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Morocco Economy
 
 
 

General

Agriculture employs about 40% of Morocco's workforce, which suffers from a high (near 20%) unemployment rate. In the rainy sections of the northeast, barley, wheat, and other cereals can be raised without irrigation. On the Atlantic coast, where there are extensive plains, olives, citrus fruits and wine grapes are grown, largely with water supplied by artesian wells. Morocco also produces a significant amount of illicit hashish, much of which is shipped to Western Europe. Livestock are raised and forests yield cork, cabinet wood and building materials. Part of the maritime population fishes for its livelihood. Agadir, Essaouira, El Jadida, and Larache are among the important fishing harbours.

Casablanca is by far the largest port and an important industrial centre. Significant industries include textile and leather goods manufacturing, food processing, and oil refining. In the northern foothills of the Atlas Mountains there are large mineral deposits; phosphates are the most important, but iron ore, silver, zinc, copper, lead, manganese, barytine, gold and coal (the only sizable coal deposits in North Africa) are also found. Marrakech, Meknès, and Fès are the most important centres in the mineral trade. A few oases in southern Morocco, notably Tafilalt, are all that relieve the desert wastes. Tourism also is important economically, as are cash remittances from Moroccans working in France.

Morocco's coastal areas and the mineral-producing interior are linked by an expanding road and rail network, and port facilities are being further developed. The main exports are clothing, fish, inorganic chemicals, transistors, minerals, fertilisers (including phosphates), petroleum products, fruits and vegetables. The chief imports are crude petroleum, textiles, telecommunications equipment, wheat, gas, electricity and plastics. France, Spain and Italy are the leading trade partners.

Morocco’s economy is gradually becoming more integrated into the international economic system. On January 1, 2006, a comprehensive bilateral free-trade agreement between Morocco and the United States went into effect. Morocco is only the second Arab nation to have such an agreement with the United States. In December 1999, Morocco entered into a free-trade agreement for industrial goods with the European Union (EU) and expects to participate in a free-trade zone with the EU by 2012. In February 1989, the leaders of Morocco, Algeria, Libya, Mauritania and Tunisia established the Union of the Arab Maghreb (UMA) to promote a North African free-trade area. However, Algeria’s support for Western Saharan self-determination, Morocco’s condemnation of Iraq’s invasion of Kuwait in August 1990, and mutual visa restrictions by Algeria and Morocco motivated by security concerns rendered the UMA ineffective. Morocco has been a member of the World Trade Organisation since January 1995.

Overview

Economy - overview
Moroccan economic policies brought macro economic stability to the country in the early 1990s but have not spurred growth sufficient to reduce unemployment that nears 20% in urban areas. Poverty has increased due to the volatile nature of GDP, Morocco's continued dependence on foreign energy, and its inability to promote the growth of small and medium size enterprises. However, GDP growth rebounded to 6.7% in 2006 due to high rainfall, which resulted in a strong second harvest. Despite structural adjustment programs supported by the IMF, the World Bank, and the Paris Club, the dirham is only fully convertible for current account transactions and Morocco's financial sector is rudimentary. Moroccan authorities understand that reducing poverty and providing jobs is key to domestic security and development. In 2004, Moroccan authorities instituted measures to boost foreign direct investment and trade by signing a free trade agreement with the US, which entered into force in January 2006, and sold government shares in the state telecommunications company and in the largest state-owned bank. Long-term challenges include preparing the economy for freer trade with the US and European Union, improving education and job prospects for Morocco's youth, and raising living standards, which the government hopes to achieve by increasing tourist arrivals and boosting competitiveness in textiles.


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