Published October 18th, 2000 - 02:00 GMT





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e - Al-Bawaba forecasts 






Political Outlook 


Political liberalization has been the general theme characterizing King Muhammad’s first year in power. Last November, the King introduced reforms designed to end disturbances in the Western Sahara region. He proposed holding elections for a royal advisory council in the disputed territory and offered free transportation for students and handicapped citizens of the region. The King has repeatedly affirmed his country's commitment to implementing a UN-sponsored peace plan on the future of the Western Sahara, so long as all potential voters can participate in a planned referendum. Divergent views regarding voter eligibility have already caused a protracted delay of this referendum.  


Reform of media legislation is also progressing. In mid-June, Morocco’s Communication Minister announced that the government is revising the press laws to cancel prison penalties for crimes related to publishing. The new law also reduces the current executive authority concerning newspapers and will shift this power to the judiciary. Parliament is also expected to discuss another law that will allow the establishment of private radio and television stations in Morocco before the end of the present year.  


Economic Outlook 


Assessments released back in January revealed that Morocco's economy had expanded by merely 0.2 percent in 1999, compared to 6.5 percent in 1998. In response to this news, the government unleashed a package of initiatives aimed at stimulating the economy (mainly through attracting foreign investment) and curtailing poverty and unemployment.  


The most recent initiative, announced back in April, consists of allocating $700 million from a special fund to boost economic activity and create jobs. This fund was established last year after the Kingdom awarded the second GSM telephone license to the Spanish Telefonica-led consortium for $1.1 billion. The $700 million will be devoted to infrastructure projects such as roads and housing. Stakes will also be devoted to the agriculture sector, mainly the expansion of irrigated lands. 


Earlier, the Industry and Trade Ministry announced a plan to create a $10-million capital development fund, which will assist industrial enterprises to become listed on the stock market. These funds will aid firms in restructuring and modernizing their production facilities prior to going public, which should enhance the industrial efficiency of medium-sized companies.  


A further endeavor aims at alluring foreign oil exploration activities. New hydrocarbon legislation eliminates taxes on energy firms and offers a 10-year tax break to offshore oil production companies. More exploratory operations are anticipated following the promulgation of these new laws.  


Still, rising inflows of foreign investment do not automatically translate into economic growth. In 1999, foreign direct investments in this North African State reached $1.9 billion, compared with an average of $450 million over the past five years. Nevertheless, the economy exhibited scant growth, mainly due to the prolonged drought that stunted agricultural output. The government hopes to sustain high levels of investment this year, and has recently approved 10 new ventures, valued at over $900 million, which will be realized in 2000 and 2001.  




In addition to accelerating aggregate economic growth, equitable distribution of Moroccan wealth is key to achieving social harmony and tranquility. Unemployment approaches 20 percent and roughly 70 percent of the population is below the age of 25, thus creating serious social strains. Such tension manifest itself on June 19, when over 50 people injured during clashes in the capital city, Rabat, between Moroccan riot police and hundreds of jobless graduates protesting against government policies. 


Morocco's authorities expect an economic revival in 2000, largely on the back of large-scale investment inflows. Many proposed investment projects focus on the tourism sector, which would eliminate dependency on the unpredictable agriculture sector and create vital employment opportunities. Nevertheless, recent history demonstrates that the performance of Morocco's agricultural-oriented economy rests on external factors, such as high levels of rainfall. If last year's drought repeats itself, no volume of capital inflows will succeed to revitalize aggregate financial activity.  

© 2000 Mena Report (

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