Morocco Economic Monitor, June 2021: Building Momentum for Reform

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Morocco stands out as a country that has seized the COVID-19 (coronavirus) crisis as an opportunity to launch an ambitious program of transformative reforms. After its initial efforts to mitigate the immediate effects of the pandemic on households and firms, the authorities have launched various policies to correct longstanding inequities and overcome some of the structural bottlenecks that have constrained the performance of the Moroccan economy in the recent past. This reform program has the following pillars: (i) the creation of a Strategic Investment Fund (the Mohammed VI Fund) to support the private sector; (ii) the overhaul of the social protection framework to boost human capital; (iii) the restructuring of Morocco’s large network of State Owned Enterprises. In addition, the government has recently unveiled the terms of a new development model that places significant emphasis on human development and gender equity, and on the need to reinvigorate recent efforts to incentivize private entrepreneurship and boost competitiveness. If successfully implemented, these reforms could lead to a stronger and more equitablegrowth path. There are various channels through which the reform impetus described above could increase the growth potential of the Moroccan economy: (i) by increasing market contestability, levelling the playing field, and streamlining the role of the SOE sector in the economy, more firms would be enabled to enter markets, grow and create jobs; (ii) a more dynamic private sector could make a better use of the large stock of physical capital accumulated over past decades, thus increasing the growth dividend of existing infrastructure, which so far has disappointed; (iii) accelerating the pace of human capital formation could enable more Moroccan citizens to realize their productivity potential, which would contribute to raise living standards and accelerate the growth of aggregate output.
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World Bank. 2021. Morocco Economic Monitor, June 2021: Building Momentum for Reform. © World Bank, Washington, DC. License: CC BY 3.0 IGO.
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