ICEX: España y Marruecos deben seguir aprovechando la complementariedad de sus economías en esta nueva etapa
New opportunities are opening up for Spain and Morocco to continue integrating and complementing their economies in the new phase we are beginning. This is the optimistic message left by the Economic and Commercial Offices of Spain in Morocco with the webinar held this week under the heading 'Morocco-COVID 19: Current situation and prospects for Spanish companies' and co-organized by the Ministry of Industry, Trade and Tourism of the Government of Spain, the Chamber of Commerce of Spain and the CEOE, in addition to the ICEX Spain Export and Investment.
The speech was opened by the Chief Minister of Ofecomes in Rabat, Javier Fernández Méndez de Andés, who outlined a panorama of the Moroccan economy and society in the current situation. Firstly, the Minister admitted how "difficult" it is to make forecasts at this time both from the point of view of the local evolution of the coronavirus epidemic and how the crisis will affect economic growth. Fernandez recalled that the forecasts range from those of the IMF, which speak of a contraction of 3.7% of GDP and a recovery already from 2021, and those of some local analysts who say that the recession can still be avoided, to those of the World Bank, which estimates that the fall in national product will be 1.7%.
"Probably what everyone agrees on is that the problem is going to be in the fiscal situation with the fall in public revenue and the difficulty of financing a growing deficit, which is now expected to rise by at least 5%," summarised the chief advisor of the Economic and Commercial Office in Rabat. "The impossibility of appealing to the international markets will make this a critical issue," he predicted. Even with the reduction of the trade deficit, Fernandez continued, the basic elements financing it are registering very negative data: remittances from Moroccans living abroad are falling, tourism is suffering a hard blow and foreign direct investment will also fall.
The Minister recalled that the Moroccan authorities are very concerned about the social impact of the crisis, given the little protection and the precariousness of many people's jobs. Finally, Fernandez praised the government's unity on the fight against the pandemic, the creation of a special crisis cabinet, the launch of a solidarity fund to finance the growing social spending and the fact that Rabat has resorted to the precautionary liquidity line it had signed with the IMF to finance social spending and maintain the stability of the dirham. In addition, "the Treasury has prepared to finance growing expenditures and the borrowing limit has recently been removed to resort to new loans," the counselor explained.
"It is very relevant to stress that the Moroccan economy has two specific features, which it also shares with other countries in the region: its very close relationship with the European Union and, within it, with the countries of the Mediterranean arc - between Spain, France and Italy we add up to 50% of Moroccan exports; remittances and tourists come mainly from these countries - and the high rates of public investment, which make the deterioration of the budgetary situation to be key," explained the Chief Advisor of Ofecomes in Rabat, Javier Fernández Méndez de Andés, during the webinar.
As a result, the head of the Ofecomes in the Moroccan capital stressed, "Morocco will not be able to get into much debt. The pace of investment will probably suffer and this will cause public procurement to fall and many of the large infrastructure projects may slow down". "This opens up opportunities for external financiers who want to invest in the country, and everyone expects a growing recourse to public-private partnerships; and, in that sense, Spanish companies have great experience and may be interested in participating as long as the government offers the regulatory framework and sufficient conditions of trust," Fernandez optimistically pointed out.
AIn addition, the head of the Spanish economic representation in Rabat recalled that the international crisis resulting from the pandemic has highlighted the dangers for companies of having their production facilities far away, often in areas such as Asia, and that this can encourage a shortening of supply chains. "Morocco plays this role with respect to Europe and its geographical location will help it in this paradigm shift," he said. Likewise, Fernandez pointed to the digitalisation process of the economy, which raises hopes for the country's workforce: "There will be no going back and there are many opportunities in this sector". Finally, the chief advisor of Ofecomes in Rabat evoked that "the great challenge Morocco has is to increase investment in education and human capital to carry out activities of growing added value."
And from the macroeconomic to the particular reality of companies. The chief advisor of Ofecomes in Casablanca, Álvaro López Barceló, focused his speech on the medium-term prospects for Spanish companies in Morocco. And he divided them into three areas: the development of the country's physical capital, the continuation of the joint integration of companies in global supply chains, "with a model that is already characteristic of our bilateral relationship of complementarity", and in the accompanying of the process of tertiarisation of the Moroccan economy by Spanish companies.
Addressing the first area, the chief advisor of Ofecomes in Casablanca praised the "efforts and remarkable progress" made by Moroccan authorities in developing physical capital, mainly in transport infrastructure and energy sector. "It will continue to be a commitment of the country. It allows capitalising on an asset of the Moroccan economy such as its privileged location in order to take advantage of the tourist interest, integration in the supply chains via exports and the positioning of the country as an African business 'hub'". "In the whole area, Spanish companies, he said, are well positioned because they are international references and have experience and presence in Morocco, in addition to institutional support and financial instruments," said the head of the Economic and Commercial Office of the so-called Moroccan economic capital.
In addition, López warned of the challenges in this area. The foreseeable growth of indebtedness in Morocco will limit, in his opinion, the state's capacity to finance public investment, which will favour the development of the public-private partnership model. He therefore encouraged Spanish companies to prepare for this. In addition, the head of the Economic and Commercial Office of Casablanca referred to "the increasing demand for local manufacture and supply by Spanish companies in order to win tenders", which, in his opinion, is not only a trend already observed, but may be accentuated in the future.
Likewise, López called for vigilance in the use of national preference clauses and to take into account the support of international financial institutions for Morocco in recent times, which the economic and commercial advisor believes will continue to be a reality in the neighbouring country. A fact which, in his opinion, companies should capitalise on in their favour.
Secondly, the Minister referred to the current paralysis due to the pandemic suffered by the export-oriented industries, mainly the textile and automotive sectors. "Here there is going to be a potential for further integration," he warned. From 2012, he recalled, is forging a new paradigm characterised by the complementarity of our economies, is the combined launch of the port of Tangier Med, the dismantling of tariffs for industrial products, the arrival of Renault and the birth of the free zones, he listed. "The combination of these factors has led to a shift from a dynamic of competition in low value-added sectors to another of complementarity," said Lopez. "The distance is going to be even more relevant in the mid-term, and Spain and Morocco are going to be very well positioned to take advantage of each other's competitive advantages and participate jointly in international markets," he said. Other challenges could be the eventual appearance of a carbon adjustment at the border or the community pressure to change the tax regime in free zones, said the head of the Ofecomes in Casablanca.
The growing process of Moroccan tertiarisation is linked, said López, to the increasing digitalisation of businesses and accentuates the complementarity of the two economies, which, in his opinion, is a source of opportunities for Spanish firms. He gave the outstanding example of tourism. "Once Morocco's undeniable tourism potential is recovered, Spain can continue to contribute its know-how," he said. Likewise, the chief economic and commercial advisor of Ofecomes in Casablanca spoke of the existing opportunities for operators in the field of transport and logistics as long as bilateral trade flows continue to increase. Finally, López mentioned the opportunities in agricultural technology and food for our companies, as well as underlined the importance of positioning our country's companies in Morocco's role as a gateway to Africa in education, transport and trade.
On the other hand, the Spanish Commercial Counselor in Rabat, María Josep Ball, made clear in her speech at the webinar that the transit of goods by road between Spain and Morocco has not suffered any problems in recent weeks. And she described the changes under way in some provisions, such as those relating to certificates of conformity in the transport of goods. The Minister specified that the transitional period initially established by the Moroccan authorities has just been extended: until 19 June 2020 it will be possible to continue operating as before, only with an invoice, but from the following day the certificates of conformity will be obligatory, which "is important for the 80% of industrial products that are subject to obligatory certification in origin, in EU territory". Another important decision of the Ministry of Industry and Moroccan customs, recalled Ball, is that a circular of April 3 lightened the provisions to send the EUR 1 and prove that the goods are of European origin.
Finally, the Ofecomes have drawn up a document - made available to the public for those interested - with the measures adopted by the Moroccan authorities to combat the economic crises, which have special repercussions for Spanish companies already established in Morocco. Among the various initiatives, the following stand out: income support for workers, compensation for companies that have had to reduce their activity, the implementation of a guarantee system so that the banking system continues to open up credit lines to companies, delays in tax declarations, suspension of social security contributions for the hardest hit companies, moratoriums on bank credit payments or the promotion of digitalisation to speed up public administration procedures.
On the other hand, the International and Latin American Foundation for Administration and Public Policy (FIIAPP) recently held an activity as part of its twinning project on the transport of dangerous goods in Morocco, which is financed by the EU. The objective, according to the state agency belonging to the Spanish Cooperation, is "the improvement of transport safety and the strengthening of structures and activities related to the transport of dangerous goods by road in the Maghreb country, as well as support in the implementation of the regulation of the European Agreement concerning the International Carriage of Dangerous Goods by Land (ADR)".
The last component of the project, according to FIIAPP sources, has allowed progress in the "diagnosis of the structures responsible for monitoring and implementing the provisions of the ADR and its application in Moroccan legislation for local transport". In addition, the experts worked on the ministerial structures needed to implement and establish the regulations for the transport of dangerous goods in our southern neighbour. The regulatory framework for the transport of dangerous goods is broad and cross-cutting, which requires the participation and point of view of different ministries, recalled from the FIIAPP. The development of these activities has meant a great advance for the project, since it has offered a clear and precise vision of the situation of the transport of dangerous goods in Morocco with the aim of creating the necessary administrative structures for its effective implementation, they explain from the agency assigned to the Spanish Cooperation.
