January 2015 - AbiNader Advisory Services

What are the Ingredients for Promoting Entrepreneurship?

January 23, 2015/0 Comments/in Economic development, Employment, Entrepreneurism, Morocco, News and Analysis /by Jean AbiNader

UK Report Examines What Conditions Help Grow New Businesses

In a rather lopsided view of the world of entrepreneurs, UK Trade & Investment (UKTI) engaged The Economist Intelligence Unit (EIU) to write “Helping entrepreneurs flourish: Rethinking the drivers of entrepreneurship.” According to the introduction, “This report investigates the complex issue of encouraging entrepreneurship, and in particular, the contribution that education and business can and should make towards achieving that goal.”

Surveyed entrepreneurs and aspirates in 40 countries

The EIU conducted two global surveys – one of entrepreneurs and the other of aspiring entrepreneurs ages 18-25. I call it lopsided because they went for the low-hanging fruit—only 10 percent of respondents were from the Middle East, North Africa, Africa, and Latin America, with the other 90 percent almost evenly divided among North America, Europe, and South Asia. Of course, there is great value in polling those whose experiences are reflected in their responses. On the other hand, guidance from that larger pool may not be based on the same challenges and environments encountered by start-ups in the MENA region and Africa, where driving employment is a national priority, if not a crisis in the making – witness the remnants of the Arab Spring.

I found the report useful most of the time in terms of the old rubric that defined testing at my university – compare, contrast, analyze – the directions given for many of my exams — and so I am applying that to the highlights of the report’s observations and recommendations.

Passion and Mentoring are Prime Movers

Regardless of national origins and level of education, there was a high degree of agreement among entrepreneurs and aspirants that “passion and determination are the most important attributes for entrepreneurial success.” Almost as important is the value of access to mentoring within ongoing businesses, providing much-needed work experience; and mentoring by external sources such as incubators, university programs, and accelerators. Mentoring has become so central a service to upcoming companies that there are “innumerable government-supported and private schemes to link those in need of advice with more established businesspeople.” These programs have a double benefit – providing insight for the mentee and broadening networks for existing companies that may become a source of innovation and employees.

Mentors are key to successfully developing entrepreneurs

In looking at the South however, the passion demonstrated by up-and-coming African and Arab entrepreneurs is scarcely matched by an institutional or organizational network of experienced hands to lend advice and experience. While much has improved in the last decade — witness the growth of mentor programs in Morocco and elsewhere — the sheer number of potential entrepreneurs in the region, estimated at perhaps 10 percent of the adult population, overwhelms the few initiatives to support a vibrant eco-system for business growth. In the South, there are few role models for the young to emulate, especially if their focus is on new technologies and media. What about those who feel passionate about agro-technology, eco-tourism, and improved rural health delivery?

Given the limited bandwidth, it can sometimes be burdensome for the same 30-50 established businesses in a country to be the go-to mentors for rising entrepreneurs on a continuing basis and concurrently run their own companies. Another issue in the South is that many “entrepreneurs” reside in the informal sector of the economy, which carries its own challenges and burdens inhibiting access to programs that could support them, not the least of which is an inadequate education.

Whether from the North or South, the bottom line is the same, “Finding better ways to educate potential entrepreneurs, both before they start out and in the early stages of their efforts, is therefore an important potential focus for creating an environment more conducive to successful start-ups.”

Education Remains The Key Variable

Those who have built and grown companies point out the value of education that goes beyond how to gather information to how to use it in complex environments. One is David Gorodyansky, CEO of AnchorFree, “It’s time to evolve education from just being information-driven to being experience-driven and personalized. If you are going to be an entrepreneur, it’s a lot more important to understand the world and different cultures, people and mindsets.” Regardless of their backgrounds, respondents to both surveys said that educational systems “need to give more support to potential entrepreneurs.”

An example of a UK-Moroccan mentoring program

Yet there is a challenge when comparing personal educational experiences vis-à-vis learning in the marketplace. Less than 20 percent in both groups think that strong academic skills are an important attribute for success. And in many ways, a formal secondary or tertiary institution may not be the most effective venue for enhancing the eco-system for entrepreneurs. “Of entrepreneurs surveyed, 81 per cent say that they acquired more entrepreneurial skills through work experience than education, and 70 percent say that having corporate experience before becoming an entrepreneur is preferable.”

It might make more sense, particularly in the South where access to quality education is often a function of socio-economic background, to instead provide discrete courses accessible to more learners that focus on skill sets required by entrepreneurs, such as financial planning, business plan development, navigating a regulatory environment, networking skills, issues related to registering a company, etc. These simple how-to business-focused components, when part of a robust environment for business start-ups, may provide the framework for partnerships between the government and the private sector that lead to accelerated job growth, key to domestic stability and building a strong middle class.

While it is challenging to stretch the insights in the report to specifically fit realities in Africa and the Middle East, the core issues are the same – how to craft an eco-system linking education, training, financing, an enabling regulatory environment, transparency, supportive institutions, and whatever else is needed to give passionate, focused, willing-to-learn risk takers real opportunities to create something of benefit to themselves, their colleagues, and their country. Perhaps, having less to start with, as in the South, may generate options that are beyond the imagination of others who do not face the same obstacles.

2015 Challenging Domestic Agenda for Morocco

January 23, 2015/0 Comments/in Economic development, Economy, Employment, Morocco, News and Analysis, Reforms /by Jean AbiNader

Lower Energy Prices, Cuts in Subsidies Will Support Economic Progress

As part of my look ahead at Morocco in 2015, there are key domestic issues that are priorities for the government, as well as the people of the country, who are concerned that external factors will complicate Morocco’s progress.

Three primary areas that directly affect the lives of Moroccans and are on the government’s agenda are the economy, reform issues, and internal stability. These three are interrelated, since stability depends on how the economy and reform agenda are managed, as well as wrestling with challenges from extremists in the region.

Economy is Bright Spot in 2015

Although it is anticipated that there will be a slowdown in the economic growth rate due to the continued lethargy in Eurozone countries and little growth in the global economy to which Morocco is linked, overall prospects are quite positive. A recent favorable rainy season coupled with strengthening macroeconomic indicators may push Morocco’s growth rate somewhere between three and four percent, the variance reflecting the drag on the economy created by debt servicing. The major financial rating agencies note that the government is taking all the right steps to reduce subsidies and public sector spending, which will make the country’s balance sheets healthier. In fact, “The IMF stated that the implemented reforms have strengthened public finances and stabilized the economy. However, downside external risks remain, in particular those related to Europe’s slowdown.”

According to FocusEconomics, “Morocco’s economic outlook remains healthy as the government is committed to fiscal discipline. FocusEconomics panelists expect the economy to grow 4.3% in 2015…For 2016, panelists see the economy also expanding by 4.3%.”

The outlook from the rating agencies is similarly positive. “Moody’s credit rating agency stressed that Morocco is heading to a gradual reduction of the budget deficit as a result of the radical procedures adopted by the government, despite the unpopularity of such measures.” “Fitch, the credit rating agency, believes these reforms allowed the reduction of the public deficit from 7.3% in 2012 to 5.4% for the last year and a decline to 4.3% is expected in 2015.”

In line with themes sounded by King Mohammed VI, financial reforms are aimed both at correcting imbalances and weaknesses in the economy and enhancing its competitiveness so as to counter the global economic slowdown by expanding markets in Africa, where Morocco has a competitive edge.

As noted in a recent Al Monitor article, “The fact that the Moroccan economy is keeping away from the red line [of excessive public spending] is basically due to the strategy supervised by the Moroccan king himself. The strategy focused mainly on the diversification of partnerships and opening new markets for Morocco’s exports in addition to the development of business initiatives and attracting foreign investment through adjusting laws in terms of facilitating the movement of profits and tax cuts. However, the most important measure was the king’s declaration of the need to have reforms within the judiciary and get rid of the obstacles that impede the flow of foreign investments.”

Focus on human and economic development

King Mohammed has not promoted economic growth without attention to income disparity, which is a continuing issue in Morocco. On the occasion of the Throne and People’s Revolution Day, he raised the issue of the imbalances in the country and said, “We do not want a Morocco where the rich benefit from the fruits of development and are made even richer, while the poor are dragged out of the course of development and made even poorer.”

The Al Monitor article concludes with the caveat, “The Moroccan economy can benefit from modernization, opening new markets and diversifying its partnerships, since such steps ensure the preservation of the economy away from risky red lines.”

Challenging Reform Agenda

A number of bills are in play in the Chamber of Deputies and in committees reviewing proposed laws. In process currently are drafts related to giving greater protection to women and child workers, guaranteeing primary education to disabled children, regulating certain types of mining, enhanced security against terrorism, providing health insurance options for divorced women, ending civilian trials by military tribunals, and judicial reform. Also up in 2015 is the effort to finalize both a media law outlining rights and responsibilities for Morocco’s traditional and contemporary media, and an associations law on civil society organizations.

By the end of the spring session, we will have a clearer picture of progress on the various bills delineated in the 2011 Constitution and expectations of if and when they will wind through the legislative process. Given the heightened security situation, now upgraded due to the Paris attacks, there will certainly be an emphasis on increasing the government’s power to track and interdict potential terrorists.

Enhancing Security Presents Opportunities for “Best Practices”

With the encouragement of its allies, Morocco continues to develop a multifaceted “toolkit” to counter violent extremism, including the training of imams from more than 10 countries in the principles of moderate Islam; special programs for militants who have returned from fighting abroad; mourchidates’ training of female counselors who work in mosques and community centers; a social media campaign against extremist messaging; and infrastructure enhancements to hardware and software resources. In fact, the country has become a prototype for working domestically and regionally to combat terrorism.

A valued component of this overall campaign is Morocco’s leadership in the various iterations of coalitions opposing extremists. From its active participation in the anti-ISIL effort to hosting meetings concerned with returned militants to the upcoming Marrakech Security Forum, Morocco has demonstrated its commitment to a long-term effort to defeat radicalism and ensure security for its people. Its role has been positively noted by Vice President Joe Biden, EU ministers, and various international agencies and departments. Combined with the country’s efforts to liberalize its political and economic space and generate meaningful jobs for youth, women, and the marginalized, Morocco is working hard to make 2015 a remarkable, progressive year.

10 Years of Promoting Literacy – One Community at a Time

January 8, 2015/0 Comments/in Human development, Morocco /by Jean AbiNader

Jamila Hassoune, noted Moroccan Bookseller, Takes Reading to Rural Areas

Morocco has a special history of melding together linguistic, cultural, and ethnic groups within its society. While urban areas such as Casablanca and Tangier are highly cosmopolitan, Morocco retains a strong rural presence in all sections of the country, defined largely by the Atlas and Anti-Atlas mountain ranges and the interior desert areas. As in most countries, economic development is dominated by the coastal areas, where there is access to markets and commodities for consumption and export.

In Morocco, the future of rural areas has not been overlooked. After commissioning a detailed study of the country’s first 50 years of development, King Mohammed VI launched the National Initiative for Human Development (INDH), a multi-year, multi-billion dollar program to attack issues of poverty, economic growth, health care, education, and infrastructure. The program’s success brought a INDH renewal in 2013 benefiting from lessons learned and greater local participation in defining and managing projects.

One of the key instruments in promoting the goals of the INDH is empowering civil society and NGOs to mobilize and take action to promote social and human development. And there is no better example of grassroots, people-centric programming than the work of Jamila Hassoune, the Bookseller of Marrakech.

The autobiography of the bookseller of Marrakech

While her work has broad exposure in Europe, it has received little attention in the US; but it deserves our attention as an example of progressive activism that benefits remote communities by addressing the psychology of development by opening new vistas to marginalized populations, especially women and youth.

Building the Book Caravan

Jamila was inspired by her father, who preceded her as a bookseller in Marrakech. After opening her own shop, she realized that bookselling too often was waiting for readers to appear at the window. In collaboration with noted author Fatima Mernissi, she began Civic Caravans in 1997 through which “representatives from Moroccan civil society could meet with local people and with those working for local and international aid associations based in the villages.”

In 2006, this morphed into the Book Caravan project – “a week of meetings organized every year in a distant oasis or village where Jamila and her colleagues would take books and hold discussions and workshops involving writers and intellectuals. The activities were usually held in local schools, for the main aim was to spread and promote book culture in the schools, and to have the students become young ambassadors of the reading in their own communities.”

JAmila Hassoune

My first encounter with Jamila was in Washington several years ago as she was meeting with potential funders. She described an oral history project that was part of the Caravan, linking largely illiterate mothers with their children to record the family’s history. As in all of the Caravans, there is a strong visual component, as well as discussions with authors and artists. Jamila was anxious to recruit English speakers to participate in her programs as few Americans have yet joined in her activities.

She is deeply committed to the value of education as a core component of citizenship. “Here in the Arab world,” she explains, “we are talking about citizens, but we don’t give much to young students. We have to give them something. We have to teach them if we want them to participate in the decisions of the country, in cultural decisions…For me it was necessary to put those books in the places where you can’t find them. So The Book Caravan, it was like a trip, a mobile cultural space.”

As a recent article noted, “The Caravan is staffed by various authors, artists, and journalists from Moroccan cities as well as from abroad. Each year, Hassoune recruits different intellectuals to assist in her humanitarian task, which has taken an importance unprecedented by many.”

Ms. Hassoune recounted her early experiences and described her long-term vision for her work to an American writer this way, “She wants to build a new kind of school and ecologically sound social enterprise at an oasis in Morocco, which would include a museum about Moroccan culture. It’s a big set of goals, but she’s pulled off the improbable before!”

This year’s Caravan is scheduled April 20-24 in Taghjijt, located east of Guelmim in southern Morocco. Its historical roots go back some 2500 years, and it is both a beautiful palm grove and a region where the two major linguistic groups, the Hassaniya and Amazigh, have coexisted. Volunteers bring their literary and media skills to remote areas to share their passions with local populations who in turn now have special access to a larger world. And it all takes place in an amazing cultural milieu.

Jamila would welcome international volunteers to help the Book Caravan have a multicultural face in its programs.

What’s at Stake in 2015 for Morocco?

January 1, 2015/0 Comments/in Economic development, Human development, Human Rights, Maghreb, Morocco, North Africa, Political development, Reforms, Sahara, Trade & Investment /by Jean AbiNader

Will the reform agenda, growth targets, and regional security goals be attained?

In the past few months, I have written several blogs marking the progress of Morocco’s bilateral relationship with the US, including highlights from 2014 ranging from expanded security cooperation and several high level business conferences, to highly visible and successful participation in the US-Africa Leaders Summit and Vice President Joe Biden’s meeting with King Mohammed VI.

While these are useful hallmarks for 2014, they are in some ways benchmarks for viewing challenges and opportunities in the year ahead. There is much to be done if Morocco is to maintain its momentum as a liberalizing and secure country.

When looking to 2015, three key categories of issues stand out. The first of course are issues related to the Western Sahara including the MINURSO renewal, disruptive actions of the Polisario Front supported by Algeria, and the potential for US foreign assistance to be extended to Sahara to advance human development.

Closely related to this are regional security and stability concerns including combating violent extremism through internal and external efforts; counteracting the ISIS threat inherent in militants returning from war-torn areas in the Levant; and supporting stronger regional economic ties to boost employment.

Finally, Morocco has quite a diverse domestic reform agenda, which includes legislation addressing key constitutional issues and continued efforts to expand its commercial and investment opportunities, promote entrepreneurship, and advance its role as a business platform for Africa.

Although the agenda is quite complex and requires heightened cooperation and collaboration among government, the private sector, and civil society, the seeds have been planted for potentially beneficial outcomes. And regardless of what some pundits claim, Morocco alone, among the Maghreb countries, has the domestic leadership stability to take risks to advance its agenda.

Western Sahara

The annual renewal of the MINURSO mandate by the UN Security Council, required to enable it to continue its mission as observers in the Western Sahara in support of a sustainable resolution to the conflict, is anything but routine. Despite recent attempts to impose a human rights monitoring role on MINURSO, Morocco has been able to demonstrate that it takes its role in the territory quite seriously and extends human rights protections throughout all of Morocco. This has enabled Morocco’s friends on the Security Council to promote extensive collaboration between Morocco and UN agencies on this issue and avoid inserting a human rights monitoring role in the MINURSO mandate.

Despite Morocco’s steps to improve the lives of the people in the South, the Polisario Front, fully supported by Algeria, continues an extensive campaign to challenge Morocco’s presence in the area, with some of its members aligning themselves to trafficking, smuggling, and militant elements who are a significant threat throughout the region. Algeria plays its part by maintaining the closure of its border with Morocco, opposing Morocco’s diplomatic initiatives, and refusal to engage in broader conversations on security and economic development.

Perhaps the prospects for positive results from hydrocarbon exploration in the area will encourage the parties to seriously engage in dialogue regarding how to best insure the future of the southern region, which depends on support from Rabat for its economic, social, and infrastructure growth. A significant step by the US government, which mandates US foreign assistance funding in the Sahara, may prove to be a catalyst to promoting the long-sought acknowledgement by Sahrawis enclosed in the Polisario camps in Algeria that their futures are better secured in a thriving, committed Morocco.

Working on a Secure, Stable Future for the Region

Secretary John Kerry meets with Morocco’s King Mohammed VI

King Mohammed VI has repeatedly called for a multidimensional approach to combating violent extremism at home, including job training, family counseling, and emphasizing religious moderation. This same approach defines Morocco’s approach to regional security and stability – training imams in moderate religious discourse; broadening economic growth to be more inclusive and sustainable; and working with governments and private sectors to support greater attention to enfranchising marginalized and excluded minorities.

Morocco’s role in the coalitions against ISIS and al-Qaeda demonstrates the strong position that the country has taken to challenge extremism and militants bent on destruction and mayhem. Hosting coalition meetings, sending forces to the UAE for military technical assistance, and participating in airstrikes against ISIS are a few of the more visible steps taken by Morocco this past year.

As importantly, the government of Morocco, under the King’s leadership, has entered into more than 80 agreements with its African neighbors to expand economic opportunities and diminish the attraction of militant recruitment.

Growing the Region, Changing Lives for the Better

Domestically, Parliament and the government have a full slate of bills that will implement significant changes in how the country operates. Chief among these is the restructuring of the judicial system to make it independent of outside forces. Other efforts of note include finalizing the new law on associations, which will define guidelines for registering civil society organizations and other associations; and passing the law that eliminates the use of military tribunals for political offenses.

Key 2015 Event: Local Elections

Another event to watch is how the government and political parties conduct themselves in the upcoming local elections. Heralded as a concrete step towards regionalization, the elections are already contentious since Parliament has not yet passed the empowering electoral law for the elections to proceed, the myriad possibilities of alliances among parties, the role of international organizations encouraging a more competitive and open process, and the implications of the various results scenarios.

Hosting the Global Entrepreneurship Summit (GES) was only the latest showcase in Morocco’s commitment to domestic and regional economic growth. The country is moving to maximize its parallel strategy of growing investments in diverse sectors while promoting workforce education and training that results in market-ready labor. Where Morocco is getting it right is emphasizing programs beyond IT to agriculture, hospitality and financial services, skills trade, and special efforts for youth and women.

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2015 can be another breakout year for Morocco. Falling energy prices are reducing the drag of energy imports on the economy. Subsidies are being phased out or re-targeted for maximum savings and impact; and the business environment continues to improve for both domestic and international companies. The year may be long and difficult, full of domestic, regional, and international challenges. Yet there seems to be a growing commitment to see the future as an opportunity, which is the key ingredient for success.