From Sun to Fog: Investment Opportunities in Morocco
Can Morocco see its way to the global investment stage despite its foggy economy?
by Sara Nunnally, Editor, Taipan Trader
Even though my flight from Madrid to Casablanca took less than two hours, I feel like I’m worlds away.
In a most appropriate analogy, the weather has taken a decidedly foggy turn as the afternoon has worn on. I guess I left the sun in Spain.
Madrid is a lively, vibrant city with bars and restaurants filled to the brim. Even during siesta, when many shops close down, there are people everywhere walking with bags in hand, hanging out at various plazas, chatting on cellphones.
(On a financial note, I spoke with one company that has totally insulated itself against the U.S. subprime crisis. I’m in the middle of writing up a full report for Taipan Trader subscribers. Be on the lookout for when that’ll be available.)
Casablanca (so far, which is to say from the airport to the train station to the hotel) is bustling for sure, but it’s mostly young male taxi drivers looking for their next fare.
The fog has rolled in…
I don’t quite know what to expect from Casablanca. The train into town was filled with three or four languages slung around casually with an abundance of hand gestures that help Westerners get the gist of the conversation.
I speak a little Spanish, a smattering of French (I can ask if you speak English), and how to say “thank you” and “please” in Arabic. So listening to conversations was a bit like listening underwater, where you can catch a few worlds here and there, and some words sound like you should know the meanings but don’t.
It is very surprising how friendly -- nearly aggressively so -- people are.
A young Moroccan woman named Laila approached me at the train station and we struck up a conversation mostly in Spanish (her husband was Spanish and she was traveling back to Morocco for her cousin’s wedding).
It was plainly obvious that neither of us understood completely what the other was saying. Luckily, a gentleman in our seating area spoke a little English. Soon we were translating back and forth using English, Arabic, Spanish and French.
Incidentally, the gentleman was a Berber -- an original Moroccan. Medieval Europe called them the Moors. There are nearly 19 million Berbers in Morocco. His name was Mbark and he was a student studying information technology at a local college.
Laila was wearing a necklace with a Berber symbol, which caused a lively discussion with a local Arab woman that quickly turned to Moroccan politics, and then to global politics.
Since the word “American” is “American” (in some form or other) in Spanish, French and Arabic, it was easy to tell when talk turned to President Bush and the West’s political philosophies.
And if I didn’t understand the words, the gestures and expressions were certainly clear enough…
The West interferes.
This is mainly true with the French, according to Laila. She said that our people generally like her people, and that her people generally like our people… “Pero los Franceses, no,” she said.
France, which has lucrative energy contracts with Algeria and Egypt and is the No. 1 trading partner with Morocco, has been moving a lot of cash into all of Northern Africa. And with a history of immigrant unrest in Paris (like the riots right around France’s presidential elections), it’s easy to see a tug-of-war is going on with national resource interests and the need for economic reforms… and, thus, with the hearts and minds of all the citizens in the Maghreb region.
This is obvious with the mixture of Western and traditional dress.
How does a country balance its need for a sustainable future with the desire to hold onto tradition and culture? Does one inhibit or suppress the other?
How can a market, whose first instinct is to invite you in for a cup of hot mint tea while you barter, keep up with the whiplash of global investing?
There isn’t a simple answer, but national economists agree on one thing: reform needs to come quicker.
About 8.6% of Morocco’s citizens have jumped ship and landed in places like France and Spain. But even more startling is that more than 10% of tertiary-educated (above secondary school) Moroccans leave the country.
Those folks send about 5.7 billion euros in remittances back to Morocco. That’s about 10% of the country’s GDP.
In their place come immigrants from other countries, poorer countries.
As a result, 19% of the country’s population lives below the poverty line, and 20% of urban populations are unemployed. In order to reinvigorate the economy, Morocco has instituted a number of economic reforms, such as the privatization of nationalized businesses and the liberalization of certain sectors like oil and gas and telecommunications, but there’s a lot of work to be done if Morocco wants to see eye to eye with EU members.
The bright side is that Morocco has seen an influx of foreign capital recently. Real estate has been growing strongly, as well as services and tourism. In fact, Fox Business News recently voted Morocco as the second-most desirable place to go when the dollar’s falling.
But that’s not all.
With Casablanca’s stock market valued at $77 billion and growing, and with closer and closer ties with the European Union, Morocco might just be prepared to push forward on the economic front.
(By the way, I’ll be visiting the Casablanca Stock Exchange on Tuesday for an exclusive tour. More on that later in the week.)
Whether or not it will happen fast enough to stymie the “Moroccan Diaspora” is a question that will take decades to answer.
One thing’s for sure, though: The mix of saffron-spiced tradition and silver-gilded economic promises make for an interesting brew; one worth exploring in the future.
Even though my flight from Madrid to Casablanca took less than two hours, I feel like I’m worlds away.
In a most appropriate analogy, the weather has taken a decidedly foggy turn as the afternoon has worn on. I guess I left the sun in Spain.
Madrid is a lively, vibrant city with bars and restaurants filled to the brim. Even during siesta, when many shops close down, there are people everywhere walking with bags in hand, hanging out at various plazas, chatting on cellphones.
(On a financial note, I spoke with one company that has totally insulated itself against the U.S. subprime crisis. I’m in the middle of writing up a full report for Taipan Trader subscribers. Be on the lookout for when that’ll be available.)
Casablanca (so far, which is to say from the airport to the train station to the hotel) is bustling for sure, but it’s mostly young male taxi drivers looking for their next fare.
The fog has rolled in…
I don’t quite know what to expect from Casablanca. The train into town was filled with three or four languages slung around casually with an abundance of hand gestures that help Westerners get the gist of the conversation.
I speak a little Spanish, a smattering of French (I can ask if you speak English), and how to say “thank you” and “please” in Arabic. So listening to conversations was a bit like listening underwater, where you can catch a few worlds here and there, and some words sound like you should know the meanings but don’t.
It is very surprising how friendly -- nearly aggressively so -- people are.
A young Moroccan woman named Laila approached me at the train station and we struck up a conversation mostly in Spanish (her husband was Spanish and she was traveling back to Morocco for her cousin’s wedding).
It was plainly obvious that neither of us understood completely what the other was saying. Luckily, a gentleman in our seating area spoke a little English. Soon we were translating back and forth using English, Arabic, Spanish and French.
Incidentally, the gentleman was a Berber -- an original Moroccan. Medieval Europe called them the Moors. There are nearly 19 million Berbers in Morocco. His name was Mbark and he was a student studying information technology at a local college.
Laila was wearing a necklace with a Berber symbol, which caused a lively discussion with a local Arab woman that quickly turned to Moroccan politics, and then to global politics.
Since the word “American” is “American” (in some form or other) in Spanish, French and Arabic, it was easy to tell when talk turned to President Bush and the West’s political philosophies.
And if I didn’t understand the words, the gestures and expressions were certainly clear enough…
The West interferes.
This is mainly true with the French, according to Laila. She said that our people generally like her people, and that her people generally like our people… “Pero los Franceses, no,” she said.
France, which has lucrative energy contracts with Algeria and Egypt and is the No. 1 trading partner with Morocco, has been moving a lot of cash into all of Northern Africa. And with a history of immigrant unrest in Paris (like the riots right around France’s presidential elections), it’s easy to see a tug-of-war is going on with national resource interests and the need for economic reforms… and, thus, with the hearts and minds of all the citizens in the Maghreb region.
This is obvious with the mixture of Western and traditional dress.
How does a country balance its need for a sustainable future with the desire to hold onto tradition and culture? Does one inhibit or suppress the other?
How can a market, whose first instinct is to invite you in for a cup of hot mint tea while you barter, keep up with the whiplash of global investing?
There isn’t a simple answer, but national economists agree on one thing: reform needs to come quicker.
About 8.6% of Morocco’s citizens have jumped ship and landed in places like France and Spain. But even more startling is that more than 10% of tertiary-educated (above secondary school) Moroccans leave the country.
Those folks send about 5.7 billion euros in remittances back to Morocco. That’s about 10% of the country’s GDP.
In their place come immigrants from other countries, poorer countries.
As a result, 19% of the country’s population lives below the poverty line, and 20% of urban populations are unemployed. In order to reinvigorate the economy, Morocco has instituted a number of economic reforms, such as the privatization of nationalized businesses and the liberalization of certain sectors like oil and gas and telecommunications, but there’s a lot of work to be done if Morocco wants to see eye to eye with EU members.
The bright side is that Morocco has seen an influx of foreign capital recently. Real estate has been growing strongly, as well as services and tourism. In fact, Fox Business News recently voted Morocco as the second-most desirable place to go when the dollar’s falling.
But that’s not all.
With Casablanca’s stock market valued at $77 billion and growing, and with closer and closer ties with the European Union, Morocco might just be prepared to push forward on the economic front.
(By the way, I’ll be visiting the Casablanca Stock Exchange on Tuesday for an exclusive tour. More on that later in the week.)
Whether or not it will happen fast enough to stymie the “Moroccan Diaspora” is a question that will take decades to answer.
One thing’s for sure, though: The mix of saffron-spiced tradition and silver-gilded economic promises make for an interesting brew; one worth exploring in the future.
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