Situation and Cooperation

Morocco is a constitutional monarchy in which the King is the central political figure. Mohammed VI has been King since 1999, and is both secular ruler and spiritual leader. He actively supports necessary reforms and is backing programmes that promote human development and political liberalisation. Thus, in recent years, the state has invested heavily in areas such as education, health and social housing. Morocco stands out in the Middle East and North Africa due to its political openness and marked progress on social and economic reforms, and on civil rights.

Economic situation

Morocco is cur­rent­ly going through a far-reaching process of change, de­vel­op­ing from an ag­ri­cul­tur­al state to a country whose economy is based on manufacturing and services. Structural adjustment programmes have delivered considerable improve­ments in macroeconomic conditions and in the investment climate. Whilst the economy is prone to considerable fluctuations, for example through failed harvests, it has nevertheless achieved growth rates of two to seven per cent in recent years.

Since Morocco’s financial system is only marginally linked to the international capital markets, the global financial and economic crisis has had an indirect rather than a direct impact on the country. Most noticeable has been the significant drop in remittances from Moroccans living abroad, in tourist revenues and in foreign direct investment.

Morocco’s economy is hampered by low levels of productivity, and is therefore unable to compete on the world markets. The reasons for this include the poor quality of industrial goods, a very limited range of finished products and a lack of skilled workers. More determination must also be shown in the fight against corruption. In the index drawn up by Transparency International, an organisation working to counter corruption worldwide, Morocco was given a mere 3.4 out of a possible 10 points in 2010, and was therefore ranked 85th out of 178 countries assessed.

Illiteracy rates remain very high; only about 58 per cent of people aged 15 or over can read and write. The 2010 Human Develop­ment Index (HDI) ranks Morocco 114th out of 169 countries. The Moroccan government has launched a reform of the education system in order to tackle this problem.

Almost half the working population is still employed in agriculture, which is increasingly affected by extreme weather events as a result of global climate change. Water resources are becoming increasingly scarce, and in wide areas the soil is threatened by degradation as a result of overuse.

It is estimated that a quarter of the population lives in poverty or on the brink of poverty. The rural regions are particularly de­prived. There, access to education, health services, clean drinking water and electricity is markedly poorer than in the cities. Many people from the countryside therefore migrate to the towns, exacerbating the problems which exist there. There is high unemployment, especially among young people and aca­de­mics. The consequences are social conflicts, illegal migration to Europe and the risk of radicalisation among some population groups.

The informal sector plays a major role in the Moroccan economy: nearly half of all jobs outside agriculture are in the informal sector. Remittances from the many Moroccans living abroad also support the economy. More than 130,000 people of Moroccan descent live in Germany.

The cultivation of illegal drug crops is a problem. Morocco is the world’s largest producer and exporter of cannabis. A large proportion of the population, especially in the very poor northern provinces, makes a living from cultivating and selling drug crops. The income earned by these families is much higher than that earned by families growing other agricultural products. The illegal cultivation of cannabis brings smuggling, which in turn has an impact on Morocco’s security situation. Furthermore, drugs are mainly grown in monocultures, which have a negative impact on the ecosystem.

Development potential

Morocco possesses great growth potential, particularly in the area of renewable energy. Up to now, Morocco has been almost entirely dependent on imports to cover its primary energy needs, and therefore completely at the mercy of world market prices for crude oil, coal and natural gas. At the same time, the growth of the country’s economy and its population has led to an increasing demand for energy. However, the Kingdom has enormous potential for harnessing renewable sources of energy. The conditions for exploiting solar and wind energy are so favourable that, if these sources were tapped, Morocco would not only be able to cover its own energy needs but could also export electricity to Europe.

A key branch of the economy is tourism, which is estimated to pro­vide one million jobs. The govern­ment is making con­sid­er­able efforts to expand tourism into one of the leading sectors of the economy. With its "Plan Azur", the government has set itself the goal of expanding tourist infrastructure significantly. One of its goals was to increase the annual number of visitors to around 10 million by 2010. According to official figures, that goal was nearly reached in 2010, when just under 9.3 million tourists visited the country. Although foreign exchange earnings from tourism have recently declined and several foreign investors have pulled out, the government is sticking to its programme.

Opportunities for development and employment can also be found in the supply sector for the automotive, IT and aeronautic industries. There are plans to make further improvements in this sector, especially with regard to quality and service. Through sustainable management of its abundant fish stocks, Morocco will also be able to achieve growth in its fishing industry, generate foreign exchange and provide jobs for more people.

In order to drive forward the country’s integration within the world trade system, Morocco’s government has started to construct a deep-sea harbour at Tangier, called Tangier-Med. Moreover, Morocco is pushing for the establishment of free trade zones, in order to enhance its own export opportunities. It has concluded relevant treaties with the EFTA countries (in 2000), the USA (in 2006) and the EU (with effect from 2012). The regional Agadir Agreements on free trade concluded in 2004 with Egypt, Jordan and Tunisia – which were supported by the EU – have since come into force.

Priority areas of German cooperation with Morocco

The Federal Republic of Germany has made new commitments totalling 131 million euros to Morocco for 2010 and 2011. Of this amount, 119.5 million euros are earmarked for Financial Cooperation (for the most part loans) and 11.5 million for Technical Cooperation.

The governments of Morocco and Germany have agreed on the following priority areas for cooperation:

• Environmental and climate protection, including the promotion of renewable energies

• The use and management of water resources

• Sustainable economic development

In addition to the measures being carried out in these priority areas, Germany is also providing support for the cross-cutting issue of gender and for the national poverty reduction initiative INDH. A programme for "good governance in the Maghreb" has been set up at regional level. Its intention is to motivate state institutions and civil society organisations in Algeria, Morocco, Mauretania and Tunisia to engage in an exchange of ideas on shaping certain areas of policy and to strive for responsible and transparent governance.

Environmental protection and climate change

Urbanisation and industrialisation are having a highly detrimental impact on the environment in Morocco. The country’s growing mountains of refuse require a structured waste management system, which focuses on minimizing the production of refuse and on recycling. Industrial effluent is discharged untreated into the environment, threatening groundwater resources and polluting the very coastlines that are so vital for tourism. Unfiltered waste gases from industry pose a risk to human health in the large conurbations, and the use of fossil fuels to generate power and heat is causing considerable environmental pollution.

The situation is further aggravated by the continued lack of sufficient official monitoring and sanctions, as well as by the very low level of environmental awareness in the population at large.

German development cooperation is playing a pioneering role in Morocco with regard to environmental protection and nature conservation. Assistance in the area of environmental management focuses in particular on support for Moroccan institutions, for example with regard to the elaboration of relevant legislation or environmental standards for industry. For instance, a groundbreaking law on solid waste was drafted with German assistance. Our Moroccan partners have increasingly been asking for support in the field of climate protection. In response, advice was provided to the Moroccan delegation at the climate summit in Cancún in 2010, and German organisations are working with partner authorities in Morocco to review financial incentive schemes which will give a boost to economic policies that take account of environmental and climate issues.

In the context of Technical Cooperation, pilot measures to improve waste disposal and reduce environmental pollution are being implemented in collaboration with trade and industry. These include measures to avoid, reduce and re-use waste products. In addition, Germany is supporting programmes to combat desertification and to establish and manage protected areas. Morocco has great potential in this sphere in particular. The country has the second highest level of biodiversity in the Mediterranean region after Turkey.

Climate protection is becoming an increasingly important area of policy advice, which is why German experts are supporting Moroccan government ministries in their efforts to establish effective administrative structures with which to meet the new challenges posed by climate change. Morocco’s government is also receiving advice on how to implement a tax reform with an ecological dimension. A further important objective of cooperation is to raise awareness among the population and political decision-makers.

Morocco is almost completely de­pen­dent on energy imports. The energy strategy presented by the Moroccan gov­ern­ment in 2009 calls, amongst other measures, for the specific expansion of the use of renewable energies in electricity production. Because of the country’s situation between the Atlantic and the Sahara, there is enormous potential here for exploiting wind and solar power. According to government plans, energy from renewable sources is to make up 18 per cent of electricity production by 2015. Germany has been advising Morocco successfully since early 2008 on its legislation with regard to renewable energies and energy efficiency, as well as on building institutional and technical capacities in this field.

Cooperation between Morocco and Germany has included pioneering work in the area of wind power: It was with German development cooperation funds that the first wind farm in the region was financed over ten years ago. Following the construction of a pilot wind farm, Morocco’s first wind farms in Essaouira and Tangier were co-financed by Germany. Germany is also providing support for the construction and expansion of solar and hydropower plants.

The use and management of water resources

Some six million people – almost 20 per cent of the total population – have no access to drinking water in Morocco’s rural regions, while in the towns the disposal of domestic sewage and industrial effluent is a major problem. The public sanitation systems are inadequate and are often in very poor condition; there is a serious shortage of sewage treatment plants. The consequences are health risks and heavy contamination of drinking water resources in urban areas.

The protection of water resources is therefore a major component of cooperation between Germany and Morocco. The focus of Germany’s development cooperation activities with regard to managing water resources is on improving Morocco’s planning efficiency, its monitoring and control systems for water management, and its participatory approach to the management of groundwater resources. Over the past twelve years the connection rate for the urban population has been increased from 80 to 95 per cent, and for the rural population from 10 to 80 per cent, with the help of German development cooperation measures.

Cooperation between Morocco and Germany has included pioneering work in the area of wastewater management and rural drinking water supply: of the 45 wastewater treatment plants built so far, Germany has helped to fund no fewer than twenty.

Work on raising public awareness is helping to make people aware of the importance of hygienic living conditions. This contributes not only towards protecting precious water resources but also towards reducing child and maternal mortality and improving the health of the people in general. The central focus of these development programmes is on women, for it is they who are traditionally responsible for supplying their families with drinking water.

It is impossible to predict what effect global climate change will have on Morocco. However, in the medium term, the country will have to expect changes in precipitation and groundwater levels. Agriculture currently still consumes nearly 90 per cent of the available water. As rainfall is irregular, fields have to be irrigated artificially in many regions. When modern irrigation systems are introduced, users are involved at the preparatory and planning stages, which means that new systems can be adapted to their needs and wishes. At the same time, less water is used more effectively to irrigate larger areas.

Sustainable economic development

In 1996, Morocco signed an Association Agreement with the EU. The intention is to create a free trade area by 2012. Moroccan industry is not yet sufficiently well prepared for this change in its operating environment. Before they can survive without economic protection mechanisms in a Euro-Mediterranean Free Trade Area, Moroccan businesses must become significantly more competitive.

Consequently, the government is promoting the private sector, and is receiving assistance for its reform measures through German development cooperation. As part of these reforms, a large number of former state-operated enterprises have been privatised, for example in the energy, telecommunications and aeronautic industries. The state apparatus has been improved structurally – through customs reform, consolidation of the financial sector and modernisation of the public sector. Industry associations are being helped to develop services that will improve the international competitiveness of small and medium-sized enterprises (SMEs).

Germany has supported the setting up of a refinancing fund which enables Moroccan microfinance institutions to extend their microcredit facilities. The principal beneficiaries of this are micro enterprises in the informal sector. An important aim in providing this kind of support is to promote growth and employment outside Morocco’s large industrialised conurbations. That is why German support is being targeted at small and medium-sized enterprises based in the provinces.

In order to ensure that Morocco has a bigger well-trained workforce in future, German development cooperation has also become involved in helping to improve vocational training. It has helped to fund a workplace-based training system, which has been rolled out across businesses and industry associations. Tried and tested models of vocational qualification have been adapted to conditions in Morocco and have been incorporated into the reforms of the country’s vocational training system. The reforms are intended to help give young people who have so far been disadvantaged and, in particular, young women – especially those working in the textile and garment industry and in tourism – the chance to find secure jobs and opportunities for career advancement. The approaches that have been developed have now been transferred into the corresponding EU sector programme.

Gender

In Morocco, women are at a social and legal disadvantage, compared with men. This means that they are also particularly hard hit by poverty. The 2004 reform of family law heralded an improvement in the status of women. Nevertheless, under Moroccan law women often do not enjoy human rights such as the right to education, the right to own property or the right to live a life free of violence. Until recently, they were largely excluded from the political decision-making process.

Germany is supporting Morocco in its efforts to embed a gender-mainstreaming approach in the public and private sector, as well as in civil society. With its extensive Technical Cooperation programme, Germany is helping its partners in government authorities, business associations, universities and non-governmental organisations by providing advice, coordinating support, advanced training and networking.

These efforts have resulted in notable success: in 2007, the Moroccan government launched a national gender-mainstreaming strategy, for which German experts had provided advice on the wording and content. In 2009, Morocco’s political parties signed a charter on ethical standards, and a quota for women was introduced, which resulted in the share of women elected in the 2009 local elections rising from 0.56 per cent to 12 per cent.

Fifty of the non-governmental organisations receiving support from Germany have introduced indicators for gender in the planning, implementation and evaluation of their projects. Eleven large-scale enterprises and twenty small and medium-sized companies now meet the criteria for gender equality laid down under the Corporate Social Responsibility (CSR) Label, which certifies that a company is being run in a socially responsible manner. Germany has supported Morocco’s entrepreneurs’ association in encouraging compliance with this mark of quality.

The project led to the introduction at the Mohammed V University in Rabat of a master’s degree course in order to address the shortage of qualified professionals trained in gender policies. The course content was designed according to proposals made by Germany’s gender project group in collaboration with Canada’s International Development Agency and the United Nations Development Fund for Women (UNIFEM).