Morocco - Economic development
Government policy stresses expansion and development of the economy, essentially through foreign investment. Morocco decided to abide by the International Monetary Fund's (IMF's) Article VIII, thus beginning the privatization of 112 public entities—mainly manufacturing enterprises, hotels, and financial institutions—slated for divestiture under the 1989 privatization law. Only 54 had been privatized by 1998, and the process had been stopped at that time. Keeping major industries under government control, Morocco proceeded to open up investment only partially, keeping the majority of revenues from the phosphates and mining, banking and securities industries.
Morocco instituted a series of development plans to modernize the economy and increase production during the 1960s. Net investment under the five-year plan for 1960–64 was about $1.3 billion. The plan called for a growth rate of 6.2%, but by 1964 the growth rate had only reached only 3%. A new three-year plan (1965–67) targeted an annual growth rate of 3.7%. The main emphasis of the plan was on the development and modernization of the agricultural sector. The five-year development plan for 1968–72 called for increased agriculture and irrigation. The development of the tourist industry also figured prominently in the plan. The objective was to attain an annual 5% growth rate in gross domestic product (GDP); the real growth rate actually exceeded 6%.
Investment during the 1970s included industry and tourism development. The five-year plan for 1973–77 envisaged a real economic growth of 7.5% annually. Industries singled out for development included chemicals (especially phosphoric acid), phosphate production, paper products, and metal fabrication. Tourist development was also stressed. In 1975, King Hassan II announced a 50% increase in investment targets to allow for the effects of inflation. The 1978–80 plan was one of stabilization and retrenchment, designed to improve Morocco's balance-ofpayments position, but the 4% annual growth rate achieved was disappointing.
The ambitious five-year plan for 1981–85, estimated to cost more than $18 billion, aimed at achieving a growth rate of 6.5% annually. The plan's principal priority was to create some 900,000 new jobs and to train managers and workers in modern agricultural and industrial techniques. Other major goals were to increase production in agriculture and fisheries to make the country self-sufficient in food, and to develop energy (by building more hydroelectric installations and by finding more petroleum and other fossil fuels), industry, and tourism to enable Morocco to lessen its dependence on foreign loans. The plan called for significant expansion of irrigated land, for increased public works projects such as hospitals and schools, and for economic decentralization and regional development through the construction of 25 new industrial parks outside the crowded Casablanca-Kénitra coastal area. Proposed infrastructural improvements included the $2-billion rail line from Marrakech to El Aaiún; a new fishing port at Ad-Dakhla, near Argoub in the Western Sahara; and a bridge-tunnel complex across the Strait of Gibraltar to link Morocco directly with Spain. Large industrial projects included phosphoric acid plants, sugar refineries, mines to exploit cobalt, coal, silver, lead, and copper deposits, and oil-shale development.
Outstanding foreign debt commitments and their serving remain a significant obstacle to economic development. The 1992 financing requirements were mostly covered, largely because of grants and bilateral credit. Despite the cancellation by Saudi Arabia of $2.8 billion of debt, the total still exceeded $23 billion. Despite reschedulings through both the Paris Club of official creditors and the London Club of commercial creditors, servicing the debt accounted for 30% of exports of goods and services. The economic plan of 1999–2004 included the creation of jobs, promotion of exports and tourism, resumption of privatization, and infrastructure construction.
External debt stood at around $19 billion in 2002, but the country had strong foreign exchange reserves and active external debt management, which was allowing it to service its debts. The government was liberalizing the telecommunications sector in 2002, as well as the rules for oil and gas exploration. The government in 2003 was using revenue from privatizations to finance increased spending. Although Morocco's economy grew in the early 2000s, it was not enough to significantly reduce poverty.