Perhaps (1) and (2) are almost the same question, but certain across MENA the Good Governance drive has flagged of late, in my view. Real good governance, not feel good blather. On the second point (and third), which The Arabist worried about with real reason, while in the Moroccan (and Egyptian) cases, much good was done, in my opinion, in opening up the government to ministerial staff with private sector experience, and Ministers with real industrial experience (rather than merely 'state industrial), there are limits to that. Those same industrialists have displayed a tendency (utterly unsurprising) to not do any reform unduly upsetting to the big private families, although competition issues clearly are there and becoming more and more serious. Yet the various competition authorities are toothless. The Palace (or Presidency, no real difference in the end in some ways) getting too close to the Magnates can be a recipe for not economic liberalism, but Statist Oligarchism which in the end will kill of the fruits of liberalisation.

On that I haven't good answers, other than trying to have counterweights. There are no really quick ways to counter-balance. Government regulation in such scenarios can be worse than useless, insofar as it tends to be turned on the actual competitors, rather than the Monopolists or Oligarchs. A fairly free press (and one rather better educated in things economic would be nice) is one antidote. Pity there are no real, genuine economic liberal parties in the region.

Touching on Morocco directly, while I can make reasonable excuses for the time being for M6 in most areas (although some I may make simply as a counter-weight or sort of critical advocate), Educational Reform there really is nothing to be said other than it is shameful the manner in which the system has been neglected. Shameful. Of course much of MENA has the same story, overspending on utterly dysfunctional, outdated and positively cretinous educational systems leading to the worst of both worlds - that is a inflated state budget, with massive education spending, but mostly wasted. The only thing that can be said in defence of the Moroccan regime is that it's done not that much worse than most of its peers. But given MENA performs very poorly overall - I think Tunisia is an exception - that's damning with faint praise.

I do not see any very good reasons for this. Teachers unions, corruption, and other factors all play a part, plus the schizophrenia about Arabic - Modern Standard - as a teaching vehicle, although in no private sector are high skills in Arabic in demand, it's always an international language. Worse, teaching of Arabic and teaching in Arabic is fossilized in outdated methods and curriculum (and people of great talent tend to migrate to private schools, which oft teach in English or French as those skills are more in demand in the market ex- Gov jobs).

With respect to pushing out growth out of the core economic corridors, there is only one real solution to this, whether in Morocco or Algeria, or Tunisia, or Egypt. Decentralise the concentration of good infrastructure. Morocco's TangerMed is a decent example, and the Investment Centres a half-way step to decentralising permissions, licenses, etc. Egypt has done some of this, but suffers from gross centralisation in Cairo. Excellent roads (and upgraded secondary roads, not just the highways, the feeder roads as well), as well as expanded freight services (rail) - this is a Morocco obs specifically - for all major cities will in the end be great boons and do ten times more than the ridiculous government job centres. Rather 1000 times more....

On affordability, obviously the systems of basic good subventions are a necessity - their real problem is they are so poorly targeted that much of the subventions budget is wasted, goes to consumers like myself. Very clearly more targeted subventions and possibly a system of direct payments to the poor would be better. The problem with the later is controlling (never mind eliminating, merely controlling at reasonable levels) for corruption. Taking again Morocco, technology in government is getting just good enough now that perhaps payment cards issued on ID cards might work - not perfectly, no doubt there'd be abuse, but it is not as if the subvention program is not abused... Certainly someone somewhere should have or should be doing a comparative cost study (with assumed levels of .... "leakage"). I would suspect that even with real leakage, a card program might end up doing better for the very poor and working poor categories and also save the Treasury real money. But that is mere suspicion.

I'll leave next steps for a post on entrepreneurship, but I would agree with The Arabist's comment (copied as noted below) that emerging entrepreneurship is in deep danger of being strangled off. That by a combination of private Magnates and Government, some of which is regulation used by the Magnates, some of which is well-intended but ultimately inapplicable regulation copied from wealthier countries.

Some specific comments on The Arabist's notes:

What are the great infrastructure projects post-highways and Tanger Med? Le Plan Vert? The tourism plan that never did quite work out? T

I rather thought that the Super Secret McKinsey studies had the road map for the future on that. Plan Vert and the MCC investments, more roads and ports upgrading. I think the Tourism plan suffered from too much focus on Big Projects of dubious viability, and far too little on investment in Morocco's key competitive advantage - cultural tourism. Beach fronts are fine, but don't really need that much government support. Medina and cultural museums do, and there Morocco can rival (in a way Algeria and Tunisia can not) a Damascus .... and provide a different alternative to a Cairo / Egypt (although no one can rival that in the end).

I do worry about cost-of-living issues, and to what extent they may be related to unnatural monopolies because of weak economic governance. I am thinking of Maroc Telecom / Vivendi of course, but also certain quasi-monopolies created in the last decade. For instance the Akwa Group - rumor is that the energy wing of that may be sold off to the royals. Addoha of course. The whole edible oils fiasco. I'd be interested to learn more about Attijirya bank's loan burden. Sure, business is business anywhere, but in Morocco (despite still too much red tape) you have a promising entrepreneurial culture dampened by too much politics in business. That's troubling for the future.

Agreed on the first part. AWB, as far as I can tell their loan portfolio is performing competitively with the other Big Moroccans, although what they are doing within the ONA Group is always worrisome.

But the concentration of Ministerial to Palace business connections is growing troublesome. It needs to be reigned in.

The discussion:

Two questions:

- Should Morocco be compared to MENA countries? While I think it's a stretch to want to compare it to Spain circa 1975, as some do, I think we can aspire to do better than merely compare well with elsewhere in the Arab world. Particularly elsewhere in North Africa: these are basketcase countries. Indeed, it might altogether to count improvements from a baseline in the history of the country. Since we are talking about M6, we might compare it to the situation on 30 July 1999 and compare the dynamic of positive change. Has the dynamic slowed down since the late 1990s? I think so. Has the actual situation gotten worse? A mixed bag: the rights situation has gotten worse (mostly because of the "Global War on Terror" and the lese-majeste trials) but did not revert to pre-1996; economic governance is no more transparent and worse in some respects due to the growing role of the royal holdings, women's rights have improved in theory though practice still needs to catch up; politics after some hope has stagnated with terrible developments such as the PAM, which ultimately will make it more difficult to mediate between the government and the population. Quality of governance, after continuing to improve between mid-1990s and mid-2000s with the arrival of more qualified people at the helm of institutions, is today so-so, especially because the king retains all the powers but takes none of the responsibility (and hard work). The constitutional/institutional balance remains unchanged: Morocco is still an absolute monarchy (and this mistake in Applebaum's piece is unforgivable: the king himself stressed this in his July 30 2007 speech). That would be my conclusion.

- When does the M6-is-better-than-H2 free pass end? 10 years enough? Why are things that are probably more important than politics and rights, such as the overhaul of education (and I agree about the Berber language thing being a stupid distraction) and raising living standards for the poorest (those people who freeze to death in the High Atlas in the winter) start being given more prevalence? Lounsbury and I (I'm in Morocco 3 months a year, more or less) live in the nice coastal cities. What we see is much better than what I see (and I think Lounsbury has seen) in Egypt (where I live the rest of the year.) But the UNDP and UN Human Development indices probably show a truer picture of the global situation of the country, not just the globalized bits/"Maroc Utile".

Hola Issandr.

Well, re comparatives to MENA... You know you have to compare peers to peers to get a sense of real evolution. Comparing Morocco to Spain has some utility, but needs context as well (e.g. impact of EU membership, etc).

On Applebaum and the Monarchy, I don't disagree per se, but she said "Traditional Monarchy" versus Constitutional.... well I suppose I can see an argument that M6 is less 'traditional.'

Weak one however.

I might quibble with some of your evals supra, and perhaps will in a separate post, but one thing I keep in mind is that no country manages flat out reforms unchecked for a decade. Flagging is inevitable. The real question in my mind is sustainability and potential "second wind." Or going backward...

Regarding the social advances, you're right, one can get fooled. Casa-Rabat axis is like say Italy or Greece in the 1960s relative to real economic development. That is, not that bad. 200 km inland and you're more in Sub Saharan Africa (good SSA, but...) standards.

It is not easy to change such things. The quick and easy items either have already been done, or are counterproductive. One thing I give the Moroccan government great credit for is investing in rational infrastructure in the past decade. Boring, useful, rational infrastructure. This sort of thing pays off, but slowly. It is, however, an absolute necessity.

Hmm, well, this is a rich comment, needs a post reply. But one obs, as you and I both have lived in the Great Mezbala, and that Rabat-Casa axis. For me the greatest indictment of the Egyptian regime is even in Cairo the regime can't deliver on basic organization in the core areas of the economic capital. Nevermind the bidonvilles / slums, I meant the damned bloody core.

Both the Maroc Utile and the Inland Morocco are real pictures, getting proper investment to allow Inland Morocco to become part of Maroc Utile is the Great Challenge. I am moderately optimistic about that. In a way that I am not, in the long term, about several neighbours.

Ouakha Sidi,

The infrastructure projects were indeed great and very useful, and general law and order are positive points. I have no way to substantiate this, but one feels they were planned under H2 (by the G14 and other mid-90s reformist technocratic outfits). What are the great infrastructure projects post-highways and Tanger Med? Le Plan Vert? The tourism plan that never did quite work out? The considerable amounts of money the EU is putting into supporting certain trade-oriented light industries?

The argument is also sometimes made that core economic reforms were made under H2 and we're seeing the benefit now, including the late 80s / early 90s decision to issue passports more freely which arguably translates into the remittances boom of the 2000s.

I do worry about cost-of-living issues, and to what extent they may be related to unnatural monopolies because of weak economic governance. I am thinking of Maroc Telecom / Vivendi of course, but also certain quasi-monopolies created in the last decade. For instance the Akwa Group - rumor is that the energy wing of that may be sold off to the royals. Addoha of course. The whole edible oils fiasco. I'd be interested to learn more about Attijirya bank's loan burden. Sure, business is business anywhere, but in Morocco (despite still too much red tape) you have a promising entrepreneurial culture dampened by too much politics in business. That's troubling for the future.

Like you said, post-worthy and your insight into business life would be v. interesting.

Powered by ScribeFire.