Mohammed VI's Strategies for Moroccan Economic Development

Eve Sandberg, Seth Binder

• Publisher: Routledge
• Year: 2019
• ISBN:
  9781351065962
• Edition: 1
• Topic: Economics
• Subtopic: Economic Theory
• Index: Economics

This book analyzes the economic development choices initiated by Morocco's King Mohammed VI since he ascended the throne in 1999 and situates those choices in the political economy development literature.

Examining the policies enacted by the King, the authors argue that over the past twenty years Mohammed VI has achieved some outstanding successes in modernizing the foundational economic sectors of Morocco, but the benefits of this development have not reached all Moroccans. With its focus on economic development, this book explores the way in which Mohammed VI's development strategies have, in part, resembled the neoliberal model advocated by Western powers and institutions, as well as how the King also adopted some of the European practices of state intervention found in the "varieties of capitalism" models across Europe. Additionally, Mohammed VI's Strategies for Moroccan Economic Development looks at the way in which the King has sought to utilize "leap frog" technologies so that Morocco has become a leader in certain productive sectors and is not just catching up to rival producers. The book also examines the extent to which Moroccan citizens have benefited from the economic transformations, arguing that not all Moroccans have benefited; many Moroccan citizens in 2019 echo the same economic concerns that were voiced in 1999 when King Mohammed VI first assumed the throne.

With its focus on economic development, this book will be of interest not only to scholars and students of Middle East and North African Studies, but also Economics, International Development, and Politics.

1 Mohammed VI ascends to the throne in 1999 facing critical choices for Moroccan development

At the end of the 1990s, the winds of democracy were blowing globally. Additionally, many around the world were demanding economic advancement – demanding not to be left out of the new benefits of globalization and at the same time to be shielded from its dangers. In Morocco, then governed by King Hassan II, many saw economic improvement and democratic governance as linked endeavors. Morocco was a monarchy, however, and Hassan was not about to abdicate nor embrace true democratic reforms. Further, after decades of neglect of the country’s economy, Hassan had abandoned his import substitution policies and instead embraced various neoliberal approaches to development in exchange for much-needed loans from the officials at the Bretton Woods Institutions (BWIs) – the International Monetary Fund (IMF) and the World Bank. As he modified his economic policies, Hassan II also allowed Morocco’s opposition political parties to form a parliamentary bloc, and then he chose a socialist party leader as Prime Minister. But the King retained control of the budget, the police, and the military, as well as the choice of Cabinet Ministers that comprised Morocco’s Executive branch of government.

While many Moroccans were proud of their royalty and its traditions as well as proud of the “Moroccan exceptionalism” that distinguished their country from their Middle East and North African (MENA) neighbors, in the later part of the 1990s, many Moroccans also aspired to improve their lives economically and longed for freedom of speech and freedom in public spaces. But Moroccans had little hope of far-reaching change through existing parliamentary politics, so they could only hope for their King to permit a greater role for the country’s political parties and to give more attention to economic initiatives that might benefit those Moroccans who lacked personal access to the royal family, to those around them, and/or to the King’s advisors. (Those close to the King are known as the “Makhzen.”) Therefore, when King Hassan II died in July 1999, after ruling Morocco for 38 years, many Moroccans looked to his son Mohammed VI, who inherited the throne, to introduce the changes to Morocco’s political economy that would lead to improved economic and political conditions in Morocco.

Mohammed VI became Morocco’s Head of State about one month before his 36th birthday. He had received both modern academic and practical workforce experience that few other monarchs had enjoyed.¹ Additionally, like other monarchs of the modern age, Mohammed VI was aware of the fate of the Shah of Iran who, 20 years earlier, having neglected the welfare of his subjects was driven from his throne. On becoming Morocco’s new King, Mohammed VI signaled that he intended to bring real political and economic change to Morocco, but he simultaneously adopted practices that let it be known that he also intended to play a major role in the next phase of Morocco’s development and its governance structures.

The new monarch continued some of his father’s recent efforts at neoliberal reform, but he immediately began planning for an accelerated phase in Morocco’s political democratization and economic growth. However, the King was facing enormous challenges, especially in bringing about economic development.

This study therefore asks, after 20 years of rule (1999–2019), how have His Majesty Mohammed VI’s economic plans (enacted and then modified over time) affected the fortunes of Moroccan citizens and how successful are the economic sectors that the King targeted for development? This is the empirical question that we ask and answer in this work. Additionally, we contextualize our findings on the Moroccan case in the important theoretical debates of economic development. For these debates, Morocco provides an insightful case study and allows us to make a contribution to the development literatures.

Empirically, we argue that Mohammed VI has achieved some outstanding successes in modernizing certain sectors of Morocco’s economy and in professionalizing some areas in which Moroccans work. For example, both Morocco’s finance and telecommunications sectors have developed in ways that improved the lives of many Moroccans, and these upgraded areas provide an important foundation on which Morocco can receive and manage additional, often foreign, investment that is needed to spur development across the economy. But it is difficult to modernize a country in only 20 years – to move a country from a largely pre-capitalist formation to an industrial and financial hub. Unsurprisingly, then, we argue that for the majority of Moroccans, little has changed during this King’s reign even though much has been accomplished. Our findings track with the UN Human Development Index that in 1999 ranked Morocco 126 on its development index, and then in 2018, 19 years into King Mohammed VI’s reign, Morocco was ranked 123 of 189 countries on the UN Human Development Index.²

Moreover, although important pockets of development have occurred in various parts of the country, in those areas where Morocco’s development efforts over the past 20 years have had little impact, citizens are bitter. Many recognize that they are being left behind and that they have little prospect of seeing in their lifetimes the changes to which they aspire.

Twenty years after Mohammed VI ascended to the throne, and despite many positive changes across parts of the country, many Moroccan citizens in 2019 echo many of the concerns that were voiced in 1999 when King Mohammed VI first assumed his duties. To be sure, Morocco’s middle class has expanded in the past two decades. For example, in 2009, Morocco’s High Commissioner for Planning claimed that 53% of Moroccans had achieved middle-class status, whereas another 13% were upper class. The Moroccan middle class was said to earn about $633 monthly which put it over the median of earners in Morocco.³ However, it is obvious that for a population living in a global economy, this salary does not provide for the kind of middle-class comfort experienced in other parts of the world. Further, we find that where previously many Moroccans had little contact with how others outside their country lived, now with Morocco’s highly successful telecommunications and internet sectors, many Moroccans are well aware of their lives within the context of the global economy. Thus, as we shall demonstrate across Morocco’s economic landscape, there has been good success in just 20 years, but that good success does not offer much comfort to most Moroccan citizens, even to many of those who are said to have succeeded.

We also find that the King’s policies have, to some degree, sought to create a demand structure within Morocco. This provides a necessary balance against the risk of Morocco’s producing almost solely for export and being at the mercy of external events.⁴ And another hedge against the vagaries of the international market can be seen in recent years when King Mohammed VI aggressively pursued a policy of diversifying the products Morocco exported as well as Morocco’s export destinations. Yet, there remains an imbalance whereby Morocco relies on external economic transactions, and this threatens Morocco’s economic security and jeopardizes the national well-being. We note that after 20 years, during times of international economic crisis, Morocco possesses few levers by which to buffer its economy and its people. Creating more domestic linkages for production, especially between urban and rural parts of the country, to boost sales internally should be an important component of Morocco’s economic development strategy. Such a strategy will require some additional deviation from the laissez-faire model; few domestic or foreign investors are likely to invest in Morocco’s remote rural areas. Yet, we argue, it is in the rural areas, or at least in their hubs, where a pragmatic leader must help to underwrite local investment for productive enterprises.

Regarding the development theories of the past 20 years, we argue that King Mohammed VI has fashioned a development policy for Morocco that, in part, resembled the neoliberal model advocated by Western powers and institutions, but importantly he also adopted some of the European practices of state intervention. While he has not particularly replicated any specific programs enacted in the “varieties of capitalism” models found across Europe, he clearly has embraced the right of the state to intervene in his country’s economy. Further, we note that King Mohammed VI departed from neoliberal principles when the King believed that Moroccan domestic concerns required it. That King Mohammed VI is able to deviate from pressures to adopt pristine neoliberal policies stems, in part, from his role in international politics and his good standing among European and US leaders. There is no push in the West to see this King overthrown. Moreover, if he delays in implementing some of the BWI’s policies, observers note that he already has implemented many of the BWI’s prescribed policies. And this King maintains high-level contacts not only with key Western allies in the United States and Europe but also with regional allies, such as the Saudis. He also engages with Russia and China.

While Mohammed VI opened his economy and his country in a major way to neoliberal investment and production practices, the Moroccan state continues to play an active role as a competitor and/or as a partner in the (public) spheres of finance and development. This does not simply involve Keynesian fiscal regulation. Rather, the state has its own companies, makes its own investments, and oversees a private banking sector that is both regulated and encouraged to provide development financing for state-prioritized economic initiatives. Additionally, where privatization has occurred, often state firms have been sold to Royals (including the King it is alleged) or to those private citizens who are favored by the Royal family and their political allies. Finally, during his initial years of reign, the King adopted an almost exclusive sectoral approach for domestic development as well as a regional approach focused on the European Union (EU) for Morocco’s economic outreach. In recent years, however, the King has come to see that regional development at home must be given attention as well. And the countries of origin for Morocco’s exports and imports have begun to diversify.

In the political sphere, King Mohammed VI has been observed as playing the role of the “ultimate arbitrator and balancer between competing social and political forces” or as an “Executive Monarchy.”⁵ In the economic realm, Morocco’s development goals and strategies now are largely animated by the King’s ongoing activities, including traveling, treaty making, and transactional deal brokering. Morocco’s King is not merely a ruler but also an active development entrepreneur on behalf of his country. There are few countries in which the head of state is as energetic and innovative as is Mohammed VI.

In Morocco, there are spaces for private sector entrepreneurs and also state-owned enterprises. There are also public–private partnerships (PPPs). Additionally, state policies target certain sectors to receive benefits and state support. Further, Mohammed VI adopted technologies that “leapfrogged” widespread existing technologies to gain greater returns for Moroccans. His famous development of Morocco’s solar power is but one example of this (though with this initiative has come some unintended consequences).

We note, therefore, that Mohammed VI did not adopt a single grand strategy for economic development. As we will discuss in this chapter, import substitution industrialization, Soviet-style state planning, and the Washington Consensus including the structural adjustment policies of the International Monetary Fund and the World Bank were largely discredited (except to their much-diminished numbers of true believers) when Mohammed VI assumed the throne. Rather the King focused on sectoral development and trade with Europe, and then broadened his trade outreach globally.

It is clear that the King believes that he has made economic choices for Morocco that ultimately will be successful. In his 2017 annual Throne Speech, despite widespread protests and unemployment, and despite the lack of evidence of substantial economic development for many Moroccans, the King argued that the country’s economic policies were correct. He stated, “All in all, our development policy choices remain sound. The problem lies with mentalities that have not evolved as well as with the inability to implement projects and to innovate.”⁶ The King had become suspicious of those working in the public sector.

Additionally, the King also had become alert to the needs of those who were being left behind. In his Throne Speech in 2015, the King noted that “there is a category of the population still living in dire conditions and feeling marginalized, notwithstanding what has already been done.”⁷ It was also in 2015 that the King launched a new five-year development plan with an eye to historically disenfranchised regions of the country. Then, following the violent protests that broke out between 2016 and 2018, the King stepped back and suggested that it was Morocco’s “political class” (in the words of commentator, Mohamed Daadaoui), not his policies that were obstructing development; in a stunning political action, the King fired five cabinet ministers for “serious dysfunctions” in implementing the country’s development plans.⁸

But while the King is alert to those who have been left behind, and while he robustly pursues Morocco’s economic development, he will not earn credit for his efforts if more is not done to improve the economic fortunes of the majority of Moroccans. The King cannot expect that Morocco can sustain two economies: one for the well-connected and the other for the have-nots. A nation’s economic activities have ripple effects throughout any state and across its population. The wealth of those who have much must be captured in taxes and not be allowed to engage in capital flight. Morocco needs liquidity. The wealth of those who have much must be directed to uplift those who do not have. Only then will an analysis of the King’s efforts yield a better report in the future.

The King’s approach to Moroccan economic development can be characterized as a sort of imprecise adaptation of European capitalist economies in the 2000s, a capitalist economy that differed from the US model. As Bob Ha...

Table of contents

• Cover
• Half Title
• Series Page
• Title Page
• Copyright Page
• Dedication Page
• Table of Contents
• Acknowledgments
• 1 Mohammed VI ascends to the throne in 1999 facing critical choices for Moroccan development
• 2 Modernizing Morocco’s strategies to manage capital and professionalizing the country’s financial sector officials
• 3 Liberalizing the telecommunications sector
• 4 Transportation, industrial production, and trade: taking advantage of its niche geographical position in a globalized world
• 5 Becoming a global leader in renewable energy
• 6 One Morocco for the haves, one for the have-nots
• 7 Developing Morocco’s tourism sector and gaining greater market share
• 8 King Mohammed VI’s economic development strategies
• Index