Morocco : economy statistics and industry reports

Historical background

In 788, about a century after the Arab conquest of North Africa, successive Moorish dynasties began to rule in Morocco. In the 16th century, the Sa'adi monarchy, particularly under Ahmad AL-MANSUR (1578-1603), repelled foreign invaders and inaugurated a golden age. In 1860, Spain occupied northern Morocco and ushered in a half century of trade rivalry among European powers that saw Morocco's sovereignty steadily erode; in 1912, the French imposed a protectorate over the country. A protracted independence struggle with France ended successfully in 1956. The internationalized city of Tangier and most Spanish possessions were turned over to the new country that same year. Morocco virtually annexed Western Sahara during the late 1970s, but final resolution on the status of the territory remains unresolved. Gradual political reforms in the 1990s resulted in the establishment of a bicameral legislature, which first met in 1997. The country has made improvements in human rights under King MOHAMMED VI and its press is moderately free. Despite the continuing reforms, ultimate authority remains in the hands of the monarch.

Economic overview

Moroccan economic policies brought macroeconomic stability to the country in the early 1990s but have not spurred growth sufficient to reduce unemployment - nearing 20% in urban areas - despite the Moroccan Government's ongoing efforts to diversify the economy. Morocco's GDP growth rose to 5.9% in 2008, with the economy recovering from a drought in 2007 that severely reduced agricultural output and necessitated wheat imports at rising world prices. Moroccan authorities understand that reducing poverty and providing jobs are key to domestic security and development. In 2005, Morocco launched the National Initiative for Human Development (INDH), a $2 billion social development plan to address poverty and unemployment and to improve the living conditions of the country's urban slums. Moroccan authorities are implementing reform efforts to open the economy to international investors. Despite structural adjustment programs supported by the IMF, the World Bank, and the Paris Club, the dirham is only fully convertible for current account transactions. In 2000, Morocco entered an Association Agreement with the EU and, in 2006, entered a Free Trade Agreement (FTA) with the US. Long-term challenges include improving education and job prospects for Morocco's youth, and closing the income gap between the rich and the poor, which the government hopes to achieve by increasing tourist arrivals and boosting competitiveness in textiles.