The Moroccan economy is recovering well despite the tragic Al Haouz earthquake’s devastating effects, finds the World Bank, underlining that increasing Female Labor Force Participation (FLFP) would have a strong economic and social dividend.
In a new report titled “Morocco, Economic Update From Resilience to Shared Prosperity,” the international institution states that “although several ambitious reforms have already been undertaken, a paradigm shift is still needed to economically empower Moroccan women,” explaining that effort should be put in place to address the specific constraints faced by women in different contexts.
In rural areas, the constraints include solving mobility problems and increasing financial and digital inclusion to enable women to engage in productive activities outside their households.
While in urban areas, where wage work is more common, promoting gender-friendly conditions in the workplace is of the essence of these much-needed efforts.
Data from the SME Observatory (Observatoire Marocain de la TPME) show that in 2022 women represented only a third of total formal private sector employment, with a very marked sectoral segregation.
The new report emphasizes that women with higher levels of education are more likely to be active and employed, but do not manage to overcome gender-specific constraints preventing their transition and staying in the labor market.
Cross-cutting constraints also need to be addressed, added the World Bank’s report, citing the supply of economic opportunities, the need for an enabling environment for women to take up these opportunities, including via further legal reforms, the provision of acceptable and affordable childcare options, and shifting traditional social norms.
“Women’s economic empowerment can support Morocco in reducing poverty and inequalities,” said the report.
Morocco´s external resiliency and boost prosperity:
The potential growth rate of the Moroccan economy has significantly declined since the 2000s and is currently estimated at 3.6%, below the average for emerging market and development economies. Word Bank’s report believes that the materialization of such a growth rate over the coming years would be clearly insufficient to achieve the ambitious objectives set by the New Development Model.
Naturally, the Moroccan authorities are aware of the challenge and have launched ambitious reforms to improve human capital and incentivize private investments. Yet, these reforms may fail to yield the desired economic take-off unless other critical micro constraints to growth are relieved.
“Morocco still needs to deepen reforms aimed at removing the regulatory and institutional obstacles that limit competition and slow the reallocation of production factors towards more productive firms and sectors. Moreover, evaluating the policies and reforms under implementation will be key to ensure that they yield the desired outcome, for which a greater access to data is necessary, an unfinished agenda in Morocco,” stated the same source.
Recent economic developments:
World Bank’s report offers a thorough analysis of Morocco’s recent economic development as well as their repercussions.
For instance, the Al Haouz earthquake serves as a reminder of the pockets of poverty that are still present in many rural areas, communities that have so far ripped limited benefits from the growth and modernization of the Moroccan economy over the past two decades.
The report underlined the limited statistical information that is available to characterize the socio-economic conditions of the affected populations.
On a positive note, economic growth has accelerated as a result of a partial agricultural recovery, tourism revival, and net exports.
According to the report, private investment has yet to return to pre-pandemic levels, and previous shocks are having long-term effects on the structure of the Moroccan economy, as indicated by the significant gap between the main components of supply and demand with 2019 levels.
On the demand side, while net exports and public consumption have already surpassed pre-pandemic levels by a wide margin, private consumption has hardly recovered, and total investment remains well below 2019 levels.
Macroeconomic policy remains broadly supportive, with pricing pressures beginning to unwind. Headline inflation has fallen, indicating that price pressures for most categories of goods and services included in the CPI have slowed; nonetheless, the decline in inflation has been principally driven by a slowing in the prices of volatile food products, fuels, and lubricants.
The report added that Moroccan authorities are increasingly resorting to non-monetary measures to confront food inflation, such as restricting certain exports.
“Morocco continues to exhibit a remarkable capacity to navigate through abrupt disturbances,” said the World Bank.