Threats to US Security Interests in the Mediterranean Call for Multiple Strategies

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German Marshall Fund Policy Brief Outlines Complexities

Last month, The German Marshall Fund of the United States published a Policy Brief “The United States and the Future of Mediterranean Security: Reflections from GMF’s Mediterranean Strategy Group.” Reading it gave me an opportunity to reflect on the multiple foreign policy challenges facing the US in the Mediterranean Basin as well as the surrounding countries. This is likely the most severe drawback of being a superpower that tries to invoke and promote a value-driven foreign policy agenda that incorporates both hard and soft power diplomacy – “damned if you do, damned if you don’t.”

While there may be disagreement about what our interests are in that swath of countries stretching from Morocco to Lebanon and southern Europe, we cannot avoid the reality that the US is still the dominant player in the region and consequently the direct or indirect target of choice for militant non-state actors that now proliferate there. As the sources of threats grow, US attempts to mobilize active friendlies on its behalf have grown beyond the historic ties to NATO to include allies that share our interests in a more secure, stable, and prosperous Mediterranean.

Credit: Facebook

Credit: Facebook

One of the points made in the paper that struck a strong chord is focusing on the new dynamics at play in regional security. “The strategic environment in the Mediterranean is increasingly shaped by forces emanating from outside the region: for the Levant and the Eurasian and African hinterlands, from the Black Sea, and from the Atlantic Basin north and south. The new result of these shifts has been the progressive globalization of Mediterranean security [emphasis added].”

Perhaps no place is this more evident than in Morocco, bordered by truculent Algeria to the east, and sitting astride the Sahel, which borders a number of ungoverned areas. Morocco is connected in many ways to security concerns elsewhere; whether it be jihadist fighters returning from the East, or terrorist cells in the country, or spillover from terrorist attacks in Europe, there are challenges that continue to emerge.

The GMF paper calls attention to the fact that “The potential for the spread of extremism…to other parts of the Mediterranean…is likely to shape the Mediterranean security environment for some time to come. State failure and dysfunctional rule could have an isolating effect on a region badly in need of economic and political development.”

Looking around the Mediterranean, the policy brief addresses the impact of instability and conflict in West Africa and the Sahel as “drivers of insecurity for the Maghreb and Europe.” It points out that “Algeria’s enormous geographic expanse and poorly monitored borders make the country a front line state in relation to West African risks. The memory of Algeria’s descent into violence in the 1990s, and the opaque nature of the regime, cause neighbors such as Morocco and Tunisia, and Europe, to cast a vary eye on the country’s stability and regional policies. Algeria’s uncertain future is one of the key open questions for Mediterranean security.”

Among other challenges mentioned are trafficking in drugs, weapons, and money from Latin America; competition for energy and commodity resources; the continuing waves of economic and political refugee migrants; and the reality that “human security” is a time bomb issue that has negative connotations for the countries of transit as well as the intended refuges in Europe.

 Who Stands with the US?

In examining America’s history of security engagement in the region, two major points stand out in the brief – the US has been there a very long time, from opposing the Barbary pirates to forward basing during World War II; and yet, despite this history, the US has not had a vision of the Mediterranean as “a coherent strategic space.” Within the US government, the region is treated differently: the State Department divides “the Mediterranean along geopolitical lines, with a fairly strict bureaucratic and intellectual division…The notable exceptions…have been in the U.S. military commands.”

In this regard, Morocco has decades of cooperation with the US and NATO militaries focusing on national, regional, and international concerns. For example, the entrance to the Mediterranean is a critical route to US bases in the region as well as the exit point for ships transiting the Suez Canal. Over-flights permitted by Morocco are also important in stabilization programs in Mali and surveillance of militants in the ungoverned areas of the Sahel.

This month, the US, Morocco and allies from Europe will take part in the second phase of African Lion, “an annually scheduled, bilateral U.S. and Moroccan sponsored exercise designed to improve interoperability and mutual understanding of each nation’s tactics, techniques and procedures. It is the largest annual US military exercise on the continent,” according to an article posted on Defence Web.

Phase one in February brought together contingents from neighboring countries Tunisia, Mauritania, and Senegal, as well as Germany and England, to collaborate on building operational proficiency in areas such as disaster relief, humanitarian aid, mission communications, and related command concerns.

Credit: en.wikipedia.org

Credit: en.wikipedia.org

In May, around 2,500 personnel from more than five countries will continue joint training exercises involving communications and close air support and aerial refueling. According to General Richard L. Simcock, commander of the Combined Joint Task Force (CJTF),
“This exercise allows the U.S., allies and partner nations to strengthen our relationships with our Moroccan hosts and improve how we will work together in the future.”

In a region beset with political, military, and economic challenges, the capacity to project US interests is in many ways dependent over the long run on the caliber and resilience of its allies that share its interests and values. Morocco’s ties with the US have endured for more than two hundred years, and its commitment to taking a regional leadership role for stability, security, and economic growth has become stronger as the bilateral relationship continues to grow.

 

Morocco’s Financial Sector Continues to Draw Support, Grow Regionally

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Attijariwafa Bank and EBRD Reaffirm Regional Strategy

Morocco’s regional economic leadership role continues to draw media attention, signaling a growing recognition that its role in Africa is substantive and long term. For example, a recent article noted that the European Bank for Reconstruction and Development (EBRD) has opened its first full-time office in Morocco. Previously, its offices there were tied to specific project funding. Given the breadth of EBRD’s commitment to Morocco for the foreseeable future, “[o]pening a resident office is an affirmation of our commitment to Morocco and to helping achieve its potential. It is a key step in implementing the bank’s country strategy and boosting economic growth through development of the private sector and promoting regional inclusion,” says Phil Bennett, EBRD’s first vice-president.

EBRD currently has 18 projects in Morocco, according to its website, focusing on “supporting sustainable energy, direct and indirect financing of private enterprises and promoting infrastructure reform and facilitating non-sovereign financing.” It recently approved a comprehensive strategy “which focuses on realising the entrepreneurial potential of the country targeting women’s entrepreneurship and increasing finance for small and medium-sized enterprises (SMEs) through private equity funds, as well as providing dedicated credit lines associated with technical assistance.” Since 2012, EBRD’s disbursements have grown more than ten-fold, from 22 to 250 million Euros. Part of its success is that the private sector contributed 72 percent of the cumulative investment in projects. In this regard, local banks, financial institutions, and private equity, as well as companies, are the partners of choice for EBRD.

Domestic and International Commitment

Of course, the largest bank in Morocco, Attijariwafa Bank, is one of those key players. An article about Attijariwafa Bank, posted on Forbes.com, is an interview with co-CEO and Director General Ismail Douiri about his thoughts on leadership, his bank, and business in Africa.

Ismail Douiri speaks at L'economiste forum photo credit: L'economiste

Ismail Douiri speaks at L’economiste forum photo credit: L’economiste

Mr. Douiri recently joined the African Leadership Network (ALN), a group of the “most dynamic and influential new-generation leaders in Africa. The ALN creates and strengthens relationships between these leaders to encourage intra-African trade, investment, and collaboration.” As Africa matures as a group of developing, frontier, and emerging markets, professional networks such as ALN provide opportunities for collaboration and strategic cooperation enabled by technology, common business vocabularies, and a shared commitment to human and economic development. This is a role for which Ismail Douiri is well prepared.

He has been instrumental in the growth of Attijariwafa Bank, which now has assets exceeding $34 billion, more than 3,000 branches, 15,000 employees, and close to five million clients. Douiri believes that Morocco’s banking story is not well known. He points out that, relative to its economy, Morocco’s banking sector is larger than South Africa’s, and the two largest Moroccan banks each have more than twice the assets of the largest Nigerian bank. With a stock exchange that ranks between second and fourth largest in Africa, Morocco is well qualified for its leadership role.

He attributes much of the bank’s success to building a strong internal culture focusing on serving the customer as the first priority. Knowing that there is no single style or talent of leadership, Mr. Douiri believes in openness to innovation, developing and enabling diversity in staffing, supporting talent and hard work, and listening…always listening. And he never forgets, despite the breadth of the challenges he faces, what matters. “I love being part of new projects aiming at entering new territories, or introducing new financing instruments that will bring value to people and help them realize their own dreams. I also love to contribute to broadening our community involvement through Attijariwafa bank’s Foundation.”

His experiences have clearly shaped his vision. When asked about inclusive growth, he replied that that is not something easily defined or arrived at. “My personal view is that the pursuit of economic growth, if coupled with the right governance principles – transparency, accountability, organized stakeholder communication … and a safety net to prevent extreme poverty, leads to inclusive growth, a growth that will generate a middle-class better able to educate their children than their parents did for them.”

Financial Services Tie Morocco Closer to Africa

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Casablanca Finance City and Attijariwafa Bank Grow Regional Roles

As the recent IMF/World Bank meetings in Washington, DC demonstrated, regional banking and investment powerhouses in Africa and Asia are increasingly important players in the world’s financial sector. Similarly, Morocco’s success in regional banking over the past decade reflects its commitment to regional economic integration and growing its own industry to global standards.

Recently, Casablanca Finance City (CFC) received the grand prize from the Africa Economy Builders for best financial center due to its role as a gateway for investment in rising markets in Africa. The award lauded the CFC approach of building partnerships with other African countries throughout the continent and promoting south-south cooperation. CFC’s recognition reflects in large part the efforts of Morocco’s banking sector in Africa, which has been featured in recent articles highlighting the country’s work building its financial services sector, especially in West and Central Africa.

the banker

One article, in The Banker, analyzed the overall banking sector and interviewed key banking figures in Morocco. The article pointed out that “Moroccan banks are relatively advanced compared with those of their north African neighbours.” It went on to mention that Moroccan banks, growing at around 7 percent a year, comply with international reporting standards, including voluntary corporate codes regarding capital reserves and risk control.

Mohamed El Kettani, chairman and CEO of Attijariwafa Bank SA, noted three factors in the success of Morocco’s banks. First of all, a high rate of banking penetration – more than 60 percent of Moroccans have bank accounts, providing the sector with liquidity to invest in generating more services in more locations, and, if well-managed, at lower costs. Critical to servicing the Moroccan population is Attijariwafa Bank’s subsidiary Wafacash, which handles remittances at more than 1200 branches, at half the fee previously charged.

The second factor Mr. El Kettani indicated is the quality of management in the banking sector, from the oversight of the Central Bank to the cooperation between the government and the private sector. This, combined with the recently enacted reforms of subsidies and stable political environment, has enabled the financial sector to expand services, reduce costs, and have the capacity to expand operations throughout the region.

Mohamed El Kettani

Mohamed El Kettani

El Kettani argues that Morocco’s regional role is smart business. “We had excess capital, distinctive skills in banking, and large clients…that were becoming regional actors. The decision we faced was either to accept leaving our best corporate clients to others and see our growth decline…or to formulate and execute a value-creating international strategy.” To date, Attijariwafa operates in 13 other African countries, which provide more than 26 percent of the bank’s revenues.

This emphasis on growth was echoed by Walter Siouffi, chief executive at Citibank Morocco. “Across the top three banks, which all have growing networks of subsidiaries and branches in Africa, expansion into the wider region is solidly prevalent. I expect this trend to continue as the Moroccan banking sector sees slower growth domestically compared with high-growth markets across the continent.” Mr. Siouffi also noted the potential importance of Morocco’s entry into Islamic finance, which “could help build the pool of foreign currency liquidity to support Morocco in serving as an important recycling hub given the sophistication of its banking sector, channelling investment funds into neighbouring francophone countries on the continent.”

As a sign of its continued commitment to strengthen its business environment, the financial sector is working with the government to reform the exchange controls, which is essential for CFC to serve as a clearinghouse and service center for regional investments and financial instruments. This would allow CFC to manage financial services across a range of currencies without restrictions on exchange rates or transaction amounts – important functions for enabling regional investments.

What is Morocco’s Strategy for Developing a Skilled Workforce?

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Minister Delegate Abdelaadim El Guerrouj Explains What’s Next

Last week, Minister Delegate for National Education and Vocational Training Abdelaadim El Guerrouj visited Washington to expand Morocco’s network of resources in support of its training goals, and to move ahead with specific projects that will enhance Morocco’s capacity for technical vocational education and training (TVET).

Among his principal stops were the signing of an MOU with Northern Virginia Community College to further collaboration between the US and Morocco; and meetings with the Institute of International Education (IIE) to discuss educational exchange programs, with the State Department to review current US support for TVET in Morocco, and with National Geographic, where the parties discussed opportunities for common research efforts.

The emphasis on TVET is relatively new in Morocco. Although the Kingdom has been doing technical and vocational training for decades, it was not until 2012 that a special ministry to address these issues was established. And the ministry has initiated a multifaceted program to build pubic-private sector partnerships to create a skilled workforce. With high unemployment among college and secondary school graduates, a high number of young people dropping out of school after sixth grade, and an informal economic sector that produces, by some estimates, at least 50 percent of the value of Morocco’s GDP and represents 30 percent of the workforce, Morocco still has challenges remaining.

Minister Delegate El Guerrouj took time to discuss Morocco’s strategy at a private roundtable hosted by Toni Verstandig, Chair of the Aspen Institute’s Middle East Programs, which has a number of programs with Morocco under the North Africa Partners for Economic Opportunity (NAPEO) project of Partners for a New Beginning (PNB). Last year, Aspen arranged for a delegation of community college leaders to visit Morocco, which led to the MOU signing.

NVCC

The purpose of the roundtable was twofold: to present Morocco’s strategy and to give experts and practitioners the opportunity to provide feedback and recommendations to the Minister Delegate. While Morocco has achieved a great deal in terms of its physical infrastructure, it continues to lag in its human resources development, for several reasons. First, the presence of large numbers of youth – some 44 percent of the population is under 24 years of age – means that education and TVET are a generational priority. Second, although more than 99 percent of youth have a primary education, there is a serious problem with young people dropping out. Finally, there is always a need for more human, physical, and financial resources to carry out and build out TVET programs. Public-private sector partnerships have the potential to play an enabling role in this area.

US Support for Morocco’s Workforce Development Strategy

El Guerrouj believes that there are three ways to bolster retention rates: First, identify skills needed – when students can see the link between education and employment, they have higher motivation. Second, integrating skills training with universal principles, such as human rights and citizenship, adds value to the programs. Finally, work with the private sector through public-private partnerships focused on skills acquisition to highlight for stakeholders the specific needs of companies that are linked to jobs.

In discussing the MOU with Northern Virginia Community College, several questions emerged that demonstrate the challenges common to both Morocco and the US. For example, what is the most useful American experience relevant to Morocco – is it setting up a community college or is it focusing on the mechanics of transferring teaching/learning methods through faculty exchanges, teacher training, and joint research? Is the US experience of public-private sector partnerships, which draw companies into curriculum design and instruction, a useful model?

Morocco and US Working on Third Compact Credit: MCC

Morocco and US Working on Third Compact
Credit: MCC

One area of creative discourse during the visit was the buzz surrounding the Millennium Challenge Corporation’s (MCC) Call for Ideas, which is looking for innovative approaches to public-private sector partnerships to close the education-employment gap. Morocco has a limited industrial base and is interested in replicating its automotive and aerospace sectors’ success in utilizing partnerships in curriculum design and delivery. As part of the second compact with Morocco now under negotiation, the MCC is proposing a focus on linking businesses with TVET institutions to strengthen relations between public and private sectors to enable TVET institutions to train teachers, interact with SMEs, and collaborate with non-governmental actors.

The Morocco-US partnership has proven particularly successful in the thorny matter of skill certification – formal recognition that someone has the necessary practical experience and knowledge to perform specific tasks. A new 40,000-square -oot training facility is currently underway in Oujda, where Moroccan students follow the same curricula as American students and receive the same certifications. The National Coalition of Certification Centers (NC3) has proposed using its network of 300 US colleges to issue US-accredited certifications in new technology and engineering processes to Moroccan students.

Minister Delegate El Guerrouj also raised the issue of training costs. He is concerned that without partnerships, it will be difficult for the government to lower its costs while still enabling students and companies to break the employment-education gap. There is also a cultural gap because university education has traditionally been preferred over TVET. Closer integration of general educational priorities within the vocational system (rather than treating vocational training as a step-child of education) will help overcome the social stigma often attached to TVET institutions.

Skills Education Matched to Business and Work Force Needs

Morocco is also addressing disparities between the needs of urban and rural labor. Minister El Guerrouj emphasized the importance of “mapping the needs of the region, both urban and rural.” He believes that any effective education program must take into account the priorities of the community it serves. Otherwise, it will be impossible to set up local programs, and policymakers will be setting themselves up for “under-reform.” He believes that the only way to equalize access to education across the country is to establish a solid infrastructure in rural schools so that they can perform at the same level as their urban counterparts.

Looking at how this has worked elsewhere, it may involve offering meals to students, building dormitories, or offering transportation. Globally, there have been many efforts over the past 6-7 years in rural areas to improve education opportunities, especially for girls. One of the main tenets of the Moroccan constitution is to provide the same education for all, no matter who they are or where they come from, and this is an important guideline for the TVET strategy.

Jobs in aerospace industry

Jobs for Moroccans extend from basic services to high tech manufacturing

For the unskilled adult population, Morocco educates approximately 40,000-60,000 people every year at non-formal learning centers for adult education, another program they hope to expand. The Minister Delegation noted the “Validation of Skills Acquired through Experience” program, which recognizes previously acquired skills and helps students build upon them in a socially and economically meaningful way. This will also enable those working in the informal sector to gradually accumulate the resources to become more involved in the formal economy. In these and other ways, Morocco is including those who lack formal education yet have acquired skills and business know-how.

It is this nexus of jobs, skills, and human resources that Morocco has made a priority for the next decade. Having a young population can bring great dividends if youth acquire skills that are both relevant to the demands of the current labor market and applicable to areas where demand exists but has not yet been addressed. Morocco understands that its young people, and under-trained adults, can make significant headway in building the diverse and responsive economy that Morocco must have to grow.