Morocco’s balancing act

Friday 24/04/2015
Weathering the turbulence, so far

Close observers of Morocco offer a number of reasons why the kingdom has managed to keep its head above water in the face of economic and political turbulence in much of the Middle East and North Africa.
Some give credit to the reason­able social and economic policies of the governing Parti de la justice et du développement (PJD). Others point to the success of the coun­try’s security services in thwarting attacks by radical Islamists by infil­trating their networks and keeping a close eye on Moroccans returning from Syria and Iraq.
Yet others argue that incentives to encourage foreign direct invest­ment have bolstered the manu­facturing sector at a time when European companies are struggling with economic recession and low demand. In 2014, the automotive industry officially became Moroc­co’s leading export sector.
An underlying source of Moroc­can stability is King Mohammed VI’s widely accepted legitimacy, which has allowed him to inter­vene when the constitu­tionally weak parliament and prime minister fail to act or act unwisely. At the same time, when the government has tried to do the right things — such as Prime Minister Abdeli­lah Benkirane’s efforts to enact necessary, if painful, pension reforms — the king has stood by the PJD in the face of opposition from the two traditional parties, Istiqlal and USFP (Socialist Union of Popular Forces).
But perhaps the king’s great­est contribution to his country’s stability derives from his outreach to his fellow monarchs in the Gulf. In October 2012, with his kingdom facing street protests and budget­ary challenges, the king took a tour of several Gulf Cooperation Coun­cil (GCC) states and returned with pledges of tangible assistance.
But challenges lie ahead. The European Union, Morocco’s largest trading partner, is facing economic difficulties; although the European Central Bank’s monetary eas­ing policy may lead to increased consumer demand before the end of the year. The PJD’s economic austerity measures are unpopular and may spark even more labour unrest.
Aware of this risk, the king is said to not favour reducing energy subsidies or freezing public service salaries. Youth unemployment re­mains high. Despite all the efforts by the palace and the government, corruption is also rife. A bloated informal economy (35% of gross national product (GNP)) encour­ages illicit practices that can hurt domestic industries. As in other countries of the region, trafficking is the best ally of jihadist forma­tions.
As an immediate neighbour to the Sahel region, the kingdom faces a turbulent environment and is under constant threat of jihadist attacks. Its security establishment has done an excellent job prevent­ing and thwarting such threats. Just one significant jihadist attack could be a huge blow to the impor­tant tourism industry and financial flows from the Gulf, which have been vital to Morocco’s stability, may diminish if oil prices remain flat or, even worse, plunge lower.
King Mohammed VI has done an impressive job in maintaining Morocco’s stability and picking up the slack where the country’s historic parties, such as the USFP or Istiqlal, have stopped play­ing a leading political role. But to sustain progress, the king must continue to make the right moves. A little luck — and more financial flows from the GCC — wouldn’t hurt, either.