions but only 30 percent graduate, which puts a lot of pressure on students to acquire marketable skills for whatever time they invest. Although the percentages for higher-education participation are much smaller in North Africa, the need for being job-ready is equally critical, as the unemployment rate among young people and women exceeds 25 percent across the region.

The Maghreb Mission – Learning for Employment

The expert panel was kicked off by Josh Wyner, Executive Director of The Aspen Institute’s College Excellence Program. He noted that there are two million unfilled jobs in the US due to the lack of skilled applicants, a situation not dissimilar to that in the Maghreb. He was struck during his visit by the opportunities to work in collaboration on common challenges, such as involving companies in shaping education programs that address market needs.

In her comments, Kathryn Mannes, Senior VP for Workforce and Economic Development at the American Association of Community Colleges, noted that the high degree of centralization in Arab education may inhibit local stakeholders from collaborating in education/training programs that serve local industries. She also mentioned that there is a perception that workforce development — acquiring technical skills while in college or university — is not well regarded in the Maghreb.

community colleges Maghreb

Blog on community college experts visit to the Maghreb

Dr. Richard Haney, Vice President for Educational Affairs at the College of Lake County in Grayslake, IL, in his HuffPost blog, mentioned three particular areas for improvement raised by their Arab counterparts: “their ability to train and educate a labor market with skills that are aligned with their local economies…developing the skills and talents of educators…[and] they lacked the basic instructional equipment and technology needed to provide students with the skills required.”

Eamonn Gearon, co-founder and Managing Director of the SIWA Group, which for more than 20 years has been advising clients in the MENA region on operational issues, cautioned that the centralized system is deeply rooted in society and often gives the impression that little can be done rapidly to bring about change. Mr. Gearon noted that lack of data was a major impediment to business relationships, as companies and governments are reluctant to share information that may be seen as proprietary or critical. He pointed out that there is a great deal of dynamism at the sub-state level where decision-makers are much closer to their constituents.

The need for changing local perceptions about work, learning, jobs, and careers was also mentioned by several of the speakers in the context of building constituencies and stakeholders for better educational outcomes. Russell Beard, VP of Information Resources and CIO at Bellevue College, pointed out that attitudes toward work are shaped by experiences in the educational system and that building strong ties with industry will give students a better grasp of how education affects their employability. In his HuffPost blog, Mr. Beard wrote about how the visit to the region affected him. “Seven days that would change my life, shake everything I know and open my eyes to the incredible beautiful world around us…I began to understand that their problems were not that different from ours.”

The Learning Agenda

The reciprocal benefits of international educational exchange

The reciprocal benefits of international educational exchange

The program concluded with a lively exchange as the audience expressed their opinions about how to best address four key issues: the benefits and drawbacks of centralization, ranging from more efficient use of resources to not addressing needs of local employers; challenges of integrating work skills and curriculum content to balance the goal of employability with the proven value of soft skills; the role of US institutions as both an adviser regarding “best practices” and as a recipient of alternative solutions that could enable US higher education to become more effective as a multi-cultural learning environment; and integrating stakeholders into the process of education/training, from curriculum to certification.

The delegation was impressed by the optimism and hope expressed by their contacts throughout the Maghreb. And their counterparts are strongly impressed with how the US is addressing employment issues so similar to their own. As Russ Beard wrote “It was crystal clear to me that the people I met saw us as a source of hope, bringing answers to the challenges they are facing in moving their nations to global participation. In us they saw the American dream.” It is perhaps the best that America can offer – optimism about the future and a mutually defined roadmap that enriches both partners.

Fitch Ratings: Morocco Shows Resilience and Growth since Arab Spring

 Leads in Investments and Economic Indicators in North Africa

A new report from Fitch Ratings offers strong praise for the social and political stability Morocco has demonstrated “since the start of the Arab Spring in early 2011,” comparing it favorably with its neighbors, even the hopeful success story in Tunisia. The report notes: “The smoother political transition in Morocco was aided by a tradition of political pluralism, the permanence of the monarchy (with King Mohammed VI seen as a reformer and legitimate among the population), and economic and social reforms started after the accession of the King to the throne in 1999. Stability in Morocco has supported growing tourist arrivals (which reached 10 million in 2013) and FDI inflows.”

The results confirm that Morocco has moved from a sedentary and often reactive economic player to one that is gaining a global reputation for business savvy. Since the accession of King Mohammed VI, there has been a country-wide campaign to build a stronger, more dynamic domestic economy capable of competing globally. To compensate for its status as the largest energy importer on the continent, Morocco is attracting international consortia to a host of renewable energy projects ranging from solar and wind to improved hydro and even nuclear options.

Morocco's infrastructure supports regional business leadership

Morocco builds infrastructure to support regional business platform

As the Fitch Ratings Report indicates: “Ratings dynamics in Tunisia and Morocco will crucially depend on their ability to narrow twin deficits [budget and current accounts], rebuild policy buffers, implement reforms and accelerate growth. In Morocco, the Stable Outlook anticipates a gradual narrowing of the twin deficits, supported by continuing reforms.”

At the top of the economic reform agenda for Parliament is restructuring the compensation and pension systems, redrawing land management and ownership guidelines, and migrating to more efficient electronic processing of trade-related documents.

With the launch of Casablanca Finance City, expansion of the Tangier-Med Port, and investments in emerging urban and transit centers, Morocco is increasingly attractive for international investments due to its stability, reputable and functioning business infrastructure, and strong ties and good relations throughout the western half of Africa.

The latter was underscored by King Mohammed VI’s four-nation Africa tour earlier this year, where the Moroccan leader presided over the signing of more than 80 agreements across diverse sectors including agriculture, financial services, tourism, transportation, and trade and investment facilitation. Domestically, Morocco continues to introduce and implement legislation that bodes well for its economic future. “Social and political stability has allowed the authorities to implement potentially difficult reforms, as illustrated by the gradual increase in subsidised energy prices,” comments the Fitch Report.

Morocco has energetically revived its reputation as a business crossroads for a market of one billion customers in Europe, the Middle East, and Africa. Investors and companies will be assured by the assessment of Fitch Ratings and others that Morocco is the place to be to do business throughout the region stretching along the Atlantic coast and into the interior of Africa.


New Reports on Africa Highlight Areas of Opportunity and Obstacles to Growth

Ahead of US-Africa Leaders Summit in Washington, DC, August 5-6, Overall Picture Promising, Yet Challenges Continue

Several recent publications have put the challenging road to prosperity for Africa center stage. The most thorough assessment is in the 2014 Economic Outlook published by the African Development Bank (AfDB). It is comprehensive, covering all 54 African countries.

Every year, the publication revolves around a central theme. This year’s “Global Value Chains and Africa’s Industrialization” takes a hard look at how African economies need to move beyond exports of commodities and marginal agricultural and industrial sectors to meet growth targets. The report combines the overall theme with local data, sifting it through reports by multinational organizations and analysts to move beyond rhetoric to realism. Recommendations include praise for what has been done, and also what will accelerate progress towards each country’s largely self-defined goals.

Invest in Africa report 2014

AU – Invest in Africa 2014

Another publication is “Invest in Africa 2014,” supported by the African Union but published independently by News Desk Media. Unfortunately, Morocco is not a member of the AU; thus the report is missing data and narrative from the second largest investor in Africa. Also absent is an in-depth look at cross-border investment opportunities.

The AU report was previewed in a program at the US Chamber this week with remarks from the AU, US officials, and African Ambassadors to the US. Comments during the panel “Opportunities across the Continent” were striking in their similarity: From infrastructure and renewable energy to value-added agriculture and resource management, the key priorities were consistent from north to south, east to west.

In introducing the program, Ambassador Don Gips, who co-chairs the Africa Business Initiative at the Chamber, focused on the upcoming US-Africa Leaders Summit in Washington, DC August 5-6, which will include separate private-sector elements: a Young African Leaders Initiative (YALI) meeting and a CEOs Forum. He said that the US goal is to increase US interest and investment in Africa. Yet, as a commentary issued by Brookings Institution pointed out, there are many challenges to a successful summit, especially the need for the African leaders to come with a unified, coherent agenda.

What Africa Needs and Wants

Peter Barlerin, Acting US Deputy Assistant Secretary of State highlighted several positive indicators for Africa, including its rapid growth rate and young human resources. He also noted challenges, such as dealing with jobs and youth employment within an inclusive growth strategy. Mr. Barlerin emphasized the critical importance of involving the private sector and taking advantage of Africa’s resources in agriculture.

Regarding negative perceptions of the continent, Olajobi Makinwa, Head of Transparency & Anti-Corruption Initiatives at the UN Global Compact, pointed out that government and stakeholders must confront gender and youth issues. She characterized government transparency regimes as “some good, some are bad, getting worse.” Ms. Makinwa said collaboration among public and private sectors and civil society is needed to support human rights and accountability.

Ambassador Girma Birru of Ethiopia began the conversation on investment opportunities, mentioning agriculture and food industries followed by infrastructure, including power and railways, and value-added manufacturing. Ambassador Steve Matenje of Malawi spoke about factoring in climate change in assessing the agriculture sector — gauging its effect on crop varieties and water management. Matenje also noted related opportunities in livestock and fisheries. Power and, especially, transportation linkages in roads, rail, and aviation are on his infrastructure list. Ambassador Matenje highlighted the importance of attracting young people to the huge potential in agriculture and paying close attention to gender inclusion.

Obama Speaks about Upcoming US-African Leaders Meeting

African Leaders to meet in US August 5-6, 2014

Ambassador Bockari Stevens of Sierra Leone repeated the need for transportation links among the countries in West Africa, along with added-value mining, attention to fisheries and airport management to meet growing demands, and opening new efforts in promoting financial services. Ambassador Daouda Diabaté of Côte d’Ivoire, chair of the African Ambassadors in the US, concluded the panel with comments related to the importance of peace and security for enabling economic growth, and the priority that West Africa is placing on highway linkages and greater economic integration. He restated the importance of utilizing the vast arable land resources of Africa to end the dichotomy of the co-existence of farmland and famine.
The Case for Morocco

Although the AU report does not include Morocco, the country’s economic progress is much more than a footnote to Africa’s development profile. While Morocco continues to work hard to meet its own Millennium Development Goals, its prognosis is largely positive, according to the AfDB report. “Overall, Morocco’s performance has been encouraging and benefited from a context of political and social stability.”

Morocco’s strongest asset for investors is that it is stable, has a reputable and functioning business infrastructure, and very good relations throughout the western half of Africa. On the macro-level, swings in Morocco’s GDP have been more a function of the disproportionate impact of poor harvests on the economy than systemic issues. And Morocco is moving to “spread the risks” by attracting greater investments in manufacturing, tourism, and service industries for a more balanced economy.

Morocco is also working to improve government efficiency and its effectiveness in attracting high value investments to generate high value jobs. Its trade balance continues to benefit from increases in exports of high-value products, although traditional sectors such as textiles suffer from poor consumer demand from Europe. Most importantly, based on the government’s agenda, Morocco knows where it needs to go. “Improvements to the support system for the private sector are needed and must still be implemented, in particular for land management, training, financing (especially for SMEs), and removal of bureaucratic red tape, as well as in the fight against corruption.” Recent initiatives such as the constitutionally mandated Economic, Social, and Environmental Council (CESE); Council on Higher Education, Training and Scientific Research; and the Competitiveness Council, made up of stakeholders, specialists, and government, underscore Morocco’s commitment to do it right.

Companies turning to Morocco to do business in Africa

Morocco is cited for strong business environment

The AfDB report is not the only external source to recognize Morocco’s continued progress as a home for global business. The Heritage Foundation’s 2013 Index of Economic Freedom report place Morocco ahead of Thailand, Indonesia, Russia, and Luxembourg based on the steps it has taken to date. Much more is expected of Morocco, and all indications are that it is ready to deliver a first-class business relationship, both as a destination for investment and as a hub for the region as a whole.

Why is Morocco Smiling? Tourism Gets Boost from New Investments and Projects

Tourism Minister showcases Morocco’s plans for Tangier, Rabat, and Casablanca

In a series of stories in the business media, the news about tourism in Morocco is all good. The numbers are up; investments are flowing in; and Morocco is gaining greater global recognition as “the place to be.” Situated at the western end of the Mediterranean, a short ferry ride from Spain, Morocco also enjoys a 1300-kilometer long Atlantic waterfront that has become a stop on the world tour of kiteboarding and other aquatic delights! A new report on CNN’s Marketplace Middle East says Morocco ranks among the top trending travel spots for tourists.

Tourism Review, in its annual look at the region, commented, “Untouched by revolutions, Morocco continues to attract. In 2013, the tourism sector represented more than 8.6% of GDP ($9.5 billion). Tourism revenues are expected to grow 8.1% in 2014 according to the World Travel and Tourism, while the Moroccan National Tourist Office plans to host more than 11 million foreign tourists in 2014. Relative peace and social problems of its neighbors make Morocco a popular destination.”

Tourism Minister interviewed on CNN

Minister Lahcen Haddad speaks to CNN

Yet Morocco is not standing still. The Wessal Capital Fund, focusing on the tourism sector, is a collaboration of the Moroccan Fund for Tourism Development, Qatar Holdings, Kuwait’s Al Ajial Investments, Abu Dhabi’s sovereign wealth fund Aabar, and the Saudi Investment Fund, and it is moving with impressive speed. The first priorities, already announced, are projects in Tangier, Casablanca, and Rabat. In Rabat and Tangier, the fund’s investments focus on mixed-use projects that include residential housing, port/marina development, entertainment and destination centers, and commercial and shopping areas. In Casablanca, activities concentrate on the coastline. “Casablanca-Port will completely change the city. There will be hotels, cruising port, marina and an ambitious plan to renovate the old Casablanca’s medina,” according to Tourism Minister Lahcen Haddad.

In addition to the tourism projects, Morocco is also working hard to improve its infrastructure, with high speed trains connecting the three cities, improvements in telecommunications access and bandwidth, and modern, efficient tourist facilities.

In Rabat, the fund will invest nine billion dirhams ($1.10 billion) in the second phase of the Bouregreg River development, which is along the valley where the river winds from the Atlantic Ocean to the interior. There will be hotels, a marina, residential housing, urban green spaces, a museum, and a theater to highlight Rabat’s cultural attractions. Minister Haddad noted that the government is planning to spend another nine billion dirhams to renovate the urban areas of the city.

Tangier is slated for expansion of the world-class Tangier-Med Port on the Mediterranean as well as continued restructuring of its tourism districts. Earlier this year, King Mohammed VI launched the next phase of the port’s development, which features an intermodal terminal that will serve as an advanced industrial and logistical platform with connectivity to markets throughout Europe, North Africa, the Middle East, and Africa. It will include a ferry terminal, passenger services, a railway station with two passenger docks, a bus station, an auditorium of 288 seats, a center with restaurants, banks, shopping and business services, and offices for companies serving the maritime industry.

As for tourism in Tangier, Middle East Online commented that “the city is looking to capitalise on its ‘coastal assets’ — building a marina on the Mediterranean seafront and a fishing harbour on the Atlantic — as well as promoting its cultural scene, with a new arts centre and theatre planned.”

 Building Global Awareness

Morocco's tourism goals in Vision 2020 Plan

Vision 2020 Tourism Plan for Morocco

To ensure that the good news about Morocco’s tourism keeps going global, it has secured the rights to host the World Travel Awards Grand Final for the next three years. The Awards were established by WTA in 1993 to “acknowledge, reward and celebrate excellence across all sectors of the tourism industry. Today, the WTA brand is recognized globally as the ultimate hallmark of quality, with winners setting the benchmark to which all others aspire” according to Travel Daily News.

In announcing the agreement, Minister Haddad noted that “Morocco is an enchanting, hospitable land, full of mystery, wonder, and cultural richness…Hosting the World Travel Awards Grand Final will be a defining event in enhancing the awareness of the Kingdom of Morocco among the most powerful leaders of the travel and hospitality industry.”

In the Middle East and North Africa, where there are few success stories of concrete efforts to meet the economic growth needs of the countries, Morocco is demonstrating repeatedly that it is not taking a wait-and-see attitude. By building international collaboration among investors on concrete projects in Morocco, the country is addressing the twin issues of employment and quality of life. The King’s commitment to human development rests on securing an economy that is responsive to the needs of Moroccans. His ability to pull together international investors and Moroccan expertise in viable projects is a healthy sign for the future.

Maroc Telecom More Than Doubles its Footprint in Africa

Acquires six companies as part of Etisalat’s Takeover Strategy

In a blockbuster deal announced earlier this week, the UAE telecoms firm, Etisalat, which has just completed its purchase of Vivendi’s 53-percent share of Maroc Telecom, sold its existing African operations to Maroc Telecom. For the Moroccan company, this adds Benin, Central African Republic, a second company in Gabon, Ivory Coast, Niger, and Togo to its operations in Morocco, Mauritania, Burkina Faso, Gabon, and Mali. For Etisalat, this consolidates their West African operations under one entity, another indicator that investors increasingly rely on Moroccan expertise to manage projects throughout Francophone Africa.

The deal, valued at $650 million, gives Etisalat a much stronger foothold on the continent and a proven platform, in Maroc Telecom, for expanding its operations further to compete with regional rivals for the growing telecoms and ITC business in sub-Saharan Africa. Etisalat’s acquisition of Maroc Telecom from Vivendi for $5.7 billion and the sale of its Africa operations in advance of the takeover of Maroc Telecom allow it to now control companies in 10 countries for the price it paid for Maroc Telecom’s ownership of its five existing operations.

Sanyalaksna Manibhandu, an analyst at NBAD Securities in Abu Dhabi, told Bloomberg, “It really makes sense they’re doing this. It’s a move to consolidate control of their west African assets as they obviously think Maroc Telecom can manage them better out of Casablanca better than they can out of the U.A.E.” In a related commentary carried on, Abdel Malek Alaoui noted, “There are obvious business consolidation and rationalization benefits to both companies as Maroc Telecom’s Middle East partner makes no bones about wanting to snap up state-owned incumbents as well as expand its mobile licenses in West Africa.”

Maroc Telecoms chief talks about upcoming Etisalat deal

Maroc Telecoms chief talks about upcoming Etisalat deal

He added, “Moreover, the Emirates and Morocco both have THE same goal: contribute to the security and stability of the Sahel and generate economic growth in a large zone ranging from the Atlantic Ocean to the Red Sea… Both countries share the same general views about religion, and have a moderate, tolerant practice of Islam. Both are also pretty aggressive business-wise. Although it does not have oil or natural resources except phosphates, Morocco launched in the mid 90’s an external business policy aimed at Africa entitled ‘economic diplomacy,’ and Moroccan groups have since increased market share in telecoms, banking, insurance, and IT. In 2013, Morocco became the second largest investor in the rest of Africa behind China.”

In yet another nod to Morocco’s growing international business prowess, Frédéric Ichay, a Paris-based lawyer who specializes in telecommunications and energy mergers opined that “this kind of restructuring is not unusual but it is interesting to see that for Etisalat, its investment arm in West Africa is going to be Maroc Telecom.”

As Mr. Alaoui concluded in this commentary, “Building bridges with the Middle East and investing in south-south partnerships with Africa is no new policy for Morocco. It’s rather one of the pillars of the strategy pursued by the Moroccan Monarch for years.” So for those commentators who question Morocco’s capacity to serve as a platform for greater business in Africa, Etisalat is providing a $5.7 billion answer.

IMF’s Christine Lagarde on Need for Strengthening “the Middle”

Speaks in Morocco on challenges of post-Arab Spring economic and human development

In Rabat on May 8, Christine Lagarde, the Managing Director of the International Monetary Fund (IMF), provided her analysis and prognosis of the “The Arab Countries in Transition—Strengthening the Economic Middle,” an insightful overview of the challenges and trends in the region.

Lagarde noted that despite the overwhelmingly economic and political nature of the demands for change, all were grounded in a basic human need for dignity. She quoted noted Moroccan author Fatima Mernissi, “Dignity is to have a dream, a strong dream that gives you a vision, a world where you have a place, where your contribution, however small it may be, will change things.”

More than three years after the Arab Spring began in December 2010, unfinished reform and development agendas throughout the region are complex, difficult to manage in the short term, and vary widely in responses and successes. What began as demonstrations about lack of jobs and transparency across the region turned political as people felt that they lacked the levers by which to effect policy changes. And now that many political participation issues are being resolved in the transition countries, some are moving forward to consolidate growth strategies.

Citing Morocco as an example she said: “Countries like Morocco are reaping the fruits of their efforts by diversifying and spurring both exports and foreign investment—especially in high value-added areas like cars, aeronautics, and electronics.”

Yet Lagarde is clear that there is much still to be done if the goals of people and governments are to be met. “So the great challenges for the next step of the transition are clear: How to create the jobs needed to meet the aspirations of a rising generation. How to create a vibrant and dynamic economy that offers opportunities to all.” It is this link between economic needs and the elusiveness of ready solutions that frustrates both governments and society. What seem at street level to be easy answers, such as increased pay, subsidies, and public employment, are in fact corrosive factors that undermine a country’s capacity for economic growth in the medium and long term. “These tasks are daunting. To make inroads, we would need to see growth rates doubling from the current levels of around 3 percent. We also need to see growth feeding into jobs to a far greater extent than is currently the case.”

Success Comes from Building the Middle

Lagarde has no illusions about the difficulties ahead, but she believes that strengthening the “middle” of the economy, society, and state economic policies can lead to progress and solutions. “Strengthening the economic middle means giving a shot in the arm to small- and medium-sized enterprises (SMEs) in the formal sector. These are the kinds of firms that form the backbone of a healthy economy, and— in other regions of the world—are the main engines of job creation.”

Leather and brass souk in Morocco

Souk in Morocco

Note her emphasis “in other regions of the world” since, in the MENA region, SMEs generate less than 20 percent of the jobs in the formal sector. Moreover, because informal companies have no access to formal financing, are not protected by the regulatory environment, cannot guarantee labor rates and benefits, and lack the ability to access formal distribution channels, they are doomed to remain small players in creating jobs and wealth. Policies that transition the informal sector into a valued player in a country’s economic growth strategy are an essential ingredient in building the private sector and rewarding entrepreneurs.

Lagarde then addressed the importance of the second key “middle.” “Global experience tells us that we need a strong middle class to drive an economy forward. A strong middle class sustains consumption and invests in the future. A strong middle class makes societies more cohesive, and lays the groundwork for stability and prosperity. A strong middle class is also home to the kinds of entrepreneurs we need for today’s modern economy.”

One of the essential vehicles for growing a middle class is the kind of public-private partnerships Morocco is supporting that match the professional and technical expertise of private sectors with the economic and financial goals and policies of governments.  Through its incentives for investment, training, and site selection, and reforms to the education and training sectors, the government of Morocco is striving to promote entrepreneurism and mobility to the middle class through the third “middle” – balanced economic growth policies.

“Looking ahead, the state needs to step back from some areas and step forward in others. It needs to provide fewer blanket subsidies, and more of a basic safety net for people who fall through the cracks. Perhaps most importantly, it needs to become less of an employer, and more of an effective and impartial regulator and enabler of the private sector—the ultimate source of good jobs.” She adds, “Just look at Morocco. Over the past couple of years, it has managed to cut its subsidy bill while increasing spending on programs aimed at improving access to health and education for the poorest.”

Of particular interest to Lagarde is the importance of broadening opportunities for women. After recounting statistics that show the critical contribution greater female participations can make to a country’s GDP, she said “So it is imperative to let women contribute, by removing outdated obstacles and introducing enabling polices. After all, it was Ibn Rushd who said that ‘treating women like a burden to the men is one of the reasons for poverty.’ The logic is clear—greater opportunities for women mean greater rewards for everyone.”

Growth and Dignity

Christine Lagarde, IMF, in Morocco

Christine Lagarde, IMF

Christine Lagarde is no stranger to the challenges facing the MENA region and emerging economies globally. She has provided important leadership in the IMF’s response to crises ranging from the Ukraine to sub-Saharan Africa. And the IMF is evolving, with greater attention to its role as a facilitator rather than a guardian of strict and rigid growth mandates. Her focus on the “middles” represents a clear and deliberate enunciation of how Arab countries can move ahead in response to their particular needs for growing their economies and their societies.

Dignity does not derive from food and energy subsidies, shadow employment, or passive participation in society. Citizens want to feel that they are invested in by their governments and in turn they can invest in their country’s future. Valued jobs and a vibrant public space are vital ingredients in securing the stability and economic growth that nurture and protect the “middles” Lagarde describes. This is the daily agenda for the leadership and civil society in Morocco, where they are working to realize both economic and political agendas that encourage and facilitate human and economic development.

Investing in Natural Resources in the Western Sahara

How Morocco is Meeting International Standards for Resource Management

The most challenging decision facing companies interested in doing business the Western Sahara is gaining sufficient awareness of how external realities and internal facts on the ground affect the business environment in which they will be working. For the Western Sahara, this means that one must understand the overall milieu in Morocco, how this impacts the Sahara, and what, if any, special considerations affect potential operations in the south.

The Business Environment

When one takes a close look at what’s going on in Morocco, two large issues stand out: the need for jobs and the demand for transparency. Morocco has a young population whose education, job, and social needs must be met. But the government, which imports more than 95 percent of its energy needs and spends up to seven percent of GDP on subsidies for food, energy, and social services, does not have unlimited resources to stimulate job creation. This is, in fact, an opportunity for companies, which can play a key role in setting economic growth strategies through public-private partnerships (PPPs).

Local and international private sectors have much to offer. Their knowledge of global and local markets, the competition, and the costs of doing business affect everything from labor/employment/training priorities to what is needed from governments in terms of infrastructure and investment incentives. Morocco values PPPs because they bring technical expertise and funding to projects that might otherwise be delayed or never get off the ground.

With regard to the Western Sahara, business opportunities have been limited to date, despite claims by some of its extensive on and off shore resources. Without expanded infrastructure, robust development of existing and potential resources remains limited. The previous Millennium Challenge Corporation (MCC) compact in Morocco addressed some issues for ramping up the fishing industry but did not extend its work to the Sahara. It is hoped that the increased pace of exploration for gas and oil will encourage more companies—if outcomes are successful—to look at supply chains and value-added industries and services as viable prospects for doing business in the Western Sahara.

As importantly, Morocco knows what it has to do to reassure the international business community on issues of transparency. The joint declaration of principles concerning hydrocarbon exploration and production, proposed revision to labor statutes, overall judicial reforms, environmental codes, and related regulations, all demonstrate that Morocco is committed to best practices in terms of local consultation, empowering beneficiaries equitably, and protecting investments.

Fairness and Equity in Resource Management

Morocco has adopted a policy towards governing the Sahara and management of its resources that is serious, realistic, and credible. In 2006, it proposed autonomy for the region, the only fresh thinking to date on resolving the political conflict. Also, as part of the overall Moroccan reform process that started in the late 90s, the people of the Sahara fully participate in local and national elections, have their own representatives locally and in Parliament, and are included in national development programs such as the National Initiative for Human Development (INDH) and the Millennium Development Goals’ social, economic, and human development programs.

Title page of the CESE report

CESE Study which sets the model for Morocco in the Sahara

To develop a new regional model for sustainable development throughout the country, King Mohammed VI tasked the Economic, Social, and Environmental Council (CESE) to undertake extensive consultations with stakeholders in the south, and with analysts, experts, and researchers to draw up recommendations, which resulted in three key assessments:

Despite the expenditure of around $2.5 billion over the past decade, much more has to be done to achieve the vision of economic growth and robust local governance.

A new model and budget for sustainable and participatory development in the region is needed to build capacity for representative and effective local governance, economic and social growth—a model centered on a culture of human rights, honoring ethnic diversity, and treating all citizens equally.

The participatory democracy model must have at its core inputs of local stakeholders and potential beneficiaries for the use of local on- and off-shore natural resources. This commitment is already evident: in the EU-Morocco fisheries agreement, and Joint Declaration of Principles regarding energy exploration and production, both of which commit to returning benefits to the local population; in upgraded programs for supporting small- and medium-sized businesses; in market-linked training programs; and in the broad range of legislation to be enacted to implement the recommendations of the CESE report, budgeted at some $18 billion over the next 10 years.

Why Invest in the Sahara

As noted, not only has Morocco already invested some $2.5 billion in the infrastructure and social services in the Sahara, it is poised to spend $18 billion more in the next 10 years, whether or not oil and gas are found in commercial quantities. This means opportunities in light manufacturing, port and transport facilities, value-added fish and food processing, and infrastructure projects, among others.

The south of Morocco is part of the government’s substantial program of investments in renewable energies. This will generate a broad array of supply-chain opportunities for new businesses and services. To support this growth, the government hass in place specific training incentives to bring local hires up to market-ready standards.

Morocco banks on solar power

Solar Array in Morocco

In terms of managing the natural resources in the south, then, a key element is managing expectations about what is yet to be realized. Rathern than waiting to see what happens in the hydrocarbon sector, companies can look at what can be done within the broad parameters of recommendations from the CESE report. With Congress’ lifting of restrictions on US funding in the south as part of the 2014 Appropriations law, EX-IM Bank, OPIC, and other US agencies should be redefining their missions in the Sahara.

Ironically, several analysts have already opined that oil and gas discoveries in the Sahara may actually speed a peaceful resolution of the conflict in a win-win outcome. Under its commitment to benefit the local inhabitants and its adoption of the CESE recommendations, Morocco has made a credible case for ending the humanitarian crisis in the Tindouf camps by bringing the refugees home, and empowering the local population through the sustainable, participatory democracy envisioned in the CESE reports.