During a time of global economic crisis and political unrest in the region of North Africa, Morocco offers an alternative of economic growth and political stability. Economic growth has averaged 4.5% in the past three years, foreign trade increased by almost 20% in 2011, FDI stocks doubled in the past two years, political stability has been maintained and social progress is continuing.
Mr Khalfi, what is your point of view regarding this economic growth and the investment opportunities in recent years?
Morocco presents a very specific and unique model in the region in the context of the Arab Spring; we call this model the Third Path between revolution and evolution, different from we have seen happening in countries such as Tunisia and Egypt where the revolution leads to the collapse of the existing regimes. The second path will be to ignore the democratic demands of the people, but Morocco has represented an alternative, a third path: reforming within stability, making the necessary political, economic, social, and cultural reforms without losing stability, while maintaining the foundations of the political system.
How can we explain the Moroccan case? There are four elements; the first one is the leadership of the monarchy. His majesty Mohammed the VI is a leader that has succeeded in formulating a road map, presented in his historical discourse the 9th of March 2011, in order to anticipate the challenges of a democratic transformation, and to create a road map explaining how to implement the democratic transition without losing the stability of the country.
Why do I make this link between reform and stability? One of the elements that has helped, and keeps helping the country in attracting foreign investment is stability. The second element is good governance; the reforms are going to help to establish a new system of good governance while preserving the stability, so the marriage between those two elements is our message to foreign investors to come here. But the key factor to accomplish this is the crucial role of the monarchy.
The third factor is the already existing political parties that work within Moroccan society, that help to formulate a response to the road map presented by the monarchy. In some way we have seen this during the debate regarding the main elements of the constitutional reform and during the electoral process of November 25th, which helped to strengthen the credibility of the political reforms happening in our country. This is not just a project formulated in the context of the Arab Spring, so when the spring was over there was no need in implementing the reforms; we have implemented a credible political reform.
Another important factor that contributes to our stability is the existence of a solid civil society with human rights, women’s rights, and Berber rights groups. We have a very active civil society in Morocco of almost 50,000 different associations. We have succeeded in developing a credible platform of integration and engaging civil society in the main public policies implemented in our country. The fourth element will be the emergence of moderate youth movements that believe in the necessity of having a new generation of reforms while maintaining the existing system.
All these four elements have helped to develop this third path, a Moroccan model within the Arab democratic spring. The new government based in the obligations of the new constitution, has succeeded in developing a new platform based on three main objectives. The first one is to strengthen a good governance system in Morocco with transparency, respect for the rule of law, respect for equality, but with good governance as the key of dealing with social, political and economic issues. Good governance is based in transparency, accountability and the rule of law.
In a few months, we have succeeded in creating a new political and social climate in our country; the relationship between the government and society is that the government is at the service of society. Good governance has many implications on the ability of the government to deal with political and economic challenges, encourage economic development in both public and private sectors, and build strong partnerships with the private sector. Two months ago, we succeeded in reaching an agreement with the private sector, which is the engine of economic development and the platform to cooperate with foreign investors. We must have strong partnerships with the private sector while consolidating the public sector.
One of the elements that explain why the impact in the international crisis was limited in Morocco is the role of the public sector. Huge infrastructure projects are being implemented in rail, ports, airports and housing, through public funds. This has generated internal economic demand, and helps the private sector to participate directly in economic development. The country is so linked to the international economy that it suffered. Morocco succeeded in creating equilibrium between international and national interests, for which the private sector is the platform. So we are strengthening the role of the private sector.
At the national level the public sector is working. This year we have allocated almost 180 billion dirhams to public investment in huge infrastructure projects such as roads, rail, tunnels, transportation, equipment, airports, seaports and housing.
The third objective is social justice. The problem we suffered in the past was that we had economic development and growth, but distributing the resulting wealth to all regions of the country needs to be reformed. All segments of society must have their share in economic development. They can see a lot of projects going on, but what is the impact in people’s daily lives? Social justice means education, health, housing and fighting poverty. We launched the first phase of the National Initiative for Human Development between 2005-2010, and now we are in the second phase. We have succeeded in reducing poverty in many cities and rural areas by half.
For us, social justice means quality education. One of the things has been to link the quality of the education system with the economic system, job market, and the business sector. We want to enhance the youth culture to participate in the private business sector. Two months ago we just launched a huge project in Casablanca to provide health services to 8.5 million of the poorest Moroccans. We also have a huge housing deficit of at least 700,000 units, so we are working on that.
The efforts we are making in education, health and housing will work together in fighting poverty and strengthening the role of the family. Now we have launched the 160 million-dirham fund to strengthen families in the country. The second project is to facilitate and encourage poor families to educate their children by giving them direct financial aid. This project was first launched years ago, and now it is in its second phase to double the number of families we are helping. These are the three main objectives that the Third Path is looking for: good governance, economic development and social justice.
In parallel to this, there is a huge programme to implement the new Constitution. At least 150 new laws are going to be drafted and adopted by Parliament in order to implement the new provisions in the new Constitution.
In December 2010, popular revolutions were held in several Arab countries such as Egypt and Tunisia. These revolutions end up changing the governments and they instigated a period of instability. However, Morocco with a deeper democratic tradition, managed to assure the stability of the kingdom.
Could you please share with us which have been the communication strategies to show the country’s differences to the entire world?
Morocco is now creating an opportunity for international investors by preserving its stability. Communicating with them is the key. Many people are creating some negative stereotypes about the Arab world, given what happened in Tunisia, Libya, and Egypt in 2011. These companies are now working on improving to limit this negative image of the last year.
The case of Morocco is totally different. For this reason, the National Commission of Investment recently examined 35 investment projects that total about 200 million dirhams. To send a strong and effective message to foreign investors, we must show them that the government is working for them and their projects in a positive way. Morocco is a platform for them.
We cannot only communicate by sending a message, meeting people, or organising conferences. We can only communicate by taking concrete measures. The total investment of these projects is 18.74 billion dirhams, which has been examined and accepted by the National Commission of Investment. The message was clear.
Investors from Switzerland, Britain, Spain, France, Germany, Saudi Arabia, Kuwait, the US, and even Libya, all presented their projects. They asked the government to give them some privileges because the amount of investment is so high in terms of the interest rates, value addition and tax duties. Encouraging them with the fiscal, lending, and formation, and equipment incentives is the kind of things that the government is doing for them.
Thirdly, there was a recent conference of French businessmen in Rabat, and a second in Casablanca concerning the World Bank’s Doing Business reports. In many cases to evaluate the business climate, people want to know your rank in international indices. We are working on resolving some problems in this ranking, and Morocco gained a good position as opposed to previous reports. An international conference was organised this week in Rabat about Women Leaders from more than 200 societies.
We want to communicate by creating opportunities for debate, and examining what is happening in the world, and in Morocco. We are working on many strategies, but I believe an effective strategy must be based on concrete measures that people can see. The recent investment agreements send a good message.
Germany is the third-strongest country in the world after the US and China, and number one in the European Union, with a GDP surpassing 3.5 trillion dollars. Actually nowadays Germany is the voice, the leader of the European Union.
What should be the relationship between Germany and Morocco?
I think Germany is the model. Within an environment of economic crisis in Europe, they succeed in keeping unemployment low at 5%, as compared to other EU countries where it is 10%, 18%, or even 24% in Spain. Germany also demonstrates the importance of partnership between the public and private sectors to defend the national economic system against the economic crisis. Germany is also a model for the relationship between its regions and the central government in dealing with economic and social difficulties.
Within the current situation, one of the projects we are working on is developing the energy sector and our solar programme. Germany succeeds in having some agreements, which sends a message of good governance that a foreign company came here and succeeds in securing agreements for huge renewable energy projects. Morocco has a strategy to develop its renewable energy, tourism and infrastructure sectors, within which foreign investors can find huge opportunities. There is a mutual interest. We should work on strengthening the economic relationship between Morocco and Germany, which provides many opportunities for German investors.
We live in a very globalised world where borders are disappearing little by little.
How important is communication for companies?
New technologies are providing a platform to enhance communication between companies. In the past we needed to have common chambers that gathered investors from both countries. But now in the age of information and new technologies, it is a communication revolution. I encourage a direct relationship with confidence and trust. For example, there is a huge community of Moroccans in Germany, and they are playing a role in building successful relationships between companies there and here.
In this globalised world, using new technologies and sharing information is as important as building on the existence of large foreign communities abroad. There are two million Moroccans living in Europe, and 250,000 living in North America, which creates an opportunity.
You have been the Minister of Communications since last January. This is a very important ministry because it is essential to communicate the progress being made in Morocco.
Which project do you feel most proud of?
When I see people like yourselves coming in to present my country to the world, I feel proud. The main thing I have succeeded in doing since coming to the ministry has been reviving the partnership between the government and mainly the Ministry of Communications, with other actors such as journalists, editors and associations.
This successful partnership will help us in sending one clear message to the world that Morocco is the platform of many opportunities. You can come here to invest, and not only take advantage of the country’s stability, but also the new system of good governance and transparency. Yes, there are still some difficulties because we cannot change everything overnight. It is a long process, but we are going in the right direction.
This process, and our partnership with different groups, help us to better understand the real problems we are facing economically, socially, as well as culturally. Morocco is culturally diverse and open. We succeed in maintaining our Moroccan identity while remaining open to other civilisations and cultures.
Linguistic diversity is one of the foundations of this country. Cultural diversity and openness succeeds in creating Morocco’s specificity in the world. Sometimes we focus on political, economic, and social issues, and ignore the fact that these three issues are related to what is happening culturally. I am trying to create the critical balance between economic development, good governance, and social justice, while at the same time with cultural diversity and openness.
You are going to be addressing 10 million people through this report.
What would be your final message for the German community?
That we are looking to consolidate and strengthen our relationship – politically, economically, culturally, and socially – and Morocco is an opportunity to do that.