Morocco’s Economy Is Sinking, but Its King Prefers the Bright Lights of Paris

The country has been spending millions of dollars on military hardware but still hasn’t recovered from the effects of a serious drought and the COVID pandemic. Youth unemployment is soaring, along with rental prices and public outrage

A photo of Dr. Zvi Bar'el.
Zvi Bar'el
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Morrocan King Mohaamed V1 with his son Crown Prince Moulay Hassan, left, and his brother Prince Moulay Rashid in the Royal Palace, 2019 (AP)
Morrocan King Mohaamed V1 with his son Crown Prince Moulay Hassan, left, and his brother Prince Moulay Rashid in the Royal Palace, 2019 (AP)
A photo of Dr. Zvi Bar'el.
Zvi Bar'el

The king of Morocco, Mohammed VI, is a sick man. He underwent heart surgery two years ago and this year came down with the coronavirus. In recent months, he has been spending more time in Paris than in his own country – issuing instructions to his assistants and his prime minister either by phone or on Zoom.

His troubles aren’t limited to his health problems though. Two months ago, he was seen on camera in the company of friends whilst appearing to be drunk, and holding a drink in his hand. His bodyguards tried to stop the filming, but the video clip surfaced on social media.

That had been preceded by another scandal, after three German wrestlers of Moroccan origin, the Zuaiter brothers, were hosted in the royal palace and photographed in the king’s presence. That wouldn’t have prompted controversy if the brothers hadn’t exploited the photos for their own benefit – to buy land at a discount and obtain business licenses, all based on their relationship with the king.

Mohammed VI didn’t attend the funeral of Queen Elizabeth, opting to send his son, Crown Prince Moulay Hassan, in the process hinting at who is expected to succeed him to the throne. The king’s advisors said that he didn’t go to London for the funeral due to his health condition. Unofficially it was also explained that he was attending to his ill mother in Paris.

Morocco’s own condition is no better than the king’s. It has invested heavily in purchasing arms, missiles and other military hardware, including the Iron Dome antimissile system and air-to-ground missiles from Israel, but the country hasn’t recovered from the twin shocks of the coronavirus and a serious drought. At the beginning of the year, the World Bank forecast the annual growth of the country’s economy at 3.2 percent, but that was recently downgraded to just 1.5 percent.

The kingdom imports 90 percent of the oil and natural gas that it consumes, the cost of which has risen sharply since the invasion of Ukraine, punching a major hole in Morocco’s national budget. Tourism to the country may be gradually recovering, but revenues from the sector – $2.7 billion in the first half of this year – fell substantially lower than expectations and below pre-pandemic levels. Tens of thousands of workers in the sector had lost their jobs and many of them still haven’t returned to work. The country’s hotel occupancy rate is estimated at under 50 percent.

Against this backdrop, one can understand the massive public anger when the country’s tourism minister, Fatim-Zahra Ammor, chose to spend her vacation in Zanzibar rather than in Morocco. “The minister turned her back on her country when she went to spend her vacation in Zanzibar, where she pays her expenses in hard currency,” Ismail al-Halwati wrote in an angry article on the Akhbarona website. And he wasn’t the only one to object.

Tweeted footage of the Moroccan King Mohammed VI appearing to be drunk with friends

Official figures put the country’s unemployment rate at more than 12 percent, but among young people, the figure is closer to 30 percent. Serious drought has driven people from rural areas to the cities, cutting employment in the agricultural sector, which has accounted for more than 14 percent of Morocco’s GDP, employing 40 percent of the population. According to recent surveys, outlying rural areas have lost more than 150,000 jobs to the big cities.

That also has major implications for the real estate sector, for rental prices and the cost of housing more generally. In addition, the major cities aren’t equipped to accommodate hundreds of thousands of rural migrants and provide them with health care, education and sanitation.

The real estate sector, which has served as a gauge of the country’s economic health and growth, has been showing signs of collapse. There is a housing supply, but most of it is upscale and not appropriate for middle – and lower-income people — who represent most of those seeking housing — and sales of which have dropped 17 percent in the first half of the year. The drop is also the result of the cancellation of a 50 percent exemption on registration fees.

The increased cost of construction materials, particularly iron, aluminum and cement, as a result of the war in Ukraine, has also made things worse for large numbers of people who cannot afford to buy an apartment. Now they are forced to rent at prices that are much higher than a year or two.

The situation has also translated into frustration and anger over the dramatic drop in the quality of life. In April, the government planning department published data showing that more than 76 percent of those polled reported a substantial drop in their quality of life. Eighty-seven percent expected the jobless rate to worsen, and 47 percent have needed loans to finish out the month.

A year ago, the king appointed Aziz Akhannouch, who is apparently the wealthiest person in Morocco, as prime minister. His wealth is estimated at $1.5 billion, and he controls roughly 50 companies. His appointment sparked hope that his business experience and royal backing would propel the economy forward and extract the country from its crisis. Among his decisions was boosting the public sector minimum wage by 10 percent over two years to roughly $320 per month. Since then, for the first time since 2008, inflation in August surged to 8 percent over August 2021 – in the process substantially eroding the pay raise.

The hopes that the citizenry pinned on the new prime minister appear at this point to be on paper alone, and there have already been articles calling upon him to resign. In the face of the criticism, the king might accede to the demands and replace Akhannouch, who won’t offer a miracle cure in any event. But his appointment created the impression that at least the king was receptive to the public – even from Paris.

Warmer ties with Israel

In the meantime, ties between Morocco and Israel have been strengthening, particularly in the military field. Morocco is interested in buying advanced Israeli military technology – in addition to the weaponry that it has already purchased. A trade agreement was signed between the countries in February and there have been visits by trade missions between the two.

In November, Defense Minister Benny Gantz’s first official visit to Morocco included the signing of the countries’ first cooperation agreement. And in July, Israel Defense Forces Chief of Staff Aviv Kochavi visited the North African country. That was followed by a visit to Israel of Morocco’s military chief, El-Farouk Belkhir, who was joined by a military procurement delegation.

The reciprocal visits have laid the official foundation for military cooperation that in practice existed well before the signing of the Abraham Accords, in which under American auspices, Morocco followed the United Arab Emirates and Bahrain in forging diplomatic relations with Israel. Morocco purchased Heron drones from Israel, which it uses to fight the Polisario Front in Western Sahara.

Israel and Morocco are hoping to increase bilateral annual trade to $500 million from $90 million last year. Those are relatively modest aspirations compared to the volume of trade that Israel has developed with the UAE, which reached $1.4 billion in the first seven months of this year. Excluding oil and gas, the goal is closer to Israel’s annual trade with Egypt -- $300 million – but there are hopes of doubling it by 2025.

The full extent of the benefits of the normalization of trade between Israel and Morocco still appears distant.

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