Morocco Gains Important Support for Reform Agenda

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World Bank Group and Millennium Challenge Corporation Stay the Course

As Morocco moves ahead with implementing the results of its historic regionalization elections held in September, international organizations continue to support measures to increase government accountability and capacity to manage. This is particularly critical at this time, when a massive transition is underway to redefine how local government and regional bodies will interact to better serve the needs of their constituents. Not only are regional bodies now directly elected, but Morocco has also reduced the number of regions from 16 to 12 provinces in an effort to focus decision-making at the regional level with support from the central government for national projects.

This is matched on the national level by the geographic redistribution of new economic development zones to bring more balance to the overall growth of the country, decentralizing overextended industrial urban areas such as Casablanca while creating incentives for greater mobility to populate these new areas. It is a comprehensive and multifaceted strategy that will take years to implement, yet Morocco shows no signs of weakening its resolve to make it happen.

I have often wondered how multilateral organizations such as the World Bank Group and bilateral assistance program such as the Millennium Challenge Corporation (MCC) undertake their program formulations in specific sectors, especially if the goal is some years in the future. Two recent cases give some insights into their processes for building a suite of project recommendations with funding parameters unique to each country’s conditions.

World Bank Sustains Accountability Projects

It was recently announced that the World Bank would provide a $200 million loan to Morocco to promote government efficiency, transparency, and accountability. It is called the Transparency and Accountability Policy Loan (DPL) and is the second segment in a longer-term program to enable the government of Morocco to achieve its governance goals as outlined in the 2011 Constitution. What is not explained in the press release on the program is how the World Bank, working with the government of Morocco, decided that this project was a priority over others that might have a more immediate impact, such as drafting new health policies, or developing higher standards for teachers in the public school systems.

World Bank Continues to Support Morocco's Reforms

World Bank Continues to Support Morocco’s Reforms

Going back over the World Bank’s regional “Reading Room,” I found two studies highlighted in this blog. The first, “Trust, Voice, and Incentives: Learning from Local Success Stories in Service Delivery in the Middle East and North Africa,” concluded “that a cycle of poor performance has emerged in much of the region as a result of state institutions lacking both internal and external accountability mechanisms.” Thus the seed was sown for initiating projects focused on improved government accountability both in terms of internal functions and staffing, and mechanisms for delivering services.

This is of particular concern to King Mohammed VI, who consistently calls for a government responsive to its citizens and encourages increased efforts on behalf of constituent services. The initial emphasis in the DPL program was a set of reforms to heighten citizen awareness of and access to government services. This included greater on-line access to government ministries and information on services provided, increased openness on the national budget and budgeting process, and more details of the operations of Parliament in drafting and discussing bills.

According to the World Bank, “The second DPL provides further momentum through deepened support to policies for fiscal transparency and citizens’ access to information and the right to petition. The new operation also promotes increased efficiency in the overall handling of public funds, with a focus on better financial management at the central and local government, as well as state owned enterprises.”

A critical feature of the program, dubbed “Governance,” or “Hakama” in Arabic, is capacity building for administrators, managers, and information centers to make sure that staff acquires the skills needed to implement the reform protocols. As Marie Francoise Marie-Nelly, World Bank Country Director for the Maghreb commented, “What matters now, however, is that Moroccans see the results of change, and that reforms lead to greater participation of citizens in public life.”

The World Bank is joined in this effort by the EU and the African Development Bank, which together have invested a further $250 million in support of the program and its reform agenda. Training and technical assistance is being provided to the central and local governments, and to parliament, in the areas of performance budgeting, monitoring and evaluation, fiscal decentralization, and citizen engagement.

MCC Initials Second Compact with Morocco

The second World Bank report, “Jobs or Privileges: Unleashing the Employment Potential of the Middle East and North Africa,” feeds directly into its programs in support of workforce development in Morocco and complements the recently announced second MCC compact with Morocco in the amount of close to $450 million.

MCC Board Votes Second Compact with Morocco

MCC Board Votes Second Compact with Morocco

According to the report’s editor, “This report argues that Middle East and North Africa (MENA) countries face a critical choice in their quest for higher private sector growth and more jobs: promote competition, equal opportunities for all entrepreneurs and dismantle existing privileges to specific firms or risk perpetuating the current equilibrium of low job creation.” It is this nexus that is addressed in part by the MCC compact.

Recently released results of the “Call for Ideas” regarding the Morocco Private Sector Engagement Work Stream section of the second compact emphasize the need for equitable access to workforce development programs. It promotes public-private partnerships as the most efficient way to meet the goals of the program. The overall goal is two-fold – to improve the delivery of training services, especially in technical and vocational training, and to increase the effectiveness of intermediary services that link workers to jobs in the marketplace. It is anticipated that requests for proposals will be released in 2016.

Morocco is marshalling impressive national and international support for its economic growth and job creation strategies. Adapting lessons learned in other countries and utilizing a broad range of creative options are valuable mechanisms for accelerating the investments in people, training, and projects that will advance Morocco’s efforts.

US Companies See Opportunities in Morocco’s Agricultural Sector

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Atlanta Forum Provides Key Contacts

One can’t help but be skeptical when hearing about another business conference extolling the promise of opportunities abroad. It is not uncommon to ask “So what?” when looking for results that justify the expense of attending events while coming away with glossy brochures, a fistful of business cards, and tenuous promises of quick responses.

So we did something different at the US-Morocco Trade & Investment Forum in Atlanta on October 13. Most of the time was allocated for companies to talk with presenters, other companies, and government officials, with an emphasis on building face-to-face relationships so essential to doing business.

Well, how did that turn out? I can only give you my perspective and reflect on emails I received following the Forum, but I think they made the right decision – put people with mutual interests in a room and let them talk business. It worked out fine. I moderated a panel on agriculture, agri-business, and water management. Not unimportant to a country like Morocco where upwards of 40% of the workforce is in the farming sector and, in a good year, the sector contributes more than 18% to the country’s GDP.

In the room were representatives of Coca-Cola bottlers and distributors in Morocco, whose business affects some 70,000 Moroccan employees and their families. Given that Coca-Cola sources as much as it can locally, they are major players in the sector and in the economy. More importantly, Coke provides a great deal of technical assistance to local businesses to grow supply chain products and services, building the next generation of entrepreneurs.

From the Moroccan government, we heard from three very competent representatives: Mrs. Asma El Kasmi from the National Office of Electricity and Potable Water (ONEE), Abdeslam Ziyad, who directs strategic planning at the Ministry of Agriculture, and Soufiane Larguet, Director for Strategies and Statistics at the Ministry. All presented current data and projected opportunities in their areas of specialty.

The US and Moroccan private sectors included private equity investment firms, a foundation and company specializing in agriculture and water projects in Africa, a leading producer of organic and specialty food and cosmetic oils, several agro-industry firms, and a working farm that provides overseas technical assistance in a broad range of areas including improving seed, water management technologies, and food security processes.

­­­­­­One of the highlights of the session was the opening remarks by Gary Black, Commissioner of the Georgia Department of Agriculture. His presentation on the industry in Georgia and his insights into potential bilateral links has already led to discussions with Moroccan Ambassador Rachad Bouhlal on an exchange program between food security experts in Morocco and Georgia. Commissioner Black’s rational is that a thorough understanding of the food security (read FDA and USDA in the US) guidelines in the marketplace facilitates trade. This was borne out by several participants who spoke about the difficulty of navigating food and argan and olive oil exports to the US, despite the US-Morocco Free Trade Agreement.

A positive follow up is that several of the US participants in the room have already begun to the in touch with counterparts in the government and private sector in Morocco. And Moroccan companies are clearly interested in pursuing relationships that ease the process of exporting into the US. It is a beginning of an important exchange of ideas, proposals, and discussions about concrete business and investment opportunities that will continue for some time.

From Small Seeds, Morocco-Mississippi State University Partnership

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Wide-ranging Collaboration Addresses Key Growth Sectors

It seemed like a good idea – to interview Mark E. Keenum, the president of Mississippi State University (MSU), recently named an honorary consul for Morocco in the US. It was an opportunity to discover why a partnership between a leading SEC football powerhouse and a frontier market economy makes sense, and what lies ahead for both parties. Well, along the way, I got quite an education.

First of all, I found out that MSU is not only the premier university in the state, it is, as its website proudly notes, “among the nation’s leading major research universities, according to the Carnegie Foundation for the Advancement of Teaching, which represents the highest level of research activity for doctorate-granting universities in the U.S.” It has an impressive array of more than 175 academic programs building on its strengths in engineering, agriculture, and arts and sciences…Quite impressive and an exceptional partner for Morocco.

msu1Gone are the days when honorary consuls were largely ceremonial opportunities to showcase visiting dignitaries. Morocco’s Ambassador Rachad Bouhlal is determined to promote his country’s ties of friendship to key communities across the US by demonstrating the mutual benefits of cooperation and collaboration that serve both countries’ interests. This partnership with MSU certainly illustrates the potential for enabling Morocco to find capable and committed partners in its efforts to realize economic growth and prosperity for the country, the region, and the African continent.

The relationship is no happenstance. There are MSU faculty members from Morocco who helped build a partnership with the International University – Rabat (IUR), a public-private partnership focused on developing skilled graduates in line with Morocco’s national initiatives. This is underscored by the joint programs that have been launched in automotive and aeronautic engineering. The undergraduate program consists of three years of study at IUR in mechanical and automotive engineering, then a senior year at MSU, with BS degrees awarded at both schools and automatic entry into the Masters programs at MSU.

The programs are off to a quick start. This fall, 21 Moroccans are enrolled in the Masters program in aeronautical engineering. In fall 2016, the first class of 49 students will complete their senior year at MSU in mechanical engineering and enter into the Masters programs. And 61 are expected in automotive engineering as undergrads in 2017. This is quite an innovative program for MSU, its first international program – and one that has the full support of President Keenum, which is where this blog started…

Mark is both a lifelong Bulldog (as MSU’s sports teams are called) and one of its staunchest supporters. He completed his undergraduate and advanced degrees in Agricultural Economics at the school, later serving as chief of staff for Senator Thad Cochran and as an Undersecretary in the Agriculture Department under President George W. Bush. While in the Administration, he oversaw the Foreign Agricultural Service, which gave him broad exposure to other countries, as well as international and multinational to agencies in the food and agricultural sectors.

He is acutely aware of food and water issues facing the world and has developed partnerships with the United Nations Food and Agriculture Organization (FAO) and the World Food Program. Mark has formed six partnerships with USAID and has a program with FAO in Africa. MSU, under his tenure, has been designated as a UN Global Agricultural Health Center, where the university brings its expertise to bear on issues of food security and sustainability.

IUrabatIn discussing these issues and initiatives, it is clear that President Keenum is passionate about the challenge of feeding people. With 20 billion people expected on this earth by 2050, he says that we need smart, educated, and talented people to direct more research, resources, science, technology, and innovation to meet this challenge. He has high praise for Morocco and its efforts in Africa, and is well acquainted with OCP, since he is a member of the International Fertilizer Development Council.

He gives Ambassador Bouhlal credit for recognizing how honorary consuls can play a dynamic role in building strong bilateral bridges beyond politics, especially on issues of common concern. This past spring, he met with Morocco’s Agriculture and Fisheries Minister Aziz Akhannouch to discuss how MSU’s Water Resources Centers covering research, the environment, aquaculture, and water management can contribute to Morocco’s USAID triangular aid projects in Africa.

It is a beginning of a broad array of opportunities for Moroccan and American students and experts to gain valuable experience, share knowledge, and together generate innovate approaches to meeting the critical food, water, and energy security issues challenging human development.

At UN, King Challenges International Community to Support African Development

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Too often, in the drama of high political tension at the opening of the UN General Assembly, the media focuses on the hot button news such as Russia versus the US on issues including Syria, Iran, and the Ukraine, that naturally drive the headlines. No less important are the substantive calls from regionally important players regarding needed advancements in human and social development.

Such a speech was delivered on behalf of King Mohammed VI of Morocco, who gave his perspectives on several key themes: lessons learned regarding setting ambitious global development goals, the need for large-scale partnerships to effectively improve society; and the need for clarity and purpose on issues such as climate change.

Blog reform parliament featureI happen to think that his speeches do not attract the attention of the media and pundits because Morocco is not in crisis; it has a functioning government led by a moderate Islamic party; it has a very effective security apparatus that is quite effective in combating terrorism and radicalism; and Morocco delivers on its promises – in achieving its Millennium Development Goals, countering extremism, and introducing gradual liberalizing reforms, among others.

This year’s speech began with simple rhetorical questions: “Have we managed to change the day-to-day life of the poor? Are the results achieved solid and sustainable enough to withstand tensions, wars and social and economic crises?” Once again, as in Pope Francis’ addresses in the US, the focus was on the poor, those who are underserved and marginalized in their communities.

A review of Morocco’s achievements made under the Millennium Development Goals indicates significant progress between 1990 and 2015. Yet, this is not true globally. The gaps between regions around the world and inside certain countries are a legitimate cause for concern. The King recognized that much has been done, but also believes that if the international community cannot point to actions that deliver measurable and sustainable progress, then “It should induce stakeholders to ponder on the best means to promote development and address the malfunctions affecting international cooperation.”

In addressing the UN’s campaign to develop Sustainable Development Goals, King Mohammed said that the gap between words and actions was not acceptable. “No matter how relevant and promising the sustainable development agenda is, its credibility will hinge on the resources to be raised to finance its implementation.” He noted in particular that too often regional and international obstacles impeded progress. “International cooperation therefore has to adapt to global facts on the ground and not only shake off the legacy of the past, but also avoid geo-political calculations and refrain from imposing near-impossible conditions to access aid.”

The King sounded a clear message about the inadequacy of solutions imposed externally: “Development cannot be achieved through bureaucratic decisions or ready-made technical reports that have no credibility. To fulfill people’s aspirations and to address their real concerns, it is necessary to fully understand the reality of their situation and their characteristic features, make an objective assessment of their living conditions and carry out serious work on the ground.”

As he frequently has since assuming the throne in 2001, he focused on his neighbors in Africa, saying that “These African people’s lives are a never-ending struggle, full of daily challenges. They have to face harsh conditions and can only rely on scant resources. However, they live with dignity, are true patriots and hope for a better tomorrow.”

Morocco is doing its part. Over the past five years, scholarships for students from sub-Saharan Africa have increased, a ground-breaking migrant inclusion program has been initiated, and an array of bilateral agreements covering social, human, and economic development has been signed with many African countries — by a country that has limited financial resources but understands the meaning of community and acts on it.

The King said that “an inclusive, coordinated and multi-dimensional medium-term approach needs to beblog 2 22May14 adopted.” Recognizing that Africa is the fastest growing continent and has water, energy, and agricultural potential to meet its needs if managed effectively, he remarked that “Seen from this perspective, Africa must be at the heart of international cooperation for development in order to help the continent rid itself of its colonial past and unlock its potential.”

While a variety of financial and investment projects have been launched over the past decade to support growth in Africa, there is concern that there is little coordination among donors and recipients to ensure that resources are allocated and managed efficiently for maximum impact. “For this reason,” the King added, “Morocco is calling on the United Nations Organization and on regional and international financial institutions to draw up an action plan for economic transformation in Africa and provide steady resources to finance it.”

There is no question that the King takes challenges to African development seriously. In the past year, he has made at least three major speeches emphasizing that the future of Africa is in the hands of Africans and their partners in the global community. He does not underestimate the challenges, given the violence that afflicts all regions of the continent. King Mohammed added, “I also call for making peace and stability top priorities to prevent conflicts, confront extremism and terrorism and address the migration problem using an approach that takes into account the dignity of migrants, preserves their basic rights and tackles the root causes of the migration phenomenon.”

It is this long-term vision for his people, his country, and the continent, and his commitment to actions for progress and results that is the bedrock of King Mohammed’s legacy.

Morocco’s Energy Strategy Attracts Global Attention

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International Players Drawn by Government’s Ambitious Program

 

I recently visited four cities: Milwaukee and Madison, Wisconsin, Chicago, Illinois, and Minneapolis, Minnesota, speaking on business opportunities sparked by the US-Morocco FTA.

Ironically, most of the attention focused on potential opportunities in renewable energies – a sector that is only tangentially impacted by the FTA, yet one that has captured the attention of the global industry, from providers of consumer and small-scale technologies to the manufacturers of large scale solar and wind facilities and equipment.

There is also interest rising in Morocco’s efforts to build an integrated LNG and gas-to-power plant with an import facility near the current coal-fired power station at Jorf Lasfar, along with a number of combined-cycle gas turbine power plants. The Minister of Energy, Abdelkader Amara, has just visited the US, meeting with industry leaders, taking a tour of several LNG facilities, and speaking to companies in several states. The visit was described as “very productive,” and it highlighted Morocco’s efforts to “enhance its commitment to green energy.”

Lahsen Amarof, head of the Ministry’s Natural Gas and Fossil Fuels Division, noted that “The project will be tendered as one integrated project through one tender. We expect to have a consortium with many companies [undertaking the project], including CCGT specialists and companies for the LNG part.”

The Interfax report also noted that “The project also includes the construction of a 400-km high-pressure pipeline connecting the LNG terminal to the existing Maghreb-Europe pipeline, which takes Algerian gas to Spain via Morocco, through Mohammedia, Kenitra and Dhar Doum. The scheme also includes the construction of pipelines to each of the projected power stations, and may be extended to underground gas storage facilities at a later date.”

As financing comes on line through a variety of public-private sector partnerships, companies will line up to take part in this estimated $4 billion project that is part of the overall shift in the energy profile of Morocco.

Solar Continues to Dominate the News

sciamScientific American is the latest magazine to take notice of what Morocco is doing, in a recent article on solar energy in the Middle East. The article concedes that Gulf investors such as the UAE, Saudi Arabia, and Qatar and energy importers like Morocco have markedly different rationales for investing in solar. While the Gulf producers are concerned with achieving the best value for their exports by reducing domestic consumption, Morocco is simply trying to reduce its expensive fossil fuels import bill and reach its climate change goals.

“Global consulting firm Ernst & Young, in its latest Cleantech Survey Report for MENA, ranked Saudi Arabia, UAE, Morocco and Jordan as having the greatest potential for renewable energy investment in the region, adding that ‘the opportunities to provide affordable and secure low-carbon energy are continuously expanding.’”

Solar energy has many benefits. It can then be used to meet other development needs, such as powering high-use desalination and waste/water treatment plants at lower cost and lower greenhouse gas emissions technology such as the CSP projects in Morocco.

The magazine pointed out that “As part of its 2009 National Energy Strategy, Morocco has pledged to bring online 6,000 MW of renewable energy — 42 percent of its installed capacity — from hydro, wind and solar resources by the end of the decade. Last year, officials told the Al-Hayat newspaper that the country would invest $11 billion in wind and solar over the next five years, allowing the country ‘to turn from an importer into an exporter of alternative energy by 2020.’”

In its latest Renewable Energy Country Attractiveness Index, published this month, Ernst & Young credited Morocco’s solar program for adhering to a “bold risk allocation strategy for such large-scale and complex projects.”

In related news, Italian firm Enel Green Power SpA, a well-known leader in renewable energy, announced the opening of an office in Morocco.

enelAccording to CEO Francesco Venturini, Morocco has emerged as a renewable “energy pioneer” in the region, outlining clear goals and providing the “regulatory framework” necessary for renewable development. “We have already set foot in the country, establishing a local headquarters, and now we are aiming to grow by installing megawatts and contributing to the achievement of the country’s ambitious energy targets,” Venturini told a business conference in Rabat, according to media reports.

At the current time, Enel has a number of tenders on its radar, including the most recent project of Morocco’s national utility ONEE for an 850MW wind project that has attracted prequalified bidders from a number of countries.

The bottom line is that Morocco is making good on its vision for the future and is securing the commitments and expertise needed to meet it energy and climate change goals.