Global Competitiveness

Global Competitiveness: is considered a relatively liberal economy governed by the law of supply and demand. Since 1993, the country has followed a policy of privatization of certain economic sectors which used to be in the hands of the government.
Where does Morocco Stand?
Low level of product and market diversity, technological level also limited and a low adaptation dynamic. In a word, the specialisation profile of Morocco prevents it from benefitting from its policy of commercial openness. The Royal Institute of Strategic Studies (IRES) reviews Morocco’s weaknesses, weaknesses which have alarming proportions for the balance of payments situation.
The last study of the IRES on “The global competitiveness of Morocco: Challenges and Prospects”, of which the Moroccan daily newspaper l’Économiste obtained a copy, looks into the factors that help build an active role in regional and international treasury. It also evaluates the country’s performances and looks into the different dimensions of its global competitiveness.
The study lingers on the phenomenon of the supply quality of the country’s exports. It is concentrated on a few products, primarily phosphates and clothing textiles. Add to that the low level of diversification of the export markets, which depend significantly on the economic evolution of France and Spain. From 2000 to 2008, 80% of Morocco’s external demand came from the countries of the European Union.

Neither on the technological side has the country managed to get out while the going is good. So, nearly two thirds of manufacturing exports are low level technology products and are highly natural resource and labor intensive, and only 10% of manufacturing exports are considered high technology, a situation which refers to insufficient expenditure in research and development which is no more than 0.79% of the GDP. This is due, amongst other things “to low corporate commitment to innovation and to research and development”.

Morocco also remains focused on less dynamic sectors of global commerce. Three product groups provide nearly 80% of revenue from exportation of goods, as it happens: agricultural and fishing products, clothing textiles and phosphates and their derivatives, products which, according to the IRES, saw the slowest growth in global trading markets.

Other shortcomings to tackle relate to institutional competitiveness. The observation made by the Institute is that Morocco is classed, according to “the 2009 institutional profiles” in the category of countries where social regulations are determined by traditional societal norms (such as family for example) rather that by the State and modern institutions. In addition, social organization focuses on collective safety instead of individual liberties.

The IRES, which charts the issues for Morocco in terms of global competitiveness, also makes some suggestions. So the institute suggests permanently adapting the specialization profile climb higher up the chain of goods values, to promote exports to dynamic markets, the traditional ones but also Brazil, Russia, India and China (BRIC). The country could also focus on regional integration thus maximizing the effects of advanced status. In a global context in which change accelerates under the effect of economic and financial crisis, a new competitive order and new economic balance will emerge. For instance, see the acceleration of the rise of Brazil, Russia, India and China and the relative decline of the influence of Europe. We also see the emergence of new arrangements of spheres of influence: energetic alliances and the intensification of international competition with a greater role for innovation and human capital in construction of competitive advantages.

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