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Is Morocco’s economy booming?

By Abdelfettah Fakihani - RABAT

Morocco is officially enjoying an economic boom this year, with the state predicting that growth will leap to 7.3 percent from just 1.8 percent in 2005.

But while some economists are hailing the upturn, others are sceptical about the rosy outlook presented by a government with an eye on next year's general election.

They warn that continued growth will depend on the fortunes of the north African country's key agricultural sector. And in these days of global warming, that farming sector depends on the vagaries of increasingly unpredictable weather.

The kingdom of Morocco has in recent months attracted significant foreign investment. The tourist industry has sparked particular interest, with United Arab Emirates groups EMAAR and Dubai Holdings pouring nine billion dollars into the sector.

Major infrastructure projects are flourishing - in roads, in low-cost housing to replace slum dwellings and in bringing power to the countryside. Energy Minister Mohamed Boutaleb says the electricity grid will be extended to cover 89 percent of the largely rural country by the end of 2006.

"Morocco is well on the road to sustainable growth," said Abdelali Doumou, professor of economics at Casablanca University. Average economic growth was 4.7 percent between 2001 and 2006, compared to 3.0 to 3.5 percent in the 1990s, he noted.

The huge infrastructure projects and the halving of Morocco's foreign debt to 11 billion euros (14.4 billion dollars) over the past seven years are contributing to national wealth, he told AFP. So are improvements in governance and and public companies, which are set to invest 53 billion dirhams (4.82 billion euros) in 2007.

"There is also an undeniable improvement in Moroccans' standard of living," Doumou added, pointing to a surge in car sales and mortgages.

If there is a major weakness in the Moroccan economy today, it is its regional disparities of wealth, which need evening out, he said.

For example, in the southern region of Marrakesh, increasingly prized by European tourists and house-buyers, 7.0 percent of the population lives below the poverty line. In the western regions of Essaouira and Chichaoua poverty scales heights of 30 percent.

Other economists are less enthusiastic, though.

The state planning commission (HCP) recently announced that the number of jobless people in Morocco - a country of 30 million - had just dropped below the one-million mark for the first time in 13 years. Officially, unemployment now stands at 7.7 percent of the active population, as opposed to 11.1 percent a year ago.

Around the same time, Finance Minister Fathalah Oualalou declared the number of people living in extreme poverty - surviving on less that one dollar a day - had fallen to 14 percent in 2005, or 4.2 million people, from 16.5 percent in 1997.

"The figures have been massaged," protested Najib Akesbi, economics professor at the Hassan II Agronomy Institute in Rabat.

"How can you say the poverty rate and unemployment rate are falling when Morocco's Human Development Index in the United Nations Development Programme report for 2005 is stagnant? The country was classed 124th (in 2005) and 125th the previous year."

"The government is churning out propaganda in the run-up to the autumn 2007 parliamentary election," he sniffed.

Akesbi acknowledged that "privatisation of the air transport sector and the 'Azur' plan for the tourist industry are positive points".

But, he cautioned, "growth is volatile because it depends on climatic conditions and these are changing."

Farming employs 40 percent of Morocco's active population and generates between 15 and 20 percent of gross domestic product, depending on the year. Nearly 45 percent of the population lives in rural areas.

"There is growth but it's fragile," agreed Mustapha Meftah, economist and deputy director of the national construction federation.

"The weight of the farming sector in the economy is still significant. We haven't yet got into a virtuous growth circle," he said.

"It's paradoxical to declare that Morocco is close to full employment when only a handful of sectors are showing any dynamism," Meftah continued.

"The informal sector and hidden unemployment are still huge - particularly in the countryside."



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