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Morocco Country Report

Essay by   •  March 12, 2016  •  Research Paper  •  3,154 Words (13 Pages)  •  1,149 Views

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I. Demographics of Morocco

Morocco, officially the Kingdom of Morocco, is situated on the northwestern corner of Africa. It is the 39th largest country in the world with a population of 34,377,611, as estimated on December 31st, 2015. In 2015, the natural growth was positive, and we could forecast that Morocco’s population growth will continue at around 1.05% annual rate, reaching about 36.4 million by 2020 (Worldometers, 2015). Morocco is a demographically young country with 27% of its population under the age of 15, 18% between the ages of 15 and 24, 42% between 25 and 54 years old, 7% between the ages of 55 and 64, and just 6% of its population over 65 years. This large share of young population provides great opportunities for Morocco to develop its emerging industries by using advanced technology and skills (World Population Review, 2015).

   While the rise of a new business has been happening in Morocco, the population living below the poverty line remains high at 12%. It means that four million out of Morocco's 33 million people live below the poverty line, and almost three million of them in rural areas. As Figure 1 shows, Morocco has the highest Gini Index, 40.9, among the North African countries. The household income of the poor people accounts for only 2.7% of the country’s wealth, while the rich people have 33.2% of the country’s wealth (Central Intelligence Agency, 2007). The distribution of wealth in Morocco is manifested through the obvious gap between the upper and lower class. The sex ratio of the total population was 0.976 (976 males per 1000 females), which means genders are distributed equally in Morocco (World Bank, 2014). However, the female-to-male ratio of wage for similar work is around 0.52 (Wrold Economic Forum, 2015). It is clear that Morocco’s workplace gender gap exists, so all businesses in Morocco should fight against gender discrimination. If women cannot be financially independent and control their own lives, Morocco will not sustain its economic development of different industries in the long run.  [pic 1]

   According to the World Bank, Morocco’s urban population (% of total) was 60.2%, and rural population was 39.8% as of 2015. Over the past 50 years, more Moroccans have left the countryside for greater opportunities, which are offered by big cities. The rate of urbanization continues to grow at 2.26% per year (World Bank, 2015). The process of urbanization provides sufficient labor force and promotes a better economic development in big cities. However, we can forecast that urbanization will increase the real estate price, which means new companies will have to pay more money to rent offices in big cities, which will increase their cost of doing business in Morocco.

   Classical Arabic is Morocco’s official language, but the country’s distinctive Moroccan Arabic dialect is the most widely spoken language. In addition, about 10 million Moroccans, mostly in rural areas, speak Berber. However, French is the official business language. While English is rapidly growing among educated youth, local companies and wealthy individuals expect foreign businesses to provide product and service documentation in French with standard labeling requirement (Complete Morocco, 2015). Therefore, all businesses, including finance service, should provide prepared French brochures or pamphlets for business purpose.

   In Morocco, the primary net enrollment rate is 98%, and the primary completion rate is 99%. Both of these indicate that Morocco has achieved universal primary education. (Education Policy and Data Center, 2014). By 2015, 68.5% of the Moroccan population was literate, which spiked from 41.6% in 1990. But despite this long-term commitment to education, there remains a startling gap between men and women: 78.6% of adult males, beyond the age of 15, can read and write, while only 58.8% of adult females can do the same thing in their everyday life (Central Intelligence Agency, 2015). In rural areas, there are many traditional and religious obstacles to businesses when they want to provide positions to female employees, and quite a few females do not have relevant knowledge and skills. 

   Morocco is an Islamic country (about 99% of people are Muslims), and Islam was declared the state religion in 1961. Muslims are obligated to pray five times a day, and people will not work on Friday. During the holy month of Ramadan Muslims must fast from sunrise to sunset and are only allowed to work six hours a day. Respecting local people’s religious belief is an important tradition when doing business in Morocco, and people should bear in mind that Islam penetrates every sector of Morocco’s business. The success of business in an Islamic country like Morocco depends on how will a company can combine religious values with its principles.

II. Politics of Morocco

Morocco’s political system has been carefully evolving from a strongly centralized monarchy to a parliamentary system. Although the King, Mohamed VI, retains much of the executive power, the parliamentary elections of 2011 could be seen, despite the relatively low turnout (45%), as a new step towards democracy (European Forum, 2015). In the past, the government failed to carry out a policy of privatization of certain industries. But after the democratic uprising, known as Arab Spring, a decentralization process has been launched, which opened up a number of prime opportunities for new businesses. This new political dynamics will allow UBS and other companies to raise capital and manage the sale of centrally-owned assets for Morocco’s government and central bank.

   Moroccan government has enacted two business-related laws, which aim to boost its domestic economy. The first one is 06-99 Law on free pricing and competition, setting the rules for the protection of competition and prohibiting anti-competitive economic practices (Global Legal Insights, 2015). Without this law, international companies who want to launch business in Morocco would not be able to operate in an open market, and the transparency and fairness in the business will not be guaranteed. The second one is 09-08 Act, which governs data protection, is to facilitate the growth of the digital economy while protecting privacy. Financial service companies, such as UBS, have a huge amount of confidential data and analyses, and those multinational companies need to have a fair platform to compete with domestic competitors. Therefore, both of these laws ensure the development of financial services in Morocco (Baker & McKenzie, 2013).

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