Morocco will have to prepare on several levels to deal with the repercussions of the conflict between Ukraine and Russia, which could last several years. What impact for Morocco and how to deal with it? Tracks with economist Khalid Benali.
As the conflict in Ukraine continues to rage in the face of the international community’s inability to respond, countries will have to deal with the repercussions of this war if it takes hold.
Several scenarios, theories and questions arise and deserve to be asked, in particular what to do if Russia takes Kiev.
For the economist Khalid Benali, “Morocco advocates respect for the decisions of the international community and the legitimacy and sovereignty of countries as aspects that must be considered to achieve solutions in the case of conflicts between nations”. It is on the basis of this observation that Morocco’s position vis-à-vis this conflict should be taken, whatever the foreseeable scenarios.
Another possible scenario, a war which settles in time, and it is a theory that several countries predict, in particular France and Great Britain.
“This war will last, and all the criesthere will be lasting causes behind it,” according to French President Emmanuel Macron.
The conflict could last “several years because we know that Russia has significant forces”, indicated for her part the head of British diplomacy Liz Truss.
In this case, Morocco, although it is not highly dependent on Russian or Ukrainian products, the risks of a negative impact will be felt directly through imported inflation generating a rise in prices and indirectly through the contraction of the foreign demand sent to Morocco by its strategic partners.
The conflict in Ukraine enables us to deduce that the cold war is in fact not completely over, of course, a calm was observed after the fall of the Berlin wall, but now we are witnessing the other side, namely the repercussions of the new cold war which are visible in a new form and another definition through new technologies, social networks, the world of finance, and commercial exchanges”, estimated the economist in a statement to MoroccoLatestNews.
“Predicting the duration of this conflict is not at all easy, but the longer the conflict lasts, the heavier the consequences will be for the whole world, knowing that the conflict is part of a phase of ascending confrontation”, he said. -he affirmed before advancing that the risks of imbalance between supply and demand would be very probable, hence the need for Morocco and the rest of the world to think about alternatives.
This with the idea of filling “the probable disappearance of the financial markets for products exported from both Ukraine and Russia”, in particular cereals (29% of world exports) and Europe’s needs in terms of natural gas estimated at 47% in 2021.
The products concerned
Among the trade exchanges at the heart of Ukraine and Russia’s transactions with other countries are mainly wheat, sunflower oil, gas and oil. A shortage of these products would cause impacts not only direct on consumption but also indirect since they will disrupt the supply of production chains in different sectors, in particular the agri-food sector, or even agriculture since it will also affect the livestock feed, and generate difficulties in transporting products between countries.
According to the Ministry of Industry and Commerce, in 2020, the total volume of trade between Morocco and Ukraine amounted to around 4.68 billion dirhams, representing 0.7% of total trade. .
The volume of imports reached 4.1 billion dirhams, up 1% over the last year, led by cereals representing 65% of Ukraine’s imports and 12% of total cereal imports, while exports amount to 534 million dirhams and are mostly natural and chemical fertilizers, cars and fish.
What alternatives for Morocco?
“All the products that Morocco imports from Ukraine and Russia are likely to experience a price increase in the event that these products are subject to significant global demand and especially if Europe depends on them”, hence a foreseeable rise in prices for Morocco resulting from imported inflation given that it imports about 40% of its consumption needs.
In the medium and long term, “Morocco should, in my opinion, find new markets, new alternatives. This leads us to question the ability to regulate world markets to ensure market balance to limit the impact of the consequences of this conflict, which has been present invisibly since 2014, and to substitute products from Russia and Ukraine.” , explained Khalid Benali.
According to him, the kingdom must encourage private investment in sectors with high added value to revive and restructure the national economy, the development of the agricultural sector through investments aimed at promoting new technologies in the fields of irrigation. , land use, new professions, digitization, renewable energies such as wind power, green hydrocarbons… to limit dependence in terms of agricultural production vis-à-vis other countries.
“The purpose of this investment is to promote the agricultural sector, the rural world as a whole and this, in the national interest”, he explained.
In the long term, the challenge will be to reduce Morocco’s international dependence on fossil fuels through renewable energies. “We must strengthen this work through partnerships in these areas to produce energy that will replace fuel,” said Mr. Benali.
With a strategy geared towards investment as a lever for the development of the agricultural and energy sectors, Morocco could “generate margins which should be mobilized to finance and assume the repercussions of imported inflation in situations such as this conflict in Ukraine”.