Bloomberg names Morocco as one of five “connector” countries that are emerging as important links in a global economy that is fragmenting into rival blocs.
In collaboration with Bloomberg Economics, Bloomberg Businessweek has analyzed in-depth trade and investment data to highlight five countries – Morocco, Vietnam, Poland, Mexico and Indonesia – that are strategically positioned on new geopolitical fault lines.
Collectively, these nations generated an economic output of $4 billion in 2022, surpassing India and almost rivaling economic powerhouses such as Germany and Japan. Although their political and historical backgrounds are varied, they share an opportunistic ambition to capture economic spinoffs by establishing crucial links between the USA and China, as well as between China, Europe and other Asian economies.
These five nations are not alone in positioning themselves as mediators between the world’s evolving economies. However, thanks to their strategic location and efficiency in facilitating trade, they play a crucial role as focal points.
Although they account for just 4% of global gross domestic product, they have attracted more than 10%, or $550 billion, of all so-called “greenfield” investments since 2017. This term encompasses spending on the creation of new factories, offices and other facilities by a foreign company looking to establish or expand its operations in another country. Bloomberg Economics’ analysis reveals that all these countries have seen an acceleration in their trade with the rest of the world over the past five years.
According to the same source, Morocco, holder of the world’s largest phosphate reserves, is becoming a major player in the transformation of the global automotive industry. This mineral is a key ingredient in lithium iron phosphate (LFP) batteries, a fast-growing variety of rechargeable cells used in electric vehicles (EVs).
What’s more, the country already boasts a booming automotive sector, with plants owned by Renault SA and Stellantis NV producing thousands of cars a day, supported by dozens of well-established US suppliers. Among them are Lear Corp. based in Southfield, Michigan, and Commercial Vehicle Group Inc, of New Albany, Ohio, which have announced expansion plans this year, recalls Bloomberg.
Today, a strong supply chain for batteries for electric vehicles is emerging. Morocco’s excellent trade relations with Europe and the USA, as well as its openness to foreign direct investment, make it a focal point where companies on both sides of the growing divide between the USA and China can either compete or collaborate.
In 2022, Morocco saw the announcement of $15.3 billion in new greenfield plant projects financed by foreign investors, a sum almost equivalent to that of the previous five years combined, and this trend shows no sign of slowing.
The analysis also highlights that in May, China’s Gotion High-Tech Co. signed an agreement with the Kingdom to build a $6.4 billion battery factory, which would be one of the largest in the world.
In September, CNGR Advanced Material Co. a Chinese manufacturer of battery components, announced a project worth up to $2 billion to produce enough LFP batteries to eventually equip 1 million vehicles a year. For his part, Thorsten Lahrs, CEO of CNGR Europe, claims that Morocco is ideally placed to supply the car batteries of the future.
Similarly, South Korea’s LM Chem and Youyshan, a subsidiary of China’s Huayou Group, announced plans to make Morocco their global base in the LFP battery market, with mass production scheduled for 2026. In the announcement, the partners were explicit about the economic rationale: the choice of Morocco was influenced by the provisions of the US Inflation Reduction Act of 2022.